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TMI Blog2015 (8) TMI 224X X X X Extracts X X X X X X X X Extracts X X X X ..... quashing the re-assessment order as bad in law on the basis that the AO has issued the notice u/s 148 at old address, but ignored fact that the notice was served validly. 3. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in quashing the re-assessment order as bad in law despite the fact that the AO has passed the speaking assessment order. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) erred in deleting the addition of Rs. 32,00,000/- u/s 68 of the Act despite the settled position of law that the onus is on the assessee to Date of Hearing 08.07.2015 Date of Pronouncement 31 .07.2015 establish the identity, creditworthiness and genuineness of the transaction, ignoring the fact that the assessee could not be able to furnish even one basic document i.e original copy of confirmation of creditors. 5. The appellant craves to add, alter, amend, modify add or forego any ground of appeal at any time before or during the hearing of this appeal." 2. The relevant facts of the case as emanating from the assessment order dated 30th December 2011 u/s 143(3)/147 of the Income Tax Act 1961 are that the assessee declared an income of Rs. 14,140/- by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand (A/c No. 16083, Jailaxmi Coop, Bank, Fatehpuri, Delhi) 173914 5,00,000 24/9/2003 M/s Acoot India Pvt. Ltd. (A/c No. 3365, Jailaxmi Coop, Bank, Fatehpuri, Delhi) 267960 2.3 The said notice along with enclosure as per the assessment order returned undelivered with the remark "no such firm". However, letter dated 1/12/2011 was received from the assessee on 5/12/2011 again raising these objections. Accordingly, notice u/s 142(1) dated 7/12/2011 was again forwarded to the assessee along with enclosures. In responses thereto, the assessee attended the proceedings on 14/12/2011 and objected to the reopening on the grounds that the notice u/s 148 was not issued/served upon the assessee within the statutory period of limitation. The assessee further on subsequent dates filed supporting evidences in regard to the issue on merit. 2.4 The objection of the assessee was dismissed by the assessing officer holding as under:- " Regarding the service of notice u/s 148, it is clarified that the said notice was issued at the address mentioned in its relevant ITR i.e A. Y 2004-05. The assessee cannot deny the address though it was its old address. The notice never received back und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s bad in law despite the fact that the AO has passed the speaking assessment order." 5. The facts of the case are found summed up by the CIT(A) in Para 4 of his order and are reproduced hereunder:- "4. Brief facts of the case are as under: The appellant company is a Non Banking Finance Company (NBFC) engaged in the business consists of giving of loans and advances, trading in shares etc. The appellant filed the Return of income on 1st November 2004 declaring n income of Rs. 14,140/-. The return was processed u/s 143(1). Later, notice u/s 148 was issued/sent by AO, which the appellant claimed was not served on the Appellant as it was addressed at a wrong address. Thereafter, a notice u/s 142(1) dated 8/8/2011 was issued at 1004A, Chiranjiv Tower, Nehru Place, New Delhi-19, the returned address of the appellant which was acknowledged by the appellant. The appellant objected to Assumption of jurisdiction u/s 148 and requested for dropping of proceedings u/s 148 yet furnished required documents/information, though under protest. The Ld. AO passed the Re-assessment order u/s 143 (3)/147 on 30/12/2011, wherein addition of Rs. 32,00,000/- was made on account of unexplained cash credit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he correct person? (v)Is the address correct? (vi)Are the name and status of the appellant correctly mentioned? (vii)Is the assessment year correctly mentioned? (viii)Is the person addressed given a reasonable time to respond? (ix)Are the date, time and venue of hearing given? (x)Is the notice signed and seal affixed? 3. Service of notice 3.1 As per the provisions of section 282 a notice may be served either by post or as if it were a court summons under the Civil Procedure Code. 4. Service by post 4.1 The procedure for service by post is given in section 27 of the General Clauses Act. Requirements for valid service by post are (i) Proper addressing (ii) Prepaying (iii) Sending by registered post with acknowledgement due. In view of the above CBDT Guidelines, it was pleaded that if the notice is issued and sent at wrong address, it cannot be said to have been validly issued. Further it was also submitted that in case of sending notice at a wrong address, presumption of valid service by post cannot be drawn in view of section 27 of the General Clauses Act as enumerated above." 6.2 In the light of the above guidelines and pleadings it was submitted that the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C) CIT VS. Rajesh Kumar Sharma ITA 1547/2006 (Delhi) (13 Aug 2007) ACIT and Anr Vs. Hotel Blue Moon [2010] 321 I.T.R. 362 (SC) CIT Vs. Rajeev Sharma [2010]40 DTR (ALL) 129 Alpine Electronics Asia Pvt. Ltd Vs. Director General of I. Tax & Anr. & Motilal Bimalchand Jain (HUF) Vs. CIT (285 ITR 224 (M.P) 7. On the merits of the additions it was submitted that share application money was received from six corporate assesses and one individual. In support of the said claims it was submitted that before the AO the following documents have been filed (the relevant extract from para 5.8 is reproduced hereunder for ready reference): - (a) Share application form received from the Share Applicants containing the Complete details of applicants which includes, Name of the applicants, Address, PAN, No. of Shares applied, Mode of Payment of Share Application Money, details of Bank of Share Holders, Branch, Cheque No, Date and Occupation of Applicants. (b) Confirmation/Affidavit from the Share Applicants containing the complete details of amount invested, Cheque number, date, Bank particulars, PAN and Income Tax particulars. (c) Copy of PAN Card/PAN Allotment letters of the Share holde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... od established. In view thereof relying upon various decisions it was pleaded that even on merit, the addition has been wrongly made. 10. Considering these facts the CIT(A) quashed the proceedings vide paras 6 to 6.4 and thereafter proceedings to consider the issue on merit and taking the evidences into consideration even deleted the additions on merit. 11. Aggrieved by this, the Revenue is in appeal before the Tribunal. 12. The ld. Sr. DR referring to the record stated that the notice was sent to the address mentioned in the Income Tax Return and the fact was accepted by the assessee also. Thus in the background where notice as per record has been sent the relief granted by the CIT(A) it was claimed is contrary to record. Addressing the change of address in the database of PAN and other documents it was submitted that the fact was not required to be looked into by the AO at the time of issuance of notice based on the report of the Investigation Wing and the fact that notice was sent to the return indicated in the ITR of the assessee is sufficient compliance. On merit also it was submitted that the nature of evidence relied is not sufficient proof as mere movements of funds thro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the previous address of the appellant, which was changed 6 years ago by the appellant. Necessary information was specifically given to the AO in this regard and even the address was changed in the PAN data base. It is very likely that the AO, simply attached the information received from the Investigation wing with the return for the AY 2004-05 and issued the notice u/s 148, without bothering to find out whether the appellant continues to be at the same address at which it had filed the return 5 years ago. Neither did he check the address from the current return nor from PAN data base. It is thus evident that the notice sent at wrong address was to return back. Strangely the AO has also acknowledged these facts in the impugned order. I fail to understand if the notice dated 18.3.2011 had returned before 31.3.2011, why the AO not applied mind in the matter to find out the correct address, by looking at data base of his assesses. The argument that it was the appellant, who had at some point of time given this address, is of no relevance, as the AO was in possession of the new address, which was duly informed by the appellant, and from which later returns were filed and which was a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he action of the AO in holding the same as unexplained cash credit was without any basis, cogent grounds and was therefore unjustified. 6.7 The fact that the ld. AO did not make any efforts in making enquiries by issue of summons or otherwise, distinguishes the case from the case of CIT vs. Nova Promoters and Finlease P. Ltd. (2012) 18 Taxmann.com 217 (Del.) and therefore, the decision of the Hon'ble Supreme Court in the case of CIT vs. Lovely Exports P. Ltd. 2008-TIOL-238-SC-IT, squarely applies to the case of the applicant. In view of the above, the addition made by the ld. AO by holding share application money of Rs. 32,00,000/- as unexplained cash credit was unjustified and, therefore, the same is accordingly deleted." 15. On a consideration of the same we find that the reasoning and finding of the CIT(A) in para 6 to 6.4 reproduced hereinabove cannot be faulted with. We ourselves find that the question posed by the ld. CIT(A) in para 6.2 as to why the AO did not address the defect in jurisdiction before 31.3.2011 as the facts and time was available to him has evidently remained unanswered by the ld. Sr. DR. In view of the fact that the assumption of jurisdiction is held to b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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