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TMI Blog2005 (10) TMI 619X X X X Extracts X X X X X X X X Extracts X X X X ..... s leave to add or amend any ground of appeal before it is finally disposed of. 2. The assessee declared an income of Rs. 1.50 lakhs in its return on 26-12-1996 by claiming exemption under section 54F and long term capital gains amounting to Rs. 11,83,166. As per the assessment order, on the basis of information available with the department, notice under section 148 was issued by the ITO, New Delhi and claimed to be served upon the assessee by registered post. Another notice under section 148 was served upon the assessee on 30-3-2003. Again notice under section 142(1) was issued on 3-7-2003. None appeared on behalf of the assessee. Summons under section 131 of the Act were issued to the assessee as well- as one Sh. Parveen Kapoor, owner of property - 62, Sainik Vihar, Pitampura, Delhi-34. Shri Parveen Kapoor appeared before the ITO, New Delhi on 6-10-2003 where his statement was recorded. Shri Parveen Kapoor in his statement stated that Sh. Sunil Kumar, i.e., the assessee is known to him and he regularly visits his premises. He also tendered that he has business links with Shri Sunil Kumar whom he introduced in the bank account maintained at Oriental Bank of Commerce, ND Block, Pit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he hands of the assessee and the same is a colourable device. The Assessing Officer further held that the shares amounting to Rs. 12.63 lakhs is nothing but own money of the assessee introduced in the books of account. As an amount of Rs. 1,06,500 was paid by the assessee to the alleged share broker, the balance amount of Rs. 11,56,500 was treated as unexplained cash credit in the hands of the assessee under section 68 of the Act. As per assessment order, it was held that the assessee might have paid atleast 2 per cent premium on the amount which works out to Rs. 25,260. It was also added to the income of the assessee as unexplained expenditure under section 69(c) of the Act. The assessment order was successfully carried in appeal before the ld. CIT(A). Now, the revenue is aggrieved and is in appeal before the Tribunal. 3. During arguments, we have heard Mrs. Sukhwinder Khanna, ld. DR for the revenue and Sh. Sudhir Sehgal and Sh. Ashok Goel, ld. advocates for the assessee. 4. The gist of arguments on behalf of the department is that the Assessing Officer was having information about the account of the assessee maintained in Pitampura, Delhi, notices were issued to the assessee at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prove. Reliance was also placed on certain judicial pronouncements which we will consider while deciding the issue. We have considered the submissions put forth by both the learned representatives. 6. Brief facts of the case are that the assessee is assessed at Ludhiana for the last about more than 20 years who is partner in firm namely, M/s. V.H. Synthetic Agency, Purana Bazar, Ludhiana, and thus, the place of business of the assessee is at Ludhiana. Undisputedly, Sh. Sunil Kumar is a permanent resident of Ludhiana. The case relates to assessment year 1996-97. The return was filed on 26-12-1996 alongwith various documents as per the details which are available at Page 2 of the orders of the ld. CIT(A). Similarly, the return for the assessment year 1995-96 was filed on 30-10-1996, PAN No. was allotted by ld. CIT(A), Ludhiana. In the assessment year 1995-96, the assessee invested a sum of Rs. 1,06,500 by draft for investment in shares, which amount was withdrawn from the firm as per copy of account already attached with the return for the assessment year 1995-96. As per the department, the case was re-opened under section 148 by ITO, Ward 25(1), New Delhi and notice dated 28-2-2003 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elhi, himself realised that he had no jurisdiction to issue notice under section 148, transfer the file to Ludhiana, and, therefore, the Assessing Officer, Ludhiana sent detailed questionnaire fixing the date for 24-3-2004. Undisputedly, on day- to-day basis, replies were filed by the assessee which are available at Page 49 of the paper book again challenging the jurisdiction of the ITO, New Delhi. It is evident from the assessment order itself that the assessee was denied cross-examination of the witness on whose alleged statement the case was re-opened and the contents of the statement was provided on 26-3-2004 to which the assessee asked for cross-examination. A copy of the letter is available at Page 9 of the paper-book to which the Assessing Officer in Para 8 of his order stated that onus lays upon the assessee by mentioning that it cannot be allowed at the fag end of the limitation period. This contention of the Assessing Officer is devoid of any valid reasoning in as much it is the department who is relying upon the statement recorded at the back of the assessee, so the department is supposed to produce such person for cross examination. It is not the case that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it may be stated that having acceded to the request of the assessee that ITO, New Delhi is having no jurisdiction to decide the case of the assessee, then the ITO, Ludhiana without issuing notice under section 148 completed assessment on the basis of notice already issued by ITO, New Delhi in our humble opinion is again not valid, since without fresh issue of notice under section 148, the ITO, Ludhiana could not have been vested with the jurisdiction of prime assessment. The issue of notice under section 148 and assumption of jurisdiction is supposed to be correct and valid since the issue of notice under section 148, the ITO takes away the vested right of a person which he requires in the completion of assessment. 8. We are not agree with the contention of the department that the departmental officers are very much busy and it is the assessee who deliberately delayed the proceedings or the assessee did not cooperate when he came to know about the issuance of notice under section 148. Reliance can be placed upon the decision of Hotel White, Shimla by the Chandigarh Bench of Tribunal wherein it was held if notice sent in accordance with law or is not served on proper person, such no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of valid notice wherein notice was issued to minors and served upon the person not authorized to accept notice, it was held that notice which form the basis of proceedings were wholly invalid and the petitioner could not be assessed in pursuance of this notice. 10. The Hon ble High Court of Calcutta in the case of Bhagwan Devi Saraogi v. ITO [1979] 118 ITR 906, on the issue of necessity of valid notice to confer jurisdiction held that even consent of assessee would not confer jurisdiction of validity and can be raised at the time of hearing also. It was further held that the notice was invalid and was liable to be quashed. While coming to this conclusion, the Hon ble court followed the decision pronounced in the case of Rama Devi Aggarwal v. CIT [1979] 117 ITR 256 (Cal.) and distinguish the case pronounced in the case of Pannalal Binjraj v. Union of India [1957] 31 ITR 565 (SC) and CIT v. Bhanji Kanji s Shop [1968] 68 ITR 416 (Guj.). The Hon ble court considered the cases of Bidi Supply Co. v. Union of India [1956] 29 ITR 717 (SC), 71 ITR 603 (SC), Y. Narayana Chetty v. ITO [1959] 35ITR 388 (SC) (sic), Sewalal Daga v. CIT [1965] 55 ITR 406 (Cal.) and Union of India v. Rai Singh Deb ..... X X X X Extracts X X X X X X X X Extracts X X X X
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