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R.C.Sood vs High Court Of Rajasthan on 21 November, 1994
C.I.T vs Ram Kumar Aggrawal on 2 November, 1993
C.C.E vs I.T.C. Limited on 17 February, 1994
Commissioner Of Income Tax vs Smt. Pelleti Srideramma, Nellore on 11 October, 1995
Commissioner Of Income-Tax Poona vs M/S. Manna Ramji & Co on 29 August, 1972

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Income Tax Appellate Tribunal - Delhi
Jyoti Guganani, Rohtak vs Department Of Income Tax

I.T.A. NOS. 5128-5132/DEL/2011

IN THE INCOME TAX APPELLATE TRIBUNAL

DELHI BENCH "H" NEW DELHI

BEFORE SHRI U.B.S. BEDI, JUDICIAL MEMBER

AND

SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER

I.T.A. No. 5128/Del/2011

A.Y. : 2003-04

Asstt. Commissioner of Income vs. Smt. Veena Guganani, D/o Sh. Tax, Rohtak Circle, Ramji Dass, Aayakar Bhavan, Mahavir Mander Gali, Rohtak. 1076, Chameli Market, Rohtak. (PAN. : ACRPG5799B)

I.T.A. No. 5129/Del/2011

A.Y. : 2003-04

Asstt. Commissioner of Income vs. Sh. Ravinder Kumar Guganani, Tax, Rohtak Circle, 1076, Chameli Market, Rohtak. Aayakar Bhavan, (PAN. : ACRPQ5776C) Rohtak.

I.T.A. No. 5130/Del/2011

A.Y. : 2003-04

Asstt. Commissioner of Income vs. Smt. Rajni Guganani, Tax, Rohtak Circle, 1076, Chameli Market, Rohtak. Aayakar Bhavan, (PAN. : ACRPG5850F) Rohtak.

I.T.A. No. 5131/Del/2011

A.Y. : 2003-04

Asstt. Commissioner of Income vs. Smt. Jyoti Guganani, D/o Sh. Tax, Rohtak Circle, Mangat Ram, Aayakar Bhavan, Mahavir Mander Gali, Rohtak. 1076, Chameli Market, Rohtak. (PAN. : ACRPG5800F)

I.T.A. No. 5132/Del/2011

A.Y. : 2003-04

Asstt. Commissioner of Income vs. Smt. Urmil Guganani, D/oSh. Som Tax, Rohtak Circle, Nath, Mahavir Mander Gali, Aayakar Bhavan, 790, Chameil Market, Rohtak Rohtak. (PAN. : ACRPG5774D) (Appellant) (Respondent)

Assessee by : Sh. Manoj Kumar, CA

Department by : Mrs. Shumana Sen, Sr. D.R.

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I.T.A. NOS. 5128-5132/DEL/2011

ORDER

PER BENCH

These appeals by the Revenue are directed against the common order of the Ld. Commissioner of Income Tax (A) in the case of five separate assesses for the assessment year 2003-04. Since the issue involved is common and connected, hence, these appeals are being consolidated and disposed of by this common order for the sake of convenience. This case has been adjudicated by taking the facts in the case of ACIT vs. Ravinder Kumar Guganani (I.T.A. No. 5129/Del/2011 (A.Y. 2003-04).

2. The common issue raised in the Revenue appeals read as under:-

"The Ld. Commissioner of Income Tax (A) has erred in law as well as on facts in quashing the assessment made by the Assessing Officer as the assessee never raised objection over the jurisdiction and had participated in the assessment proceedings. The issue of jurisdiction cannot be raised in appeal proceedings as per the provisions of section 292BB of the I.T. Act. At the time of completion of assessment jurisdiction over the case vested with the ACIT, Circle, Rohtak, the Department has collected independent information of the assessee on the basis of which Notice u/s. 148 was issued by the ITO, Ward 25(3), Delhi and Notice u/s. 148 was issued validly."

3. In these cases Director of Income Tax, New Delhi conducted large scale investigations to unearth huge racket involving accommodation entry providers. Such entry providers were found to

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I.T.A. NOS. 5128-5132/DEL/2011

be involved in giving accommodation entries in the form of bogus gifts/ loans / share application money/ capital gain etc. The assessee was also alleged to have taken accommodation entries in a bank at Delhi. In view of the information received, the assessment of the assessee was reopened u/s. 147 by issuing notice u/s. 148 on 26.3.2010 by ITO, Ward 25(3), New Delhi. Later on, notice u/s. 142(1) was issued by ITO, Ward 25(3), New Delhi on 20.7.2010. In response to this notice, the counsel of the assessee appeared before ITO, Ward 25(3), New Delhi and filed copies of acknowledgements of return for the A.Y. 2003-04 and 2010-11 with the request to transfer the case to ITO, Ward-I, Rohtak. Accordingly, the case of the assessee was transferred to ITO-I, Rohtak on 13.8.2010. This case was further transferred to ACIT, Rohtak as the assessee had filed return of income for the A.Y. 2010-11 with the ACIT, Rohtak. The assessee stated that the return filed with the ITO, Ward-1, Rohtak for the A.Y. 2003-04 on 29.9.2003 may be treated as return in compliance with the notice under reference. During the course of assessment proceedings, Assessing Officer made the addition of the amount of bogus receipt in this regard as well as commission payment.

4. Upon assessee's appeal Ld. Commissioner of Income Tax (A) considered the following ground of the assessee:-

"That under the facts and circumstances of the case and in law, the notice issued by Assessing Officer, Delhi having no jurisdiction over the assessee is nonest in the eyes of law and consequential proceedings in reference to that notice is also bad in law and void. Hence, the assessment is invalid and may be quashed."

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I.T.A. NOS. 5128-5132/DEL/2011

4.1 Ld. Commissioner of Income Tax (A) observed that ITO, Ward 25(3), New Delhi has issued notice u/s. 148 based on the information received from the Investigation Wing, New Delhi at the Delhi address (probably as reflected in the bank account of the assessee in Bank of Rajasthan, New Delhi) on 26.3.2010 which was followed by notice u/s. 142(1) dated 21.7.2010. Later on, notice u/s. 142(1) was issued by ITO, Ward 25(3), New Delhi on 20.7.2010. In response to this notice, the counsel of the assessee appeared before ITO, Ward 25(3), New Delhi and filed copies of acknowledgements of return for the A.Y. 2003-04 and 2010-11 with the request to transfer the case to ITO, Ward-I, Rohtak. Accordingly, the case of the assessee was transferred to ITO-I, Rohtak on 13.8.2010. This case was further transferred to ACIT, Rohtak as the assessee had filed return of income for the A.Y. 2010-11 with the ACIT, Rohtak.

4.2 Ld. Commissioner of Income Tax (A) noted that ACIT, Rohtak started proceedings for issuance of notice u/s. 142(1) dated 26.8.2010. No notice u/s. 148 was issued by the Assessing Officer having jurisdiction over the case i.e. ACIT, Rohtak. Ld. Commissioner of Income Tax (A) observed that notice u/s. 148 issued by ITO, Ward 25(3), New Delhi was without jurisdiction as he was not the Assessing Officer. The Assessing Officer having jurisdiction over the assessee i.e. ACIT, Rohtak never issued any notice u/s. 148. In these circumstances, Ld. Commissioner of Income Tax (A) referred to the assessee's submissions and case laws and held that the assessment made by the Assessing Officer was quashed and the ground of appeal was allowed. Ld. Commissioner of Income Tax (A) did not go into the merits of the case. He held that the reassessment has been held to be invalid, the issues on merits have become redundant.

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I.T.A. NOS. 5128-5132/DEL/2011

5. Against the above order the Revenue is in appeal before us.

6. We have heard the rival contentions and perused the records. Ld. Departmental Representative submitted that assessee has fully participated in the assessment proceedings. It was only on the request of the assessee that the case was transferred from New Delhi to Rohtak. In this view of this matter, Ld. Departmental Representative submitted that the impugned issue is covered by section 292BB. She submitted that Assessing Officer at Delhi as well as Rohtak had concurrent jurisdiction. The assessee's address in the bank accounts was for New Delhi, as a result which the notice was issued at Delhi address. However, the assessee pointed out that now the assessee's case was being filed at Rohtak. Hence, the case was transferred to Assessing Officer at Rohtak on the request of the assessee. Ld. Departmental Representative submitted that assessee never challenged the address at New Delhi. In these circumstances, she claimed that the Ld. Commissioner of Income Tax (A) erred in quashing the assessment, on the ground that proper jurisdiction was not obtained by the Assessing Officer.

6.1 On the other hand, ld. Counsel of the assessee supported the order of the Ld. Commissioner of Income Tax (A). He referred to the several case laws as under:-

i) ITO vs. Naseem Farms Ltd., ITAT, Delhi 134 TTJ 472.

ii) C.I.T. vs. Cebon India Ltd., Punjab & Haryana High Court, 229 CTR 188.

iii) C.I.T. vs. Mukesh Kumar Agrawal, I.T.A. No. 286 of 2011, Allahabad High Court.

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I.T.A. NOS. 5128-5132/DEL/2011

iv) C.I.T. vs. M/s Deco Glass, I.T.A. No. 180 of 2004, Allahabad High Court.

v) C.I.T. vs. Panorma Builders Pvt. Ltd., Gujarat High Court, Tax Appeal No. 435 of 2011.

vi) Cross Investment Pvt. Ltd. DHC, I.T.A. No. 111/2009.

On the basis of these case laws ld. Counsel of the assessee submitted that Ld. Commissioner of Income Tax (A) has correctly quashed the assessment in these cases as the matter stands covered by the aforesaid case laws.

7. We have carefully considered the submissions and perused the records. We find that from the bank accounts of the assessee at Delhi, it was gathered that assessee was receiving accommodation entries. In this bank a/c assessee had given address at Delhi. Notice u/s. 148 was issued which was followed by notice u/s. 142(1). In response to the notice u/s. 142(1), issued by the ITO, Ward 25(3), New Delhi, the assessee's counsel appeared before him and submitted that the assessee is assessed with the ITO, Ward-I, Rohtak and furnished the copy of acknowledgement of return with the request to transfer the records to ITO, Ward-I, Rohtak. The case was accordingly, transferred from New Delhi from Rohtak. In these circumstances, Ld. Commissioner of Income Tax (A) has noted that no notice u/s. 148 was issued by the Assessing Officer having the jurisdiction over the case i.e. ACIT, Rohtak. In our opinion, this is not valid as per the facts of the case. In these cases, the assessee's address was obtained from the bank records in which the assessee has given address of Delhi and on the same address the notice u/s. 148 was issued followed by notice u/s. 142(1). In response to that notice assessee appeared 6

I.T.A. NOS. 5128-5132/DEL/2011

before the ITO, Ward 25(3), New Delhi and requested that assessee's case is being assessed with ITO, Ward-I, Rohtak and requested to transfer the records to ITO, Rohtak from New Delhi. Thus, we find that there is no case for assessee to have any grievance in this case as assessee was issued notice u/s. 148 at an address given to the bank by the assessee himself. From the same address, in response to the notices assessee responded and submitted that he/she is being assessed at Rohtak and requested that the records may be transferred. In our considered opinion in these circumstances, it can not be said that assessee's case was reopened and assessed without assuming proper jurisdiction. We find that the case laws relied upon by the assessee's counsel are not applicable to the facts of the present case.

7.1 In the case of I.T.O. vs. Naseem Farms Ltd. cited above, the facts of the case were that the assessee company had its office in New Delhi and had been filing the return with the Assessing Officer, New Delhi. The notice was issued u/s. 148 by the Assessing Officer at Agra, who was not shown to be the Assessing Officer of the assessee. Nor he was vested the jurisdiction of the assessee. We find that facts in this case law are quite distinct from the facts in the present case. Because in the present case the address of Delhi was given by the assessee in the Bank account at Delhi. In this view of the matter, the Assessing Officer at Delhi can be said to have concurrent jurisdiction. Pursuant to the notice issued at Delhi address, assessee participated and requested that the case may be transferred from Delhi to Rohtak as he was being assessed there. In these circumstances, the case was transferred to ITO, Ward-1, Rohtak, where the assessment was finally concluded.

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I.T.A. NOS. 5128-5132/DEL/2011

7.2 In the case of C.I.T. vs. Cebon India Ltd. C.I.T.(A) & ITAT had given a concurrent finding that the notice u/s. 143(2) was not served within the stipulated time. It was held that mere giving of dispatch number will not render the said finding to be perverse.

7.3 In the case of C.I.T. vs. Mukesh Kumar Aggarwal cited above, the Hon'ble Allahabad High Court has adjudicated on the facts that the tribunal has returned the findings that the notice under section 143(2) of the Act was admittedly not issued in this case.

7.4 In other cases laws cited above by the ld. Counsel of the assessee there was finding that notice u/s. 143(2) was not served.

8. To recapitulate the facts of these cases is different from the above case laws. In the present case, the ITO, Ward-25(3), New Delhi was having jurisdiction over the assessee in as much as address of the assessee in the bank account was given of Delhi. The notice u/s. 148 was issued on this address and notice u/s. 142(1) was also served upon on the same address. In these circumstances, on the request of the assessee the case records was transferred to the ITO, Ward-I, Rohtak and subsequent assessment proceedings were taken up by the Assessing Officer at Rohtak. In response to the notice assessee has stated that the returns were filed with the ITO, Ward-I, Rohtak for the A.Y. 2003-04 on 29.9.2003 may be treated as return in compliance with the notice under reference.

9. In the background of the aforesaid discussions, we find that assessment in this case cannot be said to have been framed without assuming proper jurisdiction. We find that the notice was very much issued at the address given by the assessee himself in the bank account. In our considered opinion, the orders of the Ld. Commissioner 8

I.T.A. NOS. 5128-5132/DEL/2011

of Income Tax (A) quashing the assessment cannot be sustained. Hence, we set aside the order of the Ld. Commissioner of Income Tax (A). Since the Ld. Commissioner of Income Tax (A) has not adjudicated upon the merits of the case, the matter is being remitted to the Ld. Commissioner of Income Tax (A) to consider the merits of the case and pass a speaking order.

10. In the result, all the five appeals filed by the Revenue are allowed

for statistical purposes.

Order pronounced in the open court on 19/10/2012.

Sd/-

Sd/- Sd/- Sd/-

[U.B.S. BEDI]

BEDI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Date 19/10/2012

SRBHATNAGAR

Copy forwarded to: -

1. Appellant 2. Respondent 3. CIT 4.CIT (A) 5.DR, ITAT

TRUE COPY

By Order,

Deputy Registrar, ITAT, Delhi Benches

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