IN THE ITAT DELHI BENCH ‘SMC’
Miter Sain (HUF)
versus
Income-tax Officer, Ward-II
IT Appeal Nos. 2856 TO 2858 & 2919 (Delhi) of 2007
& 4416 to 4419 (Delhi) of 2010
[Assessment years 1993-94 & 1994-95]
AUGUST 27, 2012
ORDER
1. These appeals by the respective assessees are filed against the orders of the Ld. Commissioner of Income Tax (A) on quantum as well as penalty issue. Since the matters are connected and the case were heard together, hence, these are being consolidated by this common order for the sake of convenience.
I.T.A. NOS. 2856, 2857, 2858 & 2919/Del/2007
2. The aforesaid appeals are filed by the respective assessees against the additions made by the Assessing Officer in the respective cases. Since the facts in these cases are identical, we are adjudicating the issue by reference I.T.A. No. 2856 and the figures are taken from it.
3. The grounds raised in I.T.A. NO. 2856 read as under:-
“(i) The order of the Ld. Commissioner of Income Tax (A) is bad in law and on facts.
(ii) That the service of notice u/s. 148 is not proper and therefore the Ld. Commissioner of Income Tax (A) should have held the reassessment is illegal and liable to be quashed.
(iii) The Ld. Commissioner of Income Tax (A) has erred in law in upholding the validity of service of notice u/s. 148 of the Act.
(iv) That the Ld. Commissioner of Income Tax (A) has erred in law in summarily dismissing the objections of the appellant on the validity of the reasons to reopen.
(v) That the Ld. Commissioner of Income Tax (A) has erred in law and on facts in confirming the addition of the gift of Rs. 3,50,000/- received by the appellant.
(vi) That the Ld. Commissioner of Income Tax (A) has erred in falling to appreciate the fact that no opportunity to cross examine the deonar was provided before making the addition and the principle of natural justice has not been followed and he ought to have quashed the order deserves the order of the Assessing Officer.
(vii) That the Ld. Commissioner of Income Tax (A) erred in not giving the due weight to the explanation filed by the appellant before Assessing Officer and he should have held the assessment order deserves to be quashed.
(viii) That the Ld. Commissioner of Income Tax (A) erred in not considering that the charging of interest is not proper and no interest is chargeable.
(ix) The appellant craves leave to raise any further ground(s) of appeal at the time of hearing before your honour.”
4. Apropos issue of legality of the service of the notice. Ld. Commissioner of Income Tax (A) considered the issue as under:-
“A perusal of record shows that a notice u/s. 148 of the I.T. Act was issued on 29.5.2001 which appears to have been served on one Shri Dilbag Singh on the same date through Notice Server of the department. On the office copy of this notice there appears a number 1754 dated 31.5.2001. It clearly shows that this notice was issued on 29.5.2001, served through notice server on Shri Dilbang Singh on the same date; after entering it in the dispatch register at Sr. No. 1754 on 31.5.2001 it was dispatched by post also vide postal receipt No. 2653 dated 31.5.2001 which has also been pasted on the dispatch register. I have seen a photocopy of the dispatch register. Therefore, the issues raised by the appellant in para 7(i) and (ii) have no force. It is normal practice in the offices to note the dispatch number and date on the office copy of the notice when it is issued by post, although it has been served earlier by physical delivery on the appellant.
(ii) The appellant has not brought anything on record to prove that the notice sent by the department by post was not received by it and neither has it brought anything to prove that Sh. Dilbag Singh was not its own person. The very fact that the appellant participated in the assessment proceedings shows that it has received the notice issued u/s. 48.
(iii) During appeal proceedings when the submissions of the Assessing Officer were brought into the notice of the A.R. of the appellant. He did not press this ground of appeal.
In view of the above discussion, this ground of appeal is dismissed.”
5. Against the above order the assessee is in appeal before me.
6. I have heard the rival contentions in light of the material produced and precedent relied upon. I find that Ld. Commissioner of Income Tax (A) has given a factual finding that as detailed in his appellate order reproduced above that there was proper service of notice in this case. It is noted that notice u/s. 148 was issued on 29.5.2011 which was served on one Shri Dilbag Singh on the same date through Notice Server of the department. On the office copy of this notice there appears a number 1754 dated 31.5.2001. The notice was dispatched by post also vide postal receipt no. 2653 dated 31.5.2001 which has also been pasted on the dispatch register. In light of the above, Ld. Commissioner of Income Tax (A) observed that the ground on jurisdiction is not sustainable. Ld. Commissioner of Income Tax (A) also noted that assessee has not brought anything on record to prove that the notice sent by the department by post was not received by it and neither has it brought anything to prove that Sh. Dilbag Singh was not its own person. When the assessee was confronted that the above factual finding, the assessee’s counsel did not press this ground before the Ld. Commissioner of Income Tax (A). I find that the finding of the Ld. Commissioner of Income Tax (A) clearly indicate that there was proper service of notice in this case and assessee’s counsel could not controvert the factual findings in the above Ld. Commissioner of Income Tax (A)’s order. Accordingly, this ground is dismissed.
7. Another issue raised by the assessee in this case is that Ld. Commissioner of Income Tax (A) erred in law in summarily dismissing the objections of the appellant on the validity of the reasons to reopen.
8. I have carefully considered the submissions and perused the records. I find that there is no specific ground as mentioned in the ground of appeal before Ld. Commissioner of Income Tax (A), wherein the assessee has agitated on the validity of the reasons to reopen. However, I note that on this issue Ld. Commissioner of Income Tax (A) has observed as under:-
“As regard the initiation of proceedings on the directions of Higher Authorities, the appellant has not made it a ground in its grounds of appeal. However, on merits this contention of the assessee is not acceptable on the ground that at the time of initiating proceedings the Assessing Officer had applied its mind and formed its own belief although the information was supplied by the Investigation Wing/ Survey Wing. The Assessing Officer prima facie had reasons to believe that the assessee had omitted to disclose fully and truly the material facts and that as a consequence income had escaped assessment. Therefore, the notice issued and proceedings subsequent to it are valid. In this regard, reliance is placed on the ratio of decision of Hon’ble Kerala High court in the case of CIT v. Abdul Khader Ahmed 285 ITR 578.”
8.1 I have carefully considered the issue in this regard. I find that assessee has not raised any specific ground in this regard before the Ld. Commissioner of Income Tax (A). Still Ld. Commissioner of Income Tax (A) has adjudicated upon the issue. Hence, it cannot be said that Ld. Commissioner of Income Tax (A) has summarily dismissed the objections of the assessee with regard to the validity of the reasons to reopen. Hence, this ground of appeal is also dismissed.
9. On merits the issue in these appeals pertain to gift received by the respective assessee from the donor as follows:-
