Case Law Details
Simar Kaur Vs ACIT (ITAT Chandigarh)
It is seen that the assessee has consistently maintained its challenge that notice was not issued as it has not been served. The tax authorities have rejected the challenge holding that non-receipt is not equivalent to non-service.
It is seen that though the challenge is recorded the wording in its rejection has been remained ambivalent as no specific finding is found to have been given holding that the notice was issued on a specific date. Nor is there any reference addressing the mode and manner of its issuance nor the fact that it was issued at the correct address. In order to hold that the notice was issued, these above facts need to be recorded and available on record so as to enable an adjudicating authority to conclusively uphold the finding as otherwise sans facts the conclusion is open to the challenge of being arbitrary dehors facts and hence non-maintainable.
Thus, though the dismissal of the ground in the manner worded in the face of the challenge does not inspire much confidence in its correctness, however, even otherwise, I find that the assessee has a good case on the legal challenge posed as well as on merits. No doubt mention of the full investment value finds a mention in the “reason to believe”, the fact remains that addition has been made proportionate to the assessee’s share. This fact by itself may not lead generally to the conclusion that the re-opening was mechanical.
However, in the facts of the present case, when the Sale Deed is taken into consideration, it is clearly evident that it spells out the fact that only part consideration was moving from the assessee and thus if this bare document itself had been seen before the formation of the belief by the A.O. then while recording the reasons the AO would not have recorded the entire consideration as assessee’s contribution and would have noticed that there were other contributors also. The fact that this document was properly seen at the assessment stage as ultimately instead of Rs. 63.51 lakhs was limited to Rs. 28,03,753/- i.e. the assessee’s share. No doubt the assessee was not a regular tax payer and thus, no return could be consulted by the Assessing Officer while exercising the powers of re-opening. However, the fact remains that it was incumbent on him to at least check the facts recorded in the Sale Deed carefully ascertaining the extent of the assessee’s contribution. Since the facts set out in the Sale Deed cognizance of which was taken by the Assessing Officer himself while making the addition were un-disputably clear as is evident from Paper Book pages 10, 11, 11A and 12 the conclusion that admittedly its proper consideration escaped the notice of not only the A.O. but the approving authority also is clearly evident from record. Thus not finding fault in the manner of the specific words recorded in the order to grant approval, which has been the crux of ld AR’s argument the objection is sustained on the fact that no care or attention evidently was taken to consider the bare preliminary facts itself and the power was exercised mechanically without examining the record.
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very clear and good article easy to understand. Thank you