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INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD

ITA.No.2606/Ahd/2015 Asstt. Year: 2008-2009
Pramodari S. Dave (Appellant) vs. ITO (Respondent)
Date of Order: 01-02-2016

ORDER

The assessee is in appeal against the order of the ld.CIT(A)-6, Ahmedabad dated 28.7.2015 passed for the Asstt.Year 2008-09.

2. The appeal of the assessee was time barred before the ld.CIT(A). The ld.CIT(A) has refused to condone the delay and dismissed the appeal being time barred. The ld.counsel for the assessee while impugning the orders of the Revenue authorities took us through the copy of the application for condonation of delay filed at page no.8 of the paper book. The application for condonation of delay submitted before the ld.CIT(A) reads as under:

“I, Pramodrai S. Dave, Resident of Plot No. 2269/A, Hill Drive, Talaja Road, Bhavnagar prays the Hon'ble Commissioner of Income tax (Appeals)-6, Ahmedabad that the delay in filing the appeal arising out of the order under section 144 read with section 147 of the Act for A.Y. 2008-08 may please be condoned for the reasons as specified elsewhere in this document. The relevant facts of the case are as under:

2. I submit that I am an Individual regularly assessed to tax vide PAN AALPD9205B. I further submit that I had furnished my return of income for A.Y. 2008-09 under section 139 of the Act on 11th November, 2009, declaring total income at Rs.90,000/-. In the return so furnished, the source of this income was expressly stated to be that of "Labour Work" undertaken by me.

3. I further submit that when the return of income was furnished, I was a Director of a family owned company M/s. H.K. Dave Pvt. Ltd., which was engaged in the business interalia of clearing, forwarding, stevedoring etc. Since this company was operating from its premises situated at Plot No. 51, "Param", Behind Satyanarayan Road, Bhavnagar and since I also used to occupy this premises, the aforesaid return of income was furnished showing this address as the address for communication.

4. The above mentioned family owned company suffered huge losses and became defaulter of the Bhavnagar Branch of State Bank of India. In the process of recovery of the outstanding dues, the Bank acquired the rights over this property which was eventually transferred to somebody else. The company and thereby the undersigned were accordingly forced to vacate this premises and to move elsewhere at the relevant point of time.

5. During the course of this period, the AO invoked the provisions of section 147 and issued a consequential notice under section 148 of the Act. This was followed by his eventually passing an order under section 144 read with section 147 of the Act on 28th December 2012. In view of the undersigned having vacated the above-mentioned premises, the notices issued by him under section 148 and 142(1) were admittedly served by affixture and panchnama. Similarly, even the order passed by him under section 144 read with section 147 was admittedly served by affixture and panchnama.

6. In view of what has been mentioned above, it is stated that I never received the order so passed by the AO and could not thus file the appeal there against within the prescribed time limit of 30 days from the date of affixture of the order.

7. At a later date, I came to know about huge demand having been created against me. In order to get information of the same, I filed an application under the Right to Information Act, 2005 calling for various details and documents from the Department in this regard. The AO, acting as CPIO under the Right to Information Act, 2005 passed an order under section 7(1) of this Act on 22nd January 2015 and supplied the certified copies of the requisitioned documents to me on 28th January 2015. This appeal is being furnished on the basis of the documents so received and the same is being furnished within 30 days from the date of receipt of these documents through the RTI route.

8. In view of what has been stated above, it is prayed that the delay in filing the appeal, if counted from the date of service of the order by affixture, may please be treated as arising out of justifiable reasons which were clearly beyond the control of the undersigned. The same may accordingly please be condoned so as to adjudicate the appeal on merit of the case.”

3. I find that in the assessment order, the ld.AO has observed that the assessee did not file return of income for the Asstt.Year 2008-09 as required under section 139(1) of the Act. Whereas, the assessee has alleged that such return was filed by him on 11.1.12009. Whereas, the AO has issued notice under section 148 of the Income Tax Act on 6.4.2011 after habouring a belief that no return of income under section 139(1) was filed. PAN quoted in the assessment order as well as according to the assessee are same. Thus, prima facie, it emerges out that theld.AO has not verified the details of PAN before making such observation and issuance of notice. The claim of the assessee is that no notice was served upon him. On the other hand, the claim of the AO is that service of notice was effected by affixture at the residence of the assessee. The assessee contended that he was paid director of family owned company, which had suffered huge loss and State Bank of India started recovery proceedings of the outstanding dues. The office premises was vacated and it was sealed by the bank. He was not available even at the residential address for some of the period, and therefore, the notice could not be served upon him. The assessee, when came to know about the demand raised by the Revenue, he applied under Right to Information Act and collected details of services of the alleged notice. Such details are being compiled with on page no.12 of the paper book, where copy of the order passed by the Central Public Information Office has been placed on record. On the strength of these details, the assessee has contended that any delay in filing appeal before the CIT(A) ought to be condoned and the appeal ought to be heard on merit.

4. On the other hand, the ld.DR contended that the CIT(A) has rejected application the assessee on the ground that there is no change in the residential address of the assessee mentioned in the RTI application or in the appeal memo. Therefore, it could be assumed that the notice by affixture must have been effected upon the assessee.

5. I have duly considered rival contentions and gone through the record carefully. The case of the assessee is that he was a paid director of a family owned company, M/s.H.K. Dave P. ltd. It was engaged in the business inter alia of clearing, forwarding, stevedoring etc. The Company was operating from its premises situated at Plot No.51, “Param”, B/h. Satyanarayan Road, Bhavnagar. The Company had suffered huge loss and became defaulter of the State Bank of India. The bank has started recovery proceedings against the company and ultimately business premise was closed. The assessee has filed his return of income declaring income under section 44AD on contractual receipts. Such return was filed by the assessee on 11.11.2009. According to the AO, the assessee has not filed return of income as required under section 139(1) of the Act. He further observed that notices issued upon the assessee have been returned with postal remark “left”. He served notice issued under section 148 by an affixture. Subsequent notices have been served by affixture at the residential address of the assessee. The contention of the assessee is that no notice was received by him. He came to know about the demand, and thereafter applied under RTI Act for supply of copies of the assessment order and other notices. I have perused the copy of the notice dated 15.3.2012 available at page no.15 of the paper book. This is a report from Mini Shibu, Inspector, Office of the Income Tax Department, ward-1(4), Bhavnagar.

According to the AO notice under section 148 was served through registered post on 6.4.2011, and thereafter it was served by affixture. There is a mismatch in the dates. Notice under section 142(1) as stated in the assessment was served on 4.7.2012 by affixture, whereas notice u/s.148 has been stated to be served on 6.4.2011. Notice u/s.142(1) would be served after the service of notice under section 148. There is an apparent procedural defect. Apart from the above, in the copy of notice, nowhere it is discernible whether the Inspector has associated any independent witness while affixing the notice on the premises of the assessee. There is no signature of such witness. The manner of the affixture is also not discernible from the record. These circumstances give me an impression that there might be procedural lapse in the service of notice and the assessee was rightly prevented from filing appeal well in time. Taking into consideration the details submitted by the assessee, collected under RTI Act along the application for condonation of delay extracted (supra), I am satisfied that reasonable cause is available for not submitting the appeal in time. Though, there is a delay of more than two years, but after the factum of assessment order coming to the notice of the assessee, there is no substantial delay. He has complied every aspect within the limitation. Therefore, I condone the delay in filing the appeal before the ld.CIT(A) and restore the issues to the file of the CIT(A) for adjudicating them on merit. 6. In the result, appeal of the assessee is allowed for statistical purpose.

Order pronounced in the Court on 1st February, 2016 at Ahmedabad.

(RAJPAL YADAV)
JUDICIAL MEMBER

Appeal Filing Delay condoned for procedural defects in notice served through affixture for want of signature of independent witness, manner of affixture | 02-02-2016 |