COMMISSIONER OF INCOME TAX and ANOTHER V. M/S SARVPRIYA SAHKARI AVAS SAMITI LTD.

IAPL/686/2007

AI Insights

The case involves an appeal by the Commissioner of Income Tax against the decision of the Income Tax Appellate Tribunal, which had quashed a reassessment order for the assessment year 1996-97. The Tribunal's decision was based on the grounds that the reassessment notice was issued on the last date of limitation and that the Assistant Commissioner of Income Tax, Circle, NOIDA, lacked territorial jurisdiction over the assessee. The High Court, however, found that the notice was validly issued and that the Tribunal's findings on jurisdiction were unreasoned and perverse. Consequently, the High Court set aside the Tribunal's order and remitted the matter back for a fresh decision on merits.

• Counselvise Citation: [2021] 140 COUNSELVISE.COM (IT) 742807 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 08-09-2021
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: R S AGRAWAL; ASHISH BANSAL; MAYANK JAIN
• Assessee Lawyers: PRAVEEN KUMAR
• Keywords: Competent authority; Jurisdiction; Notice; Reassessment; Valid service
• Section: 148; 149

Judgement Text

"Court No. - 3 Case :- INCOME TAX APPEAL No. - 686 of 2007 Appellant :- Commissioner Of Income Tax And Another Respondent :- M/S Sarvpriya Sahkari Avas Samiti Ltd. Counsel for Appellant :- Praveen Kumar Counsel for Respondent :- R.S.Agrawal,Ashish Bansal,Mayank Jain Hon'ble Naheed Ara Moonis,J. Hon'ble Saumitra Dayal Singh,J. Earlier, the respondent-assessee had filed appearance. Names of three counsels for the assessee are shown. Learned counsel last engaged had earlier stated that he had no instructions. Accordingly, fresh notices were issued to the assessee to engage another counsel. Learned counsel appearing for the revenue has placed on record the affidavit of service. Office report dated 25.01.2019 indicates that notice dispatched by RPAD has been returned unserved. In any case, none of the counsel engaged earlier has withdrawn their appearance. List revised. In view of statement already on record, the matter has been proceeded ex parte. Heard Shri Praveen Kumar, learned counsel for the revenue. Present appeal arises from the order of the Income Tax Appellate Tribunal, Delhi Bench \"H\", New Delhi, dated 23.03.2007 in ITA No. 3651/Del/2005 for the A.Y. 1996-97. By that order, the Tribunal has allowed the assessee's appeal and quashed the reassessment order passed by the assessing authority dated 24.08.2005. While admitting the appeal, vide order dated 25.7.2017, the following questions of law had been framed: \"(1) Whether the notice issued under Section 148 of the Act was issued by the competent authority? and; (2) Whether the service of notice at the NOIDA address of the respondent -assessee is a valid service?\" At this stage, learned counsel for the revenue has submitted that two other questions that go to the root of the matter, also arise. Thus, the following questions of law have also been pressed: \"3. Whether the reassessment proceedings initiated by Assistant Commissioner of Income Tax, Circle, NOIDA, suffered from inherent lack of jurisdiction, since according to the Tribunal, the reassessment notice was issued by that assessing authority on 31.3.2003? 4. Whether the finding of the Tribunal that the Assistant Commissioner of Income Tax, Circle NOIDA, had no territorial jurisdiction over the assessee, is perverse and unreasoned?\" Having heard learned counsel for the revenue and having perused the record, according to the revenue, reassessment proceedings were initiated against the assessee vide notice dated 31.03.2003 issued by the Assistant Commissioner of Income Tax, Circle, NOIDA. The date of the notice is borne out from the face of the same being 26.03.2003. Its copy also reveals that there exists an endorsement of the service having been refused by Sunil Kumar Chauhan, the erstwhile Secretary of the Society. Some information also appears to have been disclosed by the said Sunil Kumar Chauhan with respect to correct address of the respondent-assessee. Without going into the aspect of the correct addresss of the assessee, it is the finding of the Tribunal that the jurisdictional notice issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act) was dispatched by post, on 31.03.2003. Under Section 149 of the Act, the limitation is prescribed with reference to the date of issue of such notice and not with respect to date of service of that notice. Again, it appears to have remained undisputed before the Tribunal that the limitation to issue that notice was six years. It ended on 31.03.2003. The notice under Section 148 of the Act was issued on the last date of limitation, as per the finding of the Tribunal, itself. Therefore, conclusion drawn by the Tribunal that that notice was a nullity, is erroneous. As to the other aspect, whether the Assistant Commissioner of Income Tax, Circle, NOIDA, was the authority having jurisdiction over the assessee, the finding of the Tribunal appears to be wholly unreasoned and perverse. In that regard, it does appear that the assessee raised the aforesaid ground at the fag end of the assessment proceeding, however, no material or evidence appears to have been brought before the Tribunal to establish either that the Assistant Commissioner of Income Tax, Circle, NOIDA, was never the assessing officer of the assessee or that his jurisdiction was later transferred or otherwise vested in any other authority. In that regard, it may be further noted that upon the notice being eventually served on the assessee, it did participate in the assessment proceedings and raised objection as to the merits which was rejected. The Tribunal has failed to consider that issue on merit and instead quashed the reassessment order, in entirety. In view of the above, the questions of law 3 & 4, framed above, are answered in favour of the revenue and against the assessee. The order of the Tribunal is set aside and the matter remitted to the Tribunal to decide the appeal afresh, on merits. The present appeal is accordingly allowed. The questions of law initially framed by this Court, are left unanswered. Order Date :- 8.9.2021 Prakhar "