Sri Kempa Bhovi , Mysore V. The Income Tax Officer Ward-1(1), Mysore

ITA 1305/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 5035 (ITAT-BANGALORE)
• Duration Of Justice: 3 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-08-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 23-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K N DHANDA
• Keywords: Salary income; Period of limitation; Reassessment proceedings
• Section: 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER ITA NO. 1305/BANG/2018 ASSESSMENT YEAR : 2008 - 09 SRI KEMPA BHOVI, 1878, 3 RD CROSS, SRIRAMPURA 3 RD STAGE, MYSORE. PAN: AGDPB 9815B VS. THE INCOME TAX OFFICER, WARD 1(1), MYSURU. APP ELLANT RESPONDENT APP ELLANT BY : SHRI NARENDRA SHARMA, ADVOCATE RESPONDENT BY : SHRI K.N. DHANDAPANI, JT.CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 16.07 .2018 DATE OF PRONOUNCEMENT : 08. 08. 2018 O R D E R THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORD ER DATED 30.11.2017 OF CIT(APPEALS), MYSORE RELATING TO ASSESSMENT YEAR 2008-09. 2. I SHALL FIRST TAKE UP FOR CONSIDERATION GROUND N OS.2 TO 4 WHICH CHALLENGES THE VERY INITIATION OF PROCEEDINGS U/S. 147 OF THE ACT. THE FACTS RELEVANT FOR ADJUDICATION OF THE AFORESAID GROUNDS ARE AS FOLLOWS. 3. THE ASSESSEE IS AN INDIVIDUAL AND HE FILED HIS RETURN OF INCOME ON 18.07.2008 FOR AY 2008-09 VIDE ACK. NO.0141108306 D ECLARING TOTAL INCOME OF RS.1,20,946. IN THE SAID RETURN, HE HAS ADMITTED INCOME FROM SALARY OF RS.2,01,939, LOSS FROM HOUSE PROPERTY OF RS.24,665 AND CHAPTER VI-A DEDUCTION OF RS.56,328. ITA NO. 1305/BANG/2018 PAGE 2 OF 7 4. THE AO ISSUED NOTICE U/S. 148 OF THE INCOME-TAX ACT, 1961 [THE ACT] CALLING UPON THE ASSESSEE TO FILE RETURN OF I NCOME. THE REASONS FOR INITIATING PROCEEDINGS U/S. 148 OF THE ACT WAS BECA USE OF INFORMATION RECEIVED BY THE AO THAT THE ASSESSEE HAD NOT DISCLO SED INCOME FROM SALE OF A SITE AT MYSORE. THE ASSESSEE IN RESPONSE TO T HE NOTICE U/S. 148 CLAIMED THAT THAT THE NOTICE U/S. 148 WAS NOT ISSUE D ON 31.03.2015 AS PER THE RECORDS MAINTAINED AT THE POSTAL AUTHORITY. 5. AS PER THE PROVISIONS OF SECTION 149 OF THE ACT, A NOTICE U/S. 148 CANNOT BE ISSUED BEYOND A PERIOD OF 6 YEARS FROM TH E END OF THE RELEVANT ASSESSMENT YEAR. IT IS NOT IN DISPUTE THAT THE LAS T DATE FOR ISSUE OF NOTICE U/S. 148 OF THE ACT IN THE PRESENT CASE AS PER SECT ION 149 WAS 31.03.2015. THE CASE OF THE REVENUE IS THAT THE AO ISSUED NOTIC E U/S. 148 OF THE ACT ON 31.3.2015. THE CASE OF THE ASSESSEE IS THAT THE SA ID POSTAL COVER CONTAINING NOTICE U/S. 148 WAS GIVEN TO THE POSTAL AUTHORITY AT 19.21 HOURS ON 1.4.2015. THE EVIDENCE ON RECORD SHOWS THAT THE POST CONTAINING THE NOTICE U/S. 148 WAS GIVEN TO THE POSTAL AUTHORITIES ON THE EVENING OF 01.04.2015 AT 19.21 HRS. ONLY. THE QUESTION IS WHE THER THE ORDER OF REASSESSMENT SHOULD BE ANNULLED FOR THE REASON THAT THE PROCEEDINGS U/S. 148 HAVE NOT BEEN INITIATED WITHIN THE PERIOD OF LI MITATION. 6. SECTION 149 OF THE ACT INSOFAR AS THE SAME IS RE LEVANT FOR THE PURPOSE OF THE PRESENT PETITION READS THUS: 149. TIME LIMIT FOR NOTICE. (1) NO NOTICE UNDER SECTION 148 SHALL BE ISSUED FOR THE RELEVANT ASSESSMENT YEAR,- (A) IF FOUR YEARS HAVE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS THE CASE FALLS UNDER CLAUSE (B); (B) IF FOUR YEARS, BUT NOT MORE THAN SIX YEARS, HA VE ELAPSED FROM THE END OF THE RELEVANT ASSESSMENT YEAR UNLESS THE INCO ME ITA NO. 1305/BANG/2018 PAGE 3 OF 7 CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AMOU NTS TO OR IS LIKELY TO AMOUNT TO ONE LAKH RUPEES OR MORE FOR THA T YEAR. EXPLANATION IN DETERMINING INCOME CHARGEABLE TO T AX WHICH HAS ESCAPED ASSESSMENT FOR THE PURPOSES OF THIS SUB-SEC TION, THE PROVISIONS OF EXPLANATION 2 OF SECTION 147 SHALL AP PLY AS THEY APPLY FOR THE PURPOSES OF THAT SECTION. (2) THE PROVISIONS OF SUB-SECTION (1) AS TO THE I SSUE OF NOTICE SHALL BE SUBJECT TO THE PROVISIONS OF SECTION 151. 7. IT IS NOT DISPUTED BEFORE US THAT THE NOTICE U/S .148 OF THE ACT WAS HANDED OVER TO THE POSTAL AUTHORITIES FOR DESPATCH TO THE ASSESSEE ONLY ON 1.4.2015 AT 19.21 HRS. IT IS ALSO NOT DISPUTED BEF ORE US THAT THE LAST DATE FOR ISSUE OF NOTICE U/S.148 OF THE ACT IN TERMS OF SEC. 149 OF THE ACT IS 31.3.2015. IT IS THE PLEA OF THE REVENUE THAT THE OFFICER SIGNED THE NOTICE U/S.148 OF THE ACT ON 31.3.2015 AND THE SAME WAS RE CORDED IN HER DESPATCH REGISTER ON 31.3.2015. THEREFORE, AS FAR AS THE AO IS CONCERNED THE NOTICE WAS ISSUED WITHIN THE DUE DATE AS PER SE C.149 OF THE ACT. 8. IDENTICAL ISSUE AS TO WHETHER THE NOTICE OF ISSU E OF NOTICE CAN BE REGARDED AS 31.3.2015 WHEN THE OFFICER SIGNED THE N OTICE U/S.148 OF THE ACT; OR THE DATE OF ISSUE SHOULD BE CONSTRUED ONLY AS THE DATE ON WHICH THE ENVELOPE CONTAINING THE SAID NOTICE IS HANDED OVER TO THE POSTAL AUTHORITIES FOR DELIVERY TO THE ASSESSEE, SHOULD BE CONSTRUED A S THE DATE OF ISSUE OF NOTICE U/S.149 OF THE ACT; WAS CONSIDERED BY THE HO NBLE GUJARAT HIGH COURT IN THE CASE OF KANUBHAI M PATEL HUF - PETITIO NER(S) VS. HIREN BHATT OR HIS SUCCESSORS TO OFFICE & 4 - RESPONDENT( S) 334 ITR 25 (GUJ). IN THE AFORESAID DECISION, THE FACTS WER E THE ASSESSEES WERE ASSESSED TO INCOME TAX BY THE INCOME TAX OFFICER, A T AHMEDABAD FOR ASSESSMENT YEAR 2003-04. RETURN OF INCOME WAS FILED ALONG WITH STATEMENT OF INCOME ETC. NONE OF THE PETITIONERS HAVE RECEIVE D ANY NOTICE UNDER SECTION 143(2) OF THE INCOME TAX ACT, 1961 (THE ACT ). ON 8.04.2010, EACH ITA NO. 1305/BANG/2018 PAGE 4 OF 7 OF THE PETITIONERS RECEIVED A NOTICE UNDER SECTION 148 OF THE ACT DATED 31.03.2010 FOR ASSESSMENT YEAR 2003-04 FOR REOPENIN G THE ASSESSMENT UNDER SECTION 147 OF THE ACT. ACCORDING TO THE PETI TIONERS, SINCE THE NOTICE WAS DATED 31.03.2010 AND ON THE SPEED POST COVER IN WHICH THE NOTICE WAS RECEIVED BY THE PETITIONERS, THERE WAS A STAMP OF 31 MAR 2010 OF THE SPEED POST BOOKING CENTRE, AHMEDABAD, WHEREAS THE N OTICE COVERS WERE DELIVERED TO THE PETITIONERS ON 08.04.2010 BY SPEED POST, THE PETITIONERS GOT SUSPICIOUS AS TO THE CORRECTNESS OF THE DATE OF ISS UE OF THE NOTICE BY THE ASSESSING OFFICER. ON FURTHER ENQUIRY FROM THE POS TAL DEPARTMENT IT TRANSPIRED THAT THE NOTICE U/S.148 OF THE ACT WAS A CTUALLY DELIVERED FOR TRANSMISSION TO THE ASSESSEES TO THE POSTAL DEPARTM ENT ONLY ON 07.04.2010. THE ASSESSEES THEREFORE, CHALLENGED THE LEGALITY AND VALIDITY OF THE NOTICES DATED 31.03.2010 ISSUED BY THE AO UN DER SECTION 148 OF THE ACT AS BEING TIME BARRED, CONTENDING THAT THE IMPUG NED NOTICES HAVE BEEN ISSUED BEYOND THE TIME LIMIT PRESCRIBED UNDER THE P ROVISIONS OF SECTION 149 OF THE ACT, WHICH WAS ADMITTEDLY 31.3.2010. THE AO TOOK THE STAND THAT SINCE NOTICES WERE DULY SIGNED ON 31.03.2010, THE S AME SHOULD BE CONSTRUED AS HAVING BEEN ISSUED WITHIN THE PERIOD O F LIMITATION. THE HONBLE GUJARAT HIGH COURT QUASHED THE REASSESSMENT PROCEEDINGS AS BARRED BY LIMITATION OBSERVING AS FOLLOWS: 13. ON A PLAIN READING OF SECTION 149, IT IS APPAR ENT THAT UNDER THE SAID PROVISION, THE MAXIMUM TIME LIMIT FOR ISSUANCE OF NOTICE UNDER SECTION 148 IS SIX YEARS FROM THE END OF THE RELEVA NT ASSESSMENT YEAR. IN THE PRESENT CASE, THE RELEVANT ASSESSMENT YEAR I N EACH OF THE PETITIONS IS 2003-2004; THE IMPUGNED NOTICES ARE DA TED 31.03.2010; AND THE SAID NOTICES WERE SENT FOR BOOKING TO THE S PEED POST CENTRE, AHMEDABAD, ON 07.04.2010. ON BEHALF OF THE PETITION ERS, IT HAS BEEN CONTENDED THAT THE NOTICES WHICH HAVE BEEN DISPATCH ED FOR SERVICE ONLY ON 07.04.2010, ARE CLEARLY TIME BARRED INASMUC H AS THE DATE OF DISPATCH WOULD BE THE DATE OF ISSUE OF THE NOTICES. WHEREAS, ON BEHALF OF THE REVENUE, IT HAS BEEN CONTENDED THAT THE NOTI CES WERE ACTUALLY SIGNED ON 31.3.2010, HENCE, THE SAID DATE WOULD BE THE DATE OF ISSUE ITA NO. 1305/BANG/2018 PAGE 5 OF 7 AND AS SUCH, THE IMPUGNED NOTICES HAVE BEEN ISSUED WITHIN THE TIME LIMIT PRESCRIBED UNDER SECTION 149 OF THE ACT. 14. IN THE BACKGROUND OF THE AFORESAID FACTS AND C ONTENTIONS, THE CORE ISSUE THAT ARISES FOR CONSIDERATION IS AS TO WHEN C AN THE NOTICE UNDER SECTION 148 OF THE ACT BE SAID TO HAVE BEEN ISSUED. IN THIS CONTEXT IT WOULD BE NECESSARY TO EXAMINE THE TRUE IMPORT OF TH E EXPRESSION SHALL BE ISSUED AS EMPLOYED IN SECTION 149 OF THE ACT. 15. THE EXPRESSION ISSUE HAS BEEN DEFINED IN BLAC KS LAW DICTIONARY TO MEAN TO SEND FORTH; TO EMIT; TO PROM ULGATE; AS, AN OFFICER ISSUES ORDERS, PROCESS ISSUES FROM COURT. T O PUT INTO CIRCULATION; AS, THE TREASURY ISSUES NOTES. TO SEND OUT, TO SEND OUT OFFICIALLY; TO DELIVER, FOR USE, OR AUTHORITATIVELY ; TO GO FORTH AS AUTHORITATIVE OR BINDING. WHEN USED WITH REFERENCE TO WRITS, PROCESS, AND THE LIKE, THE TERM IS ORDINARILY CONSTRUED AS I MPORTING DELIVERY TO THE PROPER PERSON, OR TO THE PROPER OFFICER FOR SER VICE ETC. IN P. RAMANATHAN AIYERS LAW LEXICON THE WORD ISSU E HAS BEEN DEFINED AS FOLLOWS: ISSUE. AS A NOUN, THE ACT OF SENDING OR CAUSING TO GO FORTH; A MOVING OUT OF ANY ENCLOSED PLACE; EGRESS; THE ACT O F PASSING OUT; EXIT; EGRESS OR PASSAGE OUT (WORCESTER DICT.); THE ULTIMATE RESULT OR END. AS A VERB, TO ISSUE MEANS TO SEND OUT, TO SEND OU T OFFICIALLY; TO SEND FORTH; TO PUT FORTH; TO DELIVER, FOR USE, OR U NAUTHORITATIVELY: TO PUT INTO CIRCULATION; TO EMIT; TO GO OUT (BURRILL); TO GO FORTH AS A AUTHORITATIVE OR BINDING, TO PROCEED OR ARISE FROM; TO PROCEED AS FROM A SOURCE (CENTURY DICT.) ISSUE OF PROCESS. GOING OUT OF THE HANDS OF THE CLE RK, EXPRESSED OR IMPLIED, TO BE DELIVERED TO THE SHERIFF FOR SERV ICE. A WRIT OR NOTICE IS ISSUED WHEN IT IS PUT IN PROPER FORM AND PLACED IN AN OFFICERS HANDS FOR SERVICE, AT THE TIME IT BECOMES A PERFECTED PROCESS. ANY PROCESS MAY BE CONSIDERED ISSUED IF MADE OUT AND PLACED IN THE HANDS OF A PERSON AUTHORISED TO SERVE IT, AN D WITH A BONA FIDE INTENT TO HAVE IT SERVED. ITA NO. 1305/BANG/2018 PAGE 6 OF 7 16. THUS, THE EXPRESSION TO ISSUE IN THE CONTEXT O F ISSUANCE OF NOTICES, WRITS AND PROCESS, HAS BEEN ATTRIBUTED THE MEANING, TO SEND OUT; TO PLACE IN THE HANDS OF THE PROPER OFFICER FO R SERVICE. THE EXPRESSION SHALL BE ISSUED AS USED IN SECTION 149 WOULD THEREFORE HAVE TO BE READ IN THE AFORESAID CONTEXT. IN THE PR ESENT CASE, THE IMPUGNED NOTICES HAVE BEEN SIGNED ON 31.03.2010, WH EREAS THE SAME WERE SENT TO THE SPEED POST CENTRE FOR BOOKING ONLY ON 07.04.2010. CONSIDERING THE DEFINITION OF THE WORD ISSUE, IT IS APPARENT THAT MERELY SIGNING THE NOTICES ON 31.03.2010, CANNOT BE EQUATE D WITH ISSUANCE OF NOTICE AS CONTEMPLATED UNDER SECTION 149 OF THE ACT . THE DATE OF ISSUE WOULD BE THE DATE ON WHICH THE SAME WERE HAND ED OVER FOR SERVICE TO THE PROPER OFFICER, WHICH IN THE FACTS O F THE PRESENT CASE WOULD BE THE DATE ON WHICH THE SAID NOTICES WERE AC TUALLY HANDED OVER TO THE POST OFFICE FOR THE PURPOSE OF BOOKING FOR THE PURPOSE OF EFFECTING SERVICE ON THE PETITIONERS. TILL THE POINT OF TIME THE ENVELOPES ARE PROPERLY STAMPED WITH ADEQUATE VALUE OF POSTAL STAMPS, IT CANNOT BE STATED THAT THE PROCESS OF ISS UE IS COMPLETE . IN THE FACTS OF THE PRESENT CASE, THE IMPUGNED NOTI CES HAVING BEEN SENT FOR BOOKING TO THE SPEED POST CENTRE ONLY ON 0 7.04.2010, THE DATE OF ISSUE OF THE SAID NOTICES WOULD BE 07.04.20 10 AND NOT 31.03.2010, AS CONTENDED ON BEHALF OF THE REVENUE. IN THE CIRCUMSTANCES, IMPUGNED THE NOTICES UNDER SECTION 1 48 IN RELATION TO ASSESSMENT YEAR 2003-04, HAVING BEEN ISSUED ON 07.0 4.2010 WHICH IS CLEARLY BEYOND THE PERIOD OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, ARE CLEARLY BARRED BY LIMITATION A ND AS SUCH, CANNOT BE SUSTAINED. 9. THE FACTS OF THE ASSESSEES CASE ARE IDENTICAL T O THE FACTS OF THE CASE DECIDED BY THE HONBLE GUJARAT HIGH COURT. TH E RATIO LAID DOWN THEREIN WILL THEREFORE CLEARLY APPLY TO THE FACTS O F THE PRESENT CASE. SINCE IN THE PRESENT CASE THE POSTAL COVER CONTAINING THE NO TICE U/S.148 OF THE ACT WAS HANDED OVER TO THE POST OFFICE ONLY ON 1.4.2015 , I AM OF THE VIEW THAT THE NOTICE U/S.148 OF THE ACT HAS BEEN ISSUED BEYON D THE PERIOD OF LIMITATION LAID DOWN IN SEC.149 OF THE ACT. THEREF ORE, THE PROCEEDINGS U/S.148 OF THE ACT HAVE NO LEGS TO STAND AND ARE RE QUIRED TO BE QUASHED AND ARE HEREBY QUASHED. FOR THE FOREGOING REASONS, I ALLOW THE APPEAL OF THE ASSESSEE AND QUASH NOTICE U/S. 148 OF THE INCOM E-TAX ACT, 1961. ITA NO. 1305/BANG/2018 PAGE 7 OF 7 10. IN THE RESULT, APPEAL BY THE ASSESSEE IS ALLOW ED. PRONOUNCED IN THE OPEN COURT ON THIS 08 TH DAY OF AUGUST, 2018. SD/- ( N.V. VASUDEVAN ) JUDICIAL MEMBER BANGALORE, DATED, THE 08 TH AUGUST, 2018. / D ESAI S MURTHY / COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.