DCIT, New Delhi V. M/s. Constructions Consortium (India) Pvt. ltd., New Delhi

ITA 1849/DEL/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 3593 (ITAT-DELHI)
• Duration Of Justice: 3 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2011
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 15-04-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: Y KAKKAR
• Keywords: Question of law
• Section: 27; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH B NEW DELHI) BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER I.T.A. NO.1849/DEL/2011 ASSESSMENT YEAR: 2006-07 D.C.I.T., D.C.I.T., D.C.I.T., D.C.I.T., VS. VS. VS. VS. M/S CONSTRUCTIONS CONSORTIU M/S CONSTRUCTIONS CONSORTIU M/S CONSTRUCTIONS CONSORTIU M/S CONSTRUCTIONS CONSORTIUM MM M CIRCLE CIRCLE CIRCLE CIRCLE- -- -3(1), 3(1), 3(1), 3(1), (I) PVT. LTD., T (I) PVT. LTD., T (I) PVT. LTD., T (I) PVT. LTD., T- -- -8, SWARAN MARG, 8, SWARAN MARG, 8, SWARAN MARG, 8, SWARAN MARG, NEW DELHI NEW DELHI NEW DELHI NEW DELHI MOOL CHAND COLONY, ADARSH MOOL CHAND COLONY, ADARSH MOOL CHAND COLONY, ADARSH MOOL CHAND COLONY, ADARSH NAGAR, NEW DELHI NAGAR, NEW DELHI NAGAR, NEW DELHI NAGAR, NEW DELHI PAN NO.AABCC 2027 M (APPELLANT) (RESPONDENT) APPELLANT BY : MS. Y. KAKKAR, DR RESPONDENT BY : SHRI VINOD GUPTA, CA ORDER PER RAJPAL YADAV:JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORDE R OF LEARNED CIT(A) DATED 11-02-2011 PASSED FOR ASSESSME NT YEAR 2006-07. THE REVENUE HAS PLEADED THAT LEARNED CIT(A) HAS ERRED IN QUASHING THE ORDER PASSED U/S 144 OF T HE INCOME-TAX ACT ON THE GROUND THAT NO NOTICE U/S 143 (2) WAS SERVED UPON THE ASSESSEE WITHIN THE STATUTORY TIME PERIOD PROVIDED IN THE PROVISO APPENDED TO SECTION 143(2) OF THE ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HA S FILED ITS RETURN OF INCOME ON 28 TH NOVEMBER, 2006 DECLARING AN 2 INCOME OF `10,13,684/-. THE RETURN WAS PROCESSED U /S 143(1) OF THE ACT ON 22.11.2007 AT THE RETURNED INC OME. ACCORDING TO THE ASSESSING OFFICER, CASE OF THE ASS ESSEE WAS SELECTED FOR SCRUTINY ASSESSMENT. NOTICES U/SS 143 (2) AND 115WE(2) OF THE INCOME-TAX ACT, DATED 10.10.2007 W ERE ISSUED AND SERVED UPON THE ASSESSEE BY SPEED POST F IXING THE HEARING OF THE CASE ON 24.10.2007 AT 10AM. ACC ORDING TO THE ASSESSING OFFICER, THESE NOTICES WERE SERVED ON THE ASSESSEE BUT ON THE ABOVE DATE OF HEARING, NO ONE A PPEARED NOR ANY APPLICATION FOR ADJOURNMENT WAS FILED. HE HAD GRANTED ANOTHER OPPORTUNITY TO THE ASSESSEE BY AFFE CTING THE SERVICE ON 7 TH AUGUST 2008. THE ASSESSING OFFICER HAD PASSED AN EXPARTE ASSESSMENT ORDER U/S 144 OF THE I NCOME- TAX ACT ACCORDING TO HIS BEST JUDGMENT. HE MADE VA RIOUS OF DISALLOWANCES AND DETERMINED THE TAXABLE INCOME OF THE ASSESSEE AT `56,64,580/-. 3. DISSATISFIED WITH THE ASSESSMENT ORDER, ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT(A). IT WAS CONTENDED THAT AS PER THE PROVISO APPENDED TO SECTION 143(2) OF THE INCOME-TAX ACT AT THE RELEVANT TIME, ASSESSING OFFI CER IN ORDER TO SCRUTINIZE ITS RETURN, HAS TO SERVE A NOTI CE U/S 143(2) OF THE INCOME-TAX ACT WITHIN 12 MONTHS FROM THE END OF THE MONTH IN WHICH RETURN HAS BEEN FILED BY THE ASSESSE E. IN OTHER WORDS, NOTICE U/S 143(2) HAD TO BE SERVED UPO N THE ASSESSEE BY 30 TH NOVEMBER 2007. ACCORDING TO THE 3 ASSESSEE, NO SUCH NOTICE WAS EVER SERVED UPON THE ASSESSEE. LEARNED CIT(A) HAS ACCEPTED THE CONTENTI ON OF ASSESSEE ON THE GROUND THAT ASSESSING OFFICER HAS B EEN ALLEGING THAT NOTICE U/S 143(2) DATED 10.10.2007 WA S ISSUED BY HIM BUT THERE IS NO EVIDENCE ON RECORD TO SUGGES T THAT NOTICE WAS INDEED SERVED UPON THE ASSESSEE. SINCE THE NOTICE U/S 143(2) WAS NOT SERVED UPON THE ASSESSEE WITHIN THE TIME LIMIT PROVIDED IN THE PROVISO FOR SCRUTINI ZING THE RETURN OF ASSESSEE, HE QUASHED THE ASSESSMENT ORDER . 4. LEARNED DR WHILE IMPUGNING THE ORDER OF CIT(A) CONTENDED THAT ASSESSING OFFICER HAS SPECIFICALLY R ECORDED IN THE ASSESSMENT ORDER THAT SUCH NOTICE WAS ISSUED ON 10.10.2007 BY SPEED POST. IT HAS NOT BEEN RECEIVED BACK BY THE ASSESSING OFFICER. THIS NOTICE WAS WITHIN 12 M ONTHS FROM THE END OF THE MONTH IN WHICH RETURN WAS FILED BY THE ASSESSEE. IT WAS WITHIN THE LIMITATION. ON THE ST RENGTH OF HONBLE DELHI HIGH COURTS DECISION IN THE CASE OF CIT VS. MADHSY FILMS (P) LTD. REPORTED IN 301 ITR 769, SHE CONTENDED THAT ACCORDING TO SECTION 27 OF THE GENER AL CLAUSES ACT, 1897, IF A NOTICE ON THE ADDRESS GIVEN ON THE RETURN WAS SENT BY THE ASSESSING OFFICER THROUGH SP EED POST AND IT HAS NOT BEEN RECEIVED BACK THEN PRESUMPTION OF SERVICE HAS TO BE DRAWN. SHE POINTED OUT THAT IN T HIS CASE, IDENTICAL FACTS WERE AVAILABLE BEFORE THE HONBLE D ELHI HIGH COURT. HONBLE COURT HAS ALLOWED THE APPEAL OF REV ENUE AND 4 UPHELD THE SERVICE OF NOTICE. SHE FURTHER POINTED OUT THAT IN THE PRESENT CASE ALSO, NO AFFIDAVIT WAS FILED BY TH E ASSESSEE THAT SERVICE OF NOTICE WAS NOT AFFECTED UPON IT. O N THE OTHER HAND, LEARNED COUNSEL FOR THE ASSESSEE APPRISED US THE PROCEDURE FOR AFFECTING THE SERVICE AND THE CONSEQU ENCE OF FAILURE OF EFFECTING SUCH SERVICE WITHIN THE TIME L IMIT PROVIDED IN THE PROVISO. 5. WE HAVE DULY CONSIDERED THE RIVAL CONTENTION AND GONE THROUGH THE RECORD CAREFULLY. THE FACTS CONSIDERED BY THE HONBLE DELHI HIGH COURT IN THE CASE OF MADHSY FILM S (P) LTD. ARE SIMILAR TO THAT OF ASSESSEE. THE OBSERVATIONS MADE BY THE HONBLE COURT IN THIS DECISION ARE WORTH TO NOT E:- SERVICE OF NOTICE U/S 143(2) OF THE ACT MUST BE AFFECTED IN THE MANNER LAID DOWN IN SECTION 282 OF THE ACT. SECTION 282(1) OF THE ACT, WHICH IS RELEVANT FOR DECIDING THE PRESENT CONTROVERSY, READS AS UNDER: 282 SERVICE OF NOTICE GENERALLY-(1) A NOTICE OR REQUISITION UNDER THIS ACT MAY BE SERVED ON THE PERSON THEREIN NAMED EITHER BY POST OR AS IF IT WERE A SUMMONS ISSUED BY A COURT UNDER THE CODE OF CIVIL PROCEDURE, 1908 (5 OF 1908) IN THE PRESENT CASE, THE NOTICE HAS BEEN ISSUED ON OCTOBER 23, 2002, AND WAS SENT THROUGH SPEED POST FROM I.P. ESTATE POST OFFICE ON OCTOBER 25, 2002, AT THE ADDRESS OF THE COMPANY AS PER THE RETURN, WHICH HAS BEEN MENTIONED BY THE ASSESSING OFFICER IN HIS REMAND REPORT. 5 SECTION 27 OF THE GENERAL CLAUSES ACT, 1897, PROVIDES THAT SERVICE BY POST IS DEEMED TO HAVE BEEN EFFECTED BY PROPERLY ADDRESSING PRE-PAYING AND POSTING BY REGISTERED POST, A LETTER CONTAINING THE NOTICE REQUIRED TO BE SERVED. UNLESS THE CONTRARY IS PROVED THE SERVICE IS DEEMED TO HAVE BEEN EFFECTED AT THE TIME WHEN THE LETTER WOULD BE DELIVERED IN THE ORDINARY COURSE OF POST. THOUGH THIS PRESUMPTION IS REBUTTAL BUT IN THE ABSENCE OF PROOF TO THE CONTRARY, THE PRESUMPTION OF PROPER SERVICE OR EFFECTIVE SERVICE OF THE NOTIC E WOULD ARISE. THERE IS NOTHING ON RECORD TO SHOW THAT THE NOTICE DATED OCTOBER 23, 2002, DISPATCHED ON OCTOBER 25, 2002, BY SPEED POST WAS UNDELIVERED OR RECEIVED BACK. UNDER THE NORMAL CIRCUMSTANCES, A PRESUMPTION WILL LIE THAT THIS NOTICE HAS REACHED THE ASSESSEE WITHIN 2/3 DAYS. SINCE THE ENVELOPE CONTAINING THE NOTICE IN QUESTION HAS NOT BEEN RECEIVED BACK BY THE INCOME-TAX DEPARTMENT, THERE IS A PRESUMPTION THAT IT HAS REACHED THE ASSESSEE AND, THIS PRESUMPTION HAS NOT BEEN REBUTTED BY THE ASSESSE AT ALL. NO AFFIDAVIT HAS BEEN FILED BY THE ASSESSE E TO THE EFFECT THAT THE NOTICE WAS NOT RECEIVED BY I T. UNDER THESE CIRCUMSTANCES, WE HOLD THAT THE NOTICE U/S 143(2 OF THE ACT WAS SERVED UPON THE ASSESSEE WITHIN THE PRESCRIBED PERIOD AND AS SUCH THIS FINDING GIVEN BY THE TRIBUNAL THAT NO NOTICE UNDER SECTION 143(2) HAVE BEEN SERVED UPON THE ASSESSEE WITHIN THE PRESCRIBED PERIOD IS HEREBY SET ASIDE AND THE SUBSTANTIAL QUESTION OF LAW IS DECIDED IN THE NEGATIVE IN FAVOUR OF THE REVENUE AND AGAINST THE ASSESSEE. ACCORDINGLY, THE PRESENT APPEAL STANDS ALLOWED. 6 5.1 THE ISSUE REQUIRES TO BE ADJUDICATED BY US IS W HETHER NOTICE U/S 143(2) WAS SENT BY THE ASSESSING OFFICER BY SPEED POST ON 10.10.2007 OR NOT?. IF IT IS ESTABLISHED T HAT SUCH NOTICE WAS SENT ON THE ADDRESS GIVEN IN THE RETURN, THEN ASSESSING OFFICER WOULD HAVE JURISDICTION TO SCRUTI NIZE THE RETURN, IN CASE IT IS ESTABLISHED THAT NO SUCH NOTI CE WAS SENT AND ASSESSING OFFICER HAS ONLY MADE A REFERENCE IN THE ASSESSMENT ORDER THEN HE WOULD BE PRECLUDED TO SCRU TINIZE THE RETURN OF ASSESSEE. THE LEARNED CIT(A) HAS OBS ERVED THAT THERE IS NO EVIDENCE ON THE RECORD, WHICH SUGG EST THE SERVICE OF THE NOTICE. SIMILARLY, IN THE ASSESSMEN T ORDER ASSESSING OFFICER HAS ALLEGED THAT HE HAS SENT THE NOTICE. FACED WITH THIS SITUATION, WE DEEM IT APPROPRIATE T O SET ASIDE THIS ISSUE TO THE FILE OF ASSESSING OFFICER. LEARN ED ASSESSING OFFICER SHALL CONDUCT AN INQUIRY WITH THE POSTAL AU THORITIES AND PLACE ON RECORD THE MATERIAL INDICATING THE SER VICE OF NOTICE. HE SHALL RECORD A SPECIFIC FACTUAL FINDING (I) WHETHER SUCH NOTICE WAS ISSUED ON THE ADDRESS GIVEN IN THE RETURN; AND (II) WHETHER THE POST WAS DELIVERED AT THE ADDR ESS MENTIONED ON THE LETTER. AFTER ASCERTAINING THESE FACTS, HE SHALL DECIDE THE ISSUE OF SERVICE OF NOTICE. IN CA SE, IT IS ESTABLISHED THAT SERVICE HAS BEEN AFFECTED UPON THE ASSESSEE THEN ASSESSING OFFICER SHALL RE-ADJUDICATE THE ISSUES ON MERITS BECAUSE HE HAS DETERMINED THE INCO ME OF THE ASSESSEE IN AN EXPARTE ORDER. THE LEARNED FIRS T APPELLATE AUTHORITY HAS NOT CONSIDERED THE ISSUES ON MERIT. THE 7 ASSESSEE WILL BE AT LIBERTY TO PRODUCE ANY EVIDENCE IN SUPPORT OF ITS EXPLANATION. THE OBSERVATIONS MADE BY US WILL NOT IMPAIR OR INJURE THE CASE OF ASSESSING OFFICER AND WOULD NOT CAUSE ANY PREJUDICE TO THE DEFENCE/EXPLANATION OF THE ASSESSEE. 6. IN RESULT, APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT ON 15.0 7.2011. SD/- SD/- ( K.G. BANSAL ) ( RAJPAL YADAV ) ACCOUNTANT MEMBER JUDICIAL MEMBER DT. 15.07.2011. NS COPY FORWARDED TO:- 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).