ACIT, Meerut V. Sh. Diwakar Tiwari, Noida

ITA 2368/DEL/2010

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3419 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 20-07-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 19-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: VINOD K GOEL
• Keywords: Invalid notice; Period of limitation; Validity of assessment; Time period of passing order
• Section: 143(3); 148

Judgement Text

ITA NO. 2368/DEL/2010 A.Y. 2006-07 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B NEW DELHI BEFORE SHRI R.P. TOLANI, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER I.T.A. NO. 2368/DEL/2010 A.Y. : 2006-07 ASSTT. COMMISSIONER OF INCOME TAX CIRCLE(1), MEERUT VS. SH. DIWAKAR TIWARI, R/O C-1/15, SECTOR-36, GAUTAM BUDH NAGAR, NOIDA (PAN: AAJPT9382P) (APPELLANT ) (RESPONDENT ) ASSEESSEE BY : SH. VINOD K. GOEL, ADVOCATE DEPARTMENT BY : SH. B. KISHORE. D.R. PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) DATED 09.3.201 0 PERTAINING TO ASSESSMENT YEAR 2006-07. 2. THE ISSUES RAISED READ AS UNDER:- WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE CASE , THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN ANNULL ING THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER INSPITE OF THE FAC T THAT PROPER SERVICE OF NOTICE U/S 143(2) OF THE IT ACT WAS MADE THROUGH PO STAL AUTHORITIES? WHETHER IN THE FACTS AND CIRCUMSTANCE OF THE CASE , THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW IN IGNORIN G THE DECISION IN THE CASE OF MAYAVATI VS. C.I.T. IN WP (C) 8768/2008 WHI CH RE-INFORCED THE VALIDITY OF ASSESSMENT ORDER? ITA NO. 2368/DEL/2010 A.Y. 2006-07 2 3. THE ASSESSEE IN THIS CASE HAS FILED THE RETURN ON 21.7.2006 DECLARING TOTAL INCOME OF RS. 8,22,431/-. ORDER UNDER SECTION 143( 1) WAS PASSED ON 10.8.2007 AT THE RETURNED INCOME. THE CASE WAS SELECTED FOR SC RUTINY AND NOTICE U/S 143(2) WAS ISSUED ON 30.7.2007. ASSESSING OFFICER PROCE EDED TO MAKE CERTAIN ADDITIONS AND DISALLOWANCES AND THE TOTAL INCOME ASSESSED WAS RS. 14,64,170/-. 4. BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEA LS) THE ASSESSEE AT THE THRESHOLD SUBMITTED THAT NOTICE U/S 143(2) WAS SER VED UPON AFTER 31.7.2007 AND HENCE, THE PROCEEDING U/S 143(3) IS BARRED BY LIMIT ATION. ASSESSEE FURTHER SUBMITTED THAT ASSESSEES COUNSEL HAS OBJECTED BEFO RE THE ASSESSING OFFICER VERBALLY AS WELL AS IN WRITING THROUGH LETTER DATED 6.8.2007 IN THIS REGARD. IN THE SAID LETTER ASSESSEE HAD INFORMED THE ASSESSING OF FICER THAT ASSESSEE HAD RECEIVED THE SAID NOTICE DATED 30.7.2007 ON 03.08.2 008, FIXING THE DATE OF HEARING ON 6.8.2007, WHICH IS AFTER TWELVE MONTHS. HENCE, NOTICE U/S 143(2) WAS CLAIMED TO BE BARRED BY LIMITATION. UPON LD. COMMISSIONER OF INCOME TAX (APPEALS) ENQUIRY FROM THE ASSESSING OFFICER, THE ASSESSING O FFICER INFORMED AND ENCLOSED PHOTOCOPY OF THE NOTICE ISSUED U/S 143(2) DATED 30. 7.2007 SENT TO THE ASSESSEE BY SPEED POST RECEIPT DATED 30.7.2007. LD. COMMISS IONER OF INCOME TAX (APPEALS) IN THIS REGARD, ALSO REFERRED TO THE DECI SION OF THE ITAT IN THE CASE OF H.P. BHARDWAJ & SONS IN ITA NO. 4269/DEL/2005 DATED 31.3.2006. LD. COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT THE RATIO OF THE ABOVE DECISION IS APPLICABLE IN THE PRESENT CASE. HE CONCLUDED A S UNDER:- IN THE CASE OF THE APPELLANT, NOTICE WAS HANDED OV ER TO THE POSTAL DEPARTMENT FOR BEING SENT BY SPEED POST ON 30.7.200 7. NO EVIDENCE HAS BEEN ADDUCED BY THE ASSESSING OFFICER TO SHOW THAT THE NOTICE WAS ACTUALLY SERVED ON 31.3.2007. THE ASSESSEES ADDRESS ON WH ICH THE NOTICE WAS SENT ITA NO. 2368/DEL/2010 A.Y. 2006-07 3 IS NOT OF THE SAME CITY. IT IS OF NOIDA, U.P. AND N OT MEERUT. THE ASSESSEE DULY OBJECTED TO THE NOTICE VIDE HIS LETTER DATED 6. 8.2007 AND STATED THAT THE NOTICE WAS RECEIVED BY HIM ON 3.8.2007 AND, HEN CE, IT WAS BARRED BY LIMITATION. THE ASSESSING OFFICER HAS NOT MENTIONE D ANYTHING ABOUT THIS OBJECTION IN THE ASSESSMENT ORDER. ALL THESE FACTS UNMISTAKABLY INDICATE THAT NOTICE U/S 143(2) WAS NOT SERVED ON THE ASSESS EE WITHIN 12 MONTHS FROM THE DATE OF FURNISHING OF RETURN. THE ASSE SSMENT MADE ON THE BASIS OF SUCH INVALID NOTICE CANNOT BE TREATED AS A VALID ASSESSMENT AND, HENCE, SUCH ASSESSMENT ORDER HAS TO BE TREATED AS NULL AND VOID AB-INITIO. THE FACTS AND THE RATIO OF THE CASE OF SHRI H.P. BHARDWAJ VS. ITO, ITA NO. 4269/DEL/2005, A.Y. 2002-03 WHEREIN SEVERAL OTHER C ASES HAVE BEEN REFERRED TO SQUARELY APPLY TO THE APPELLANTS CASE. THE ASSESSMENT ORDER, IS THEREFORE, ANNULLED. 5. AGAINST THIS ORDER THE REVENUE IS IN APPEAL BEFO RE US. 6. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LD. DEPARTMENTAL REPRESENTATIVE IN THIS REGARD SUBMITTE D THAT NOTICE HAS BEEN ISSUED TO THE ASSESSEE WITHIN THE PERIOD OF 12 MONTHS AND NOTICE WAS SENT THROUGH SPEED POST THROUGH POSTAL AUTHORITIES. HE CLAIMED T HIS IS SUFFICIENT IN COMPLIANCE OF THE PROVISIONS OF THE ACT. HE ALSO REFERRED TO THE DECISION OF THE HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF ASIA TO BACO COMPANY LTD. VS. UOI & ANR. 155 ITR 568 AND THE DECISION OF THE AMRITSA R TRIBUNAL IN THE CASE OF YOGESH KUMAR AND SONS VS. A.O IN 115 TTJ 696. 6.1 LD. AUTHORISED REPRESENTATIVE ON THE OTHER H AND CLAIMED THAT THE NOTICE U/S 143(2) WAS SENT THROUGH SPEED POST ON JUST ONE DAY BEFORE THE EXPIRY OF THE PERIOD OF LIMITATION. THE SAID NOTICE WAS RECEIVED BY THE ASSESSEE ON 3.8.2008, WHICH IS CLEARLY AFTER THE EXPIRY OF THE LIMITATI ON PERIOD. HENCE, HE CLAIMED THAT ON THE BASIS OF THE CASE LAWS RELIED UPON BY THE L D. COMMISSIONER OF INCOME TAX (APPEALS) WHICH IS OF ITAT, DELHI BENCH, THE CASE I S CLEARLY COVERED IN FAVOUR OF THE ITA NO. 2368/DEL/2010 A.Y. 2006-07 4 ASSESSEE. HE FURTHER RELIED UPON THE DECISION OF TH E HONBLE APEX COURT IN THE CASE OF HOTEL BLUE MOON 321 ITR 362 FOR THE PROPOSI TION THAT SERVICE OF NOTICE IS MANDATORY. 7. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. WE CAN GAINFULLY REFER HERE THE RELEVANT PROVISION OF SEC TION 143(2)(II):- 143(2)(II):- NOTHWITHSTANDING ANYTHING CONTAINED IN CLAUSE (I), IF HE CONSIDERS IT NECESSARY OR EXPEDIENT TO ENSURE TH AT THE ASSESSEE HAS NOT UNDER STATED THE INCOME OR HAS NOT COMPUTED EXCES SIVE LOSS OR HAS NOT UNDER PAID THE TAX IN ANY MANNER, SERVE ON THE ASS ESSEE A NOTICE REQUIRING HIM, ON A DATE TO BE SPECIFIED THEREIN, EITHER TO A TTEND HIS OFFICER OR TO PRODUCE, OR CAUSE TO BE PRODUCED, ANY EVIDENCE ON W HICH THE ASSESSEE MAY RELY IN SUPPORT OF THE RETURN. PROVIDED THAT NO NOTICE UNDER CLAUSE (II) SHALL BE SERVED ON THE ASSESSEE AFTER THE EXPIRY OF SIX MONTHS FROM THE END OF TH E FINANCIAL YEAR IN WHICH THE RETURN IS FURNISHED. 7.1 FROM THE ABOVE IT IS CLEAR THAT THE ACT SPEAKS SERVICE OF THE NOTICE TO THE ASSESSEE WITHIN THE SPECIFIED PERIOD OF 12 MONTHS. THE TERMS SERVICE OF NOTICE IS DIFFERENT FROM SENDING OF NOTICE. NOW THE QUESTI ON IS WHETHER SENDING NOTICE ONE DAY PRIOR TO EXPIRY OF LIMITATION PERIOD BY SP EED POST FROM MEERUT TO NOIDA CAN BE CONSIDERED SUFFICIENT COMPLIANCE OF LAW. 7.2 SECTION 282(2) PROVIDES FOR THE METHOD BY WHICH NOTICE CAN BE SERVED GENERALLY. THE SAID SECTION ENVISAGES INTER-ALIA THAT THE SERVICE OF NOTICE MAY BE MADE BY DELIVERY OR TRANSMITTING THE COPY THEREO F TO A PERSON THEREIN NAMED BY POST OR BY SUCH COURIER SERVICE AS MAY BE APPROV ED BY THE BOARD. NOW THIS SECTION ALSO ENVISAGES DELIVERY OF NOTICE BY POST TO THE PERSON NAMED IN THE NOTICE. NOW THE MATTER WOULD HAVE BEEN MORE CLEAR HAD THE REVENUE PRODUCED AN ACKNOWLEDGEMENT OF THE RECEIPT OF COPIES BY THE ASSESSEE. REVENUE IS NOT IN ITA NO. 2368/DEL/2010 A.Y. 2006-07 5 A POSITION BEFORE US TO SUBMIT ANY EVIDENCE AS TO THE RECEIPT OF THE NOTICE BY THE ASSESSEE BEFORE THE EXPIRY OF THE LIMITATION PERIOD I.E. 31.7.2008. THE ASSESSEE ON THE OTHER HAND STATES THAT THE NOTICE WAS RECEIVED BY IT FOUR DAYS LATER I.E. 3.8.2008. 7.3 IN THIS REGARD, LD. DEPARTMENTAL REPRESENTATIVE IS RELYING UPON THE DECISION OF THE HONBLE PUNJAB AND HARYANA HIGH COUR T IN THE CASE OF ASIA TOBACO COMPANY LTD. VS. UOI & ANR. 155 ITR 568. WE FIND T HAT THE SAID JUDGEMENT WAS WITH RELATION TO NOTIFICATION BY GOVERNMENT IN THE OFFICIAL GAZETTE. IT WAS HELD IN THAT CASE THAT IT WOULD BE A MOCKERY TO THE STATE THAT IT WOULD SUFFICE THE PURPOSE OF NOTIFICATION, IF THE NOTIFICATION IS MER ELY PRINTED IN THE OFFICIAL GAZETTE WITHOUT MAKING THE SAME AVAILABLE OF CIRCULATION TO THE PUBLIC OR PUTTING IT ON SALE TO THE PUBLIC. IT IS FURTHER HELD THAT NEITHER TH E DATE OF NOTIFICATION NOR THE DATE OF PRINTING, NOR THE DATE OF THE GAZETTE COUNTS FOR NOTIFICATION WITHIN THE MEANING OF THE RULE, BUT ONLY THE DATE WHEN THE PUB LIC GESTS NOTIFIED IN THE SENSE, THE CONCERNED GAZETTE IS MADE AVAILABLE TO THE PUBL IC. THE DATE OF RELEASE OF THE PUBLICATION IS THE DECISIVE DATE TO MAKE THE NOTIF ICATION EFFECTIVE. PRINTING THE OFFICIAL GAZETTE AND STACKING THEM WITHOUT RELEASIN G TO THE PUBLIC WOULD NOT AMOUNT TO NOTIFICATION AT ALL. 7.4 WE FIND THAT THE ABOVE CASE LAW IS NOT AT ALL APPLICABLE ON THE FACTS OF THE PRESENT CASE. RATHER IT SUPPORTS THE CASE THAT MERE SENDING OF NOTICE WOULD NOT SUFFICE, WHEN THE ACT ENVISAGES SERVICES THEREOF. 7.5 ANOTHER CASE LAW RELIED UPON BY THE REVENUE IS ITAT, AMRITSAR BENCH DECISION IN THE CASE OF YOGESH KUMAR AND SONS VS. A .O., ITAT AMRITSAR BENCH 115 ITA NO. 2368/DEL/2010 A.Y. 2006-07 6 TTJ 696. IN THIS CASE IT WAS HELD THAT THE ASSESSEE HAVING FILED RETURN, IN RESPONSE OF NOTICE U/S 148 AND ALSO ACTIVELY PARTICIPATED IN THE ASSESSMENT PROCEEDINGS THEREAFTER BY ITS CONDUCT ABANDONED THE RIGHT TO CL AIM, NON-SERVICE OF THE NOTICE U/S 148 AS ENVISAGED U/S 282. WE FIND THAT HONBL E APEX COURT IN THE CASE OF ACIT VS. HOTEL BLUE MOON 321 ITR 361 HAS HELD THAT OMISSION ON THE PART OF THE ASSESSING OFFICER TO ISSUE NOTICE U/S 143(2) CANNO T BE A PROCEDURAL REGULARITY AND THIS CANNOT BE CURABLE. THEREFORE, THE REQUIREMEN T OF NOTICE U/S 143(2) CANNOT BE DISPENSED WITH. IN THE LIGHT OF THE ABOVE DECI SION, THE DECISION OF THE TRIBUNAL AS RELIED BY THE REVENUE IS NOT APPLICABLE. MOREOV ER, THE SAID TRIBUNAL DECISION IS ALSO NOT APPLICABLE ON THE FACTS OF THE CASE AS THE ASSESSEE IN THE PRESENT CASE BEFORE US HAD DULY PROTESTED ABOUT THE LACK OF ISSU E OF NOTICE TO THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT. WE FURTH ER FIND THAT HONBLE DELHI HIGH COURT IN NEW LON INDIA LTD. VS. ITO 216 CTR 142 HA S HELD THAT THERE IS NO PRESUMPTION UNDER THE LAW THAT ANY NOTICE SENT BY S PEED POST MUST HAVE BEEN DELIVERED TO THE ASSESSEE WITHIN 24 HOURS. AGAIN, WE FIND THAT THE TRIBUNAL IN THE CASE OF THE H.P. BHARDWAJ IN ITA NO. 4269 VIDE ORD ER DATED 31.1.2006 HAS REFERRED TO ANOTHER DECISION OF THE TRIBUNAL THAT WHEN NOTICE IS SENT BY SPEED POST, WHERE THE ASSESSING OFFICER AND ASSESSEE AR E IN THE SAME TOWN, IT IS A FAIR INFERENCE THAT IT WOULD REACH THE DESTINATION WITHI N 24 HOURS OF ITS POSTING. NOW ITA NO. 2368/DEL/2010 A.Y. 2006-07 7 IN THE PRESENT CASE, WE FIND THAT ASSESSING OFFICER HAS ISSUED A NOTICE FROM MEERUT TO THE ASSESSEE WHO WAS RESIDING IN NOIDA. NOW ADMITTEDLY THERE IS NO EVIDENCE AVAILABLE WITH THE REVENUE AS TO WHETHER T HE SERVICE HAS BEEN COMPLETED OR NOT. ADMITTEDLY, THE ASSESSING O FFICER AND ASSESSEE ARE NOT IN THE SAME TOWN. HENCE, IT CAN NOT BE PRESUMED THAT T HE NOTICE WHICH WAS SENT BY SPEED POST ON 30.7.2007 WOULD REACH THE ASSESSEE ON 31.7.2007. IN THIS RESPECT THE DECISION OF THE HONBLE DELHI HIGH COURT REFER RED ABOVE IS QUITE RELEVANT THAT THERE IS NO PRESUMPTION UNDER THE LAW THAT ANY NOTI CE SENT BY SPEED POST MUST HAVE BEEN DELIVERED TO THE ASSESSEE WITHIN 24 HOURS . IN THE LIGHT OF THE ABOVE DISCUSSIONS AND PRECEDENT, WE UPHOLD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30/07/2010. SD/- SD/- [R.P. TOLANI] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER DATE 30/07/2010 SRB COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT ITA NO. 2368/DEL/2010 A.Y. 2006-07 8 TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES