Mundra Woollen Mills (P) Ltd. V. The Assistant Commissioner of Income Tax, Circle-2, Central Revenue Building, Jaipur Road, Ajmer and Income Tax Appellate Tribunal, Jaipur Bench, Jaipur, Rajasthan Chamber Bhawan, M.I. Road, Jaipur and Union of India, Through the Commissioner of Income Tax, Central Revenue Building, Jaipur Road, Ajmer

ITA/165/2015

AI Insights

The case involves M/s. Mundra Woollen Mills (P) Ltd., which appealed against the decision of the Income Tax Appellate Tribunal, Jaipur, which had dismissed their appeal. The primary legal contention was regarding the validity of the notice served under Section 143(2) of the Income Tax Act, 1961. The appellant argued that the notice was not properly served, a claim supported by a decision from the Jharkhand High Court in a similar case. The Rajasthan High Court found prima facie evidence that the notice was indeed not served properly, leading to the decision to remit the case back to the Tribunal for a fresh hearing.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 798460 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 07-11-2017
• Assessment Year: misc
• Other Referred Cases: Milan Poddar vs. Commissioner of Income Tax, Central Revenue Building, Main Road, Ranchi & Anr. [2013] 357 ITR 619 (Jharkhand)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PARINITOO JAIN
• Assessee Lawyers: ANANT KASLIWAL
• Keywords: Income tax appeal; Notice service; Internal Stock Register Discrepancy; Valuation of Estimated Quantity of Stock
• Section: 292BB; 143(2); 282

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 165 / 2015 M/s. Mundra Woollen Mills (P) Ltd., Having Its Registered Office At, RIICO Industrial Area, Jaipur Raod, Kekri, Through Its Director, Shiv Ratan Mundra ----Appellant Versus 1. The Assistant Commissioner of Income Tax, Circle-2, Central Revenue Building, Jaipur Road, Ajmer 2. Income Tax Appellate Tribunal, Jaipur Bench, Jaipur, Rajasthan Chamber Bhawan, M.I. Road, Jaipur Through Assistant Registrar 3. Union of India , Through the Commissioner of Income Tax, Central Revenue Building, Jaipur Road, Ajmer ----Respondents _____________________________________________________ For Appellant(s) : Mr. Anant Kasliwal For Respondent(s) : Ms. Parinitoo Jain _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE VIJAY KUMAR VYAS Judgment 07/11/2017 1. By way of this appeal, the appellant has assailed the judgment and order of the Tribunal whereby the Tribunal has dismissed the appeal of the assesse. 2. This court while admitting the matter framed the following questions of law:- “i) Whether on a proceeding initiated under Section 143(2) of the Income Tax Act, 1961, service of notice on the assessee is necessary (2 of 4) [ITA-165/2015] or not if objection regarding service has been raised and not dealt with whether initiation of the proceedings can be said to be valid. ii) Whether the discrepency in the internal stock register not forming party of the statutory books of accounts and consequential addition can be said to be legally justified when no discrepency in the statutory books of accounts could be shown. iii) Whether the ITAT was justified in having confirmed the valuation of estimated quantity of stock listed out during the survey proceeding without reconciling the same with the regular computerized quantitive records maintained by the appellant company.” 3. We have heard counsel for both the sides. 4. Taking into consideration the certificate which is issued on 17th August, 2009 and other documents on record, prima facie it seems that though the notice was sent by speed post, it has not been served on the appellant. An endeavour is made by counsel for the appellant to relied upon the decision of Jharkhand High Court in case of Milan Poddar vs. Commissioner of Income Tax, Central Revenue Building, Main Road, Ranchi & Anr. reported in [2013] 357 ITR 619 (Jharkhand) wherein it has been held as under:- “5. Learned counsel for the appellant drew our attention to the order-sheet wherein the Assessing Officer has taken note of the objection of the assessee in the order sheet dated 10.9.2008. It is submitted that finding substance in the objection of the assessee, the Assessing Officer issued notice to the Postmaster of the area concerned i.e.; G.P.O., Doranda, from where notice under Section 143(2) alleged to has been sent through Speed-post. Not only this but a letter under Section 133(6) of the Act of 1961 was also served upon Postmaster, G.P.O., Doranda. The Postmaster gave reply to the notice and submitted that the request of the Income Tax (3 of 4) [ITA-165/2015] Department is time barred as the record of the 'Speed-post' is not kept after expiry of three months. According to learned counsel for the appellant, in view of the above facts, it is clear that the presumption under Section 292BB of the Act of 1961, cannot be taken and there was no material available on the record to prove that the notice was served upon assessee at all, what to say of in time. 8. We have considered the submissions of the parties on this issue. It will be relevant to mention here that as per Section 282 of the Act of 1961, notice can be served either by post or in the manner in which the summons are issued by the Courts under the provisions of Code of Civil Procedure. Therefore, if the argument of the learned counsel for the appellant, that Income Tax Act of 1961 is special Act and it contains the provisions for service of notice, according to which only a notice can be served upon assessee; then in that view of the matter, the only recourse is that notice should be issued either by post or it may be served as is served under the provisions of Code of Civil Procedure. In this case, a notice under Section 143(2) of the Act of 1961 was alleged to has been sent by post, which includes sending notice by Ordinary Post, Post under Certificate, Registered Post, Registered A/D or by Speed Post and this fact is not in dispute that notice was sent by \"Speed Post\" and, therefore, notice was in accordance with law under Section 282(1) of the Act of 1961. 11. The next question arose is whether in the facts of the case, the Tribunal has committed error of law in holding that the service was valid?, which is the question number 1 framed in this appeal. 15. In a matter of service through post, there are certain ways whereby notices are sent through department of post. In this case, as we have already discussed that in the order sheet, name and address of the assessee was mentioned and address is wrong was not the plea of the assessee. Therefore, Department sent the notice under Section 143(2) of the Act to the Assessee on the assessee's address, and that too through Speed Post which is more reliable mode therefore, it is required to be presumed that notice was delivered to the addressee.” (4 of 4) [ITA-165/2015] 5. In our considered opinion, the appellant was not served otherwise there is no need of another notice to be issued in 2010. 6. In that view of the matter, without entering into merits of the appeal we are remitting back the matter to the Tribunal. The order of Tribunal is quashed and set aside. 7. It is made clear that we have not expressed any opinion on merit and the Tribunal will hear the appeal afresh and will decide the issue without being influence by this order of remitting back to the Tribunal. 8. Both the sides will appear before the Tribunal on 11th December, 2017. 9. The appeal stands allowed. (VIJAY KUMAR VYAS),J. (K.S. JHAVERI),J. A.Sharma/11 "