Valid service of notice and presumptive postal delivery sustained the assessment, while income was revised on estimated basis.

An objection under section 292BB confined before the AO to delay in service could not later be expanded into a plea of complete non-service, and postal service was presumed valid under section 27 of the General Clauses Act and section 114 of the Evidence Act when supported by dispatch and acknowledgment records. On the facts, the notice under section 143(2) was treated as validly served within time, so the jurisdictional challenge failed. On the income issue, the books were not pressed, serious defects remained, and the claimed business change was not fully proved; however, the Tribunal accepted a mixed estimation approach because turnover had risen sharply and indirect expenditure had collapsed, leading to a revised computation with partial relief to both sides.

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Issues: (i) Whether the notice under section 143(2) was validly served within time so as to sustain the assessment. (ii) Whether the rejection of books and estimation of income, including the allowance of indirect expenditure, called for interference.

Issue (i): Whether the notice under section 143(2) was validly served within time so as to sustain the assessment.

Analysis: The objection raised before the Assessing Officer was confined to non-service within the statutory time and was not a blanket denial of service. In such a situation, section 292BB restricted the assessee from expanding the objection in appeal to challenge service altogether. Since service was effected by post, the presumption under section 27 of the General Clauses Act and section 114 of the Indian Evidence Act applied. The dispatch record and postal acknowledgment supported the Revenue's case, and no credible contrary material was produced to rebut the presumption or discredit the actual date of service.

Conclusion: The notice under section 143(2) was held to have been validly served on 30.09.2010 and within limitation. The challenge to jurisdiction failed.

Issue (ii): Whether the rejection of books and estimation of income, including the allowance of indirect expenditure, called for interference.

Analysis: The assessee did not press the challenge to rejection of books. The record showed serious deficiencies, non-production of books on the plea of fire, and no material to establish a genuine change in business as claimed. At the same time, the dramatic rise in turnover and the collapse in indirect expenditure indicated that the existing business profile had materially changed during the year. The Tribunal therefore adopted a mixed approach: it accepted that the trading activity in paper had been added and estimated profit by separating the balance turnover from the earlier manufacturing activity, while also addressing the Revenue's objection to allowance of indirect expenditure through a revised estimation of income.

Conclusion: The estimation of income was modified by the Tribunal, resulting in relief to both sides in part.

Final Conclusion: The assessment was upheld on jurisdiction, but the income computation was revised on an estimated basis, leaving both the assessee's and the Revenue's appeals only partly successful.

Ratio Decidendi: Where an assessee's objection under section 292BB is confined before the Assessing Officer to the timeliness of service, it cannot later be enlarged into a plea of non-service, and service by post is presumed valid under section 27 of the General Clauses Act unless rebutted by credible contrary evidence.

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