2005 (7) TMI 295 - AT - Income Tax

Income Tax Assessment Invalidated Due to Late Notice

Springer Verlag Gmbh. Versus Deputy Director Of Income-Tax.

The Tribunal found that the notice under section 143(2) of the Income Tax Act served on March 3, 2004, was beyond the statutory time limit. As a result, ... Service Beyond Limitation Issues:Validity of notice under section 143(2) of the Income Tax Act, 1961.Analysis:The assessee, a company engaged in publishing scientific, technical, medical books and journals, appealed against the combined order of the CIT(A) for assessment years 1999-00, 2000-01, and 2001-02. The primary issue raised was the validity of the notice under section 143(2) of the Income Tax Act. The assessee contended that the notice served on March 3, 2004, was beyond the statutory 12-month period as per the proviso to section 143(2). The CIT(A) called for a remand report from the assessing officer (AO) regarding the notice issuance. The AO reported that notices under sections 142(1) and 143(2) were issued on November 4, 2003, and served via registered post. The assessee claimed to have received only the notice under section 142(1) and not under section 143(2). The CIT(A) held that since the notice dated November 4, 2003, was available on record with the registered post acknowledgment, the additional ground raised by the assessee had no merit.The assessee argued that the notice received on March 3, 2004, was the only notice under section 143(2) received, emphasizing that none of their correspondence mentioned this notice. They cited the onus on the Department to prove proper service as per Section 106 of the Evidence Act. The Tribunal noted discrepancies in the AO's records and the absence of certain entries related to the notice under section 143(2). The Tribunal examined the original records and found that the assessee's correspondence only referred to the notice under section 142(1), raising doubts about the proper service of the notice under section 143(2). Additionally, the Tribunal highlighted the lack of mention of the notice under section 143(2) in the order-sheet entries and the discrepancies in the AO's response regarding the inspection carried out by the assessee. Based on these findings, the Tribunal concluded that the notice under section 143(2) dated November 4, 2003, was not served on the assessee.As the notice served on March 3, 2004, was beyond the statutory time limit, the Tribunal held the assessment made based on that notice to be invalid and quashed it. Consequently, the Tribunal allowed all three appeals of the assessee, focusing on the legal grounds for invalidating the assessment without delving into the merits of other grounds raised in the appeal.