1997 (9) TMI 160 - AT - Income Tax

Tax Tribunal rules on Assessing Officer's jurisdiction to issue notice under Income-tax Act, emphasizing timely initiation.

The Appellate Tribunal ITAT Jaipur ruled on the jurisdiction of the Assessing Officer to issue a notice under section 148 of the Income-tax Act within the ... Notice Of Reassessment, Delay In Notice Issues:1. Jurisdiction of Assessing Officer to issue notice under section 148 within the prescribed period of limitation.2. Interpretation of the term 'issued' in the context of notice under section 148.3. Comparison of the requirement of 'issue' and 'service' in relation to notice under section 148.4. Analysis of relevant case laws to determine the validity of the notice under section 148.5. Examination of the presumption under section 114 of the Evidence Act regarding regular performance of official acts in the context of issuing notice under section 148.Analysis:1. The appeal before the Appellate Tribunal ITAT Jaipur revolves around the jurisdiction of the Assessing Officer to issue a notice under section 148 of the Income-tax Act within the prescribed period of limitation. The primary issue is whether the notice served on the assessee was within the permissible time limit as per section 149(1)(a)(i), considering the decision in R.K. Upadhyaya v. Shanabhai P. Patel [1987] 166 ITR 163/33 Taxman 229.2. The Assessing Officer, in this case, issued a notice under section 148 for reassessment, contending that a certain amount should have been deducted from total receipts instead of net profit. The assessee challenged the jurisdiction of the Assessing Officer based on the limitation period for issuing the notice. The CIT(Appeals) held that the notice was served beyond the permissible time limit, rendering the reassessment void ab initio.3. The crux of the matter lies in the interpretation of the term 'issued' concerning the notice under section 148. The counsel for the assessee argued that merely preparing the notice does not constitute issuance unless the process of serving it is set in motion within the limitation period. On the contrary, the department contended that once the Assessing Officer records the reasons and prepares the notice, it is presumed to be issued, irrespective of the actual service date.4. Various judicial authorities were cited to ascertain the validity of the notice under section 148. The decision in R.K. Upadhyaya's case emphasized that service is not a condition precedent for conferring jurisdiction on the Assessing Officer but is essential for making the assessment order. Other cases like New Bank of India Ltd., Iqbal Singh Atwal, and Lallubhai Jogibhai were referenced to support different interpretations of the issue and service of notices under section 148.5. The presumption under section 114 of the Evidence Act regarding the regular performance of official acts was analyzed in the context of issuing notices under section 148. The Appellate Tribunal highlighted the importance of setting the notice into motion within the limitation period and the rebuttable nature of the presumption. The failure of the department to demonstrate timely issuance of the notice led to the conclusion that the notice was bad in law, ultimately dismissing the department's appeal.