2005 (3) TMI 33 - HC - Income Tax

Appeal dismissed for failure to prove timely service of section 143(2) notice; no substantial question of law

Commissioner of Income-Tax Versus Lunar Diamonds Ltd.

HC dismissed the appeal, holding that the appellant bore the burden of proving service of the section 143(2) notice within the prescribed period and ... Validity of notice served under section 143(2) - burden of proof - words 'served' and 'issued' - HELD THAT:- According to the assessee, in terms of section 143(2) of the Act, the notice ought to have been served on it within a period of one year and in any case before November 30, 1996. Since that was not done, the proceedings initiated against the assessee were not in accordance with law - Before the Assessing Officer, this issue was not directly raised but before the Commissioner of Income-tax (Appeals) (CIT (A)), it was contended by the assessee that it had not received any notice under section 143(2) of the Act by registered post - Tribunal rightly held that under these circumstances, the burden was upon the appellant to prove that notice was served upon the assessee within the prescribed time. The appellant had failed to prove its case in this regard. Appeal does not raise any substantial question of law which requires our decision. Dismissed Issues:Validity of notice served under section 143(2) of the Income-tax Act, 1961.Analysis:The appellant challenged the order passed by the Income-tax Appellate Tribunal, Delhi Bench, regarding the notice served under section 143(2) of the Income-tax Act, 1961. The appellant contended that the notice should have been served within one year, but it was received after the prescribed period. The Commissioner of Income-tax (Appeals) accepted the assessee's contention that there was no valid service of notice, leading to the invalidity of the assessment. The Tribunal, however, rejected the appellant's arguments, stating that the burden was on the appellant to prove the notice was served within the prescribed time, which they failed to do.The appellant argued that the words 'served' and 'issued' are interchangeable, and since the notice was issued within the one-year period, there was no error in framing the assessment order. The appellant relied on a case to support this argument, but the court found the case to be inapplicable to the present situation. The court discussed the legislative history and interpretation of similar provisions to conclude that the appellant's argument was not valid.Furthermore, the appellant contended that the post office, as the agent of the assessee, should be considered to have served the notice when dispatched by registered post. However, the court found this argument to be unfounded based on a Supreme Court case that dealt with a different context. The court emphasized that the assessment was set aside not because it was null and void, but due to the late service of the notice, as confirmed by the Tribunal.Additionally, there were doubts regarding whether the notice was sent to the correct address of the assessee, as the receipt only contained the name without the address. Despite this, the Tribunal rightly placed the burden on the appellant to prove the service of notice within the prescribed time, which they failed to do. Ultimately, the court found no substantial question of law raised by the appeal and dismissed it.