2006 (9) TMI 129 - HC - Income Tax

Court rules service of notice under Income-tax Act not valid if done after prescribed date.

Commissioner of Income-Tax Versus Bhan Textiles P. Limited.

The court dismissed the appeal concerning the interpretation of service of notice under section 143(2) of the Income-tax Act, 1961. It was held that the ... 'Whether the actual service of a notice under section 143(2) of the Income-tax Act, 1961 as it stood before amendment, after the date prescribed in the said provision would relate back to the date of issue of the notice?' - In the present case, however, it is the admitted case that the notice under section 143(2) of the Income-tax Act though issued on November 27, 1997, and dispatched on November 28, 1997, was actually received by the assessee only on December 1, 1997. The assessee had filed the return on November 20, 1996, and, therefore, the time stipulated under the proviso to section 143(2)(ii) for service of notice expired on November 30, 1997. The said proviso leaves no room for debate that the notice must be served on the assessee. – revenue’s contention that the words 'served' and 'issued' are synonymous and are interchangeable, is rejected - question framed in this appeal is answered in the negative – revenue appeal rejected Issues:Interpretation of service of notice under section 143(2) of the Income-tax Act, 1961.Analysis:The appeal in question was admitted to consider whether the service of a notice under section 143(2) of the Income-tax Act, 1961, after the prescribed date, would relate back to the date of issue of the notice. The Revenue's position in this case was weaker compared to a previous case. It was acknowledged that the notice, issued on November 27, 1997, and dispatched on November 28, 1997, was received by the assessee only on December 1, 1997. The assessee had filed the return on November 20, 1996, and the time stipulated for service of notice had expired on November 30, 1997. The proviso to section 143(2)(ii) clearly mandates that the notice must be served on the assessee. The court referred to a previous decision where it was established that there is a distinction between the 'issuance of notice' and the 'service of notice.'Ms. Bansal, representing the appellant, referred to a case involving the word 'made' but the court found her argument not applicable as the issue in the present case revolved around 'issued' and 'served.' The court relied on its previous decision in another case to maintain consistency in its approach. The judgment highlighted the importance of differentiating between 'issuance of notice' and 'service of notice.' The court concluded by answering the question framed in the appeal in the negative and subsequently dismissed the appeal.In summary, the judgment addressed the interpretation of the service of a notice under section 143(2) of the Income-tax Act, 1961, emphasizing the distinction between the issuance and service of a notice. The court's decision was based on legal precedents and the specific provisions of the law, ultimately leading to the dismissal of the appeal.