TaxTMI 
TaxTMI 
2012 (6) TMI 55
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....the CIT (Appeals) on the validity of the assessment order, the assessee preferred CO No.115/Del/2008 before the Tribunal. The Tribunal took up the cross objections filed by the assessee first since it went to the root of the matter and decided the validity of the assessment order in favour of the assessee, thus allowing the cross objections. In view of this decision, the Tribunal thought it unnecessary to adjudicate upon the appeal filed by the Revenue which was formally dismissed. A common order was passed by the Tribunal on 13.02.2009. The Revenue has preferred two appeals under Section 260A before us for this reason, namely, that the assessment has been held to be invalid as also because its appeal on merits has been dismissed by the Tribunal as a consequence. Though two appeals have been filed, the fundamental question arises in ITA No.1142/2009 which has been filed against the decision of the Tribunal in CO No.115/Del/2008. 2. On 16.05.2012, the following substantial question of law was framed by us. "Whether the Income Tax Appellate Tribunal was right in quashing the assessment proceedings on the ground that the respondent-assessee was not served with any notice under Sect....
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....at the above figure. 6. The assessee appealed against the assessment order before the CIT (Appeals) and contested both the validity of the assessment order and the additions made therein on merits. As regards the validity of the assessment order, the contention of the assessee was that no valid notice under Section 143(2) had been served upon it and therefore the assessment order was invalid. It would appear that the assessee had filed written arguments before the CIT (Appeals) in which this point had been also included. The written arguments were sent by the CIT (Appeals) to the Assessing Officer and a remand report was called for from him. In the remand report dated 11.01.2007 the Assessing Officer pointed out that the first notice issued under Section 143(2) of the Act on 27.12.2004 was sent to the assessee through the Inspector at the address given in the return of income, namely, E/18, Kalkaji, New Delhi. Under this notice the hearing was fixed on 31.12.2004. According to the Assessing Officer this notice could not be served because no such firm existed at the given address as per the Inspector. Another notice dated 28.12.2004 was sent through speed post to the same address....
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....me with whom the case was discussed. He also filed part details which were placed on record. Thus the appellant's contention that the statutory notice u/s 143(2) was not served upon the appellant within the period of 12 months, does not hold good. If notice under section 143(2) was not served, no question about appearance and compliance by the AR of the appellant would have arisen. Secondly no such objection was raised at the time of assessment proceedings. The very fact that part compliance was made by the appellant proves that notice u/s 143(2) was served within the prescribed time-limit. So far as issuance of notice under section 142(1) is concerned as per provision of section 144, it is mandatory on the part of the AO that opportunity would be given by him to the assessee by serving a notice calling upon the assessee to show cause, on a date and time to be specified in the notice, why the assessment should not be completed to the best of his judgment. However, it further provides that "it shall not be necessary to give such opportunity in a case where a notice under sub-section (1) of section 142 has been issued prior to making of an assessment under this section". Since notice....
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....m the notice was allegedly served was authorised to receive the same. On these findings the Tribunal held that there was no valid service of the notice upon the assessee and hence the assessment order was invalid and was liable to be quashed. It was accordingly ordered. 10. The Tribunal also referred to the provisions of Section 292BB and held that those provisions were not applicable to the assessment year 2003-04 since they were inserted w. e. f. 01.04.2008 and were accordingly applicable only from the assessment year 2008-09. In this view of Section 292BB the Tribunal held that despite the fact that the assessee participated in the assessment proceedings, it could still object to the validity of the assessment order. 11. The only question that arises for our consideration is whether the notice issued on 30.12.2004 under Section 143(2) of the Act was validly served upon the assessee-firm on 31.12.2004 as claimed by the Assessing Officer. We proceed on the assumption that the notice was not served on either of the two partners of the assessee-firm and that it was served on some person who was not specifically authorised to receive notice. Even so, we are not persuaded to hol....
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.... know that his case is posted before the Assessing Officer on 05.01.2005, except from the notice. 12. Several contentions were raised on behalf of the assessee before us which we may notice. It was argued, almost as an afterthought, that there is no evidence to show that the case was fixed for hearing on 05.01.2005 or that any one appeared on that date before the Assessing Officer on behalf of the assessee. We say that this argument is an afterthought because the initial argument was that the appearance made on behalf of the assessee on 05.01.2005 was not pursuant to the notice issued on 30.12.2004. Perhaps realising the difficulty that this argument is likely to cause to the assessee, the argument was modified later to the effect that there was no evidence to show that the case was fixed for hearing on 05.01.2005 or that any one appeared before the Assessing Officer on that date on behalf of assessee. The CIT (Appeals), as we have already held, has noted in para 3.1 of his order that in the remand report the Assessing Officer has stated that in the notice dated 30.12.2004, the case was fixed for hearing on 05.01.2005. This statement constitutes sufficient evidence to refute the....
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....ointed out, the issue of a notice under Section 143(2) of the Act is to enable the assessee to adduce evidence in support of the return submitted by him. The provision is essentially conceived in the interests of the assessee and once he comes to know of the opportunity that has been accorded to him and also takes a step towards availing of the same, it does not lie in his mouth to turn round and contend that there was no valid service of the notice upon him. 14. Several authorities were cited on behalf of the assessee, including those of this Court to the effect that if there is no valid service of the notice under Section 143(2) of the Act, the assessment order is null and void. The question before us however is whether there was a valid service of the notice upon the assessee. We have held, considering the facts of the case and the conduct of the assessee, that there has been a valid service of the notice upon the assessee. He has also participated in the proceedings. In the decided cases to which our attention was drawn, the discussion has proceeded on the basis that there was no service of the notice upon the assessee and therefore the assessment order was null and void. Wh....
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....urt as follows: - "The argument is that the service of the requisite notice on the assessee is a condition precedent to the validity of any re-assessment made under section 34; and if a valid notice is not issued as required, proceedings taken by the Income-tax Officer in pursuance of an invalid notice and consequent orders of re-assessment passed by him would be void and inoperative. In our opinion, this contention is well-founded. The notice prescribed by section 34 cannot be regarded as a mere procedural requirement; it is only if the said notice is served on the assessee as required that the Income-tax Officer would be justified in taking proceedings against him. If no notice is issued or if the notice issued is shown to be invalid then the validity of the proceedings taken by the Income-tax Officer without a notice or in pursuance of an invalid notice would be illegal and void. That is the view taken by the Bombay and Calcutta High Courts in Commissioner of Income-tax v. Ramsukh Motilal, (1955) 27 ITR 54 and R. K. Das & Co. v. Commissioner of Income-tax, (1956) 30 ITR 439 and we think that that view is right." It was therefore held by this Court and rightly, if we may sa....
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....ntion of the assessee without examining the crucial and relevant fact such as the appearance of the assessee‟s authorised representative before the Assessing Officer on 05.01.2005 which is the date fixed for hearing in the notice issued on 30.12.2004. The Tribunal further erred in holding that the participation of the assessee in the assessment proceedings is of no consequence because the provisions of Section 292BB came into force only from 01.04.2008. The participation of the assessee in the proceedings for the assessment in the present case is an important fact to be taken note of, not because of Section 292BB but in the light of the fact that the notice dated 30.12.2004 mentioned 05.01.2005 as the date of hearing, on which date the authorised representative had appeared and filed his power of attorney before the Assessing Officer. A little probing was enough to show that the apparent was not the real. It would be against the spirit of law relating to income tax assessments if one were to too readily be willing to hold that there was non-service or invalid service of the notice under section 143(2) of the Act, merely on peripheral allegations or facts and not looking at th....
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....79 ITR 505 which are as under: - "The lack of a notice does not amount to the revenue authority having had no jurisdiction to assess, but that the assessment was defective by reason of notice not having been given to her. An assessment proceeding does not cease to be a proceeding under the Act merely by reason of want of notice. It will be a proceeding liable to be challenged and corrected." Noticing the aforesaid two judgments, the Supreme Court in Jai Prakash Singh‟s case (supra) held as under: - "The principle that emerges from the above decision is that an omission to serve or any defect in the service of notices provided by procedural provisions does not efface or erase the liability to pay tax where such liability is created by distinct substantive provisions [charging sections]. Any such omission of defect may render the order made irregular-depending upon the nature of the provision not complied with-but certainly not void or illegal." 19. The observations made in the judgments of the Federal Court (supra) and the Supreme Court in the two judgments cited above are to be understood as reminders that whenever a case is set up by the assessee that ther....