AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2011 (3) TMI 1666
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.... notice and in the absence of valid service of such a notice, the validity of the assessment order could not have been upheld and the "CIT (Appeals)" has grossly erred in law and on facts, in taking a contrary view by observing that; "prima-facie that notice u/s 143(2) dated 30.10.2003 is well within the time and the Assessing Officer had the jurisdiction over the appellant". 3. By way of above two grounds, the assessee has challenged the validity of the notice u/s 143(2) of the I.T. Act, 1961 (in short, the I.T. Act). In this case, the assessee filed the return of income on 31st December 2002 declaring income of `3,07,448/-. The return was processed on 3rd February 2003. Subsequently, the case was selected for scrutiny and the notices u/s 143(2) and 142(1) were issued. However, the Assessing Officer completed the assessment u/s 143(3) of the I.T. Act on 30th March 2005 wherein the Assessing Officer made certain additions/disallowances. The Assessing Officer determined the taxable income at `41,12,505/- as against returned income of `3,07,448/-. The income of the assessee was computed by the Assessing Officer as under: S.No. Particular Rs. 1. Rental Income....
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..... R. heavily relied on the decision of Hon'ble Jurisdictional High Court rendered in the case of CIT vs. Sohan Lal Sewa Ram Jaggi [2009] 222 CTR (All) 412 wherein it has been held that assessee having failed to raise objection as regards jurisdiction of the Assessing Officer within 30 days of receipt of notice under section 143(2) as stipulated u/s 142(3), the Tribunal was not justified in annulling assessment on the ground of jurisdiction. 8. We have heard the learned representatives of both the parties and have also carefully gone through the material available on record. We find that the decision relied upon by the learned D. R. has been duly considered by the Tribunal in the case of Shri Sanjeev Agarwal and the Tribunal held that even if it is presumed but not admitted that the issue was not raised in earlier proceedings, then also the assessee has every right to raise the legal issue at any stage as per the ratio laid down by the Hon'ble Supreme Court in the case of National Thermal Power Co. 229 ITR 383 (SC). In that view of the matter the decision relied upon by the learned D. R. is of no help to Revenue's case. 8.1 We find that facts of the present case are simila....
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....essee may rely in support of the return: [Provided that no notice under clause (ii) shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished." 7.1 From the proviso to clause (ii) of sub section 2 of section 143, it is clear that no notice shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished. The use of word 'shall' makes it mandatory that the notice must be served on the assessee. in the instant case, nothing has been brought on record that the notice u/s 143(2) was served on the assessee since the document furnished by the department clearly revealed that the notice u/s 143(2) dated 30/10/2003 has been received by Shri Sachin Agarwal who was not authorized by the assessee to received any notice. The another argument of the Learned D.R. was that a power of attorney was issued by the assessee on 05/11/2003 to Shri Santosh Gupta, I.T.P. and Shri Parmod Singh to represent in income tax assessment proceedings relating to the assessment year 2002-2003, therefore, it is presumed that the assessee must have received the notice. In our opinion, there ....
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....7.3 In the present case, as we have already noted in the former part of this order that the notice has neither been served on the assessee or any other person authorized by the assessee. therefore, the service on Shri Sachin Agarwal, who was not authorized, was not a valid service. In that view of the matter, we are of the considered view that in the instant case the notice u/s 143(2) before completing the assessment u/s 143(3) has not been served upon the assessee. Therefore, the assessment framed u/s 143(3) was invalid. On a similar issue the Hon'ble Delhi High Court in the case of CIT vs. Iqbal Singh [2007] 162 Taxman 107 has held has under: "So, from the entire material available on record, we have no hesitation in holding that no notice u/s 143(2) of the Act had been served upon the assessee within the prescribed period and, therefore, the assessment made by the Assessing Officer, is invalid." 7.4 Similarly in the case of Vipin Khanna vs. CIT [2002] 255 ITR 220 (P&H), their Lordships, after taking notice of circular No. 549 of 1989 observed and held as under: "Therefore, in a case where a return is filed and is processed under section 143(1) (a) of the Act and no n....
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....hin the stipulated period he can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return. Here it needs to be clarified that in the Board's circular (see [1990] 182 ITR(St.) I) the stipulated period has been referred to as six months as it was the period specified originally when the new provision was introduced with effect from April 1, 1989. However, vide amendment made by the Finance (No.2) Act, 1991, this period was enhanced to twelve months with effect from October 1, 1991. In the present case it is an admitted position that no notice under section 143(2) of the Act had been served to the petitioner within the stipulated period and as such his return had become final." 7.5 The ratio laid down in the aforesaid case has been followed by Hon'ble Madras High Court in the case of CIT vs. M. Chellappan and Another [2006] 281 ITR 444 (Mad). 7.6 On a similar issue, the Hon'ble Jurisdictional High Court in the case of Mohan Dairy vs. UOI [2006] UPTC 461 (Allahabad) has held as under: "7. Having heard learned Counsel for the parties, in my view, order of Tribunal is not sustainable. There is n....