TaxTMI 
TaxTMI 
2016 (5) TMI 1394
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.... circumstances of the case and in law, the ld. CIT(A) was incorrect and unjustified in holding that the notice issued within the statutory time limit of one year from the end of the month in which the return was filed. 7. On the facts and in the circumstances of the case and in law, the ld. CIT(A) was incorrect and unjustified in not holding that no notice u/s 143(2) was issued within the permissible period." 3. Briefly stated, the facts of the case are that the assessee company files its return of income in Circle-6(1) on 31.10.2006 and the ITO, Ward-32(4) issued notice u/s 143(2) of the Income tax Act, 1961 [for short, 'the Act'] on 19.10.2007. The ITO, Ward-32(4) subsequently issued letter dated 22.10.2007 to the ITO, Ward 6(1), New Delhi intimating that the case was selected for scrutiny and the assessee had filed return of income in his ward i.e Ward 6(1) vide receipt No. 36000352 and notice u/s 143(2) has been issued by him [ITA Ward 32(4)] on 19.10.2007. The ITO, Ward 32(4) also forwarded copy of said notice issued u/s 143(2) of the Act to the ITO, Ward 6(1), New Delhi alongwith letter dated 22.10.2007. Thereafter, the ITO, Ward 6(4), New Delhi issued notice u/s 1....
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....see on or before 31.10.2007 as per the mandate of the said proviso. The ld. AR further drew our attention towards page 3 of the assessee's paper book and reiterated the objections filed by the assessee on 5.11.2008 before the AO challenging the validity of the notice. The ld. Counsel drew our attention towards page 5 of the assessee's paper book and submitted that as per the record of the postal authorities, letter at Sl. No. 4 was received on 19.10.2007 but in the same page below the date of receipt has been mentioned as 19.07.2007 which create a doubt regarding report of the postal authorities and document relied by the Revenue for issuance and handing over the notice to the postal authorities. The ld. AR further drew our attention towards page 7 of the assessee's paper book and submitted that letter of the ITO, Ward 32(4), New Delhi dated 22.10.2007 mentioned about the issuance of notice u/s 143(2) of the Act on 19.10.2007 but in the same letter, ITO, Ward-32(4) informed the ITO, Ward 6(1), New Delhi that the case was selected for scrutiny but the assessee company had filed its return of income for A.Y 2006-07 in Ward of ITO, Ward-6(1). Therefore, he transferred the ....
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....he ratio of the order of the Hon'ble High Court of Allahabad in the case of CIT Vs. MT Builders Pvt Ltd [2012] 349 ITR 271 [All] and order of the Tribunal ITAT Delhi 'E' Bench dated 12.06.2015 in ITA No. 2358/Del/2012 in the case of Mukesh Kumar Vs. ITO. The ld. Counsel also pointed out that the said notice was issued on the incomplete address as noted by the postal authorities at page 4 of the assessee's paper book and further the service of the said notice has not been established by the Revenue and the presumption of valid service of notice cannot be made in regard to notice issued on incomplete or incorrect address and handed over to postal authorities for service upon the assessee. The ld counsel placed reliance on the order of the ITAT, Jabalpur, Third Member Bench in the case of ACIT Vs. Vindhya Telelinks Ltd [2007] 13 SOT 233 [TM] and the recent order of the ITAT Ç' Bench, New Delhi dated 12.2.2016 in ITA No. 671/Del/2013 in the case of Shri Harvinder Singh Jaggi Vs. ACIT. The ld. Counsel also vehemently contended that the subsequent notice issued on 7.10.2008 has been issued after 31.10.2007 which was the last date of limitation of issuance of notice and thus th....
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....sidered and adjudicated properly and provisions of section 292BB of the Act is applicable in A.Y 2008-09 and the case in hand is pertaining to A.Y 2006-07, therefore, the lacunae and omission of the AO cannot be filled up by taking aid of section 292BB of the Act. 8. The ld. AR also placed reliance on the decision of the Hon'ble High Court of Delhi in the case of Hotel Blue Moon reported at 321 ITR 362 and submitted that if the AO without any reason repudiates the return filed by the assessee, then the AO must issue notice u/s 143(2) of the Act within the prescribed time in pursuance to section 143(2) of the Act which has not been done in the present case. Therefore, the assessment order may kindly be annulled on these counts. 9. Replying to the above, the ld. DR contended that the assessee deliberately did not mention and accept the receipt of notice dated 19.10.2007 issued by the ITO, Ward 32(4), New Delhi. The ld. DR further contended that the said notice was handed over to the postal authorities for service upon the assessee, but no postal receipt was issued to the department by the postal authorities because at that point of time postal receipt and tracking delivery numb....
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....ation of the facts and in the circumstances of the case, at the very outset, we note that the assessee filed return for the relevant A.Y on 31.10.2006 with ITO, Ward-6(1), New Delhi. Therefore, as per the proviso to clause (ii) of sub-section (2) of section 143 of the Act, notice should have been served upon the assessee on or before 31.10.2007. In the present case, as per the contention of the ld. DR, first notice was issued to the assessee by the ITO, Ward 32(4) on 19.10.2007 and proof of dispatch of notice shows that it was handed over to the postal authorities for service upon the assessee. Further, it is also the contention of the ld. DR that the said notice did not return back unserved which shows that it was effectively and validly served upon the assessee and in this situation, when handing over of the notice has been shown by the Revenue, then the valid presumption should be drawn that the notice has been served upon the assessee within the prescribed time limitation period which expired subsequently on 31.10.2007. 12. It is well accepted proposition of law that the burden was on the Revenue to prove that notice was validly served on the assessee within the prescribed tim....
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....only notice ever received by it was the one dated 21st October, 1999. In the duplicate copy of the notice dated 21st October, 1999, learned Counsel for the assessed had made an endorsement that he has received the time barred notice. This was followed by an affidavit by the assessed stating that it had not received any notice prior to the notice dated 21st October, 1999. In a case such as this, the onus is clearly upon the Revenue to show that the notice dated 28th November, 1998 was, in fact, served on the assessed within the time prescribed by law. The Revenue has not been able to discharge its onus either before the Tribunal or before us. We, therefore, find that no substantial question of law arises and the appeal is dismissed." 7.4 Whereas in the present case, the Revenue has provided enough proof that the notice was sent through speed post at the correct address provided in the return of income. Further, in the case of Lunar Diamonds Ltd. (supra), the receipt issued by the postal authorities was only containing name of the assessee and thus it was submitted by the assessee that there was a possibility that the correct address of the assessee might not have been written on t....
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....he only evidence, which could have been produced by the Department, is the proof of the dispatch of the notice and not of not-receiving the said post bade by the Department. Against this evidence of Department, there is only word of mouth of the assessee that he did not receive the notice under Section 143(2) of the Act. In that fact situation, the Assessing Officer as well as the Tribunal were fully justified in accepting the contention of the Income Tax Department that notice was duly sent and since it was not returned back as undelivered, it was deemed to have been delivered to the assessee. 7.6 As regards to the rebuttal of the presumption, the Hon'ble Court has already held that only word of mouth of the assessee that he did not receive the notice are not sufficient for establishing rebuttal of presumption. Further, the Hon'ble Court has held that the notice has not been returned back, it is presumed to be served. The relevant paragraphs are reproduced as under: 17. So far as dispute with respect to the interpretation of the "Post", "Registered Post" and "Speed Post" are concerned, the Tribunal has considered the issue in detail. We would like to quote the relevant....
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....In the case before us, the assessee has led no evidence to prove that the impugned notice was not received by him or that he was not responsible for its non-service. The details given by the AO in the assessment order included not only the receipt no. under which speed post was sent but also the tracking code. Perusal of the assessment order shows that the AO had apprised the assessee of the aforesaid facts in the course of assessment proceedings also. It was therefore for the assessee to adduce relevant evidence to prove that the said notice was not served upon him and also that he was not responsible for its nonservice. However, the assessee has not adduced any evidence to prove so in spite of the fact that he could have done so with the help of details made available in the assessment order and also in the notice issued to him in the course of the assessment proceedings. Additionally, the AO has verified his records and found that the impugned notice was not received back in his office. In this view of the matter, the legal fiction by which the service of the impugned notice is deemed to be effected on the assessee stands on a much stronger footing.(emphasis supplied) We are in ....
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....the Hon'ble Allahabad High Court in the case of CIT Vs. M/s MT Builders Pvt. Ltd., (2012) 349 ITR 271 (All.) that the notice issued by an Officer who had no valid jurisdiction over the assessee is invalid. The notice under Section 148 of the Act issued by the Income Tax Officer, Ward-26(4) is non est in the eyes of law since he had no valid jurisdiction over the appellant either territorial as notified under Section 124 of the Act or by transferring the case under the provisions of Section 127 of the Act. Now, the question is whether the action of the Income Tax Officer, Ward-26(3) New Delhi was valid in law in concluding the assessment proceedings based on the notice issued under Section 148 of the Act by the Income Tax Officer, Ward-26(4) who had no valid jurisdiction to issue the notice. The issue of valid jurisdiction is a condition precedent to the validity of any assessment under Section 147 of the Act; therefore, the assessment made pursuant to such notice is bad in law. In support of this proposition we rely upon the cases of Hon'ble Apex Court in the cases of Y. Narayana Chetty Vs. ITO, 35 ITR 388, 392 (SC); CIT Vs. Maharaja Pratap singh Bahadur, 41 ITR 421 (SC); a....
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....same time, we may also point out that the said presumption is not permissible which demolished the case of the Revenue based on presumption of valid service of notice at any of the four stages mentioned above. In our considered opinion, notice contains full address as per return of income is kept inside the envelope and the address of the assessee is mentioned on the envelope to indicate the addressee to the postal authorities and postal officer to whom envelope is handed over, notes the address from the envelope and if such address is incomplete or incorrect then the pre condition No. (2), as noted above, cannot be held as fulfilled and the presumption of valid service of notice cannot be made. In the present case, at the cost of repetition, we clearly observe that the address noted by the postal authorities [paper book page 5] is an incomplete address if compared with the address given by the assessee in the return of income for A.Y 2006-07 [paper book page 1] and thus we have no hesitation to hold that the first notice issued by non jurisdictional AO, ITO, Ward 32(4) was not handed over to the postal authorities with complete and correct address and thus a rebuttable presumption....
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....ese contentions, we are in agreement with the contentions of the ld. AR that the provisions of section 292BB of the Act was inserted by the Finance Act 2008 w.e.f 1.4.2008 i.e. from A.Y 2009-10 onwards and since the present case is pertaining to A.Y 200607, thus the provisions of section 292BB f the Act are not applicable to A.Y 2006-07. At the same time, from the proviso to section 292BB of the Act, we also note that nothing contained in this section shall apply where the assessee has raised such objection before completion of such assessment or reassessment. In the present case, as we have concluded above that the notice u/s 143(2) of the Act dated 19.10.2007 was issued by the AO not having valid jurisdiction over the assessee and the same was issued but handed over to the postal authorities with an incomplete and incorrect address on the envelope hence, presumption of valid service of notice cannot be taken in this case. 18. So far as the applicability of provisions of section 292BB of the Act is concerned, firstly it is not applicable to A.Y 2006-07 under consideration and secondly, the assessee raised objection regarding non service of notice dated 19.10.2007 on 5.11.2008 [pa....