TaxTMI 
TaxTMI 
2017 (10) TMI 46
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.... facts and in the circumstances of the case and in law, the learned Assessing Officer erred in holding and the Dispute Resolution Panel-Ill, New Delhi (DRP) has further erred in upholding/confirming the action of the learned Assessing Officer to assess the income of the appellant at Rs. 5,22,27,000 as against the returned income of Rs. 2,08,90,802. 3. That on the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in assuming jurisdiction under section 143(3) of the Act based on the notice which has not been served upon the appellant as per the time limit stipulated under section 143(2) of the Act. 3.1 That on the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in holding and the Dispute Resolution Panel further erred in upholding the action of the learned Assessing Officer that the terms 'issue' and 'service' of notice under section 143(2) of the Act can be used interchangeably. 4. That on the facts and in the circumstances of the case and in law, the learned Assessing Officer erred in holding and the Dispute Resolution Panel has further erred in upholding t....
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....icer erred in levying the interest under section 234C of the Act ignoring the fact that it is charged on the returned income and not on the assessed income. 9. That on the facts and in the circumstances of the case and in law: 9.1. That the learned Assessing Officer has erred in mechanically initiating the proceedings under section 271B of the Act. 9.2. That the learned Assessing Officer has erred in mechanically initiating proceedings under section 271(1)(c) of the Act. The above grounds of appeal are independent of, and without prejudice to each other. That the appellant reserves its right to add, alter, amend or with draw any ground of appeal either before or at the time of hearing of this appeal." 2. At the time of hearing, the learned counsel for the assessee submitted that the assessee has raised ground Nos. 3 and 3.1 which may be taken as preliminary issue and be adjudicated first. He submitted that if the issue is decided in favour of the assessee then the entire proceedings under section 143(3) of the Act would become void. Therefore, ground Nos. 3 and 3.1 are taken as preliminary issue to be decided first. The learned counse....
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....ol of the Revenue and the presumption is that the notice is served upon the assessee. Therefore, the Assessing Officer has rightly applied the judgment of the hon'ble Supreme Court in the case of Banarsi Debi v. ITO (supra). He, therefore, contended that the objection of the assessee is devoid of any merit. 2.2 We have heard the rival contentions and perused the material on record. The facts as recorded by the Assessing Officer are that the assessee had filed its return of income on October 15, 2010 declaring a total income of Rs. 2,08,90,801 consisting the income under the head "Business and profession" and claim the refund of Rs. 14,65,726. The return of income was processed under section 143(1) and was picked up for scrutiny by issuing notice under section 143(2) of the Income-tax Act, 1961 by the Income-tax Officer Ward 1(1) Baroda. The notice was issued on September 29, 2011 and was sent by the speed post bearing Receipt No. EC 45875719 IN on September 30, 2011. There is no dispute so far this fact is concerned. 2.3. The issue to be decided is whether posting of the notice issued under section 143(2) a day before the expiry of the prescribed limitation would be a val....
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....tuation where notice is issued within time but served out of time. On behalf of the Revenue, it was contended, in this context that the expression 'issued' means 'served'. The Supreme Court went into the legislative history of section 34 of the Indian Income-tax Act and held that the contention of the assessee could not be accepted because it would defeat the very purpose for which the amendment was carried out. While specifically dealing with the use of the word 'issued' in section 4 of the Amending Act, the Supreme Court noted that there is no prescription in section 34 of the Indian Income-tax Act of a time limit for sending a notice. Therefore, it was obvious that the expression 'issued' used in section 4 of the Amending Act could not be used in the narrow sense of 'sent'. Concluding the discussion on the subject, the Supreme Court noted that the intention of the Legislature was to save the validity of a notice as well as a consequent assessment order from an attack on the ground that the notice was served beyond the prescribed period. That intention would be effectuated if a wider meaning is given to the expression 'issued&#....
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....merely set aside on the ground that the notice under section 143(2) of the Act had been served upon the assessee beyond the period of one year prescribed by the law. We may also point out that there appears to be some doubt whether the notice was at all sent to the assessee because as observed by the learned Commissioner of Income-tax (Appeals), the receipt showing that an envelope was sent by registered post merely contained the name of the assessee without its address. Consequently, it is quite possible that the notice may have been sent to the assessee at some wrong or even some incomplete address. However, it is not necessary for us to go into this question at all because the assessee had filed an affidavit stating that it had not received the notice and the 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." This judgment of the hon'ble Delhi High Court was also followed in the case of CIT v. Vardhman Estate P. Ltd. (supra) as under (page 369 of 287 ITR) : "In the present case, the....
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....upreme Court in R. K. Upadhyaya v. Shanabhai P. Patel [1987] 166 ITR 163 (SC), which in fact strengthens and fortifies the position that there is a clear distinction between 'issuance of notice' and 'service of notice'. Ms. Bansal's reliance on Tea Consultancy and Plantation Services (India) P. Ltd. v. Union of India [2005] 278 ITR 356 (Delhi) is of no avail since the word that had to be construed by the Division Bench in that case was 'made' and not 'issued' or 'served'. We see no reason to adopt an approach different to the one adopted by us in CIT v. Vardhman Estate P. Ltd. [2006] 287 ITR 368 (Delhi) (I. T. A. No. 1248 of 2006) decided by us on September 25, 2006)." The learned counsel for the assessee has also placed reliance on the Central Board of Direct Taxes Circular No. 549 dated October 31, 1989 (See [1990] 180 ITR (St.) 1). The relevant paragraph 5.13 of the said Circular is reproduced herein below : "5.13. A proviso to sub-section (2) provides that a notice under the sub-section can be served on the assessee only during the financial year in which the return is furnished or within six months from the end of the mon....
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....Mills P. Ltd. v. Union of India [2013] 359 ITR 495 (P&H) ; [2013] 33 taxmann.com 675 (P&H). The learned Departmental representative has also placed reliance on the judgment of the hon'ble Punjab and Haryana High Court wherein the hon'ble High Court has decided the issue as under (page 502) : "Another judgment relied upon by the petitioner is Kunj Behari v. ITO [1983] 139 ITR 73 (P&H) the issue raised in the aforesaid case is not of issuance or serving of a notice, but method of substituted service. The issue raised is not necessary to be decided in the present case, as notice has been issued within the time prescribed. That issuance of notice is sufficient compliance with the provisions of section 143(2) of the Act. We may notice that the hon'ble Supreme Court in CST v. Subhash and Co. 130 STC 97 (SC) ; [2003] 3 SCC 454 observed as under (page 101 of 130 STC) : '12. Whether service of notice is valid or not is essentially a question of fact. In the instant case, the learned single judge found that certain procedures were not followed while effecting service by affixture. There was no finding recorded that such service was non est in the eye of the ....
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....e Delhi High Court in respect of the issue under consideration. We find that the Circular issued by the Central Board of Direct Taxes bearing No. 549 dated October 31, 1989 was not before the Punjab and Haryana High Court and also the judgment of the hon'ble Delhi High Court. Undisputedly, the hon'ble Punjab and Haryana High Court has not considered this decision of the hon'ble Delhi High Court and the judgment of the hon'ble Supreme Court in the case of R. K. Upadhyaya v. Shanabhai P. Patel [1987] 166 ITR 163 (SC). The hon'ble Supreme Court in the case of R. K. Upadhyaya v. Shanabhai P. Patel (supra) was considering the issuance and service of notice under section 148 but not under section 143(2). The hon'ble Supreme Court held that the mandate of section 148(1) is that reassessment shall not be made until there has been service. The requirement of issue of notice is satisfied when a notice is actually issued. In this case, admittedly, the notice was issued within the prescribed period of time as March 31, 1970 was the last day of that period. Service under the 1961 Act is not a condition precedent to conferment of jurisdiction in the Income-tax Officer to ....