TaxTMI 
TaxTMI 
2009 (2) TMI 17
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.... the relevant Assessment Year (which in this case is 2001-2002) since the income chargeable to tax, which has escaped assessment, amounts to or is likely to amount to Rupees one lakh or more for that year. The prayers in the Petition are for quashing (a) the Notice dated 25.3.2008 issued under Section 148 of the IT Act; (b) the Notices dated 25.6.2008 and 3.11.2008 issued under Section 142(1) of the IT Act; and (c) the Order dated 27.11.2008. 2. The factual sequence is short and uncontroverted. The A.O. had passed an Order on 24.3.2008 stating that he has reason to believe that the Petitioner had not declared full and true particulars of her income. On 25.3.2008, the CIT, Central Range-III, recorded the approval to this proposal for initiation of proceedings and issuance of notice under Section 148 of the IT Act. Accordingly, the AO has issued a Notice dated 25.3.2008 under Sections 147/148 of the IT Act to the Petitioner at her Delhi address, viz. C-1/11, Humayun Road, New Delhi- 110 003. Mr. Salve contends that, purely as a coincidence, the Petitioner had dispatched a letter dated 25.3.2008 to the Revenue, stating that since she has become the Chief Minister of the Uttar Prade....
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....tion 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject-matter of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1. - Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso. Explanation 2. - For the purposes of this section, the following shall also be-deemed to be cases where income chargeable to tax has escaped assessment, namely :- (a) where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax; (b) where a return of income has been furnished by the assessee but no assessment has been made ....
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.... before the expiry of the time limit for making the assessment, reassessment or recomputation as specified in sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice. Explanation. - For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so. 149. (1) No notice under section 148 shall be issued for the relevant assessment year,- (a) if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b); (b) if four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year. Explanation. - In determining income chargeable to tax which has escaped assessment for the purposes of this sub-section....
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....rvice of such a notice would be presumed to be legally proper as it would be deemed to have been delivered in the ordinary course at the correct address. It had, inter alia, been expressed that while there would be no justification for enlarging the period of limitation prescribed by the statute itself, we should also not lose sight of the fact that disadvantage or discomfort of the assessee is only that he has to explain the correctness and veracity of the Return filed by him. A reasonable balance of burden of proof must also, therefore, be maintained. In the facts and circumstances of the present case, we are satisfied that because notice was dispatched on August 25, 1998 and was duly addressed and stamped, the Department has succeeded in proving its service before August 31, 1998. On the other hand, the assessee has failed to prove a statement that he received the notice only on 1.9.1998. Where a statute postulates the issuance of a notice and not its service, a fortiori the presumption of fiction of service must be drawn on the lines indicated in Section 27 of the General Clauses Act, 1897. 7. To dispel any possible doubt, it would be of advantage to refer to R.K. Upadhyaya ....
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....(2) of the IT Act it has been held that the words issuance of notice and service of notice are not synonymous and interchangeable and accordingly, the notice under this Section would lose all its legal efficacy if it had not been actually served on the assessee within the scheduled and stipulated time. In this dialectic, a fortiori, since the word 'served' is conspicuous by its absence in Section 149, and the Legislature has deliberately used the word 'issued', actual service within the period of four or six years specified in the Section, would not be critical. In fairness to Mr. Salve, his argument was that whilst it was not mandatory for the impugned Notice to have been actually served on the Petitioner before 31.3.2008, it could not have been left abandoned on the file. We are not convinced a bit by the argument of Mr. Jolly that the notice could be served at any time before the commencement of the proceedings under Section 142(1) of the IT Act. In the facts of the present case, after the first service in March/April, 2008, no further steps to issue the notice under Section 147 of the IT Act to the Petitioner were initiated, although notices under Section 142(1) appear to have ....
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....ime. GKN Driveshafts (India) Limited vs Income Tax Officer, (2003) 1 SCC 72 was applied to emphasise the fact that the reasons should have been furnished within a reasonable time. It was clarified that ?where the notice has been issued within the said period of six years, but the reasons have not been furnished within that period, in our view, any proceedings pursuant thereto would be hit by the bar of limitation inasmuch as the issuance of the notice and the communication and furnishing of reasons go hand-in-hand. The expression within a reasonable period of time as used by the Supreme Court in GKN Driveshafts (supra) cannot be stretched to such an extent that it extends even beyond the six years stipulated in Section 149. The factual matrix in Haryana Acrylic is inapplicable to the sequence of events before us and, therefore, reliance by Mr. Salve to that decision is inapposite. 10. An important question is whether a noticee can insist that service must be effected upon him/her only at a specified address. It would be recalled that the Notice dated 25.3.2008 had been personally taken to C-1/11, Humayun Road, New Delhi where the Inspector was told to dispatch it to Property No.....
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.... Section 27 reads as follows:- 27. Meaning of service by post Where any Central Act or Regulation made after the commencement of this Act authorises or requires any document to be served by post, whether the expression 'serve' or either of the expressions 'give' or 'send' or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. 13. In this regard, the observations made in Har Charan Singh vs Shiv Rani, AIR 1981 SC 1284 call for reproduction: 7. Section 27 of the General Clauses Act, 1897 deals with the topic Meaning of service by post and says that where any Central Act or Regulation authorises or requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting it by registered post, a letter containing the document, and unless the contrary is proved, to have been....
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....ce could be imputed the sealed envelope must be opened and read by the addressee or when the addressee happens to be an illiterate person the contents should be read over to him by the postman or someone else. Such things do not occur when the addressee is determined to decline to accept the sealed envelope. It would, therefore, be reasonable to hold that when service is effected by refusal of a postal communication the addressee must be imputed with the knowledge of the contents thereof and, in our view, this follows upon the presumptions that are raised under Section 27 of the General Clauses Act, 1897 and Section 114 of the Indian Evidence Act. 14. In C.C. Alavi Haji vs Palapetty Muhammed, (2007) 6 SCC 555 their Lordships attention had been engaged on service of a notice under the Negotiable Instruments Act, 1881. It was observed thus:- 14. Section 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the retu....