The Commissioner Of Income Tax v. M/s. Yamu Industries Ltd. New Delhi

V.B. Gupta, J.

Admit.

2. After hearing learned counsel for the parties, the following substantial question of law is framed for consideration:-

Whether the Income Tax Appellate Tribunal was correct in law in holding that the notice sent to the Assessee under Section 143(2) of the Income Tax Act, 1961 was not served within the period of limitation

3. Filing of paper books is dispensed with.

4. Assessee-company had filed its return of income on 30th November, 1996 declaring the total income of Rs.1,710/-. The first notice under Section 143(2) of thewas issued on 7th October, 1997 and subsequently on 9th February, 1998, a notice was served by affixation at the address of the company. Later on several notices were issued but they remained uncomplied. Accordingly the assessment was completed under Section 144 of theat a total income of Rs.7,98,810/-.

5. Before the Commissioner of Income Tax (Appeals), besides challenging the assessment on merits, the Assessee also challenged the validity of assessment on the ground that notice under Section 143(2) of thewas served beyond the statutory period. The Commissioner of Income Tax (Appeals) observed that though the first notice was issued on 7th October, 1997, it has not been shown by the Assessing Officer whether it was served on the Assessee by 30th November, 1997,i.e., the last date by which the notice could have been served. Therefore, the Commissioner held that there was no presumption in law as to the date of service of notice purported to be sent under registered cover and accordingly, cancelled the assessment made under Section 144 of theand directed the Assessing Officer to accept the total income of Rs.3,471/- as determined under Section 143(1)(a) of the.

6. Aggrieved with the decision of Commissioner of Income Tax (Appeals), the Revenue filed an appeal before the Income Tax Appellate Tribunal (for short as Tribunal). The Tribunal vide impugned order dated 7th October, 2004 dismissed the appeal of the Revenue holding that in order to raise the presumption with regard to service of the notice, it is incumbent upon the Assessing officer to show that the notice was properly addressed, that it was prepaid and that it was sent through registered post, acknowledgement due. All the three ingredients have to be there to raise the presumption, but none of them has been shown by the Assessing Officer and hence the presumption as to service of notice cannot be raised. Therefore, the Tribunal held that Commissioner of Income Tax (Appeals) was justified in quashing the assessment.

7. It has been contended by the learned counsel for the Revenue that notice in the present case has been correctly addressed to the Assessee and the same has been sent by registered post. Photocopy of the postal receipt has been placed on record and as such presumption is there that notice has been duly received by the Assessee.

8. On the other hand, it has been contended by learned counsel for the Assessee that it is incumbent upon the Assessing Officer to show that as per Section 282 of the Act, the notice was properly addressed and the acknowledgement of having received the notice should have also been on record. Both the things are missing in the present case and as such the Tribunal rightly dismissed the appeal of the Revenue.

9. Section 143(2) of thewhich is relevant for the purpose of deciding the controversy reads as under:-

(2) Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall, if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not under paid the tax in any manner, serve on the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced there, any evidence on which the assessee may rely in support of the return: Provided that no notice under this sub-section shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished.

10. Section 282 of theprovides as to how the notice under the are to be served and it reads as under:- S.282. Service of notice generally-

(1) A notice or requisition under this Act may be served on the person therein named either by post or as if it were a summons issued by a court under the Code of Civil Procedure, 1908 (5 of 1908). (2)Any such notice or requisition may be addressed-

(a) in the case of a firm or a Hindu undivided family, to any member of the firm or to the manager or any adult member of the family;

(b) in the case of a local authority or company, to the principle officer thereof;

(c)in the case of any other association or body of individuals, to the principal officer or any member thereof;

(d) in the case of any other person (not being an individual), to the person who manages or controls his affairs.

11. So, according to it, any notice under the Income Tax Act has to be served on the person named therein either by post or as if it were a summon issued by court under the Code of Civil Procedure.

12. Order V Rule 19A of Code of Civil Procedure provides for simultaneous issue of summons for service by post in addition to personal service. It reads as under:-

R. 19A. Simultaneous issue of summons for service by post in addition to personal service.-

(1) The Court shall, in addition to, and simultaneously with, the issue of summons for service in the manner provided in rules 9 to 19 (both inclusive), also direct the summons to be served by registered post, acknowledgment due, addressed to the defendant, or his agent empowered to accept the service, at the place where the defendant, or his agent, actually and voluntarily resides or carries on business or personally works for gain: Provided that nothing in this sub-rule shall require the Court to issue a summons for service by registered post, where, in the circumstances of the case, the Court considers it unnecessary.

(2) When an acknowledgment purporting to be signed by the defendant or his agent is received by the Court or the postal article containing the summons is received back by the Court with an endorsement purporting to have been made by a postal employee to the effect that the defendant or his agent had refused to take delivery of the postal article containing the summons, when tendered to him, the Court issuing the summons shall declare that the summons had been duly served on the defendant. Provided that where the summons was properly addressed, prepaid and duly sent by registered post, acknowledgment due, the declaration referred to in this sub- rule be made notwithstanding the fact that the acknowledgment having been lost or mislaid, or for any other reason, has not been received by the Court within thirty days from the date of the issue of summons.

13. The requirement of Section 282 of theis that notice may be served upon the person named therein, either by post or if it were a summon issued by a Court under the Code of Civil Procedure.

14. As per the material placed on record, notice under Section 143(2) of thewhich is dated 7th October, 1997 has been sent by the registered post and as per the provisions of the it was to be served upon the Assessee on or before the 30th November, 1997. The address mentioned of the Assessee on this notice is as under:- M/s Yamu Industries Ltd. 5051, N.S.Marg, Darya Ganj, New Delhi. which is admittedly the correct address of the Assessee. The notice has been sent by registered post vide postal receipt No.757 dated 9th October, 1997.

15. So, the provisions of Section 282 of thewith regard to the service of notice has been dully complied with by the Revenue. Since the notice under Section 143(2) of thesent by the registered post had not been received back unserved within thirty days of its issuance, so there would be presumption under the law that notice has been duly served upon the Assessee.

16. In the instant case, since the notice has not been received back unserved within the period of thirty days of its issuance, under these circumstances, it has to be held that the notice has been duly served upon the Assessee.

17. Accordingly, we hold that notice under Section 143(2) of thehas been duly served upon the Assessee within the period of limitation and this finding of the Tribunal that no notice under Section 143(2) of thehas been served within the prescribed period is liable to be set aside.

18. As such the present appeal filed by the Revenue is accepted and the impugned order passed by the Tribunal is set aside and consequently the order quashing the assessment for the period in question is also set aside.

19. The substantial question of law is answered in the negative, in favour of the Revenue and against the Assessee.