TMI Blog2011 (3) TMI 543X X X X Extracts X X X X X X X X Extracts X X X X ..... f notice within the ambit of Section 148(1) of the Act Since the Tribunal has not dealt with the findings of the CIT(A) on the remaining ten questions, the matter is remanded back to the Tribunal to decide the appeals afresh keeping in view our above findings with regards to the notice under Section 148 of the Act - I.T.A. No.1604/2010 & ITA No. 1778/2010 - - - Dated:- 25-3-2011 - MR. A.K. SIKRI, MR. M.L. MEHTA, JJ. Ms.Prem Lata Bansal, Sr. Advocate with Mr.Deepak Anand, Advocate For Applicant Dr.Rakesh Gupta with Dr.Raj K. Agarwal, Ms.Poonam Ahuja, Ms.Rani Kiyala and Mr.Johnson Bara, Advocates. For Respondant M.L. MEHTA, J. 1. These appeals are filed against the common order dated 25th September, 2009 of the Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal ) whereby cross-objections filed by the assessee for the assessment year 1999-2000 were allowed and consequently appeal of the Income Tax Officer, Ward 16(2), New Delhi (for short the Revenue ) was dismissed. Vide this common order both the appeals are being disposed. 2. The issue raised in the present appeal centered around a narrow compass. With the consent of the counsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 basement, Ramesh Nagar, New Delhi. It is also true that the assessee has been filing its return for A.Y.2004-05, 2005-06 and 2006-07 at another address i.e. 5/2, Punjabi Bagh Extn., New Delhi-110015. The Assessing Officer had also sent one notice under Section 271(1)(c) for AY 2001-02 on 14.02.20056 at the above said address of Punjabi Bagh only. However, the perusal of the assessment order reveals that the notice dated 27.03.2006 was dispatched by registered post which has been supported with the copy of postal receipt sent by Assessing Officer along with the remand report. The contention of AR is also that the postal receipt should be backed with the evidence of dispatch at RPAD and in absence of the same service is not in accordance with law. He has relied upon the judgment of Hon‟ble Delhi High Court in the case of CIT v. Hotline International Pvt. Ltd. 161 Taxman 104 (Del) holding that under order V, Rule 19A of the Code of Civil Procedure, the notice sent by registered post should have been sent along with acknowledgment due and in absence of the same service was not valid. I am not able to convince myself with the arguments of the Counsel for at least three reasons. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ribunal. The Tribunal has arrived at this finding on the ground that no valid notice under Section 148 of the Act was served upon the assessee before making assessment by Assessing Officer. This will require interpretation of Section 148 of the Act. Relevant part of this Section read as under:- 148. Issue of notice where income has escaped assessment. (1) Before making the assessment, reassessment or recomputation under Section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139. 8. Referring to the provisions of sub-Section (1) of Section 148 of the Act, learned counsel for the assessee has vehemently argued that the issue of notice bef ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt bound by the judgment in Banarsi Debi v. ITO [1964]53ITR100(SC) . As the Income-tax Officer had issued notice within limitation, the appeal is allowed and the order of the High Court is vacated. The Income-tax Officer shall now proceed to complete the assessment after complying with the requirement of law. Since there has been no appearance on behalf of the respondents, we make no orders for costs. 10. In the case of Mintu Kalita (supra) following R.K. Upadhyaya (supra) it was held that service of notice under Section 148 for the purpose of initiating proceedings for reassessment is not a mere procedural requirement, but it is a condition precedent to the initiation of proceedings for reassessment. To the same effect was the finding in the case of Thayaballi Mulla Jeevaji (supra). In the case of Harish J. Punjabi (supra) no notice under Section 148 was sent or served upon the assessee, through any manner whatsoever and that being so assessment was held to be void. 11. The facts of the case of Rajesh Kumar Sharma (supra) are somewhat similar to the instant case inasmuch as in that case also notice under Section 148 was issued at the old address of the assessee. The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee in the return of AY 2004-2005 2005-2006. Above all, another factor which weighed with the Court Eshaan Holding (supra) was the tax effect of that case being about Rs.4.00 lakhs and not thus appealable. 13. The learned counsel also relied upon the case of Haryana Acrylic Manufacturing Co. v. Commissioner of Income Tax Anr. (2009) 308 ITR 38. The facts of this case are not applicable to the present case. This case came to be considered by the Division Bench of this Court in another case titled Mayawati v. CIT Ors. (2010) 321 ITR 349, wherein, issues were substantially the same as before us in the present case. Before adverting to the facts and issues in that case, it may be noted as to what the Division Bench had noted about the factual matrix of the case of Haryana Acrylic (supra). The Court observed as under:- Various issues had arisen in that case, none of which, in our opinion, are of any relevance to the determination of the questions which fall for determination by us. In Haryana Acrylic it had, inter alia, been opined that for Section 147 to become operational it is essential that it should be alleged that escapement of income is a consequence of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the case of Mayawati (supra) this Court referred to various decisions of different High Courts and noticed that in the context of Section 143(2) of the Income Tax Act, it has been held that the word 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 issue‟, actual service within the period of four and six years specified in the section, would not be critical. It was further held as under:- 5. On a plain reading of these Sections it is palpably plain that Section 148 of the IT Act enjoins that the AO must serve on the assessee a notice requiring him to furnish a return of his income, in respect of which he/she is assessable under this Act during the previous year corresponding to the relevant assessment year. Firstly, the notice contemplated by this Section relates to the furnishing of a return and not to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fortiori the presumption of fiction of service must be drawn on the lines indicated in Section 27 of the General Clauses Act, 1897. 15. We are in complete agreement with the reasoning of the Division Bench in the aforesaid case of Mayawati (supra) that what is contemplated under Section 149 is the issuance of notice under Section 148 and not the service thereof on the assessee and further that the service of notice under Section 148 is only required before the assessment, reassessment or re-computation. 16. Learned counsel also relied upon the case of Kanubhai M. Patel (HUF) v. Hiren Bhatt or his Successors to Office Others, (2010) 43 DTR (Guj) 329 to substantiate that the notice issued six years after the expiry of assessment year was barred by limitation and assessment made thereon was void ab initio. In this case, a notice issued under Section 148 of the Act was apparently held to be issued after the expiry of six years and in that way of the matter, the notice was held to be bad in law. It was in this background that it was held that there was no need of filing of objection by the assessee against the reopening of the assessment under Section 147 of the Act as no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard, it may be stated that this provision came to be inserted by the Finance Act, 2008 with effect from 1st April, 2008 and is not applicable to the assessment year in question. However, this provision also substantiates our finding that in the given circumstances as in the present case, service of notice before assessment could be inferred. The participation by the assessee in the assessment proceedings on receipt of the copy of the notice can be deemed to be service of notice within the ambit of Section 148(1) of the Act. That is what is the legislative intent of service of notice on assessee under this section that no assessment under Section 147 can be finalized before the assessee has sufficient notice thereof. 20. Thus, we are of the view that the Tribunal was not correct on facts and law to annul the assessment framed by the Assessing Officer. Consequently, we answer the questions in affirmative in favour of the Revenue and against the assessee. Since the Tribunal has not dealt with the findings of the CIT(A) on the remaining ten questions, the matter is remanded back to the Tribunal to decide the appeals afresh keeping in view our above findings with regards to the no ..... X X X X Extracts X X X X X X X X Extracts X X X X
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