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TMI Blog2013 (8) TMI 439X X X X Extracts X X X X X X X X Extracts X X X X ..... dutta Mallick, is an individual engaged in the business of running a nursing home in the name and style of Cuttack Urology Centre in proprietorship. A survey operation under section 133A of the Income-tax Act, 1961 was conducted in the clinical premises of M/s. Cuttack Urology Center on January 16, 2007. Based on the material gathered during survey, additions under different heads were made by the Assessing Officer in the case of the respective assessees, as under : 1. Dr. Tulsi Prasad Mohapatra (Rs.) Consultancy fees 4,29,400 Fees from surgical operations 12,97,310 Disallowance of salary to staff 48,000 2. Dr. (Smt.) Debaduta Mallick (Rs.) Total business income 23,14,885 Disallowance of salary to staff 45,600 Payment of doctor's fees 20,900 Aggrieved, the assessees filed appeals before the Commissioner of Income-tax (Appeals). Besides challenging the merits of additions, the assessees raised a specific ground that the order passed on December 31, 2009 and served on May 10, 2010, is barred by limitation being passed back-dated and hence, should be quashed in toto. The learned Commissioner of Income-tax (Appeals) considered this ground and after bear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ata in the case of Elkom Enterprises P. Ltd. v. ITO in I. T. A. No. 1081/KOL/2009 dated April 30, 2010 (copy placed on paper book on pages 29-40) ; and 7. The decision of the Income-tax Appellate Tribunal, Cuttack in the case of Torsteel Ltd. v. Asst. CIT [2012] 16 ITR (Trib) 425 (Cuttack) in I.T.A. No. 059/CTK/2011 dated June 17, 2011 (copy placed on pages 41-49). The learned Departmental representative relying on the above judicial pronouncements has assailed the orders passed by the learned Commissioner of Income-tax (Appeals) and sought for setting aside the same by allowing the Department's appeals. Contrary to this, the learned authorised representative for the assessee has contended that the citations relied on by the learned Departmental representative are not at all applicable to the facts of the present cases on hand as they are distinguishable on facts. Thus contended, he distinguished the facts of those cases from the cases on hand. He further submitted that the orders of the learned Commissioner of Income-tax (Appeals) are well reasoned and in accordance with the judicial pronouncements relied on by the learned Commissioner of Income-tax (Appeals) and hence, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fective in law. Accordingly, he sought for dismissing the appeals of the Department and allow the cross-objections of the assessee. On a careful analysis of the orders passed by the Departmental authorities it is found that the learned Commissioner of Income-tax (Appeals) has found from the assessment record that the assessment orders were passed by the Assessing Officer on December 31, 2009 and demand notice under section 156 dated December 31, 2009 and orders of the assessment and demand notices were served on the assessee on May 10, 2010. Notice under section 274(1)(b) was signed by the Assessing Officer on December 31, 2009 asking the assessee to appear before him on May 21, 2010. The said notice was sent by the Assessing Officer on December 31, 2009. These notices were also received by the assessee's representative on May 21, 2010. We further found that there is no material in the assessment record which could indicate that initiative was taken by the Assessing Officer to serve the assessment orders along with demand notice immediately after passing of the assessment orders on December 31, 2009. Thereafter, the learned Commissioner of Income-tax (Appeals) considered the judic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtmental representative, it is found that the Tribunal's order of the Jodhpur Bench was appealed before the hon'ble Rajasthan High Court and it is pending adjudication, but it is not the case of the Department that the hon'ble High Court has stayed the operation of the said order of the Income-tax Appellate Tribunal. In the case of Kodidasu Appalaswamy and Suryanarayana [1962] 46 ITR 735 (AP), the assessment order was passed on March 29, 1957 and served on the assessee along with demand notice on April 6, 1957 after a delay of six days only. But in the present case on hand, there is delay of 85 days that too unexplained before the Tribunal and no material is available in the assessment record as can be seen from the observation of the learned Commissioner of Income-tax (Appeals) in his impugned orders. In the case of Ramanand Agarwalla v. CIT [1985] 151 ITR 216 (Gauhati), the assessment order is dated March 16, 1968 but served on the assessee on April 13, 1968 with a delay of 13 days. But in this case the demand notice was dated April 13, 1968 and it was served on the assessee on April 13, 1968 along with the assessment order. In the case of K. U. Srinivasa Rao v. CWT [1985] 152 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... out of the assessment order. This proves that the said assessment order was passed within the period of limitation. On comparison of the present facts and circumstances available in the present case on hand, the facts and circumstances of the above cases are distinguishable more so when the demand notice and assessment orders in the present case were served on the same day, i.e., May 10, 2010 though they purportedly made on December 31, 2009. Therefore, respectfully following the decision of the hon'ble apex court rendered in the case of B. J. Shelat v. State of Gujarat, AIR 1978 SC 1109 as well as the decision of the hon'ble Kolkata High Court rendered in the case of Mohendra J. Thacker and Co. [1983] 139 ITR 793 (Cal), which have categorically been held that the communication is a condition precedent to an order of assessment becoming effective, and also following the decision of the hon'ble Kerala High Court in the case of K. Joseph Jacob v. Agricultural Income-tax Officer [1991] 190 ITR 464 (Ker) dealing with section 35(2) of the Agricultural Income-tax Act similarly worded as in section 153 of the Incometax Act, 1961, we are of the considered view that the view taken by theI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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