TMI Blog2011 (3) TMI 1666X X X X Extracts X X X X X X X X Extracts X X X X ..... y of the assessment order could not have been upheld and the CIT (Appeals) has grossly erred in law and on facts, in taking a contrary view by observing that; prima-facie that notice u/s 143(2) dated 30.10.2003 is well within the time and the Assessing Officer had the jurisdiction over the appellant . 3. By way of above two grounds, the assessee has challenged the validity of the notice u/s 143(2) of the I.T. Act, 1961 (in short, the I.T. Act). In this case, the assessee filed the return of income on 31st December 2002 declaring income of `3,07,448/-. The return was processed on 3rd February 2003. Subsequently, the case was selected for scrutiny and the notices u/s 143(2) and 142(1) were issued. However, the Assessing Officer completed the assessment u/s 143(3) of the I.T. Act on 30th March 2005 wherein the Assessing Officer made certain additions/disallowances. The Assessing Officer determined the taxable income at `41,12,505/- as against returned income of `3,07,448/-. The income of the assessee was computed by the Assessing Officer as under: S.No. Particular Rs. 1. Rental Income as show ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice. Accordingly, it was submitted that when the notice was not served on the assessee u/s 143(2), the assessment framed u/s 143(3) was invalid. He, therefore, submitted that facts being identical and, therefore, the order passed by the Tribunal in the case of assessee s brother Shri Sanjeev Agarwal in I.T.A. No.495/Luc/09 relating to assessment year 2002-2003 may be followed and the assessment may be held as invalid. 7. Shri Vivek Mishra, D. R. heavily relied on the decision of Hon'ble Jurisdictional High Court rendered in the case of CIT vs. Sohan Lal Sewa Ram Jaggi [2009] 222 CTR (All) 412 wherein it has been held that assessee having failed to raise objection as regards jurisdiction of the Assessing Officer within 30 days of receipt of notice under section 143(2) as stipulated u/s 142(3), the Tribunal was not justified in annulling assessment on the ground of jurisdiction. 8. We have heard the learned representatives of both the parties and have also carefully gone through the material available on record. We find that the decision relied upon by the learned D. R. has been duly considered by the Tribunal in the case of Shri Sanjeev Agarwal and the Tribunal held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee on or after the 1st day of June, 2003;] (ii) notwithstanding anything contained in clause (i), 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, any evidence on which the assessee may rely in support of the return: [Provided that no notice under clause (ii) shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished. 7.1 From the proviso to clause (ii) of sub section 2 of section 143, it is clear that no notice shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished. The use of word shall makes it mandatory that the notice must be served on the assessee. in the instant case, nothing has been brought on record that the notice u/s 143(2) was served on the assessee since the document furnished by the department clearly revealed that the notice u/s 143(2) dated 30/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The provisions contained in order (v) Rule 12 of the CPC 1908 provides that wherever it is practical, service shall be made on the defendant in person when practicable or on his agent. The said provisions read as under: Service to be on defendant in person when practicable or on his agent whenever it is practicable, service shall be made on the defendant in person, unless he has an agent empowered to accept service, in such case, service on such agent shall be sufficient. 7.3 In the present case, as we have already noted in the former part of this order that the notice has neither been served on the assessee or any other person authorized by the assessee. therefore, the service on Shri Sachin Agarwal, who was not authorized, was not a valid service. In that view of the matter, we are of the considered view that in the instant case the notice u/s 143(2) before completing the assessment u/s 143(3) has not been served upon the assessee. Therefore, the assessment framed u/s 143(3) was invalid. On a similar issue the Hon'ble Delhi High Court in the case of CIT vs. Iqbal Singh [2007] 162 Taxman 107 has held has under: So, from the entire material available on record, we h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t if an assessee, after furnishing the return of income does not receive a notice under section 143(2) from the Department within the aforesaid period, he can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return. (emphasis supplied). Thus, it is evident that the Board itself concedes that if the assessee after furnishing the return of income does not receive a notice under section 143(2) of the Act within the stipulated period he can take it that the return filed by him has become final and no scrutiny proceedings are to be started in respect of that return. Here it needs to be clarified that in the Board's circular (see [1990] 182 ITR(St.) I) the stipulated period has been referred to as six months as it was the period specified originally when the new provision was introduced with effect from April 1, 1989. However, vide amendment made by the Finance (No.2) Act, 1991, this period was enhanced to twelve months with effect from October 1, 1991. In the present case it is an admitted position that no notice under section 143(2) of the Act had been served to the petitioner within the stipulated period and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the proviso is mandatory. In the absence of the notice being served within the stipulated period under section 143(2) of the Act, assessment proceeding comes to an end and deemed to have become final. Reliance is being placed on the decisions in the case of Commissioner of Income Tax Versus M. Chellappan (supra), Vipan Khanna Versus Commissioner of Income Tax Others (supra) Commissioner of Income Tax versus Palaniappan (supra), Commissioner of Income Tax versus Bhan Textiles Pvt. Ltd. (supra), Commissioner of Income Tax versus Lunar Diamons Ltd. (supra) and Deputy Commissioner of Income Tax versus Mahi Vally Hotels Resorts (supra). 7.8 In the aforesaid referred to cases, the ratio laid down by the various Hon'ble High Courts is in favour of the assessee. In that view of the matter, we are of the confirmed view that since the notice u/s 143(2) before completing the assessment u/s 143(2) has not been served on the assessee within the stipulated period, therefore, the assessment framed was invalid. 7.9 As regards to the case laws relied by the Learned CIT, D.R. appearing on behalf of the Revenue is concerned, those cases are distinguishable on facts and are not applic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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