TMI Blog2016 (5) TMI 1394X X X X Extracts X X X X X X X X Extracts X X X X ..... First Floor, Vikram Vihar, Lajpat Nagar IV, New Delhi 110 024” whereas thë address noted by the postal clerk from the envelope was “Micro Spacematrix Solution, Sohel, 32/205, Vikram Vihar, which clearly shows that the address noted by the postal authorities from the envelope containing said notice was dated 19.10.2007 not only incomplete but it was incorrect. Hence, valid presumption of service of notice in favour of Revenue and against the assessee cannot be made. So far as the applicability of provisions of section 292BB of the Act is concerned, firstly it is not applicable to A.Y 2006-07 under consideration and secondly, the assessee raised objection regarding non service of notice dated 19.10.2007 on 5.11.2008 [paper book page 3] replying to the notice dated 7.10.2008 wherein he categorically objected to the service of second notice dated 7.10.2008 notice beyond prescribed time limit. So far as objection to first notice dated 19.10.2007 is concerned when this notice was not properly served upon the assessee then how the assessee can be expected to file objection against the notice which has not been served upon him. The assessee filed its objection on 5.11.2008 [paper book p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issued u/s 143(2) of the Act to the ITO, Ward 6(1), New Delhi alongwith letter dated 22.10.2007. Thereafter, the ITO, Ward 6(4), New Delhi issued notice u/s 143(2) of the Act on 07.10.2008 fixing the case for hearing on 17.10.2008 and the assessee in its reply vide letter dated 5.11.2008 alleged that such notice was barred by time limit being illegal and out of time and therefore, proceedings may be dropped. 4. However, the AO did not agree with such contention of the assessee and proceeded to complete the assessment u/s 143(3)/144 and 115WE(3) of the Act by treating all the credit balances as per the balance sheet as income. He took the share capital, reserves and surpluses as reduced by rental income, unsecured loans and liabilities as income of the assessee and thus completed the assessment at ₹ 1,92,10,073/-by adding amount of ₹ 1,86,02,274/-to the returned income of the assessee as unexplained credits u/s 68 of the Act. Aggrieved, the assessee preferred appeal before the ld. CIT(A) which was also dismissed on the legal grounds of the assessee wherein the assessee agitated the legal issue challenging the validity, limitation and jurisdiction of the notice u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi that the case was selected for scrutiny but the assessee company had filed its return of income for A.Y 2006-07 in Ward of ITO, Ward-6(1). Therefore, he transferred the information of the case for issuance of scrutiny notice u/s 143(2) of the Act to the jurisdictional AO, i.e. the ITO, Ward 6(1), New Delhi. The ld. AR also drew our attention towards page 4 and 5 of the assessee's paper book and submitted that even in the remand report dated 26.2.2010, submitted to the ld. CIT(A) by the ITO, Ward 6(1), New Delhi, it has been mentioned that the ITO, Ward 32(4), New Delhi issued notice on 19.10.2007 fixing the date for hearing on 31.10.2007, thereafter, the case was transferred to the ITO, Ward 6(1), New Delhi vide letter dated 22.10.2007 [supra] which clearly shows that earlier notice dated 19.10.2007 was issued by the nonjurisdictional AO i.e ITO, Ward 32(4) not having jurisdiction of assessment over the assessee. 6. The ld. AR further drew our attention towards page 11 of the remand report dated 19.8.2011 of ACIT, Range-6 submitted to the ld. CIT(A)-IX and submitted that in the remand report also it was mentioned that the ITO, Ward 32(4), New Delhi categorically stated th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ently contended that the subsequent notice issued on 7.10.2008 has been issued after 31.10.2007 which was the last date of limitation of issuance of notice and thus the same is clearly time barred and has been issued and served upon the assessee beyond the prescribed time limit period. The ld. AR has further drawn our attention towards the order of the ITAT, Jabalpur Third Member order dated 22.09.2006 in the case of ACIT Vs. Vindhya Telelinks Ltd reported at [2007] 107 TTJ 149 [TM] and submitted that when the pre condition of the relevant provisions of the Act is service of notice for assuming valid jurisdiction for assessment, then the Revenue has to prove that (i) the envelope was correctly addressed to the assessee; properly stamped and dispatched by the AO and handed over to postal authorities for valid service upon the assessee. In the present case, the dispatch as shown by the postal authorities is not reliable as there are contradictory dates mentioned therein and address as noted by postal authorities [page 4 of assessee s paper book] is incomplete and incorrect thus no valid presumption can be made about the eservice of said notice upon the assessee. 7. The ld. AR furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rvice upon the assessee, but no postal receipt was issued to the department by the postal authorities because at that point of time postal receipt and tracking delivery number was not issued to the sender. The ld. DR placing reliance on the judgment of the Hon'ble Jurisdictional High Court of Delhi in the case of CIT Vs. Madhsy Films P. Ltd reported at 175 Taxmann 347 [Del] submitted that where notice issued to the assessee u/s 143(2) of the Act had been dispatched by speed post at the address as per it return and the same has not been received back, it could be presumed that it reached the assessee and if the notice is handed over to the postal authorities for service, then it would be presumed that the notice has been properly served upon the assessee. 10. In the rejoinder, the ld. Counsel for the assessee again drew our attention towards page 5 of the assessee's paper book and submitted that the address written at Sl. No. 4 shows that the notice has been sent to Microspace Matrix Solutions 32/305 Vikram Vihar which is a incomplete address as there are four Vikram Vihars in the country, out of which two Vikram Vihars are in Delhi viz. Vikram Vihar, Lajpat Nagar and Vik ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y on 31.10.2007. 12. It is well accepted proposition of law that the burden was on the Revenue to prove that notice was validly served on the assessee within the prescribed time limit as per the provisions of section 143(2) of the Act. We further note that as per the dicta laid down by the coordinate Bench of Delhi in the case of Shri Harvinder Singh Jaggi Vs. ACIT [supra], five conditions have to be cumulatively fulfilled for a valid service of notice. The relevant operative part of this order of the Tribunal at paras 7.2 to 7.7 is reproduced hereinbelow for ready reference: 7.2 It has been held by various courts that the service of notice by post include service by speed post as well. In the cases of CIT Vs. Silver Streak Trading P. Ltd., (supra) cited by the assessee, it was claimed by the assessee that the return of income was filed on November 30, 1997 and a notice under section 143(2) of the Act was issued by the Assessing Officer through speed post on November 28, 1998 but the assessee claimed that said notice was not ever received and a duplicate copy of notice dated October 21,1999 was received by the learned counsel of the assessee, who endorsed the office copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies was only containing name of the assessee and thus it was submitted by the assessee that there was a possibility that the correct address of the assessee might not have been written on the envelope and therefore the notice was not served to the assessee, but in present case the correct address was mentioned in the receipt issued by the postal authorities. Thus the cases cited by the assessee are distinguishable on facts. 7.5 In the case of Milan Poddar Vs CIT reported in [2012] 24 taxmann.com 27, the Hon'ble High Court of Jharkhand has dealt the issue of notice of service though speed post and rebuttable presumption of the service and held that when the dispatch has been proved by the receipt number of speed post and the notice has been sent at correct address, it is presumed that the notice was delivered to the assessee. The relevant paragraph of the judgement is reproduced as under: 14. From a bare perusal of the order-sheets, shown to us by the assessee, started from dated 24.10.2007, it is clear that in the order-sheet dated 24.10.2007, on the top of it, the name and address of the assessee was mentioned and thereafter it was ordered that notice under Section 143( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 17. So far as dispute with respect to the interpretation of the Post , Registered Post and Speed Post are concerned, the Tribunal has considered the issue in detail. We would like to quote the relevant paragraphs from the order of the Tribunal, which are as under :- 11. .... 12. ..... 13. ... 14. .... 15. .... 16. ... 17. .... 18. ... 19. ... 20. ... 21. ... 22. ... 23. ... 24. ... 25. ... 26. The aforesaid judgments lay down in no uncertain terms that, in terms of section 27 of the General Clauses Act, unless and until the contrary is proved by the addressee, service of notice is deemed to be effected at the time at which the letter would have been delivered in the ordinary course of business when it is sent to the addressee at his address by registered post. Details given in the assessment order as also receipt of speed post make it clear that all the conditions stipulated by section 27 of the General Clauses Act are satisfied and hence service of the impugned notice would be deemed to have been effected well before the expiry of time limit stipulated by section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO has verified his records and found that the impugned notice was not received back in his office. In this view of the matter, the legal fiction by which the service of the impugned notice is deemed to be effected on the assessee stands on a much stronger footing.(emphasis supplied) We are in full agreement with the reasons given by the Tribunal with respect to the interpretation given by the Tribunal on various issues decided by the Tribunal which we have quoted above. 7.7 Thus, we can summarize that for a valid service of notice following conditions should be fulfilled: (i) the notice should have been sent through any of the modes mentioned in section 282 of the Act (ii) The name and address should be correctly written over the notice and the envelope containing the notice and the envelope should be delivered to the postal authorities for service. (iii) The Revenue should show the receipt of postal authorities and/or tracking number of post office to establish valid dispatch of notice, (iv) If the notice is not returned then it shall be presumed that it was served validly. (v) The presumption can be rebutted by the assessee by filing e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e validity of any assessment under Section 147 of the Act; therefore, the assessment made pursuant to such notice is bad in law. In support of this proposition we rely upon the cases of Hon'ble Apex Court in the cases of Y. Narayana Chetty Vs. ITO, 35 ITR 388, 392 (SC); CIT Vs. Maharaja Pratap singh Bahadur, 41 ITR 421 (SC); and CIT Vs. Robert, 48 ITR 177 (SC). In the light of the above settled principle of law, we have no hesitation to quash the reassessment proceedings since there was no valid notice pursuant to which the reassessment proceeding was made in the present case. Accordingly, the appeal filed by the appellant is allowed. 14. In the light of the above dicta, in the present case, we are inclined to hold that first notice dated 19.10.2007 issued by the ITO, Ward 32(4) is non est in the eyes of law since he had no valid jurisdiction over the present assessee either territorial as per mandate of section 124 of the Act or by transferring the case under the provisions of section 127 of the Act. Secondly, even if the issue of non-jurisdiction AO is kept aside then from the copy of the record of the postal authorities [paper book page 5] it is clear that the notice was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ddress if compared with the address given by the assessee in the return of income for A.Y 2006-07 [paper book page 1] and thus we have no hesitation to hold that the first notice issued by non jurisdictional AO, ITO, Ward 32(4) was not handed over to the postal authorities with complete and correct address and thus a rebuttable presumption, which can be rebutted by filing and showing substantive and reliable facts, evidence and circumstances. We may also point out that the same cannot be rebutted by self serving explanation and document or by merely uttering word of mouth in a casual manner that the assessee did not receive the notice and such lame excuses, self serving evidence and word of mouth are not sufficient for establishing rebuttal of said presumption. 16. In the light of above noted propositions, when we logically analyze and test the fact of the present case, on the touch stone of well accepted principles on service of notice, preconditions for having presumption of valid service of notice and its rebuttal, then we observe that the notice issued by non jurisdictional ITO of Ward 32(4) dated 19.10.2007 was handed over to the postal authorities containing in an envelope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e hence, presumption of valid service of notice cannot be taken in this case. 18. So far as the applicability of provisions of section 292BB of the Act is concerned, firstly it is not applicable to A.Y 2006-07 under consideration and secondly, the assessee raised objection regarding non service of notice dated 19.10.2007 on 5.11.2008 [paper book page 3] replying to the notice dated 7.10.2008 wherein he categorically objected to the service of second notice dated 7.10.2008 notice beyond prescribed time limit. So far as objection to first notice dated 19.10.2007 is concerned when this notice was not properly served upon the assessee then how the assessee can be expected to file objection against the notice which has not been served upon him. The assessee filed its objection on 5.11.2008 [paper book page 2] when he received notice dated 7.10.2008 alleging time barring which complete the requirement of proviso to section 292BB of the Act. Hence, on the basis of foregoing discussion and legal contention of the ld. DR are jettisoned and rejected. 19. At this juncture, it is relevant and necessary to adjudicate the contention of the ld. DR that at that point of time receipt and trac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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