TMI Blog2021 (3) TMI 1173X X X X Extracts X X X X X X X X Extracts X X X X ..... writ applicant at village : Khorsam, Taluka : Chanasma, District : Patan. In such circumstances, it is obvious that the writ applicant could never be said to have receive such notice. - Decided in favour of assessee. - R/SPECIAL CIVIL APPLICATION NO. 17794 of 2018 - - - Dated:- 18-3-2021 - HONOURABLE MR. JUSTICE J.B. PARDIWALA AND HONOURABLE MR. JUSTICE ILESH J. VORA Appearance: MR DARSHAN R PATEL(8486) for the Petitioner(s) No. 1 MRS MAUNA M BHATT(174) WITH MR KARAN SANGHANI, ADVOCATE for the Respondent(s) No. 1 ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1. By this writ application under Article 226 of the Constitution of India, the writ applicant has prayed for the following reliefs: (A) Issue a writ of certiorari and/or a writ of mandamus and/or any other writ direction or order to quash and set aside the impugned objection rejection order dated 1.11.2018 annexed hereto at Annexure G the proceedings initiated u/s 147 on the strength of notice u/s 148 dated 30.3.2018, unilaterally said by the respondent to have been issued and served on the petitioner though the same is never received by the petitioner. (B) Issue a writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner, issue NOTICE returnable on 7.1.2019. By way of adinterim relief, further proceedings pursuant to the impugned notice are hereby stayed. Direct service is permitted. 3. Mr. Patel, the learned counsel appearing for the writ applicant vehemently submitted that his client has not been in receipt of the impugned notice issued by the Assessing Officer for reopening of the assessment under Section 148 of the Income Tax Act, 1961 (for short, 'the Act') at any point of time. Mr. Patel, the learned counsel would submit that notice to an assessee under Sections 148 and 143(2) respectively is quite different from a notice under Section 142(1) of the Act. The valid service of notice on the assessee strictly in terms of Section 148 read with Section 282(1) of the Act is mandatory and without such service of notice, the Assessing Officer cannot proceed to make a re assessment. Mr. Patel would submit that the onus is upon the Revenue to establish that the service of notice had been effected on the assessee. The failure to serve such notice would lead to the inevitable result of invalidating the reassessment order itself if passed any. 4. On the other hand, Ms. Bhatt, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 148 shall be issued for the relevant assessment year....... . The language used in Section 149 is issued and not served . Therefore, the assessee's contention that he was not served with the notice under Section 148 within the time prescribed is beyond the provision. Ms. Bhatt seeks to rely upon the decision in the case of Rajesh Sunderdas Vaswani vs. Meena and others reported in [2017] 392 ITR 571 (Guj) [Paras 9 and 10]. 5. The short point for the consideration of this Court is whether the Revenue can proceed with the reopening sought to be initiated under Section 147 of the Act in the absence of any notice under Section 148 of the Act actually served upon the assessee? 6. Section 292 BB of the Act of 1961 is a deeming Clause, which is quoted as under: [292BB. Notice deemed to be valid in certain circumstances Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The relevant portion of Section 148 (1) reads as under: 148. Issue of notice where income has escaped assessment (1) Before making the assessment, reassessment or re-computation under Section 147, the Income tax Officer shall serve on the Assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of Section 139; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub section. 10. The Supreme Court in R. K. Upadhyaya vs. Shanhai P. Patel reported in [1987] 3 SCC 96, explained that there was a distinct shift in the scheme of the provisions of the 1961 Act in comparison with the corresponding provision i.e. Section 34 under the 1922 Act under which the mandatory requirement was that both the issuance and service of notice had to be completed within the prescribed period. Consequently, the service of notice within the limitation period was the foundation of jurisdiction under the 1922 Act. In Y. Narayana Chetty v. Income Tax Officer, Nellore [1959] 35 ITR 388 (SC) the Supreme Court observed in the context of Section 34 of the 1922 Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e prescribed under section 148 of the Act for initiating reassessment proceedings is not a mere procedural requirement ; the service of the prescribed notice on the assessee is a condition precedent to the validity of any reassessment made under section 147. If no notice is issued or if the notice issued is shown to be invalid, then the proceedings taken by the Income tax Officer without a notice or in pursuance of an invalid notice would be illegal and void. 14. In CIT v. Hotline International (P) Ltd. [2008] 296 ITR 333 , the Delhi High Court held that affixation of notice on an address at which the security guard of the Assessee company refuses to receive such notice cannot be construed to be a proper service of notice under Section 148 of the Act. The security guard was not an agent of the assessee and therefore, the reassessment proceedings were held to be bad in law. 15. In Dina Nath v. Commissioner of Income tax [1994] 72 Taxman 174 (J K), the notice under Section 143 (2) of the 1961 Act was served upon one S, who was neither a member of the family of the Assessee nor his duly authorized agent. However, S had been accepting the notice on behalf of the Assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that the notices under Section 148 addressed as SCR and the karta S were valid notices for reassessing the income of the HUF MM or MS or its successors. ● ONUS ON REVENUE TO PROVE SERVICE OF NOTICE: 19. There is sufficient judicial authority for the proposition that the burden of showing that service of notice has been effected on the Assessee or his duly authorized representative is on the Revenue. These include Fatechand Agarwal v. Commissioner of Wealth Tax [1974] 97 ITR 701 (Ori) and Venkat Naicken Trust v. ITO [1999] 107 Taxman 391 (Mad). In CIT v. Thayaballi Mulla Jeevaji Kapasi (1967) 66 ITR 147 (SC), the Respondent to whom the notice was directed was not in town. The only information which the process server had was that the Respondent was either in Bombay or Ceylon. Thereafter, the process server affixed the notice on the business premises of the Respondent. The Supreme Court affirmed the essential principle that if no notice was served within the period, the Income tax Officer was incompetent to commence proceedings for reassessment under Section 34 of 1922 Act. It was further held that service of notice under Section 34 (1) (a) within th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was, in fact, handed over to the postal authority for delivery on 31st March 2015 itself. However, on account of overload in the postal department, the same was booked on 1st April 2015. In such circumstances, this Court interpreted the expression to issue used in the context of notice referred to in Section 149 of the Act. This Court interpreted the said expression holding that the date of issue of notice would be the date on which the same is handed over for service to the proper officer i.e. the postal department. The Court, thereafter, went into the factual aspect whether the envelope containing the notice for reopening addressed to the writ applicant had been handed over to the postal department for delivery on 31st March 2015 or was handed over on 1st April 2015. 23. In the aforesaid context, this Court relied upon a decision in the case of Kanubhai M. Patel (HUF) vs. Hiren Bhatt or his successors to office and others reported in (2011) 334 ITR 25 (Guj), wherein this Court observed as under: 16. Thus, the expression to issue in the context of issuance of notices, writs and process, has been attributed the meaning, to send out; to place in the hands of the prope ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
