Commissioner of Income Tax vs Regency Express Builders P. Ltd.

V.B. Gupta, J.—Revenue is aggrieved by the order dated 25th February, 2005 passed by Income Tax Appellate Tribunal, Delhi Bench ""E

vide which the appeal filed by Revenue was dismissed for the Assessment year 1999-2000.

The facts giving rise to present appeal are that M/s Regency Express Private Limited (hereinafter referred to as assessed) had filed its return on

1st December, 1999 declaring a loss of Rs. 1785/- for the Assessment Year 1999-2000.

The Assessing Officer issued notice u/s 143(2) of the Income Tax Act, 1961 (for short ''the Act'') to the assessed on 29th December, 2000 and

the said notice was sent at the address given by the assessed in its return. The said notice was duly served on the assessed which was received by

one ""Gunanand"" and according to this notice, the date of hearing was 11th January, 2001.

In pursuance to the aforesaid notice, assessed''s representative Shri Harish Bansal, Chartered Accountant attended the hearing on 11th January,

2001 and was asked to furnish the various information.

Next, the hearing for assessment was taken up on 7th February, 2001 and on that day one Shri Mohammad Aslam, Assistant with M/s S.

Prasad and Co., Chartered Accountant appeared and filed letter dated 7th February, 2001 seeking adjournment and accordingly the matter was

adjourned. Thereafter, in the presence of assessed/ representative, assessment order dated 27th March, 2002 was passed u/s 143(3) of the Act.

assessed being dissatisfied with the order of the Assessing Officer, filed an appeal before the Commissioner of Income Tax (Appeal) and for the

first time raised objections stating that no notice was served upon him within the period of 12 months from the end of the month in which the return

of Income Tax was filed; that the notice has not been served either on the assessed, directors or any of its authorized agents.

Commissioner of Income Tax (Appeal) accepted the contentions of the assessed and held that the notice has neither been served within time nor

on duly authorised person.

Revenue being dissatisfied with the order of the Commissioner of Income Tax (Appeal), filed an appeal before the Income Tax Appellate

Tribunal and the Tribunal dismissed the appeal of the Revenue and canceled the impugned assessment.

On these facts, we framed the following substantial question of law for consideration:

Whether service of notice u/s 143(2) to employee of the assessed within limitation is valid service specially when assessed raises no objection

before Assessment Officer and participates in the proceedings?

It has been contended by learned Counsel for the Revenue that notice in question was issued on 29th December, 2000 that is within one year

from the end of the month of filing of return on 1st December, 1999 and was within limitation and the same was served on the assessed on 29th

December, 2000 and was duly accepted by one of the employees of the assessed. The representative of the assessed attended the hearing on 11th

January, 2001 and even filed his authority letter and thereafter on subsequent hearing also representative of the assessed was present and no such

objection was raised.

On the other hand, it has been contended by learned Counsel for the assessed that no notice as required under the law has been served upon

the assessed or any of its authorised agents.

As per Annexure-I, which is copy of notice u/s 143(2) of the Act, it has been received by one ""Gunanand"" on 29th December, 2000. It has

nowhere been pleaded on behalf of the assessed either before Assessing Officer, Commissioner of Income Tax (Appeal) or the Tribunal, that

Gunanand is not their employee or he is a fictitious person.

Even assuming for arguments sake that no notice u/s 143(2) of the Act has been received on behalf of the assessed on 29th December, 2000,

then there was no occasion for assessed or his representative to appear before the Assessing Officer on 11th January, 2001.

The fact that on 11th January, 2001 Mr Harish Bansal, Chartered Accountant appeared before the Assessing Officer and filed his Power of

Attorney and was asked to file details/information and thereafter on 7th February, 2001, one Shri Mohammad Aslam, Assistant Along with M/s.

S. Prasad and Co., Chartered Accountant appeared before the Assessing Officer and filed a letter seeking adjournment, goes on to show that

notice u/s 143(2) of the Act has been duly served on the assessed through his representative on 29th December, 2000 and that is why the

representatives of the assessed have been appearing before the Assessing Officer in pursuance of the notice.

Accordingly, we hold that the Income Tax Appellate Tribunal erred in observing that the notice u/s 143(2) of the Act has not been served

upon the assessed and the assessment stands vitiated.

The substantial question of law is answered in the affirmative, in favor of the Revenue and against the assessed.

Present appeal filed by Revenue is accordingly allowed and order passed by the Commissioner of Income Tax (Appeal) canceling the

impugned assessment is set aside and the matter is remanded back to the Commissioner of Income Tax (Appeal) to consider the matter afresh in

accordance with the law.