Commissioner of Income Tax vs Vins Overseas India Ltd.

Madan B. Lokur, J.—The Revenue is aggrieved by an order dt. 23rd Dec., 2005 passed by the Tribunal in ITA No. 3764/DeI/2001 for

the asst. yr. 1997-98.

Admit.

After hearing learned Counsel for the parties, the following substantial question of law is framed for consideration:

Whether the Tribunal was correct in law in holding that the assessment framed by the AO u/s 143(3) of the IT Act, 1961 was without jurisdiction

as no notice u/s 143(2) was served on the assessed within the prescribed time.

Filing of paper book is dispensed with.

The Tribunal, in the order under appeal dt. 23rd Dec., 2005, came to the conclusion that the notice dt. 9th Oct., 1998 issued u/s 143 (2) of the

Act was not served upon the assessed. The Tribunal relied upon an affidavit filed for the first time by the assessed before it in which the assessed

denied receipt of the notice dt. 9th Oct., 1998. The Tribunal concluded that since the assessed had, by filing the affidavit, rebutted the presumption

of service, the burden shifted on the Revenue to show, by reference to the postal record, that the notice was in fact duly served on the assessed. It

was held that the burden had not been discharged by the Revenue.

According to learned Counsel for the Revenue;, a notice u/s 143(2) of the Act dt. 9th Oct., 1998 was sent to the assessed through registered

post on 13th Oct., 1998. The said notice was not received back undelivered. According to learned Counsel for the Revenue, in terms of Section

27 of the General Clauses Act, 1897 there is a presumption of service of the notice since it was properly addressed and duly posted.

Learned Counsel for the Revenue has also produced the original record which shows that a subsequent notice sent to the assessed at the same

address as mentioned in the notice dt. 9th Oct., 1998 was in1 fact served upon the assessed. On this, there is no dispute.

Learned Counsel for the assessed flatly denied receipt of the notice dated 9th Oct, 1998 by the assessed. It is true that the assessed received a

notice dt. 28th Feb., 2000 on 1st March, 2000 and in compliance with that notice, the Manager (Finance) along with the General Manager

(Finance) of the assessed attended the proceedings before, the AO on 7th March, 2000.

Learned Counsel for the assessed submits that the filing of the affidavit amounts to an effective rebuttal of the presumption of service u/s 27 of

the General Clauses Act. He further submits that in the appeal filed by the assessed before the CIT(A), a ground has been taken to the effect that

no notice dt. 9th Oct., 1998 was, served upon the assessed. He also submits that the fact that from 9th Oct., 1998 to 7th March, 2000 no

proceedings were at all held by the AO reinforces his position that the notice dt. 9th Oct., 1998 was not served on the assessed. Learned Counsel

for the assessed placed reliance on the judgments of this Court in CIT v. Hotline International (P) Ltd. (2007) 211 CTR (Delhi) 207 and CIT v.

Lunar Diamonds Ltd. (2005) 197 CTR (Delhi) 312 : (2006) 281 ITR.

Having heard learned Counsel and having gone through the record produced by learned Counsel for the Revenue, we are of the view that in

terms of Section 27 of the General Clauses Act, if a notice is properly addressed and dispatched through registered post, there is a presumption

that it has been served on the assessed. Learned Counsel for the assessed is right in contending that the presumption is rebuttable but on the facts

of the present case we find that the assessed has not been able to rebut the presumption.

On 7th March, 2000 the assessed appeared before the AO through its Manager (Finance) as well as General Manager (Finance) in response

to the notice dt. 28th Feb., 2000. Given their status and position, we would have expected them to query the AO about why the assessed was at

all called and after such an enormous delay. However, we find that they apparently did not do so nor did they make any submission before the AO

to the effect that they had not been served with any notice prior to the notice dt. 28th Feb., 2000, Of course, the assessed had come to know of

the notice dt. 9th Oct., 1998 because it, raised a plea before the CIT(A) that it was not served with any notice within the prescribed time. Despite

this, no objection was. taken before the AO, and even before the CIT(A) the assessed did not file any affidavit to rebut the statutory presumption

of service. The affidavit denying service of notice was filed by the assessed only before the Tribunal.

In our view the Tribunal erred in placing reliance upon the affidavit filed rather belatedly, to come to the conclusion that the assessed had

successfully rebutted the presumption. Had such an affidavit been filed before the CIT(A) it is possible that the CIT(A) may have remanded the

matter to the AO for making an appropriate enquiry. The assessed having let that opportunity go by, it ought not to have been permitted by the

Tribunal to rely on an affidavit filed at a time of the assessed''s choosing.

We also find that the facts in the cases in which the two decisions referred to were rendered by this Court were quite different and Therefore,

those decisions do not help the assessed.

In Hotline International (supra), the issue was of affixation of a notice without trying to serve the assessed or its agent. That is not the position

here. In Lunar Diamonds (supra) there was some doubt whether the notice was at all sent or not. Again, that is not the position in this case.

For the above reasons, we did not find any merit in the contention of learned Counsel for the assessed. Under the circumstances, we answer

the question in negative, in favor of the Revenue and against the. assessed. We set aside the impugned order and remit the matter back to the.

Tribunal for deciding the appeal on merits.

The parties will appear before the Tribunal on 15th Oct., 2007 for directions.

The appeal is disposed of.