Shahbad Cooperative Sugar Mills Ltd. vs Deputy Commissioner of Income Tax, Special Range

Rajive Bhalla, J.—The petitioner prays for issuance of a writ of certiorari quashing notices dated 22.5.1992 and 17.8.1993 issued u/s 143(2) of the income tax Act, 1961 (hereinafter referred to as the "Act"). Counsel for the petitioner submits that as notice for reassessment, issued u/s 143(2) of the Act, was served on the assessee 12 months after the end of the month in which the return was furnished, the impugned notice is null and void. It is further argued that the petitioner filed its return, for the assessment year 1991-92, on 31.10.1991. The return was picked up for scrutiny by serving a notice dated 17.8.1993 u/s 143(2) of the Act. The petitioner preferred objections by averring that notice was not served within 12 months from the end of the month in which return was furnished. The Assessing Officer forwarded a communication falsely averring that an earlier notice dated 22.5.1992, issued u/s 143(2) of the Act, had already been dispatched to the petitioner, within the period prescribed by the proviso to Section 143(2) of the Act. The petitioner replied vide letter dated 11.11.1993 that no such notice had ever been received as it had received a notice for assessment year 1991-92, Despite this objection, the respondent proceeded to finalize assessment. It is further argued that as notice was served after the period of 12 months and service of any notice, dated 22.5.1992, is not borne out from the record, the writ petition may be allowed, the notice and the assessment order may be quashed. In support of his arguments, counsel for the petitioner, relies upon a judgment of the Hon''ble Supreme Court in Assistant Commissioner of Income Tax and Another Vs. Hotel Blue Moon,

Counsel for the revenue submits that the writ petition should be dismissed as notice dated 22.5.1992, issued u/s 143(2) of the Act, for the assessment year 1991-92, was dispatched to the petitioner vide dispatch No. 177 dated 22.5.1992 and likewise for the assessment year 1990-91, notice u/s 143(2) of the Act was issued and sent vide dispatch no. 177 dated 22.5.1992. Copies of the notices are appended with the reply as Annexures R-1 and R-2. A second notice for the assessment year 1991-92 was issued on 17.8.1993, vide registered post with dispatch No. 487 dated 18.8.1993 was also served on the assessee. The contention of the assessee that this notice was served after the period of 12 months was considered and office Letter No. 877 dated 21.10.1993 was forwarded to the assessee by appending a photo copy of notice issued on 22.5.1992. Thus, as notice, u/s 143(2) of the Act, issued on 22.5.1992, duly evidenced by an entry in the dispatch register, was never received back, it was presumed to have been served upon the assessee within twelve months. The petitioner''s contention that the assessee was not served with notices u/s 143(2) of the Act, for assessment years 1990-91 and 1991-92, is factually incorrect.

We have heard counsel for the parties, perused the impugned notice and the impugned orders.

The dispute, in the present case, revolves around the issuance and service of notices issued u/s 143(2) of the Act for assessment years 1990-91 and 1991-92. There is no dispute that notice u/s 143(2) of the Act, has to be served upon an assessee, before the expiry of 12 months from the end of the month in which the return is furnished. The revenue relies upon notices dated 22.5.1992, dispatched to the petitioner, vide dispatch No. 177 dated 22.5.1992, etc. A relevant extract from paras 6, 7 and 8 of the reply reads as follows:--

6 That initial notice u/s. 143(2) dated 22.5.92 issued vide dispatch No. 177 dated 22.5.92 has never been received back by the office and as such this tantamounts to be a valid service. Moreover the petitioner appeared before the A.O. in pursuance to notice dated 22.5.1992 for Assessment Year 1990-91 hence it does not lie in his mouth to contend that notice u/s. 143(2) for the assessment year 1991-92 is not served upon particularly when both the notices u/s. 143(2) for the assessment year 1990-91 & 1991-92 were dispatched together.

That this notice of dated 22.5.92 also falsifies the contention of the assessee as the same notice was also issued for the assessment year 1990-91 vide the same dispatch No. i.e., 177 dated 22.5.92 in a single Envelop and to this assessee has duly complied.

That surprisingly the assessee has nothing uttered towards the issuance of notice u/s. 143(2) of the I.T. Act which was issued vide dispatch No. 177 dated 22.5.92 for the assessment year 1990-91. Only this score proves that the notices issued u/s. 143(2) of the Income Tax Act vide dispatch No. 177 dated 22.5.1992 were validly issued and served.

The averments in the reply, duly supported by copies of the notices, dispatched vide dispatch No. 177 and the fact that notices were not received back raise a presumption of service u/s 27 of the General Clauses Act, 1897. The onus to rebut the presumption of service of notice sent by post, lies upon the petitioner. The petitioner has failed to discharge this onus. The bald denial by the petitioner that notice was never received, in our considered opinion, is insufficient, to record a finding in favour of the petitioner. We, therefore, find no reason to accept the petitioner''s averments and submissions that notice dated 22.5.1992 was not served upon the petitioner, within the period of 12 months prescribed by the proviso to Section 143(2) of the Act.

The judgment, relied by the petitioner in Hotel Moon Blue''s case (supra), does not enure to the petitioner''s benefit as it has only been held that notice u/s 143(2) of the Act, should be served within one year from the date of filing of return and omission on the part of the revenue to serve notice u/s 143(2) of the Act is not a mere procedural irregularity so as to curable. We have no quarrel with the ratio of this judgment but as controversy in the present case, is not, whether the notice suffers from any curable defect, but whether notice was issued and served within 12 months of the period prescribed by proviso to Section 143(2) of the Act, the judgment does not advance the petitioner''s case. In view of what has been stated hereinabove, we find no error of jurisdiction or of law in the impugned order or proceeding and dismiss the petition with no orders as to costs.