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2007 (1) TMI 122 - HC - Income TaxValidity Of service of notice u/s 143(2) - service beyond period of limitation or not - HELD THAT - The fact that on January 11 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 February 7 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 to show that notice u/s 143(2) of the Act has been duly served on the assessee through his representative on December 29 2000 and that is why the representatives of the assessee 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 assessee and the assessment stands vitiated. The substantial question of law is answered in the affirmative in favour of the Revenue and against the assessee. The present appeal filed by the Revenue is accordingly allowed and the order passed by the CIT(A) cancelling the impugned assessment is set aside and the matter is remanded back to the CIT(A) to consider the matter afresh in accordance with the law.
Issues:
Validity of notice under section 143(2) for assessment year 1999-2000. Analysis: The Revenue appealed against the Income-tax Appellate Tribunal's order dismissing their appeal for the assessment year 1999-2000. The assessee, M/s. Regency Express Private Limited, declared a loss of Rs. 1,785 in its return filed on December 1, 1999. The Assessing Officer issued a notice under section 143(2) of the Income-tax Act, 1961, on December 29, 2000, which was duly served on the assessee's employee, "Gunanand," with a hearing date of January 11, 2001. The assessee's representative attended the hearing and was asked to provide information. Subsequently, the assessment order was passed on March 27, 2002. The assessee raised objections during the appeal process, stating that no notice was served within the required timeframe or on any authorized agent. The Commissioner of Income-tax (Appeals) accepted the assessee's contentions, ruling that the notice was not served within the stipulated time or on an authorized person. The Revenue then appealed to the Income-tax Appellate Tribunal, which upheld the cancellation of the assessment. The High Court framed a substantial question of law regarding the validity of serving notice under section 143(2) to an employee of the assessee within the limitation period, especially when no objections were raised by the assessee during the proceedings. The Revenue argued that the notice was served within the timeframe and accepted by the assessee's employee, with the representative participating in the proceedings without raising any objections. On the other hand, the assessee contended that no proper notice was served as required by law. The High Court noted that the notice was received by "Gunanand" on December 29, 2000, and no objections were raised regarding his identity. The Court concluded that since the assessee's representative appeared before the Assessing Officer, filed necessary documents, and participated in the proceedings, it indicated that the notice under section 143(2) was validly served on the assessee through its representative. Therefore, the Income-tax Appellate Tribunal's decision was deemed erroneous, and the substantial question of law was answered in favor of the Revenue. Consequently, the High Court allowed the Revenue's appeal, set aside the order canceling the assessment, and remanded the matter back to the Commissioner of Income-tax (Appeals) for reconsideration in accordance with the law.
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