2016 (5) TMI 1394 - AT - Income Tax

Validity of notice u/s 143(2) - not validly served upon the assessee - notice u/s 143(2) of the Act was issued by non jurisdictional AO of Ward 32(4) instead of jurisdictional AO of the ITO Ward 6(1) New Delhi - applicability of provisions of section 292BB - Held that - The notice issued by non jurisdictional ITO of Ward 32(4) dated 19.10.2007 was handed over to the postal authorities containing in an envelope and the address mentioned in the notice was as per return of income but the address noted by the postal authorities is incomplete and presumption of valid service of notice on the basis of copy of the postal record as relied by the Revenue cannot be made and thus we are inclined to accept contention of the assessee towards attempt of rebuttal of presumption that the first notice dated 19.10.2007 was issued by the non jurisdictional AO and the notice was handed over to the postal authorities containing incomplete and incorrect address on the envelope as address mentioned by the AO in the copy of the notice is Micro Spacematric Solution Private Limited 32/205 First Floor Vikram Vihar Lajpat Nagar IV New Delhi 110 024 whereas th address noted by the postal clerk from the envelope was Micro Spacematrix Solution Sohel 32/205 Vikram Vihar which clearly shows that the address noted by the postal authorities from the envelope containing said notice was dated 19.10.2007 not only incomplete but it was incorrect. Hence valid presumption of service of notice in favour of Revenue and against the assessee cannot be made. So far as the applicability of provisions of section 292BB of the Act is concerned firstly it is not applicable to A.Y 2006-07 under consideration and secondly the assessee raised objection regarding non service of notice dated 19.10.2007 on 5.11.2008 paper book page 3 replying to the notice dated 7.10.2008 wherein he categorically objected to the service of second notice dated 7.10.2008 notice beyond prescribed time limit. So far as objection to first notice dated 19.10.2007 is concerned when this notice was not properly served upon the assessee then how the assessee can be expected to file objection against the notice which has not been served upon him. The assessee filed its objection on 5.11.2008 paper book page 2 when he received notice dated 7.10.2008 alleging time barring which complete the requirement of proviso to section 292BB of the Act. Hence on the basis of foregoing discussion and legal contention of the ld. DR are jettisoned and rejected. - Decided in favour of assessee.

Summary

Issues Involved:
1. Validity of notice under section 143(2) of the Income Tax Act, 1961.
2. Jurisdiction of the Assessing Officer (AO) issuing the notice.
3. Timeliness of the notice issued under section 143(2).

Issue-wise Analysis:

1. Validity of Notice Under Section 143(2):
The assessee contended that the notice under section 143(2) was not validly served. The Tribunal noted that for a notice to be valid, it must be issued within six months from the end of the financial year in which the return was filed. The return was filed on 31.10.2006, so the notice should have been served by 31.10.2007. The first notice dated 19.10.2007 was issued by ITO, Ward 32(4), but there was doubt regarding its service due to incomplete address and lack of proper evidence from postal authorities. The Tribunal held that valid service of notice could not be presumed merely based on proof of issuance; it must be properly served within the prescribed time limit.

2. Jurisdiction of the Assessing Officer Issuing the Notice:
The Tribunal found that the notice dated 19.10.2007 was issued by ITO, Ward 32(4), who did not have jurisdiction over the assessee. The jurisdiction lay with ITO, Ward 6(1), New Delhi. The Tribunal cited the case of CIT Vs. MT Builders Pvt Ltd, where it was held that a notice issued by an officer without valid jurisdiction is invalid. Therefore, the notice issued by ITO, Ward 32(4) was non est in law.

3. Timeliness of the Notice Issued Under Section 143(2):
The second notice dated 07.10.2008 was issued by the correct jurisdictional AO, ITO, Ward 6(4), but it was beyond the prescribed time limit of 31.10.2007. The Tribunal emphasized that the notice must be served within the statutory time limit to assume valid jurisdiction for assessment. Since the notice was issued after the prescribed period, it was time-barred and invalid.

Conclusion:
The Tribunal annulled the assessment order as the notices under section 143(2) were either issued by a non-jurisdictional officer or served beyond the prescribed time limit. Consequently, the grounds raised by the assessee were allowed, and the appeal was decided in favor of the assessee. The Tribunal's decision underscored the importance of proper jurisdiction and timely service of notices under section 143(2) for valid assessment proceedings.