9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2010 (11) TMI 537 - AT - Income TaxIncome escaping assessment - Validity of notice - The claim of the assessee is that no notice u/s 148 was served either on the Principal Officer of the assessee company or any authorized person. On the contrary, the claim of the department is that one Shri O. P. Nehru received the notice and he was the legal advisor of the assessee company, therefore, there was a valid service of notice u/s 148 of the Act. - Held that - the notice u/s 148 was not served upon the Principal Officer of the assessee company and was claimed to have been served firstly on one Shri Dinesh Singh, Chartered Accountant and secondly later on one Shri O. P. Nehru. - However, nothing is brought on record that either Shri Dinesh Singh or Shri O. P. Nehru were empowered specifically by holding Power of Attorney to receive the notice u/s 148 of the Act. - As regards to the valid Power of Attorney, the provisions of section 14 of the Power of Attorney Act, 1882 are relevant which provide that the power was to be utilized for the purpose for which power of attorney was given. Therefore, in the instant case even if it is presumed that Shri Dinesh Singh was having the Power of Attorney on the stamp paper of Rs. 20/- which was purchased on 30/06/2004, the facts remain that on 10/03/2004 he was not having any Power of Attorney to receive the notice u/s 148 of the Act - since there was not a valid service of notice upon the assessee, the Assessing Officer does not get jurisdiction to make assessment.
Issues Involved:
1. Validity of the assessment order under section 143(3)/147. 2. Validity of the service of notice under section 148. Detailed Analysis: Issue 1: Validity of the Assessment Order under Section 143(3)/147 The original assessment order was passed by the Assessing Officer on 28/03/2005, which included an addition on account of extra profit on suppressed sale. The assessee's appeal to the CIT(A) was dismissed, and the matter was further appealed to the ITAT, which remanded the case back to the Assessing Officer for a de novo assessment. The ITAT noted that the final conclusion of the raid by Central Excise Authorities had a direct bearing on the assessment of income, and the adjudication order by the Commissioner of Central Excise Authorities was not available at the time of the original assessment. Therefore, the entire assessment order was set aside for reconsideration by the Assessing Officer. Issue 2: Validity of the Service of Notice under Section 148 The assessee challenged the validity of the notice issued under section 148, claiming it was not addressed to the Principal Officer and was not served on an authorized person. The Assessing Officer dismissed these objections, stating that it was sufficient if the notice was served on any authorized person. The CIT(A) upheld this view, noting that the assessee had acknowledged receipt of the notice and participated in the reassessment proceedings. The ITAT recalled its previous order to specifically address the validity of the service of notice under section 148. The assessee argued that the notice was not served on the Principal Officer or any authorized person and that the person who received the notice did not have the authority to do so. The ITAT examined the provisions of section 148 and section 282 of the Income Tax Act, as well as relevant case laws, and concluded that the service of notice was not valid as it was not served on the Principal Officer or an authorized person. The ITAT noted that the Power of Attorney given to the Chartered Accountant was dated after the notice was served and was specific to proceedings under section 143(2), not section 148. The ITAT also observed that the department failed to prove that the person who received the notice had the authority to do so. Consequently, the ITAT held that the assessment order was invalid due to the improper service of notice under section 148. Conclusion: The ITAT allowed the appeal in I.T.A. No.66/Luc/07, declaring the assessment order void ab initio due to the invalid service of notice under section 148. The related appeal in I.T.A. No.268/Luc/10 was dismissed as infructuous since it arose from the same invalid assessment proceedings.
|
