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2011 (9) TMI 611 - HC - Income TaxMeaning of expression Served / issued - Notice u/s 143(2) - Whether such expression is to be used literally, so as to mean that actual physical receipt of notice by the addressee or the expression served is inter changeable with the word issue - service by affixation at 11.20 pm on 30.09.2010 is not in terms of the Code of Civil Procedure - Held That - In view of Commissioner of Sales Tax and others Vs. Subhash & C o - the date of receipt of notice by the addressee is not relevant to determine, as to whether the notice has been issued within the prescribed period of limitation. The expression serve means the date of issue of notice. The date of receipt of notice cannot be left to be undetermined dependent upon the will of the addressee. Therefore, to bring certainly and to avoid attempts of the addressee to evade the process of receipt of notice, the purpose of the statute will be better served, if the date of issue of notice is considered as compliance of the requirement of proviso to Section 143(2) of the Act.
Issues Involved:
1. Validity of the notice issued under Section 143(2) of the Income Tax Act, 1961. 2. Interpretation of the term "served" in the context of Section 143(2) of the Income Tax Act. 3. Applicability of precedents and statutory provisions regarding the issue and service of notice. Detailed Analysis: 1. Validity of the Notice Issued Under Section 143(2) of the Income Tax Act, 1961: The petitioner challenged the notice dated 30.09.2010 issued under Section 143(2) of the Income Tax Act, 1961, on the grounds that it was not served on the assessee until the last date of limitation for the initiation of proceedings for the Assessment Year 2009-10. The petitioner argued that the service by affixation at 11.20 pm on 30.09.2010 was not in accordance with the Code of Civil Procedure, 1908. The court examined the relevant provisions and found that the notice was issued within the prescribed period, thus complying with the requirements of Section 143(2) of the Act. 2. Interpretation of the Term "Served" in the Context of Section 143(2) of the Income Tax Act: The court deliberated on the meaning of the term "served" as used in Section 143(2) of the Income Tax Act. The petitioner contended that "served" should mean the actual physical receipt of the notice by the addressee. However, the court opined that the terms "serve" and "issue" are interchangeable, as evidenced by Section 27 of the General Clauses Act, 1887, and the Supreme Court judgment in Banarsi Devi Vs. The Income - Tax Officer, District IV, Calcutta and others. The court held that the moment the notice is signed and put in the course of transmission by the department, it is deemed to be served. 3. Applicability of Precedents and Statutory Provisions Regarding the Issue and Service of Notice: The court referred to several precedents and statutory provisions to support its interpretation. It cited the Supreme Court's decisions in Collector of Central Excise, Madras Vs. M/s M.M.Rubber and Co., Tamil Nadu and State of Punjab v. Khemi Ram, which emphasized that the date of issue of notice is the relevant date for determining compliance with the statutory provisions. The court also considered the judgment in AVI-OIL India P. Ltd. but found it to be per incuriam as it did not consider the relevant statutory and binding precedents. The court further referred to the Supreme Court's judgment in Commissioner of Sales Tax and others Vs. Subhash & Co., which established that non-issue or defective service of notice does not affect the jurisdiction of the assessing officer if a reasonable opportunity of being heard has been given. The court concluded that the date of receipt of notice by the addressee is not relevant for determining compliance with the proviso to Section 143(2) of the Act. The expression "serve" means the date of issue of notice. Conclusion: The court dismissed the petition, holding that the notice issued on 30.09.2010 was validly issued within the prescribed period, and the expression "serve" in Section 143(2) of the Income Tax Act refers to the date of issue of the notice, not the date of its receipt by the addressee.
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