2012 (3) TMI 261 - HC - Income Tax

Notice under Section 143(2) that the case was taken up for scrutiny - after the scrutiny Assessing Officer added an income of Rs. 43,91,913/ - The assessee contented that AO has exceeded the jurisdiction under Section 143(2) of the Act because the notice was sent to an address at which the assessee was not available and no presumption of service of notice upon the assessee within the period of limitation of 12 months of the end of the month in which the return was filed, could be drawn - Held that - From the perusal of Section 27 of the General Clauses Act it is clear that service of notice would be deemed to be sufficiently effected if a letter containing the document is properly addressed, prepared and posted by registered post - revenue has sent the notice under Section 143(2) of the Act on a wrong address and not on the address mentioned in the income tax return and has not been able to substantiate by adducing any evidence that any notice under Section 143(2) was issued within the prescribed period of limitation.

Summary

Issues:
1. Jurisdiction of Assessing Officer under Section 143(2) of the Income Tax Act, 1961.
2. Validity of notice under Section 143(2) of the Act.
3. Compliance with the requirement of proviso to Section 143(2) of the Act.

Issue 1: Jurisdiction of Assessing Officer under Section 143(2) of the Income Tax Act, 1961:
The judgment addresses the jurisdiction of the Assessing Officer under Section 143(2) of the Income Tax Act, 1961. In the first case (ITA No. 85 of 2011), the Commissioner of Income-tax (Appeals) held that the Assessing Officer exceeded jurisdiction under Section 143(2) due to improper service of notice. The CIT (Appeals) set aside the assessment order, emphasizing the importance of service within 12 months from the end of the month in which the return was filed. The Tribunal upheld this decision, noting the incorrect address on the notice. Similarly, in the second case (ITA No. 287 of 2011), the CIT (A) allowed the appeal as there was no evidence of timely service of notice under Section 143(2). The Tribunal affirmed this decision, highlighting the absence of proof of the notice issued by the Assessing Officer within the prescribed period.

Issue 2: Validity of notice under Section 143(2) of the Act:
The judgment delves into the validity of the notice under Section 143(2) of the Act. In both cases, the validity of the notice served on the assessee-respondent is questioned. In ITA No. 85 of 2011, the Tribunal found that the notice was sent to the wrong address, leading to the dismissal of the revenue-appellant's appeal. Similarly, in ITA No. 287 of 2011, the CIT (A) highlighted the lack of evidence regarding the service of the notice within the prescribed period. The Tribunal upheld this decision, emphasizing the importance of proper issuance and service of notices under the Act.

Issue 3: Compliance with the requirement of proviso to Section 143(2) of the Act:
The judgment also discusses compliance with the requirement of the proviso to Section 143(2) of the Act. It analyzes the Division Bench judgment in the case of V.R.A. Cotton Mills (P) Ltd. and distinguishes it based on the specific facts of the cases at hand. The judgment emphasizes the need for proper addressing and timely issuance of notices under Section 143(2) to ensure compliance with the statutory provisions. The court dismisses the appeals, highlighting the failure to meet the requirements of the proviso to Section 143(2) in both cases.

In conclusion, the judgment provides a detailed analysis of the issues related to the jurisdiction of the Assessing Officer, the validity of notices under Section 143(2) of the Act, and compliance with the proviso to Section 143(2). It underscores the significance of proper addressing, issuance, and service of notices within the prescribed period to maintain the integrity of the assessment process under the Income Tax Act, 1961.