2015 (6) TMI 328 - HC - Income Tax

Notice under Section 143(2) - CIT(A) arrived at the conclusion that no notice under Section 143(2) was served upon the assessee on or before 30.9.2010, therefore, the process under the provision aforesaid was impermissible - Held that - So far as service upon Shri Bherulal said to be an employee of the assessee is concerned, it is pertinent to notice that by way of filing an affidavit Shri Bherulal stated on oath before the Commissioner of Income Tax (Appeals) that he was not in service with the assessee after 12.11.2008 and was not in touch with the assessee and never visited business place after leaving the service. He also stated that no notice from any government department/agency in his name or in the name of assessee was received by him. No counter to the statements made by Shri Bherulal on oath was made by any officer of the revenue. In view of it, we are of considered opinion that the Commissioner of Income Tax as well as learned Income Tax Appellate Tribunal rightly relied upon the statements made by Shri Bherulal. The other argument advanced by learned counsel for the appellant is also bereft of merit in view of the fact that the presumption as per Section 292-BB of the Act of 1961 could have been drawn only if the assessee did not have raised objection about the service of notice before completion of the assessment in question. In the instant matter the assessee not only raised the objection but also contested the same before the Assessing Officer - Decided against revenue.

Summary

Issues:
Challenge to correctness of judgment by Income Tax Appellate Tribunal affirming Commissioner of Income Tax's order; Validity of notice served under Section 143(2) of the Income Tax Act, 1961; Applicability of Section 292-BB presumption on notice service.

Analysis:
The case involved an appeal challenging the judgment of the Income Tax Appellate Tribunal, which upheld the Commissioner of Income Tax's order. The dispute centered around the validity of a notice served under Section 143(2) of the Income Tax Act, 1961. The assessee contended that the notice was served beyond the statutory time limit, rendering the assessment jurisdictionally flawed. The Assessing Officer argued that the notice was served within the prescribed period. Subsequently, the Commissioner of Income Tax (Appeals) concluded that the notice was not served within the stipulated time frame, thus invalidating the assessment.

The revenue contested the Commissioner's decision before the Income Tax Appellate Tribunal, which dismissed the appeal. The appellant then raised two arguments before the High Court. Firstly, they claimed that a notice was served to an employee of the assessee within the time limit, thus fulfilling the service requirement. Secondly, they invoked Section 292-BB of the Income Tax Act, 1961, arguing that participation in assessment proceedings implied notice acknowledgment. However, the High Court found no merit in these arguments.

Regarding the service to the employee, the High Court noted that the employee, in an affidavit, denied receiving any notice and clarified that he was not associated with the assessee after a certain date. The absence of any rebuttal to this statement further strengthened the Court's reliance on the employee's testimony. Additionally, the Court highlighted that Section 292-BB's presumption only applies if the assessee does not object to notice service before assessment completion. Since the assessee raised objections during the assessment, the presumption did not hold.

Consequently, the High Court dismissed the appeal, emphasizing the lack of merit in the appellant's contentions. The Court affirmed the decisions of the lower authorities, emphasizing the importance of timely and valid notice service in income tax assessments.