2017 (8) TMI 1510 - HC - Income Tax

Reopening of assessment - notice issued after the expiry of the extended period of limitation of six years - whether merely signing of notice on a particular date cannot be equated with the date of issuance of the notice as contemplated u/s 149? - issue of notice and service of notice - Held that - As the notice was signed on 31.03.2016 and was handed over the the postal authorities for effecting service upon the petitioner on 01.04.2016 as per the track report of the India Post. There is no evidence otherwise on record to establish that the notice was handed over to the post office for effecting service upon the petitioner on 31.03.2016. In view of the aforesaid facts and circumstances of the case, we hold that the notice u/s 148 of the Act was issued to the petitioner beyond the last date of limitation prescribed and as such, is barred by time. - Decided in favour of assessee

Summary

Issues:
Challenging an Income Tax Act notice dated 31.03.2016 for A.Y. 2009-10 on the grounds of limitation.

Analysis:
The petitioner filed an income tax return for A.Y. 2009-10, which was scrutinized, and an assessment order was passed on 21.10.2011. Subsequently, a notice dated 31.03.2016 under section 148 of the Income Tax Act was issued, served on 02.04.2016. The petitioner argued that the notice was dispatched on 01.04.2016, beyond the six-year limitation period, rendering it invalid. The respondent contended that the notice was dispatched on 31.03.2016, within the limitation period.

The dispute centered on whether the notice was dispatched within the limitation period. The Department's dispatch register indicated dispatch on 31.03.2016, while the petitioner claimed dispatch on 01.04.2016 based on a track report from India Post. The petitioner's evidence showed the notice was booked for postage on 01.04.2016, suggesting dispatch post-limitation. The court noted the crucial distinction between the "issue of notice" and "service of notice" under the Act, emphasizing the relevance of the date of issuance.

Referring to a similar case, the court held that signing a notice on a specific date does not equate to issuance as per the Act's requirements. In this case, the notice was signed on 31.03.2016 but handed over to postal authorities for service on 01.04.2016, as evidenced by the track report. Lacking evidence of handing over the notice on 31.03.2016, the court concluded that the notice was issued beyond the limitation period, deeming it time-barred.

Consequently, the court quashed the notice dated 31.03.2016 and allowed the writ petition, ruling in favor of the petitioner.