2009 (2) TMI 17 - HC - Income Tax

Petitioner prays are for quashing the notice issued u/s 148 & 142(1) service of notice receipt of notice - notice was duly addressed and stamped - notice was not barred by limitation and retained its legal efficacy - Petitioner has failed to disclose any grounds justifying the exercise of extraordinary jurisdiction vested in this Court by virtue of Article 226 of the Constitution of India therefore, petition is dismissed

Summary

Issues Involved:
1. Legality of proceedings initiated under Section 147 of the Income Tax Act.
2. Validity of the notice issued under Section 148 of the Income Tax Act.
3. Timeliness and service of the notice under Section 148.

Detailed Analysis:

1. Legality of Proceedings Initiated under Section 147 of the Income Tax Act:
The Writ Petition challenges the legality of proceedings initiated by the Respondents under Section 147 of the Income Tax Act (IT Act). The Assessing Officer (AO) had reason to believe that the Petitioner's income, chargeable to tax, had escaped assessment. Section 147 allows the AO to assess or reassess such income, subject to the provisions of Sections 148 to 153. The AO must serve a notice under Section 148 before making the assessment, reassessment, or recomputation.

2. Validity of the Notice Issued under Section 148 of the Income Tax Act:
The AO issued a notice on 25.3.2008 under Sections 147/148 of the IT Act to the Petitioner at her Delhi address. The Petitioner had informed the Revenue of her change of address to Lucknow on the same date, but this information was received by the AO on 31.3.2008. The notice was dispatched to the new address on 29.3.2008 by Speed Post. The AO recorded his reasons for initiating proceedings, and the CIT approved the proposal on 25.3.2008. The court noted that the notice under Section 148 relates to the furnishing of a return and not to the decision to initiate proceedings under Section 147.

3. Timeliness and Service of the Notice under Section 148:
Section 149 mandates that the notice must be issued within six years from the end of the relevant assessment year if the income chargeable to tax, which has escaped assessment, amounts to or is likely to amount to Rupees one lakh or more. The court emphasized that Section 149 speaks only of the issuance of a notice within a prescribed period and does not mandate that such a notice must also be served within the prescribed period. The court referred to previous judgments, including CIT vs. Shanker Lal Ved Prakash and R.K. Upadhyaya vs. Shanabhai P. Patel, to support the view that the issuance of a notice within the period of limitation is sufficient to confer jurisdiction on the AO.

The court also addressed the issue of service of the notice. The Petitioner had declined to accept the notice at multiple addresses. The court referred to Section 27 of the General Clauses Act, which creates a statutory presumption that if a letter is properly addressed, it must be deemed to have been served. The court cited various judgments, including Har Charan Singh vs. Shiv Rani and C.C. Alavi Haji vs. Palapetty Muhammed, to support the presumption of due service.

The court concluded that the Petitioner had failed to disclose any grounds justifying the exercise of extraordinary jurisdiction under Article 226 of the Constitution of India. The Writ Petition was dismissed without any order as to costs.