2016 (6) TMI 967 - HC - Income Tax

Reopening of assessment - notice is challenged solely on the ground that the Assessing Officer had neither issued nor served such notice before the last date i.e. 31.03.2015 - Held that - We find that the file of the department contains reasons recorded by the Assessing Officer carrying a signature of the date of 31.05.2015. The draft notice in proforma was placed before the higher authority for approval. He has granted his approval recording as under After perusal of record and in view of reasons given by AO in Annexure I I am satisfied that income has escaped assessment. In this case and it is a fit case for issue of notice u/s. 148 of the Income Tax Act. Therefore necessary approval is accorded. Below this we find the signature of the Principal Commissioner of Income Tax Shri Sandip Kapoor carrying date of 31.03.2015. The question of issuance of notice therefore must rest. As noted according to the department the service was effected through two modes. Firstly the service was delivered by personal delivery at the given address of the petitioner-company where one Krishna Yadav was present and also received a notice putting his signature and giving his mobile phone number. However to avoid any future complications the Assessing Officer also directed the Tax Inspector to serve notice to the company in person upon which the Tax Inspector visited the office of the assesee and found it closed upon which the service was made through affixing in presence of two panch witness. We find the original panchnama in the files of the department - Decided against assessee

Summary

Issues:
Challenge to notice for reopening assessment of assessment year 2008-09 based on alleged pre-dated and unserved notice.

Analysis:
The petitioner, a private limited company, challenged a notice to reopen its assessment for the assessment year 2008-09, contending that the notice was pre-dated and not served before the last date. The department claimed the notice was issued and served after recording reasons on 31.05.2015, through personal delivery to a representative of the petitioner and affixing at the office address. The petitioner objected to the process, alleging lack of proper service and attempted creation of evidence by the authority. The petitioner emphasized that the alleged panch-witness disowned his signature on the panchnama, casting doubt on the service of notice through affixing. Moreover, the petitioner denied appointing the person who received the notice on its behalf, questioning the legal validity of such service.

Regarding the objections raised by the petitioner, the Assessing Officer did not rely on the service through affixing. The department argued that all necessary documents, including reasons recorded, were present in the original file, with the draft notice approved on 31.03.2015. The Income Tax Inspector served the notice through affixing after initially serving it to the representative of the petitioner, supported by the presence of two panchas. The department contended that disputed factual questions should not be examined in a writ petition. The similarity between the panch-witness's signatures on the panchnama and the affidavit filed by him was highlighted, suggesting the authenticity of the service of notice.

The court examined the original department file, finding the Assessing Officer's reasons recorded on 31.05.2015 and the approval of the draft notice on 31.03.2015 by the Principal Commissioner of Income Tax. While the issuance of notice seemed clear, the service of notice was more contentious. The department claimed dual service methods: personal delivery and affixing in the presence of panch witnesses due to the office being closed. The court noted the lack of specific observations by the Assessing Officer on the non-service contention raised by the petitioner. The court attempted to compare the signatures of the panch-witness on the panchnama and the affidavit, acknowledging the difficulty in conclusively determining their identity. Ultimately, due to the highly disputed factual nature of the issue, the court declined to decide on the matter in a writ petition, leading to the dismissal of the petition.