2009 (9) TMI 2 - HC - Income Tax

Block Assessment Notice under section 158BD Change of Address Period of limitation for passing assessment order - as per the A.O. the notice u/s 158BD dated 24.1.2002 was served upon the appellant on 15.2.2002. - as the notice was served on 15.2.2002, the limitation for completion of block assessment proceedings comes to February, 2004 as per the assessee submitted the envelop and copy to notice to prove that notice was served on him on 30.1.2002 Held that - since the Order dated 5.2.2004 has been passed beyond the permissible statutory period which expired on 31.1.2004, it is, therefore, legally non est

Issues:
1. Jurisdiction of the Assessment Order due to the period of limitation for block assessments.
2. Discrepancy in the date of service of the notice under Section 158BD.
3. Validity of the notice served on the assessee.
4. Burden of proof on the assessee regarding the service of notice.
5. Presumption of valid service of notice through registered post.
6. Department's inconsistent stance on the issuance of the notice.
7. Legality of the Assessment Order due to exceeding the statutory period.

Analysis:

1. The appeal under Section 260 A(1) of the Income Tax Act, 1961 challenges the Order of the Income Tax Appellate Tribunal (ITAT) regarding the Block Assessment period from 1.4.1990 to 30.10.2000. The issue revolves around the period of limitation for block assessments as prescribed by Section 158BE(2b) of the IT Act. The ITAT found that the Assessment Order lacked jurisdiction since it was passed on 5.2.2004, beyond the last permissible date of 31.1.2004.

2. The CIT(A)-III, New Delhi, noted a discrepancy in the date of service of the notice under Section 158BD. While the appellant claimed the notice was served on 30.1.2002, no corroborative evidence was provided. The appellant's failure to substantiate the claim led to the conclusion that the notice was served on 15.2.2002, affecting the limitation for completing block assessment proceedings.

3. The validity of the notice served on the assessee was a crucial aspect of the case. The ITAT examined the notice dated 24.1.2002 and found it was duly dispatched and received by the assessee on or before 30.1.2002, despite the response/return being filed later on 22.3.2002. The presumption was in favor of the notice being served properly.

4. The burden of proof regarding the service of notice was discussed, with reference to the Division Bench decision in CIT vs. Shanker Lal Ved Prakash. The court noted the positive assertion by the assessee regarding the receipt of the notice on 30.1.2002, emphasizing the need for the department to prove otherwise.

5. The presumption of valid service of notice through registered post was highlighted, citing the case of CIT vs. Vins Overseas India Ltd. The court emphasized that if a notice is properly addressed and dispatched through registered post, there is a presumption of service on the assessee, which was not rebutted effectively by the department.

6. The court criticized the department's inconsistent stance on the issuance of the notice, noting the change in position after the production of the notice and envelope by the assessee. The shifting stands of the department were viewed with concern, especially in light of the conflicting affidavits filed by the Chief Commissioner and the Assessing Officer.

7. Ultimately, the court upheld the ITAT's decision that the Assessment Order was legally non est due to exceeding the statutory period, leading to the dismissal of the appeal with costs to be deposited within a specified timeframe.

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