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2018 (6) TMI 280 - AT - Income TaxValidity of reopening of assessment - notice u/s 147 issued beyond stipulated time limit - maximum time limit for issuance of notice - Held that - Merely signing the notices cannot be equated with the issuance of notice as contemplated u/s 149 - the date of issue would be the date on which the same were handed over to the Post Office for the purpose of booking, for the purpose of effecting service on the assessee - The process of issue of notice will be completed only when the envelope containing the notice is handed over to the Postal Authorities in Kolkata which is only on 05.04.2015 and therefore, the notice u/s 148 of the Act even though dated 31.03.2015 has to be taken as issued only on 05.04.2015, which action of Assessing Officer is clearly barred by limitation and as such cannot be sustained. - Decided in favor of assessee.
Issues Involved:
1. Validity of notice issued under Section 148 beyond the stipulated time limit. Issue-wise Detailed Analysis: Validity of Notice Issued Under Section 148 Beyond the Stipulated Time Limit: The primary issue in this case revolves around the validity of the notice issued under Section 148 of the Income Tax Act, which the assessee contended was issued beyond the stipulated time limit. The assessee company, engaged in the business of Non-Banking Financial Company (NBFC), filed its return of income on 27.09.2008. The Assessing Officer (AO) issued a notice under Section 148 on 31.03.2015, proposing to reopen the assessment on the grounds of income escapement. However, the assessee received this notice only on 08.04.2015 and argued that the notice was issued beyond the prescribed time limit as it was handed over to the postal authorities only on 05.04.2015, making it legally non-compliant. The Commissioner of Income Tax (Appeals) [CIT(A)] examined the issue, noting that the notice dated 31.03.2015 was served upon the appellant on 07.04.2015. The CIT(A) scrutinized the postal tracking records, which confirmed that the notice was bagged by Kolkata RMS(CRC) on 05.04.2015 and dispatched to the appellant in Delhi on 06.04.2015. The CIT(A) concluded that the notice could be considered issued only when it left the control of the AO, which was on 05.04.2015. This date was beyond the stipulated period, rendering the notice invalid. The CIT(A) relied on precedents, including the Hon'ble Kolkata ITAT decision in the case of Shri Nirmalendu Dutta vs. DCIT, to support this conclusion. Aggrieved by the CIT(A)'s order, the Revenue appealed, arguing that the AO had issued the notice on 31.03.2015 and handed it over to the postal authorities on the same day. The Revenue contended that any delay caused by the postal authorities should not be attributed to the AO. They cited the Hon'ble Supreme Court's decision in R.K. Upadhyay Vs. Sanabhai P. Patel to support their stance. However, the assessee countered this argument by presenting the postal tracking record, which clearly showed that the notice was taken over by the Post Office at Kolkata only on 05.04.2015. The Tribunal considered the evidence and the legal precedents, including the Hon'ble Gujarat High Court's decision in Kanubhai M. Patel (HUF) v. Hiren Bhatt, which held that the date of issue of a notice is when it is handed over for service to the proper officer, not merely the date it is signed. Applying this principle, the Tribunal concluded that the notice dated 31.03.2015 was effectively issued only on 05.04.2015, beyond the statutory time limit. Consequently, the notice was deemed invalid, and all subsequent proceedings based on it were held null and void. In conclusion, the Tribunal upheld the CIT(A)'s order, dismissing the Revenue's appeal. The decision reaffirmed that for a notice under Section 148 to be valid, it must be issued within the prescribed time limit, which is determined by the date it is handed over to the postal authorities for service, not merely the date it is signed by the AO. Order pronounced in the open court on 30.05.2018.
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