2018 (12) TMI 468 - HC - Income Tax

Validity of Assessment u/s. 143(3) - non serving of notice - Revenue has failed to prove the satisfaction regarding service of notice u/s. 143(2) - Held that - Tribunal has recorded that the notice was not dispatched through the postal authorities. As claimed to have been served through personal service. The notice did not bear the name of the person or identification of the person to whom it was served. The notice merely contained the signature with a date from which, according to the Tribunal, it cannot be ascertained to whom the notice was served. Tribunal records that in the Assessment proceedings, there was no recording of proceeding before 08.08.2008. This, was long after the alleged service of notice by the deponent on the Assessee. The Tribunal also noted that the Assessee was a company. There was noting on record to suggest that the notice, even if, served was on any person authorized by the Company to receive the same. AO had filed affidavit, claiming that the notice was duly served. However, Tribunal recorded that the said affidavit was not based on any personal knowledge of the deponent. It can thus be seen that on the basis of material on record, the Tribunal came to the conclusion that the Department failed to establish that the notice was duly served. Consequently, the stand of the Assessee that no such notice was served upon us, was accepted. No question of law, therefore arises. Appeal dismissed.

Summary

Issues:
Service of notice under Section 143(2) of the Income Tax Act, 1961.

Analysis:
The High Court considered the appeal filed by the Revenue challenging the Judgment of the Income Tax Appellate Tribunal regarding the service of notice under Section 143(2) of the Income Tax Act, 1961. The primary question was whether the Tribunal was correct in holding that the assessment under Section 143(3) of the Act was invalid due to the Revenue's failure to prove the satisfaction regarding the service of notice under Section 143(2) of the Act. The dispute centered around whether the notice was served on the Assessee or not. The Assessee raised objections to the service of notice before the Assessing Officer, who proceeded to frame the assessment without deciding on this issue. The Tribunal observed that there was no proof of service of notice on the Assessee, as the notice did not bear the name or identification of the person to whom it was served, and there was no evidence that the recipient was an authorized person of the Assessee. The Tribunal concluded that the Department failed to establish that the notice was duly served, leading to the acceptance of the Assessee's claim that no such notice was served.

The Tribunal found that the notice was not dispatched through postal authorities but claimed to have been served through personal service. However, the notice lacked essential details for identification of the recipient. The Tribunal highlighted that there was no recording of proceedings before the date of the alleged service of notice, and the Assessee being a company required the notice to be served on an authorized person. Despite the affidavit filed by the Assessing Officer claiming proper service, the Tribunal noted that it lacked personal knowledge and did not provide sufficient details. Consequently, based on the evidence presented, the Tribunal concluded that the Department failed to prove the service of notice, leading to the dismissal of the Appeal.

In summary, the High Court upheld the Tribunal's decision by dismissing the Appeal filed by the Revenue. The Court concurred with the Tribunal's findings that the Department did not establish the proper service of notice under Section 143(2) of the Income Tax Act, 1961. The lack of essential details on the notice and the absence of evidence supporting its proper service led to the acceptance of the Assessee's claim that no such notice was served. As a result, the Court found no grounds for questioning the Tribunal's decision, thereby affirming the dismissal of the Appeal.