2008 (5) TMI 321 - AT - Income Tax

Summary

Issues Involved:
1. Validity of the assessment order annulled by CIT(A) due to the alleged improper service of notice u/s 143(2) of the IT Act, 1961.

Summary:

1. Validity of Service of Notice u/s 143(2):
- The Revenue's appeal contested the CIT(A)'s annulment of the assessment order dated 30th Jan., 2004, passed by the AO under s. 143(3) of the IT Act, 1961.
- The assessee filed a return of income on 29th Oct., 2001, and the AO issued a notice u/s 143(2) dated 28th Oct., 2002, which was served on 1st Nov., 2002.
- The CIT(A) annulled the assessment on the ground that the notice u/s 143(2) was not served within twelve months from the end of the month in which the return was furnished, as required by the proviso to s. 143(2)(ii).
- The AO argued that the notice was sent to the address provided in the return but was not served, leading to the notice being sent to an alternative address in Udaipur.
- The CIT(A) found no evidence that the notice was served within the prescribed time and relied on the decision of the Hon'ble Delhi High Court in CIT vs. Lunar Diamonds Ltd., which emphasized the necessity of serving the notice within the stipulated period.

2. Arguments and Evidence:
- The Revenue argued that the notice sent by speed-post on 28th Oct., 2002, should be deemed served within the time limit.
- The assessee contended that the notice was served on 1st Nov., 2002, beyond the prescribed period, and the burden of proof was on the Revenue to establish timely service.
- The Tribunal examined the assessment records and found no evidence of the notice being served within the stipulated period.

3. Legal Precedents and Tribunal's Decision:
- The Tribunal referred to multiple judgments, including CIT vs. Lunar Diamonds Ltd., CIT vs. Vardhman Estate (P) Ltd., and Dy. CIT vs. Mahi Valley Hotels & Resorts, which supported the requirement of serving the notice within the prescribed period.
- The Tribunal concluded that the Revenue failed to prove the timely service of the notice and upheld the CIT(A)'s decision to annul the assessment order.
- The Tribunal dismissed the Revenue's appeal, affirming that the assessment order was not in accordance with the law due to the improper service of notice u/s 143(2).

Conclusion:
The Tribunal upheld the CIT(A)'s annulment of the assessment order, emphasizing the mandatory requirement of serving the notice u/s 143(2) within the prescribed period and the failure of the Revenue to establish such service.