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2015 (2) TMI 544 - HC - Income TaxValidity of notice under Section 143(2) - whether served within the period of limitation so as to validate the assessment proceedings of assessment year (AY) 2006-07? - Held that - This Court had directed the revenue to produce the original record of the assessment. Carbon copies of notice are on record and such notices were alleged to have been sent to the assessee before 31.7.2007, yet there is no material to show that they were dispatched. Another important aspect is that the notice was not sent through registered post nor affixed at the assessee s address known to the revenue so as to allow presumption enacted under Section 7 of the General Clauses Act to operate. In these circumstances the notice issued after the period of limitation could not be held against the assessee as done by the CIT(Appeals) which rejected the appeal. Consequently, following the previous rulings of this Court, i.e. Shyam Gopal Charitable Trust V. Director of Income Tax (2006 (11) TMI 149 - DELHI High Court ); BHPE KINHILL Joint Venture V. Addl. DIT (2007 (12) TMI 244 - ITAT DELHI-F) ; World wide Exports P. Ltd. Vs ITO (2004 (6) TMI 287 - ITAT DELHI-J ) , it is held that the revenue did not discharge the burden of proving due service of notice which was caused by law upon it. Consequently, the findings of the ITAT and as well as CIT(Appeals) cannot be sustained. - Decided in favour of the appellant.
Issues:
Validity of notice under Section 143(2) for assessment year 2006-07. Analysis: The primary issue in this case is whether the Income Tax Appellate Tribunal (ITAT) erred in holding that the notice under Section 143(2) was served within the period of limitation to validate the assessment proceedings for assessment year 2006-07. The assessee contended that it did not receive any notice within the statutory limitation period, even though the Assessing Officer proceeded with the assessment. The Commissioner and the ITAT relied on the revenue's assertions that the notice was issued to the assessee through its chartered accountant. The ITAT acknowledged the assessee's participation in the assessment proceedings under protest but dismissed the appeal, upholding the CIT(Appeals) order. The key argument presented was that the assessee consistently maintained that it never received the notice, and participation under protest should not be construed as acceptance of the notice. The High Court directed the revenue to produce the original assessment records, revealing that the notices alleged to have been sent before the limitation period lacked proof of dispatch. Furthermore, the notices were not sent through registered post or affixed at the known address of the assessee, hindering the presumption under Section 7 of the General Clauses Act. Relying on previous court rulings, including Shyam Gopal Charitable Trust v. Director of Income Tax, it was held that the revenue failed to prove due service of notice as required by law. Consequently, the findings of both the ITAT and CIT(Appeals) were deemed unsustainable, and the question of law was decided in favor of the appellant. In conclusion, the High Court allowed the appeal, emphasizing that the notice served after the limitation period could not be upheld against the assessee. The judgment underscores the importance of proper service of notice in income tax assessment proceedings and the burden of proof on the revenue to establish compliance with legal requirements.
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