2016 (6) TMI 564 - HC - Income Tax

Reopening of assessment - validity of notice - Held that - It had come on record that the department had sent the notice for service to the petitioner through postal department on 26.03.2015 which was duly returned by the department with a remark left . The question of wrong address is virtually given-up by the petitioner. In fact, the petitioner contends that at that very address, the petitioner has received multiple communications and, therefore, the endorsement left was totally wrong. For multiple reasons, the stand of the petitioner cannot be accepted. Firstly, as noted, the postal dispatch has nothing to do with attempted personal service by the department. Secondly, the petitioner does not dispute that the notice was in fact, dispatched through the postal department on or around 26.03.2015. Thirdly, the petitioner does not at least now dispute the correctness of the address. Lastly, the petitioner has not joined the postal department to question why and under what circumstances, the remarks left was made. So far as the Income Tax department is concerned, it was entitled to proceed on the basis of official remark of the Government of India Department that the service could not be effected since the addressee had left the place. Only on the ground of non-issuance of service of notice, we are not inclined to terminate the reopening proceedings since no other contention regarding the validity of the notice was raised.

Summary

Issues:
Challenge to re-opening of assessment for the assessment year 2008-09 based on non-service of notice.

Analysis:
The petitioner challenged the re-opening of assessment for the assessment year 2008-09 by the Assessing Officer, citing non-service of notice as the sole ground for challenge. The petitioner contended that the notice dated 24.03.2015 was not served within the time specified under Section 149 of the Income Tax Act, 1961. The department claimed the notice was served on Krishna Yadav, who was allegedly present at the given address of the assessee and received the notice on 27.03.2015. However, the petitioner denied any connection with Krishna Yadav and argued that service on him was improper as he was not an authorized agent. The petitioner also highlighted discrepancies in the department's claims regarding the service of the notice.

The department's stance was that the notice was served to Krishna Yadav in person and dispatched through the postal department as well. The notice sent through post was returned with remarks "left." The department failed to establish that Krishna Yadav had the authority to receive the notice on behalf of the petitioner. The court noted the lack of clarity on Krishna Yadav's authorization to accept the notice, leading to the failure of the service attempt by the department.

Regarding the service through the postal department, the petitioner initially raised objections about the notice being dispatched to a wrong address. However, the petitioner later acknowledged receiving communications at that address, undermining the claim of incorrect address. The court emphasized that the postal dispatch was separate from the attempted personal service and that the petitioner did not dispute the dispatch of the notice. The petitioner's failure to challenge the correctness of the address and involve the postal department in questioning the "left" remark led the court to uphold the department's reliance on the official remark for non-service.

Ultimately, the court declined to terminate the re-opening proceedings solely based on the grounds of non-service of notice, as no other challenges to the notice's validity were raised. The petitions were dismissed, affirming the continuation of the re-assessment process for the assessment year 2008-09.