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TMI Blog2008 (5) TMI 321X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel for the assessee attended and sought adjournment through letter dt. 8th Nov., 2002 on the ground that the notice under s. 143(2) was served on 1st Nov., 2002. The assessee had also raised validity of service of notice under s. 143(2) which was disposed of by the AO while passing the assessment order under s. 143(3) dt. 30th Jan., 2004 wherein the AO held that the first notice was issued on the address given in the return of income i.e. at 55/124, General Ganj, Kanpur, but the same was not served at the given address and thereafter the notice under s. 143(2) was sent at the address "32/2, New Fatehpura, Udaipur (Rajasthan)". The relevant observations made by the AO are as under: "The assessee has stated in his written reply dt. 30th Dec., 2003 that notice under s. 143(2) was served upon him on 1st Nov., 2001 and the same must have been seized within 12 months from the date of filing of return. The contention of the assessee is not legally correct because the notice under s. 143(2) was sent on the address given on the return of income. But it was not served that is why the notice under s. 143(2) dt. 28th Oct., 2002 was sent by post on 28th Oct., 2002 at Udaipur a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground alone the assessee in question does not deserve to be given any benefit on this score. It is also pertinent to mention here that not only return has been filed on 29th Oct., 2001 but the same has been filled in by the assessee on 20th Oct., 2001 i.e. much after he has left premises No. 55/124, General Ganj, Kanpur. Copy of challan dt. 16th Oct., 2001/19th Oct., 2001 for Rs. 1,09,400 enclosed with the return also shows the address as 55/124, General Ganj, Kanpur only. Assessee therefore, cannot take a fresh plea that return though submitted to the Department on 29th Oct., 2001 was filed in fresh plea that return though submitted to the Department on 29th Oct., 2001 was filled in by him prior to 1st Oct., 2001 i.e. before change of address and hence the mistake of mentioning the incorrect address since all the three dates, i.e., date of filing, date of preparation of return and date of challan are much after 1st Oct., 2001 when the assessee shifted to new address i.e. 16/12, Civil Lines, Kanpur. In spite of the facts as discussed above the AO was able to issue the notice under s. 143(2) at Udaipur address of the assessee. A copy of notice along with receipts of postal autho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... date of filing of return. The AO has mentioned in the assessment order that the contention of the appellant was not legally correct because the notice under s. 143(2) was sent on the address given on the return of income but it could not be served and therefore the notice under s. 143(2) dt. 28th Oct., 2002 was sent by post on 28th Oct., 2002 at Udaipur address well within time. The proviso to cl. (ii) of sub-s. (2) of s. 143 as under: 'Provided that no notice under cl. (ii) shall be served on the assessee after the expiry of twelve months from the end of the month in which the return is furnished.' In the present case the notice has been served on 1st Nov., 2002 which is clearly beyond the time provided in the provision to cl. (ii) of sub-s. (2) of s. 143. The word used in the proviso is 'served'. The AO in his report has not denied the fact that the notice under s. 143(2) was served for the first time on the appellant on 1st Nov., 2002. Vide my letter dt. 14th Sept., 2005 I had asked the AO to send his comments along with case records after duly flagging them pointing out the evidence to show that the notice under s. 143(2) had been issued within prescribed time. The AO has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not be accepted in view of the decision of Hon'ble Delhi High Court in the case of CIT vs. Bhan Textiles (P) Ltd. (2007) 208 CTR (Del) 253 : (2006) 287 ITR 370 (Del). He also relied on the following decisions: (i) Dy. CIT vs. Mahi Valley Hotels & Resorts (2006) 201 CTR (Guj) 308 : (2006) 287 ITR 360 (Guj); (ii) CIT vs. Lunar Diamonds Ltd. (2005) 197 CTR (Del) 312 : (2006) 281 ITR 1 (Del); (iii) Avadh Automobiles (P) Ltd. vs. Dy. CIT (ITA No. 864/ All/2000. dt 18th Jan., 2008); (iv) Smt. Bandana Gogoi vs. CIT (2007) 209 CTR (Gau) 31 : (2007) 289 ITR 28 (Gau); (v) CIT vs. Vardhman Estate (P) Ltd. (2007) 208 CTR (Del) 251 : (2006) 287 ITR 368 (Del); (vi) CIT vs. C. Palaniappan (2006) 284 ITR 257 (Mad); (vii) CIT vs. M. Chellappan & Anr. (2005) 198 CTR (Mad) 490 : (2006) 281 ITR 444 (Mad); (viii) Bapalal & Co. Exports vs. Jt. CIT (2007) 208 CTR (Mad) 330 : (2007) 289 ITR 37 (Mad); (ix) Vipan Khanna vs. CIT (2002) 175 CTR (P&H) 335 : (2002) 255 ITR 220 (P&H); (x) Raj Kumar Chawla & Ors. vs. ITO (2005) 92 TTJ (Del)(SB) 1245 : (2005) 277 ITR 225 (Del)(SB)(AT); (xi) Bhagat Singh & Virender Singh vs. Asstt. CIT (2000) 69 TTJ (Del)(TM) 660 : (2001) 251 ITR 74 (Del)(TM)(AT); ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO during the course of assessment proceedings. Admittedly, the assessment order under s. 143(3) has been passed on 30th Jan., 2004. In the assessment order, the AO has mentioned that since notice under s. 143(2) was sent on the address given by the assessee on the return of income, but it was not served that is why the notice under s. 143(2) dt. 28th Oct., 2002 was sent on 28th Oct., 2002 at Udaipur address well within time. However, the AO has not given any finding that the notice was served on the assessee well within time. There is no evidence on record to suggest that the notice under s. 143(2) was served on the assessee within the stipulated period of 12 months from the end of the month in which the return was furnished, i.e., on or before 31st Oct., 2002. We have also examined the assessment records and from there it is clear that no notice under s. 143(2) has been issued to the assessee on the address given on the return of income. Thus, it is clear that the AO had issued only one notice under s. 143(2) on 28th Oct., 2002 at Udaipur address which was served on the assessee on 1st Nov., 2002. 14. In view of the decision of Hon'ble Delhi High Court in the case of CIT vs. Lun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this regard. The Tribunal was right in setting aside the order of assessment. No substantial question of law arose from its order." 16. In the present case also there is no proof on record to suggest that notice was served on the assessee on or before 31st Oct., 2002. 17. At this stage, we may also refer to the judgment of Hon'ble Gujarat High Court in the case of Dy. CIT vs. Mahi Valley Hotels & Resorts wherein the Hon'ble Court held that "under the proviso to s. 143(2)(ii)", no notice is to be served on the assessee after the expiry of 12 months from the end of the month in which the return is furnished. The Hon'ble Court further observed that "on a plain reading of the language in which the proviso is couched, it is apparent that the limitation prescribed herein is mandatory, the format of the provision being in negative terms". The Hon'ble Court concluded that when an assessment is framed under s. 143(3) by issuing statutory notice beyond the prescribed time-limit, the assessment would be bad in law and is to be quashed. 18. Recently, the Tribunal, Allahabad Bench (Third Member) in the case of Awadh Automobiles (P) Ltd. vs. Dy. CIT relating to asst. yr. 1997-98 vide orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Hon'ble Gujarat High Court held that notice under s. 143(2) must be served on assessee before the stipulated period, i.e., within twelve months. The Hon'ble Courts have also held that burden is on Revenue to prove the service of notice within time. In absence of such proof, assessment order has to be annulled. 22. It seems that the decision of Hon'ble Rajasthan High Court in the case of CIT vs. Gyan Prakash Gupta relied upon by the learned Departmental Representative is against the assessee. However, the decisions of Hon'ble Delhi High Court and Hon'ble Gujarat High Court referred to above are in favour of the assessee. There is no direct decision of the jurisdictional High Court. It is well-settled law that even if two views are possible the view which is favourable to the assessee must be accepted while construing the provisions of taxing statute. Therefore, in view of the decisions of Hon'ble Delhi High Court and Hon'ble Gujarat High Court, we are' of the view that the learned CIT(A) was justified in annulling the assessment. 23. In our considered view, the decision of the Hon'ble Supreme Court in the case of Jai Prakash Singh relied upon by the learned Departmental Represen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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