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TMI Blog2024 (1) TMI 1327X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Bhargav D. Karia And Honourable Mr. Justice Niral R. Mehta For the Petitioner : Mr Manish J Shah For the Respondent : Mr Nikunt Raval For Mrs Kalpana K Raval ORAL ORDER PER : HONOURABLE MR. JUSTICE NIRAL R. MEHTA 1. By way of this petition under Article 226 of the Constitution of India, the petitioner sought to challenge initiation and conclusion of proceedings for reassessment as well as the order dated 22.11.2019, by which the objections raised by the petitioners were turned down. 2. Brief facts of the case can be stated as under : 2.1 The petitioner is a senior citizen and agriculturist, who does not have any regular source of income, for which he is liable to file his return of income and thereby, it is the case of the petitioner that he has not filed his return of income for the Assessment Year 2012-13. 2.2 The petitioner was served with a notice under Section 142(1) of the Income-Tax Act, 1961 (for short 'the Act') dated 9.9.2019 directing, inter-alia, to comply with the notice issued under Section 148 of the Act. It is the case of the petitioner that he has not received any notice under Section 148 of the Act. The petitioner, therefore, through his Chartered Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with costs against the respondent." 3. We have heard learned advocate Mr.Manish Shah for the petitioner and learned advocate Mr.Nikunt Raval for learned advocate Mrs.Kalpana Raval for the respondent - revenue authority. 4. Learned advocate Mr.Manish Shah for the petitioner, while assailing the initiation of reassessment proceedings as well as order dated 22.11.2019, has made the following submissions : (i) It was vehemently submitted that the notice dated 28.3.2019 purported to have been sent through Speed Post on 23.3.2019 was never served upon the petitioner. It was further submitted that admittedly, the said notice, as has been observed in the order, served on incorrect address. It was, therefore, submitted that the said mandatory notice under Section 148 of the Act cannot be said to have been served within the limitation prescribed under Section 149(1) of the Act and thereby, the said notice as well as the impugned order rejecting the objections and initiation of proceedings would fall flat on the said ground alone. (ii) It was submitted that to assume the jurisdiction under Section 147 of the Act for undertaking reassessment proceedings, notice under Section 148 of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that falls for consideration of this Court is whether the Revenue can proceed with the reopening sought to be initiated under Section 147 of the Act, in absence of any notice under Section 148 of the Act actually served upon the assessee ? 8. In our considered opinion, the said question is no more res-integra. The Coordinate Bench of this Court in the case of Rambhai Mafatlal Patel (supra) has extensively considered the provision of law and various authorities while deciding the identical question. It would, therefore, be profitable to take note of the relevant observations of the aforesaid decision, which are reproduced below : "6. Section 292 BB of the Act of 1961 is a deeming Clause, which is quoted as under: "[292BB. Notice deemed to be valid in certain circumstances- Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come has escaped assessment - (1) Before making the assessment, reassessment or re-computation under Section 147, the Income-tax Officer shall serve on the Assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of Section 139; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub- section." 10. The Supreme Court in R. K. Upadhyaya vs. Shanhai P. Patel reported in [1987] 3 SCC 96, explained that there was a distinct shift in the scheme of the provisions of the 1961 Act in comparison with the corresponding provision i.e. Section 34 under the 1922 Act under which the mandatory requirement was that both the issuance and service of notice had to be completed within the prescribed period. Consequently, the service of notice within the limitation period was the foundation of jurisdiction under the 1922 Act. In Y. Narayana Chetty v. Income Tax Officer, Nellore [1959] 35 ITR 388 (SC) the Supreme Court observed in the context of Section 34 of the 1922 Act: "The notice prescribed by section 34 of the Income tax Act for the purpose of initiating re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is not a mere procedural requirement ; the service of the prescribed notice on the assessee is a condition precedent to the validity of any reassessment made under section 147. If no notice is issued or if the notice issued is shown to be invalid, then the proceedings taken by the Income tax Officer without a notice or in pursuance of an invalid notice would be illegal and void." 14. In CIT v. Hotline International (P) Ltd. [2008] 296 ITR 333, the Delhi High Court held that affixation of notice on an address at which the security guard of the Assessee-company refuses to receive such notice cannot be construed to be a proper service of notice under Section 148 of the Act. The security guard was not an agent of the assessee and therefore, the reassessment proceedings were held to be bad in law. 15. In Dina Nath v. Commissioner of Income-tax [1994] 72 Taxman 174 (J & K), the notice under Section 143 (2) of the 1961 Act was served upon one S, who was neither a member of the family of the Assessee nor his duly authorized agent. However, S had been accepting the notice on behalf of the Assessee and prosecuting the cases on his behalf earlier before the income tax authorities. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a "S" were valid notices for reassessing the income of the HUF "MM‟ or "MS‟ or its successors. • ONUS ON REVENUE TO PROVE SERVICE OF NOTICE: 19. There is sufficient judicial authority for the proposition that the burden of showing that service of notice has been effected on the Assessee or his duly authorized representative is on the Revenue. These include Fatechand Agarwal v. Commissioner of Wealth-Tax [1974] 97 ITR 701 (Ori) and Venkat Naicken Trust v. ITO [1999] 107 Taxman 391 (Mad). In CIT v. Thayaballi Mulla Jeevaji Kapasi (1967) 66 ITR 147 (SC), the Respondent to whom the notice was directed was not in town. The only information which the process server had was that the Respondent was either in Bombay or Ceylon. Thereafter, the process server affixed the notice on the business premises of the Respondent. The Supreme Court affirmed the essential principle that "if no notice was served within the period, the Income-tax Officer was incompetent to commence proceedings for reassessment under Section 34 of 1922 Act." It was further held that "service of notice under Section 34 (1) (a) within the period of limitation being a condition precedent to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... delivery on 31st March 2015 itself. However, on account of overload in the postal department, the same was booked on 1st April 2015. In such circumstances, this Court interpreted the expression "to issue" used in the context of notice referred to in Section 149 of the Act. This Court interpreted the said expression holding that the date of issue of notice would be the date on which the same is handed over for service to the proper officer i.e. the postal department. The Court, thereafter, went into the factual aspect whether the envelope containing the notice for reopening addressed to the writ applicant had been handed over to the postal department for delivery on 31st March 2015 or was handed over on 1st April 2015. 23. In the aforesaid context, this Court relied upon a decision in the case of Kanubhai M. Patel (HUF) vs. Hiren Bhatt or his successors to office and others reported in (2011) 334 ITR 25 (Guj), wherein this Court observed as under: "16. Thus, the expression to issue in the context of issuance of notices, writs and process, has been attributed the meaning, to send out; to place in the hands of the proper officer for service. The expression shall be issued as used ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rein. This agricultural land we are talking about is situated at Kalol, District : Gandhinagar. The only mistake that the department committed was to dispatch the notice under Section 148 of the Act to the address at Kalol, Gandhinagar and not to the residential address of the writ applicant at village : Khorsam, Taluka : Chanasma, District : Patan. In such circumstances, it is obvious that the writ applicant could never be said to have receive such notice. 27. In the result, this writ application succeeds and is hereby allowed. The order disposing of the objections dated 1st November 2018 filed by the assessee against the reopening proceedings (Annexure : G page : 22) is hereby quashed and set aside." 9. Keeping in mind the aforesaid decision, if the facts of the present case are considered, it would transpire that the notice under Section 148 of the Act was served on the wrong address by stating incorrect name of village. The said fact could not be disputed by learned advocate Mr.Nikunt Raval for the Revenue as the very fact has been recorded by the authorities while rejecting the objections. 10. In view of the aforesaid, in our considered opinion, there is no scope available ..... X X X X Extracts X X X X X X X X Extracts X X X X
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