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TMI Blog2025 (2) TMI 125X X X X Extracts X X X X X X X X Extracts X X X X ..... ve the notice in even alternative mode and also assessee / appellant submitted affidavit containing facts of that effect before the Ld. AO in the assessment proceedings but the Ld. AO completed the assessment without disposing the objection regarding question of valid service.
As no notice u/s 143(2) was duely served upon the assessee / appellant on or before 30.09.2013, hence requirement of law not been fulfilled. Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ny before making the addition during the course of appellate as well as assessment proceedings and hence, he said appellate order / assessment order are bad in the eyes of law and liable to be quashed. 6. That on the facts and circumstances of the case and the provisions of law, the Ld. CIT(A) as well as the Ld. AO were not justified to rely on the report of the inspector without confronting it to the appellant company. 7. That the appellant company craves the right to amend, append delete any or all grounds of appeal. " 1.2 The Revenue has raised the following grounds of appeal: "1. The Ld.CIT (A) erred in not considering that the assessee did not show figures of any accumulated profit / Reserve & Surplus before AY 2012-13. The ITRs for AY 2007-08 & 2008-09 which show such figures were filed on 03.02.2014 i.e. after the ITR for AY 2012-13 had been filed. Thus the source of accumulated profit / Reserve & Surplus remained unexplained." 2. "Alternatively the Ld. CIT(A) erred in treating the sale of closing stock during the previous year relevant to AY 2012-13 particularly when the assessee has shown the closing stock of Rs. 6.62 Cr. & 2.91 Cr. in its subsequen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... questionnaire and later on, it has received another notice dated 07.01.2015 issued u/s. 143(2). In response to notice, the assessee company filed the requisite details, i.e. copy of complete set of balance sheet with ITRs vide its letter dated 12.01.2015. 5. The Ld. DR heavily relied upon the orders of the authorities below. 6. The Ld. Counsel for the assessee further submitted that the statutory limit to issue notice U/s 143(2) for framing assessment for AY 2012-13 was six months from the end of financial year. So the statutory limit to issue notice U/s 143(2) had expired on 30.09.2013 and the assessee had not received the notice within the said period. In this regard, submitted chronologically that the notice U/s 143(2) dated 23.09.2013 was sent to the registered address the assessee i.e. B-340, Second Floor, Hari Nagar, New Delhi-110064 through speed post no.- ED906633941IN. However, on 26.09.2013, it was returned un-served to the office of revenue department with remarks landlord informed that any company with this name does not exist on this address' and on 24.04.2014, notice U/s 142(1) was issued to the assessee and delivered on the same registered address of Hari Naga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e, upto 30.09.2013. Accordingly, scrutiny assessment proceedings were required to be dropped and on this ground also assessment proceedings are illegal." 9. The Ld. AO submitted remand report by stating that notice U/s 143(2) was served through speed post. Further, the AO has taken refuge of the section 27 of General Clauses Act, 1927, stating proper address and stamp for 'deemed service' in which himself acknowledged the fact that assessee had raised objection on 09.02.2015 regarding the non-issuance of notice U/s 143(2). as per the judgement of Hon'ble High Court in Commissioner of Income-tax v. Lunar Diamonds Ltd., (2006) 281 ITR 1, that once the assessee had filed an affidavit stating it had not received notice U/s 143(2), the burden of proof had shifted to the revenue department to prove that the notice was served within prescribed time. The relevant para 16 of the judgment Lunar Diamonds (supra) is reproduced as under: "16. We may also point out that there appears to be some doubt whether the notice was at all sent to the assessee because, as observed by the CIT(A), the receipt showing that an envelope was sent by registered post merely contained the nam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e by affixture, specifying the date and time of service and the name of the identifier if any. It should conclude with an affidavit of the ITI solemnly affirming the facts and particulars of service as reported. The report is to be filed as an endorsement to the original notice after being docketed in the order sheet. The report should be verified by an affidavit. In the absence of such an affidavit the Assessing Officer must examine the Inspector on oath." In the present case when the notice was returned unserved no affixture was done by AO or ITI. 12. The CIT(A) passed the impugned order dated 23.01.2017 and held that notice U/s 143(2) was duely served on 25.09.2013 at the registered address of the assessee duely reflected in the return of income and ignoring the affidavit of assessee and averment of notice being return un-served which was never controverted or rebutted by the Ld. AO. Relevant para of this order is reproduced as under: "3.2 Considering above a factual report was called from the assessing officer the notice under section 143(2) of the Act was duly issued on 23.09.2013 and served through the speed post on 25.09.2013 at the address duly shown by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice u/s. 143(2) was actually served upon the assessee on or before 30-09-2010. The only notice which was issued on 08-09- 2010 was returned by the postal authorities and thereafter no effort was made to serve another notice before the deadline. Since the requirement of 'service' of notice u/s. 143(2) and not its 'issue', is a jurisdictional condition, which is unfortunately lacking in the instant case, the sequitur is that the AO lacked jurisdiction to make the assessment. Ex consequenti, the assessment order passed in absence of a valid jurisdiction has to be and is hereby quashed. 25. In view of our decision on quashing the assessment for want of service of notice u/s. 143(2), there is no need to delve into the grounds raised by the assessee on merits. 26. In the result, the appeal is partly allowed." 15. In the instant case assessee / appellant company declared an income of Rs. 15,592/- on 28.02.2012 for A.Y. 2012-13. Notice U/s 143(2) of the Act was sent registered address of assessee / appellant company on 23.09.2013 was returned undelivered on 26.09.2013 and thereafter another notice u/s 143(2) of the Act was issued on 07.01.2015. The relevant A. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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