By Ajay R. Singh, Advocate
CIT vs. M/s. Abacus
Distribution Systems (India) Pvt. Ltd. [ Income tax Appeal No. 1382 of 2014,
dated : 07/02/2017; AY: 2006-07 (Bombay High Court)].
[M/s. Abacus
Distribution Systems (India) Pvt. Ltd.
vs. DCIT. [ITA No. 8226/MUM/2010 ; Bench : K ; dated:06/12/2013 ; A Y:
2006-07 . MUM. ITAT ]
The assessee filed its
return of income on 20th November, 2006 wherein its address is
mentioned at Nariman Point, Mumbai 400 021.” On 23rd November, 2006,
the assessee filed a communication to the AO intimating him that the address of
the assessee had now changed and its new address was intimated at Dadar (W),
Mumbai – 400 028.”
On 28th
November, 2007 a notice u/s. 143(2) of the Act was issued by the AO to the
assessee at its original address of Nariman Point, Mumbai. On 29th
November, 2007 Income Tax Inspector filed a report stating that he had visited
the office premises of Nariman Point, Mumbai to serve the notice u/s. 143(2) of
the Act, but no such company was found in occupation of the address as
communicated in the return of income.
On 30th
November, 2007, the AO handed over the notice u/s. 143(2) of the Act to the
Post Office for service of the notice addressed to the erstwhile office of
Nariman Point, Mumbai of the assessee.
On 11th
December, 2007, the AO once again sent a notice u/s. 143(2) by post to the
assessee. However, this time it was addressed to the new office premises of the
assessee at Dadar, Mumbai.
On 12th
December, 2007 a notice was served upon the assessee fixing the hearing for the
subject assessment year on 17th December, 2007. Immediately on
receipt of the above notice the assessee on 13th December, 2007 had
objected to the assessment proceedings for the subject AY on the ground that no
notice u/s. 143(2) of the Act has been served within the statutory period of 12
months as provided in proviso to section 143(2) of the Act.
Notwithstanding the above, on 9th September, 2010 the AO consequent
to the directions of the Dispute Resolution Panel passed an Assessment Order
u/s. 143(3) r.w.s. 144C(13) of the Act.
Being aggrieved with the
order, the assessee filed an appeal to the Tribunal. The Tribunal allowed the
assessee’s appeal holding that in terms of section 143(2) of the Act, it is
mandatory for the AO to serve a notice u/s. 143(2) of the Act before the expiry
of 12 months from the end of the month in which the return is furnished. It is
undisputed position that the assessee had informed the AO as far back as 23rd
November, 2006 of the change in its address from Nariman Point, Mumbai to
Dadar(W), Mumbai. Notwithstanding the above, on 30th November, 2007
the AO sent a notice u/s. 143(2) by post at the old address. It was only later
on 11th December, 2007 that the AO sent a notice u/s. 143(2) to the
assessee at its new address. Taking into account the fact that the assessee had
objected at the very first instance to the assessment being taken up for
completion, in the absence of the mandatory requirement of section 143(2) of
the Act being satisfied i.e. service thereof within one year from the end of
the month in which the return is filed. The Tribunal held that the assessment
order dated 9th September, 2010 for the subject AY to be null and
void.
Being aggrieved, the
Revenue carried the issue in appeal to the High Court. The Hon. High Court
observed that the notice u/s. 143(2) of the Act which was handed over to the
post office on 30th November, 2007 was incorrectly addressed. In
terms of section 282 of the Act as existing in 2007, a notice may be served on
the person named therein either by post or as if it were a summons issued by
the Court under the Code of Civil Procedure. Section 27 of the General Clauses
Act provides that where any Central Act requires a document to be served by
post where the expression “serve” or “given” or “sent” shall be deemed to have
been effected by properly addressing, prepaying and posting. In such cases,
unless the contrary is proved which would be deemed to have been served at the
time when the letter would be delivered in the ordinary course of post to the
addressee. In this case admittedly the envelope containing the notice was
wrongly addressed. Thus the presumption u/s. 27 of the General Clauses Act
cannot be invoked. It is very pertinent to note that subsequently i.e. on 11th
December, 2007 the AO served the notice upon the correct address of the
assessee. This posting to the correct address was on the basis of the record
which was already available with the AO by virtue of letter dated 23rd November,
2006 addressed by the assessee to the AO. Moreover, as the objection to the
Assessment proceeding was taken much before the Assessment proceedings were
completed on the basis of no service of notice before the expiry of the period,
the Assessment Order will not be saved by section 292BB of the Act.
In the above view, the
Tribunal correctly held the notice u/s. 143(2) has not been served at the
correct address on or before 30th November, 2007. Accordingly,
Appeal was dismissed.
