BHPE Kinhill Joint Venture
vs. Additional DIT (Delhi).
A.Y. : 2000-01 Dtd. : December 14, 2007
Section 143 — Notice under Section 143(2) is required to be
served on assessee within 12 months from end of month in which return of
income has been filed and mere issuance of notice within a period of 12 months
is not sufficient —The onus to prove service of notice on assessee within
statutory period is upon Assessing Officer.
The assessee filed return of income on 22-10-2001. The
Assessing Officer issued notice by way of foreign air registered letter on
31-10-2002. The assessee contended that since the notice under Section 143(2),
dated 31-10-2002 had not been received by it by 31-10-2002, the assessment
proceedings were not valid in law. The Commissioner (Appeals) relying on the
decision of the Apex Court in Prima Realty vs. Union of India [1997]
223 ITR 655, held that the Post Office had acted as an agent of the assessee
and, therefore, the date of service under the provisions of Section 143(2)
would be treated as 31-10-2002, which was within time.
On second appeal by the assessee, the ITAT held that :
1) The onus to prove the service of notice on the
assessee within the statutory period is upon the Assessing Officer and not
upon the assessee.
2) In the instant case, the notice was only issued by the
Assessing Officer on 31-10-2002, but neither the same had been received back
by the Assessing Officer nor the Department was able to prove the service of
notice upon the assessee on 31-10-2002. Therefore, the notice under Section
143(2) was not proved to have been served upon the assessee on or before
31-10-2002 by the Department.
3) In the case of Prima Realty vs. Union of India
[supra] the Apex Court was dealing with the payment made by cheque.
The ratio of that case is that whether the addressee has shown his desire
either expressly or impliedly to send a cheque by post, the property in the
cheque passes to him as soon as it is posted. Therefore, the Post Office
acts as an agent of the person to whom the cheque is sent and so the facts
of that case are clearly distinguishable with the facts of the case of the
assessee.
4) In case the Revenue has failed to establish the
service of the notice upon the assessee under Section 143(2) within the
statutory period of limitation provided under the proviso to Section 143(2)
then the assessment proceedings completed by the Assessing Officer in
violation of statutory provision of Section 143(2) are liable to be
cancelled/quashed.
In support of his contention, the assessee has relied upon
the decision of the ITAT Delhi Bench ‘C’ in the case of Whirlpool India
Holdings Ltd. vs. Dy. DIT rendered in I.T. Appeal No. 330 (Delhi) of 2004
for the assessment year 2000-01, which has also considered the decision of the
Apex Court in the case of Prima Realty (supra). The Tribunal has also
placed reliance on the decision of jurisdictional High Court of Delhi in the
case of CIT vs. Lunar Diamonds Ltd. [2006] 281 ITR 1 (Delhi), wherein
Their Lordships have also discussed the decision of Apex Court delivered in
the case of Prima Realty (supra).
Cases relied upon :
1. Whirlpool India Holdings Ltd. vs. Dy. DIT [IT
Appeal No. 330/Delhi of 2004]
2. Raj Kumar Chawla vs. ITO [2005] 94 ITD 1
(Delhi) (SB).
