IN THE INCOME TAX APPELLATE TRIBUNAL
(DELHI BENCH ‘G’: NEW DELHI)
SHRI I.P. BANSAL, JUDICIAL MEMBER
BEFORE SHRI B.C. MEENA, ACCOUNTANT MEMBER
(ASSESSMENT YEAR: 2006-07)
ACIT, Circle 2,
M/s. Sonal Industries Ltd.,
Roorkee Road, Modipuram,
ASSESSEE BY: Shri V.K. Goel, Advocate
REVENUE by: Shri S. Mohanty, DR
PER B.C. MEENA, ACCOUNTANT MEMBER:
This appeal filed by the assessee emanates from the order of CIT (Appeals), Meerut dated 30.09.2011 for the assessment year 2006-07. The grounds of appeal read as under:-
“(i) Whether in the facts & circumstances of the case Ld. Commissioner of Income tax (Appeals) has erred in law and facts of the case in annulling the re-assessment proceedings merely on the ground of service of notice ignoring the provisions of section 292BB of the It Act 1961 which precludes the assessee for raising such objections after completion of the assessment proceedings.
(ii) Whether in the facts & circumstances of the case Ld. Commissioner of Income Tax (Appeals) was justified in law in and circumstances of the case by holding that there was no service of notice ignoring the facts that notice was sent by speed post and it was not received back which is deemed service of notice as in held in the following judgments.
“Ramesh Khosla Vs. ITO & Anr. (P&H) 155 ITR 556
Capital Gem Overseas (P) Ltd. Vs. ITO (IT AT Delhi) 101 ITD 117
(iii) Whether Ld. CIT(Appeals) was justified in accepting the view of the assessee ignoring that fact that notice was served through speed post and duly entered in dispatch register, The assessment proceedings could not be struck down only on the basis of claim that notice was not served. This also gets support from the following cases:-
" ITO Vs. Gurinder Kaur - ITAT Delhi 102 ITD 189"
(iv) In the facts and circumstances or the case, the order or the Commissioner or Income Tax (Appeals) may be set aside and that of the AO restored.”
2. In this case, the return of income was filed on 25.11.2006 declaring income Rs.3,15,710/-. The return was processed u/s 143(1) of the Income-tax Act, 1961, on 04.03.2008. The case was selected for scrutiny and the order was finalized u/s 143(3) on 29.12.2008. The learned DR submitted that the CIT (A) is not justified on the facts and circumstances of that case in annulling the reassessment proceedings merely on the basis of service of the notice ignoring the provisions of section 292BB of the Act. The provisions of section 292BB preclude the assessee for raising such objections after completion of the assessment proceedings. The CIT (A) was not justified in holding that there was no service of notice ignoring the facts that notice was sent by speed post and it was not received back which deemed to be served on the assessee. For this proposition, he relied on the decision of Ramesh Khosla vs. ITO – 155 ITR 556 (P&H) and Capital Gem Overseas Pvt. Ltd. vs. ITO – 101 ITD 117. Ld. DR also pleaded that the CIT (A) is not justified in accepting the assessee’s contention that notice was not served on them. The notice was served by speed post and it is duly entered in the dispatch register. The CIT (A) is not justified in struck down the assessment on the basis that notice was not served. For this, Ld. DR relied on the order of ITO vs. Gurinder Kaur – 102 ITD 189 (ITAT-Del.) and she pleaded that the order of the CIT (A) deserves to be set aside.
3. On the other hand, the learned AR relied on the order of the CIT (A) and pleaded that the notice claimed to have been issued to the assessee was never received by the assessee. The CIT (A) has inspected the records and then only annulled the assessment. He relied on the order of the CIT (A).
4. We have heard both the sides. The CIT (A) has annulled the order by holding as under:-
“I have carefully gone through the assessment order, AR's submissions and the AO's report. I have also inspected the assessment records. The AO has stated that service of notice u/s 143(2)/142(1) is entered at serial No. 1720 dated 19.10.2010 of the Dispatch Register. It has also been stated that Shri O.P. Gupta, AR of the assessee, appeared during assessment proceedings in compliance to statutory notices. The inspection of assessment records reveals as under:
i. Order dated 29.12.2008 under section 143(3) was passed on 29.12.2008 which is entered in the order sheet. Before this date Shri O.P. Gupta, Advocate attended on several occasions, which is also entered in the order sheet. Copies of 6 pages of order sheet are made part of this order as A1-6.
ii. A page which is captioned 'Reasons under section 148 is found on the file. It does not have any date. A copy of the same is made part of this order as A-7.
iii. A notice u/s 148 dated 12.3.2010 is found on the file. It does not have any acknowledgement of receipt by anybody. A copy of it is made part of this order as A-8.
iv. A notice u/s 143(2) dated 15.10.2010 is found on the file. It also does not have any acknowledgement of receipt by anybody. A copy of it is made part of this order as A-9.
v. The reassess¥1ent order does not show whether any notice was served on the assessee.
Having carefully gone through the records, I find that after completion of original assessment on 29.12.2008, there is no evidence of service of any notice under section 148 or 143(2). Shri O.P. Gupta, Advocate, has filed an affidavit to say that he never received any notice after the completion of the original assessment. The AO, by his own admission, has not served any notice u/s 148. In his report, he has only stated that a notice U/S 143(2)/142(1) was served for which he has no unmistakable evidence. Perusal of the reassessment order under appeal and the inspection of records unmistakably show that no notice u/s 148 was served. The order is, therefore, annulled.” We have also perused the annexures to the order of the CIT (A). From the notice u/s 148 dated 12.03.2010 placed at page A-10 of the paper book, we find that there is dispatch number of 2115. The CIT (A) has acknowledged that notice u/s 148 dated 12.03.2010 was found on record but the acknowledgement receipt was not available. The CIT (A) has also recorded that reasons recorded for issuing notice u/s 148 was also found on file. The copy of which is placed at A-7 as annexure to the order of the CIT (A). However, the CIT (A) has not given any finding recording the entry of the dispatch no.2115 on the face of notice u/s 148 of Income-tax Act. In our considered view, the CIT (A) should have given a finding on the dispatch of the notice where the dispatch number is mentioned on the face of the notice itself. Non-availability of the acknowledgement of the receipt cannot be the sole basis on which the order made can be annulled. The fact that notice was not served on the assessee has to be established by considering all relevant facts. The dispatch number on face of notice is a relevant fact. Once the notice has been issued at the correct address by speed post and same has not been received back then it will be deemed to be served. Therefore, CIT (A) is directed to decide the issue after taking all these relevant facts into consideration.
5. In the result, the appeal of the revenue is allowed for statistical purposes.
Order pronounced in open court on this 29th day of February, 2012.
(I.P. BANSAL) (B.C. MEENA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Dated the 29th day of February, 2012 /TS
Copy forwarded to:
4. CIT (A), Meerut.
5. CIT (ITAT), New Delhi.