Scruitiny Notice

Notice cannot be served after 30/09/2009 u/s 143(2) for assessment . the notice would be bad in law and the assessment would be irregular and void ab initio .

Since notice itself is bad in law , assessment cannot be completed u/s 143(3) .

It will be deemed to be completed u/s 143(1)(a) of The IT Act , 1961.

Pls remember to file an assesse's affidavit stating that no notice is served within the limitation period . Once the affidavit is filed the onus to prove that notice was served properly is on the Department ( CIT v/s Lunar Diamonds 2006 )

148 is for reassessment .

Please note your objection if you have indeed received the notice in hand after 30th September. Please note if speed post had come on 30th and you were not there or door was closed, it is a service on 30th even if you collect the speed post after a few days from the delivery office against intimation letter dropped by postman. service date of the notice would mean the 1st service by the postman even if your door is closed.

If the notice is served to you on or after 1st October, you are still duty bound to reply. If you or your CA cooperate with the department for the assessment, there is a new section 292BB from 1/4/2008 that suggests your cooperation will be deemed waiver of serving notice on time unless you record your objection before the completion of the assessment.

What I suggest (please take more opinions) is you record your objection to having been served the notice late if the postman's first attempt was on or after 1st October. After this the AO may serve notice under section 142(1) asking for details of loans and income sources etc.which you will have to comply with and furnish. Normally if the notice is served to you on time and there is no reply or cooperation from you the AO will complete the assessment u/s 144 using best judgement. Please remember that today AO is equipped with detailsof interest received by you without TDS also as well as your credit card expenses and payments (for salaried employee this is the problem when they use the credit card for employers expenses). He will use the best judgment option with all this information. I am unable to ascertain whether he can use best judgement if notice is served late. However, if you have the notice in hand late, I suggest you record your objection first and then give details for AO to complete assessment. If you cannot go yourself, please send someone with a letter of authority on stamp paper (non judicial and not court fee stamp) of denomination according to your state where you are assessed. In maharashtra (Mumbai, Pune, Nagpur etc. it is Rs.100). Do remember that AO is equipped with all your AIR information and what they are catching everyone on is the FDs where TDS is not done because of manipulations. The banks file the return and if by chance they have given your PAN even though no TDS is done, AO has the details in front of him. It is upto you to cooperate or not.

Please note that the time barring for service of notice is 30/sep 2009 only if return was filed between 1/4/2008 and 31/03/2009. If return was filed upto 31/3/2008, the old rule of 12 months from end of month of submission still applies. If it is for 2007-2008, the scrutiny will have to be completed before December 31, 2009. If you are salaried assessee, I would suggest to cooperate. If you have made expenses on behalf of your employer by card please take certificate from them that the expenses were made by you for their business purpose and they have accounted for it accordingly and reimbursed you or paid your credit card bill directly as the case may be. If they pay the membership fee of your card, then that is taxable in your hand if it is your individual card. If it is a corporate card in their name it will be part of their AIR and would not reflect in your PAN.

Sunil ,

Yes he can assess exparte u/s 144 by treating the concerned person an assessee in default . But if an affidavit is filed reccording his objection , the onus to prove that notice is properly served u/s 282 lies on the AO / comm . Also 292BB is of no purpose once the affidavit is filed .

Kr ,

Sunil ji is right when hes saying that pls check with the postal dept that if  the notice was served and returned back ,then i think it will be deemed service ( if the notice was served to the right person , right address )

Dear Sunil & Rajeev,

Thanks for your comments. My sincere thanks to both of you & UdayKiran for giving your valuable time and replying my query. This forum is really very helpful  for the person like me.

Thanks once again & regards,