High Court Of Delhi
CIT vs. Silver Streak Trading (P) Ltd.
Sections 143(2), 282
Asst. Year 1997-98
Madan B. Lokur & V.B. Gupta, JJ.
IT Appeal No. 1237 of 2007
2nd January, 2008
Counsel appeared :
Ms. Sonia Mathur, for the Appellant : None, for the Respondent
MADAN B. LOKUR, J. :
The Revenue is aggrieved by an order dt. 3rd Nov., 2006 passed by the Tribunal, Delhi Bench ‘D’ in ITA No. 1820/Del/2002 relevant for the asst. yr. 1997-98.
2. The only issue that arises for our consideration is whether the notice sent by the AO under s. 143(2) of the IT Act, 1961 (for short the Act) was served upon the assessee within the statutory period of limitation of 12 months from the date of filing the return.
3. The assessee filed its return of income on 30th Nov., 1997 along with an audited balance sheet. On 28th Nov., 1998, a notice was issued to the assessee by the AO through speed post. The notice stated that the case of the assessee would be fixed for hearing on 8th Dec., 1998. It appears that no proceedings took place on 8th Dec., 1998 apparently because no one appeared on behalf of the assessee.
4. According to the assessee, a notice dt. 21st Oct., 1999 was received by learned counsel for the assessee who accepted the notice and endorsed the office copy with the remark “time barred notice received”. According to the assessee, this was the first time that it received a notice under s. 143(2) of the Act.
5. Thereafter, the AO passed an assessment order under s. 144 of the Act raising a tax demand of Rs. 34,37,635.
6. The assessee had filed an affidavit before the AO stating that it had not received any notice prior to the notice dt. 21st Oct., 1999. In spite of the affidavit having been filed by the assessee, no steps were taken by the Revenue to ascertain whether in fact the notice dt. 28th Nov., 1998 was served on the assessee or not and what steps, if any, had been taken to ascertain the factual position on or immediately after 8th Dec., 1998 when no one appeared on behalf of the assessee before the AO. The Tribunal took the view that there was nothing on record to suggest that the notice dt. 28th Nov., 1998 was, in fact, served upon the assessee on 30th Nov., 1998 (29th Nov., 1998 being a Sunday). In view of the affidavit filed by the assessee, it was incumbent upon the Revenue to make some enquiry and to produce some material on record to show that the notice dt. 28th Nov., 1998 had, in fact, been served on the assessee before expiry of the limitation period, otherwise, the affidavit of the assessee would have to be accepted as correct. No such material was brought on record by the AO. We find it little odd that when no one appeared on behalf of the assessee on 8th Dec., 1998, the AO did not take any steps to find out whether the notice had been served upon the assessee or not. Enquiries could have been made at that point of time itself but for some reason the AO sat back till October, 1999 before sending another notice to the assessee. Under these circumstances, we are of the opinion that the Tribunal rightly took note of the affidavit filed by the assessee that the only notice it received was the one dt. 21st Oct., 1999. The Tribunal rightly noted that no material was produced by the Revenue to suggest that the notice dt. 28th Nov., 1998 was, in fact, served upon the assessee within the time prescribed by law.
Learned counsel for the Revenue relied upon a decision rendered by this Court in CIT vs. Shankar Lal Ved Prakash, IT Appeal No. 1455 of 2006, decided on 6th Nov., 2006 [reported at (2007) 212 CTR (Del) 47—Ed.]. We find that the decision relied upon is distinguishable. In that case, the notice under s. 143(2) of the Act was dt. 25th Aug., 1998 and a hearing was fixed on 31st Aug., 1998. According to the assessee therein, it received the notice only on 1st Sept., 1998 and it was held by this Court that it was a little unnatural that the assessee therein made no enquiry or correspondence alleging that the notice was received after the due date and the proposed proceedings had, therefore, become time barred. This Court did not accept the explanation of the assessee therein that the envelope containing the notice had been “foolishly destroyed” by it. Under these circumstances, this Court presumed that the notice dispatched on 25th Aug., 1998 would have reached the assessee therein within a few days and the onus was on the assessee therein to substantiate its contention that the notice had been received by it on 1st Sept., 1998. Insofar as the present case is concerned, it is not the case of the assessee that it ever received notice dt. 28th Nov., 1998. In fact, its case has been that the only notice ever received by it was the one dt. 21st Oct., 1999. In the duplicate copy of the notice dt. 21st Oct., 1999, learned counsel for the assessee had made an endorsement that he has received the time barred notice. This was followed by an affidavit by the assessee stating that it had not received any notice prior to the notice dt. 21st Oct., 1999. In a case such as this, the onus is clearly upon the Revenue to show that the notice dt. 28th Nov., 1998 was, in fact, served on the assessee within the time prescribed by law. The Revenue has not been able to discharge its onus either before the Tribunal or before us. We, therefore, find that no substantial question of law arises and the appeal is dismissed.
We have been noting for the last several months that the Revenue mechanically files frivolous appeals and despite our imposing costs on the Revenue from time to time it has not resulted in any rethinking on the part of the IT Department with regard to the filing of frivolous appeals. We have noted on several occasions that a large number of persons in the Registry are put to inconvenience because of the filing of frivolous appeals and even the time of the Court is wasted in dealing with unimportant appeals. On the other hand, serious matters which ought to deserve attention get sidelined because of this attitude of the Revenue which needs to be deprecated. Consequently, while disposing of this appeal, we do so with costs of Rs. 10,000 to be deposited by the Revenue by a cheque made out in favour of the Registrar General of this Court within four weeks from today. The Registrar General will keep aside this amount for utilization for juvenile justice. List for compliance on 4th Feb., 2008.
[Citation : 326 ITR 418]