Gauhati H.C : No notice under Section 143(2) or 142(1) of the Income Tax Act, 1961, was served on the respondent and is not the said decision perverse

High Court Of Gauhati

CIT vs. Smt. Gita Rani Ghosh

Assessment Year : 2002-03

Section : 142

I.A. Ansari And Dr. Mrs. Indira Shah, JJ.

IT Appeal No. 1 Of 2012

June 28, 2013

JUDGMENT

I.A. Ansari, J. – This is an appeal under Section 260A of the Income Tax Act, 1961, (in short, the Act) impugning the order, dated 19.03.2010, passed, by the learned Income Tax Appellate Tribunal, Guwahati Bench, in ITA No.132 (Gau)/2007, for the assessment year 2002-2003, whereby the learned Tribunal has allowed the appeal of the assessee-respondent by taking the view that the assessment, which was challenged in the appeal before the learned Tribunal, being without service of any notice under Section 143(2) or 142(1) of the Act, was illegal and void ab initio.

2. The appeal has been admitted, on the following substantial question of law for hearing:

“Whether on the facts and in the circumstances of the case, the Tribunal was justified and correct in law in declaring the assessment order as illegal and void ab initio and in cancelling the same by holding that no notice under Section 143(2) or 142(1) of the Income Tax Act, 1961, was served on the respondent and is not the said decision perverse?”

3. We have heard Dr. A.K. Saraf, learned Senior counsel, for the appellant, and Mr. R. Goenka, learned counsel, for the respondent.

4. Before coming to the merit of the order, which stands impugned in this appeal, the material facts, giving rise to this appeal, may, in brief, be set out as under:

(i) For the assessment year 2002-2003, the assessee-respondent filed her return of income, on 26.03.2003, showing total income at Rs.1,47,000/- and the same was processed, under Section 143(1) of the Act, on 03.09.2003. As the assessee-respondent’s case was selected for scrutiny, notices, according to the Revenue, were issued to the assessee-respondent under Sections 143(2) and 142(1) of the Act. The said notices, according to the Assessing Officer, were served on the assessee on 01.03.2004; but, as, according to the Assessing Officer, there was no response by the assessee, further notices were issued, on 27.12.2004 and 15.02.2005, re-fixing the hearing on 19.01.2005 and 17.02.2005, respectively.

(ii) According to the Assessing Officer, as the assessee did not respond to any of the notices aforementioned, an assessment order was made, on 31.03.2005, in terms of the provisions of Section 144 of the Act. Aggrieved by the ex parte assessment, so made, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) (in short, the CIT(A) contending, inter alia, that assessment had been made, under Section 144 of the Act, without giving any notice to the assessee and without affording to her an effective opportunity of hearing and that the order of assessment, having been made, on 31.03.2005, in respect of the assessment year 2002-2003, was barred by limitation inasmuch as the assessment, under Section 144 of the Act, was made on 31.03.2005, though the return was furnished on 26.03.2003 and, therefore, the assessment, under Section 144, which ought to have been made within a period of two years, i.e., on 25.03.2005, came to be made on 31.03.2005.

(iii)In support of her case that the notices, under Sections 143(2) and 142(1), claimed to have been issued, on 02.12.2003, by the Assessing Officer did not relate to the assessee-respondent and though the assessee had received a notice on 01.03.2004, neither the Permanent Account Number (in short, PAN), mentioned in the notice nor address, mentioned therein was that of the assessee-respondent inasmuch as the PAN, mentioned on the notice, dated 02.12.2003, was AGNPG 1745 K and the address, mentioned in the notice, was Flat No.B-2, Shankar Madhab Housing Society, P.O. Pandu, Pandu, Guwahati, Assam; whereas the assessee’s PAN is ACLPG 5721 KFG and her address is “Proprietor, M/s. Ghosh Brothers, Barthakur Mill Road, Ulubari, Guwahati.

(iv) Thus, according to the assessee-respondent, since none of the notices, issued by the Assessing Officer, concerned the assessee-respondent, the assessee-respondent was not bound to comply with the same and, consequently, the assessee-respondent pleaded before the CIT(A) that the ex parte assessment, made by the Assessing Officer, on 31.03.2005, without serving any notice, as warranted by Section 143(2) and Section 142(1) of the Act, was illegal and untenable in law.

(v) The CIT(A) did not, however, agree with the assessee-respondent’s contention and rejected the same by observing, in brief, thus: As per the return filed by the assessee, on 26.03.2003, for the year 2002-2003, PAN No. ACPPG 9406M and the assessment record, including confidential folder, shows that the computer generated notice, under Section 143(2), with PAN No. AGPG 9406 M, dated 02.12.2003, was issued, which carried the name and address of Smt. Gita Rani Ghosh, A.K. Azad Road, Rehabari, Guwahati; whereas PAN Number of the assessee-respondent was not the same and, thus, the notice, generated by the computer, was different from what ought to have been given to the appellant (i.e., the appellant-respondent herein) and, therefore, on the same day, a manually generated notice, under Section 143(2), for the assessment year 2002-2003, was made in the name of the appellant (i.e., the assessee-respondent) and that the later notice was served on the appellant (i.e., the assessee-respondent herein) on 01.03.2004. The acknowledgement, in respect of the notice issued under Section 143(2) and 142(1), dated 02.12.2003, bore the signature of the assessee, but the only error in the acknowledgement slip was that the acknowledgement slip mentioned the assessment year as 2001-2002; whereas the notices, dated 02.12.2003, were meant for the assessment year 2002-2003. According to the CIT(A), since the appellant (i.e., the assessee-respondent herein) did not respond to the notice, so issued, the Assessing Officer issued two letters fixing the dates of hearing, but there was no response from the assessee and, therefore, the assessment was completed, under Section 144, on 31.03.2003 and, hence, the assessment, so made, was legal and valid and cannot be interfered with. On the basis of the conclusions, so reached, the assessee-respondent’s appeal was dismissed by the CIT(A).

5. It is in the background of the facts, as noticed above, that the present appeal needs to be considered and while considering the present appeal, what needs to be borne in mind is that the question as to whether notices, which were claimed by the Revenue to have been served on the assessee-respondent, had, in fact, been served on the assessee-respondent or not was a question of fact and the finding, given on this disputed question of fact by the learned Tribunal, cannot be interfered with, in appeal, under Section 260A of the Act, by this Court unless the learned Tribunal’s finding can be shown, or is found, to be perverse in the sense that the finding that the assess-respondent had not received requisite notice, under Sections 143(2) and 142(1), was without any material on record or wholly contrary to the weight of the materials on record. If the view, which has been taken by the learned Tribunal, is one of the possible views, then, this Court, in exercise of its appellate jurisdiction, would not interfere with such a finding of fact.

6. Coupled with the above, what also needs to be noted is that the assessee-respondent’s case was that the assessee-respondent had filed her return, for the assessment year 2002-2003, on 26.03.2003 and, hence, the assessment had to be made within a period of two years from the date of filing of the return. Looking from this angle, the assessment order, made under Section 144, on 31.03.2005, was, according to the assessee-respondent, barred by limitation inasmuch as the assessment order, if any, under Section 144, ought to have been made on or before 25.03.2005.

7. In the backdrop of what have been pointed out above, let us, now, come to the learned Tribunal’s order, which stands impugned in this appeal. In this regard, it is of immense importance to note that the learned Tribunal has clearly observed, setting out the case of the assessee-respondent, that so far as assessee was concerned, it had claimed to have received notices under Section 143(2) and 142(1) of the Act, both dated 02.12.2003, bearing PAN AGNPG 1745K and the said notices were addressed to Smt. Gita Rani Ghosh, Flat No.B-2, Shankar Madhab Housing Society, PO. Pandu, Pandu, Guwahati, Assam; whereas the Revenue had sought to support the findings of the CIT(A) on the basis of copies of notices, under Sections 143(2) and 142(1), both issued, on 02.12.2003, bearing PAN/GIR No. ACKPG 5721 G and addressed to Smt. Gita Rani Ghosh, Prop. M/s. Ghosh Brothers, Soni Apartment, Ulubari, Barthakur Mill Road, Guwahati, as well as acknowledgement receipt bearing signature of the assessee-respondent on having received the notices under Section 143(2) and 142(1), dated 02.12.2003 relating to assessment year 2001-2002 and not for assessment year 2002-2003.

8. Having observed what have been indicated above, the learned Tribunal has pointed out that the question, which arises for consideration, is that out of the two notices, one, issued under Section 143(2) and 142(1), dated 02.12.2003, bearing PAN AGNPG 1745 K and addressed to Smt. Gita Rani Ghosh, Shankar Madhab Housing Society, had been served on the assessee-respondent or the notice, issued under Sections 143(2) and 142(1), bearing PAN ACKPG 5721 G and addressed to Smt. Gita Rani Ghosh, Prop. M/s. Ghosh Brothers, Soni Apartment, Ulubari, Barthakur Mill Road, Guwahati, which had been served on the assessee as per the acknowledgement slip, copy of which had been placed by the Revenue at page 10 of its Paper Book.

9. Having noted the fact that the acknowledgement slip mentions the assessment year 2001-2002 and not the assessment year 2002-2003, the learned Tribunal has pointed out, and in our view, not incorrectly, that doubt arises with regard to the assessment year for which the notices were served in terms of the acknowledgement slip; whereas the CIT(A) had treated the mentioning of assessment year 2002-2003, in the acknowledgement slip, as a mere mistake and it was according to him, the notices, for the assessment year 2002-2003, which were served on the assessee as per the acknowledgement slip, the learned Tribunal rejected this conclusion of the CIT(A) by pointing out that this finding could have been accepted as correct, had the Revenue been able to establish from the records that the notices, served upon the assessee-respondent herein, under the acknowledgement slip, were for assessment year 2002-2003, but no such evidence had been brought to the learned Tribunal’s notice or has been placed on record. In the words of the learned Tribunal, since it is well settled law that to establish the service of a notice upon the assessee, the initial onus is on the Revenue and unless and until this onus is discharged, the service of a notice simply, on the basis of presumption and assumption, cannot be accepted. The learned Tribunal has also pointed out that the acknowledgement slip, in the case at hand, clearly mentions the assessment year 2001-2002 and, therefore, in the absence of any material brought to its notice by the Revenue, it was unable to accept the CIT(A)’s finding that the assessment year, mentioned in the acknowledgement slip, was a mere mistake.

10. We may pause here to point out that the finding, so recorded, as indicated by the learned Tribunal, was a question of fact and this finding cannot be said to have been reached by ignoring any material fact or without any rationale or reasonable cause having been assigned therefor.

11. Situated thus, the finding of fact, so recorded by the learned Tribunal, cannot be described as perverse. This apart, when the assessee-respondent had denied receipt of the notice for the assessment year 2002-2003, it was for the Revenue to prove, by brining materials on record including witnesses, if any, that the notices sent to the assessee-respondent were for the assessment year 2002-2003. This was, however, not done.

12. Coupled with the above, the learned Tribunal, we find has also gone through various entries mentioned in the order sheet and pointed out as follows:

“7.5. So far as the present case is concerned, it is noted that the AO has mentioned the PA No. as ACPPG 9406M but seems to have cancelled the same later on because another PA No. ACKPG 5721G has been mentioned.

7.6 The first entry in the order sheet dated 3rd September, 2003, is with respect to furnishing of return of income on 26th March, 2003, showing total income at Rs.1,47,000/-and processing of the same on that very date under Section 143(1) of the Act. The second entry dated 2nd December, 2003, mentions the fact of selection of assessee’s case for scrutiny and issuance of notices under Section 143(2) and 142(1) fixing the date of hearing on 04.06.2004. The month has been over written and seems to have been changed from 02 to 06. The third entry is dated 17.12.2004, which shows the issuance of a letter refixing the assessee’s case for hearing on 19th January, 2005.

7.7 From the aforesaid three entries though factum of issuance of notice under Section 143(2) and 142(1) of the Act on 2nd December, 2003, fixing the hearing on 04.06.2004 is coming out but this do not support the CIT’s plea where he says that the assessment records including confidential folder shows that computer generated notice u/s 143(2) of the Act with the same PAN AGPG 9406 M dated 2nd December, 2003, was generated which carried the name and address of Smt. Gita Rani Ghosh, A.K. Azad Road, Rehabari, Guwahati, and since the assessee’s PAN as well as address was not the same, manually generated notices u/s 143(2) for assessment year 2002-2003 was made in the name of Smt. Gita Rani Ghosh, Prop. M/s. Ghosh Brothers, Soni Apartment, Ulubari, Barthakur Mill Road, Guwahati, which was served upon the assessee on 1st March, 2004 has not supported because the original copy of the first notice which as per CIT(A) himself was not related to the assessee as with the assesee whereas original copy of the alleged handmade notice is not available either the assessee or in the record. The availability of original copy of notice dated 02.12.2013, which according to the revenue were not related to the assessee being with the assessee, the scale of justice goes in assessee’s favour that notice served upon the assessee on 1st March, 2004, as per acknowledgement copy at page 10 of the revenue’s paper book, where the notices issued with PAN ACKPG 5721G and address to Smt. Gita Rani Ghosh, Prop of M/s. Ghosh Brothers, Sony Apartment, Ulubari, Guwahati-7, meaning thereby that even if it assumed that AO had come to know of his mistake of having prepared notices under the wrong name, then also the revenue having no material to establish that it was the second set of notices, which was served upon the assessee cannot be accepted.

7.8. Without prejudice to the above and without admitting that it was the second set of notice which was served upon the assessee, there is another reason for not accepting the revenue’s case and the reason is that after AO had come to know of having issued notices in wrong name and corrected the same by issuing second set of notices, then this fact could have been mentioned in the order sheet which is not the case. Similarly, the fact of service of notice has also not been mentioned in the order sheet meaning thereby that in a nutshell, there is no evidence with the revenue to establish its case that it was the second set of notice which was served upon the assessee as per acknowledgement (copy placed at page 10 of the revenue’s paper book).

7.9 In addition to above, we, even at the cost of repetition, would again like to refer to the settled principles of law with respect to establishment of service of a notice which is on the revenue and since in the present case, revenue has not discharged its onus by any cogent material, the assessee’s objection that it was served on 1st March, 2004, only with the first set of notice, which were not relating to the assessee has to be accepted.

7.10 Having held as above, we are further of the opinion that the AO having not served any notice under Section 143(2) or 142(1) subsequently, also, no assessment could be framed either under Section 143(3) or Section 144 of the Act on the basis of the return furnished the assessee on 26th March, 2003. We are, therefore, of the opinion that assessment under appeal having been passed without serving any notice under Section 143(2) or 142(1) of the Act was illegal and void ab initio and the same is cancelled as such. Since the assessee’s appeal has been allowed on legal ground, we do not consider it necessary to go into the merits of other grounds.”

13. We have gone through carefully and minutely the observations made and the conclusions reached above by the learned Tribunal and we do not find that the learned Tribunal’s observations were based on no material or that the learned Tribunal’s findings were wholly contrary to the materials on record. The appellant could not show before us that it had produced before the learned Tribunal any such material, which could have proved, beyond any shadow of doubt, that notices, under Sections 142(3) and 142(1), were, indeed, issued to the assessee-respondent herein and served upon the assessee-respondent herein as the appellant claims.

14. At any rate, we have already pointed out above, that when the respondent, as assessee, had denied receipt of notice, imperative it was, on the part of the appellant, to produce requisite materials and, if available, such person(s), who had sent the notices as had been claimed by the Revenue. Nothing of the sort was, however, done by the appellant.

15. Because of what have been discussed and pointed out above, we are clearly of the view that the finding, reached by the learned Tribunal, cannot be described as perverse. Consequently, this appeal must fail and the learned Tribunal’s order, impugned in this appeal, must be maintained.

16. In the result and for the reasons discussed above, this appeal fails and the same shall accordingly stand dismissed.

17. Parties shall bear their own costs.

[Citation : 361 ITR 17]

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