High Court Of Kerala
Latha Chandy vs. CIT
Sections 260A, 282
Asst. Year 1975-76
G. Sivarajan & K. Balakrishnan Nair, JJ.
IT Appeal No. 140 of 2000
7th October, 2002
Counsel Appeared
M. Pathrose Mathai & John Ramesh K.I. John, for the Appellant : P.K.R. Menon, for the Respondent
JUDGMENT
G. SIVARAJAN, J. :
The matter arises under the IT Act, 1961 (for short, the Act). The appellant is a partner in a firm M/s M.M. Chandy & Co., Kottayam. The assessment year concerned is 1975-76. The assessment of the said partnership firm was completed by making an addition of Rs. 27,040 (Rupees twenty-seven thousand forty only) as income from undisclosed sources. The assessing authority also made a protective assessment on the appellant in respect of the sum of Rs. 27,040 added in the firm’s assessment, as per order dt. 17th Jan., 1978 (Ext. A1). The firm filed an appeal against the firm’s assessment which was allowed and the sum of Rs. 27,040 was deleted from the firm’s assessment. This was on the finding that the said sum of Rs. 27,040 is the undisclosed income of the appellant. Though the protective assessment was made on the appellant, she did not file any appeal against the said assessment order and the same has become final. The appellant, after about 13 years, made an application before the assessing authority requesting for issuance of a copy of the protective assessment order and the same was obtained on 9th Aug., 1991 Thereafter, she filed an appeal against the protective assessment order before the 1st appellate authority, who, after considering the contentions, rejected the appeal on the ground of limitation. In second appeal by the appellant before the Tribunal, the order of the CIT(A) was upheld. This Court while admitting the appeal, ordered notice on the following five questions of law :
“1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the appeal filed is barred by limitation by reckoning the date of service of notice of demand and assessment order on the father of the assessee in ITA 332(Coch)/93 ?
Whether, on the facts and circumstances of the case, the Tribunal was justified in law in holding that the appeal filed before the Dy. CIT(A) is barred by limitation while admittedly the order was served on the assessee only on 9th Aug., 1991, and the appeal was filed on 29th Aug., 1991?
Whether, on the facts and circumstances of the case, the Tribunal was justified in law in holding that ITA No. 470/Coch/95 does not survive for consideration in view of the finding of the Tribunal in ITA 332(Coch)/1993 ?
Whether, on the facts and circumstances of the case, the Tribunal was justified in law in disposing of the appeal without entering into a final finding of fact when the Dy. objection from the Department on the question of limitation ?
Whether, on the facts and circumstances of the case, the Tribunal was justified in law and on facts in confirming CIT(A) disposed of the appeal not on question of limitation but only on facts and when there was no cross- the protective assessment made final withoutconsidering the agricultural source explained by filing agricultural income-tax assessment orders and in sustaining the additions of Rs. 27,040.”
Shri. Pathrose Mathai, learned counsel appearing for the appellant submits that there was no proper notice of the protective assessment order on the appellant at any time prior to the service of the said assessment order on 9th Aug., 1991. He further submitted that under s. 282(1) of the IT Act, a notice or requisition under the Act has to be served on the person therein named, either by post or as if it were a summons issued by a Court under the CPC. The counsel also submits that in the instant case, admittedly, the copy of the assessment order was served only on the managing partner of the firm, which will not satisfy the requirement of the said sub- section. He also submitted that though this aspect was brought to the notice of the Tribunal, the Tribunal relied on the provisions of sub-s. (2) of s. 282 and held that the service of the assessment order on the managing partner of the firm is sufficient compliance of the provisions of s. 282 of the Act. Shri P.K.R. Menon, senior standing counsel for the Revenue, on the other hand, submits that both the appellate authorities have found that there is sufficient compliance of the provisions of sub-s. 1 of s. 282 of the Act, that the assessment order was served at the address given by the appellant in the return and that too, to the father of the appellant, who is the managing partner of the firm. The senior counsel further submits that the Tribunal has clearly stated the circumstances under which the copy of the assessment order was served on the managing partner of the firm.
4. We have considered the rival submissions and also perused the orders of the two appellate authorities. The 1st appellate authority has noted that the appellant had given address in the return of income as M.M. Chandy & Co., Kottayam, that notice was issued to the appellant in the said address, that the said notice was served on the managing partner Shri M.M. Chandy, that he appeared before the AO, that the assessment order was served on Shri M.M. Chandy, who is the managing partner of the firm and that since the appellant has given her address as M/s M.M. Chandy & Co., Kottayam, the assessment order could only be served in that address. It was also noted that the said Chandy, at no point of time, had objected to receipt of the notice or order on behalf of the appellant. The first appellate authority accordingly held that the assessment order was properly served on the appellant. The Tribunal has also independently considered this matter and observed as follows : “In this case, indisputably, the notices were served at the address furnished in the return of income, i.e., Smt. Latha Chandy, c/o M/s M.M Chandy & Co., Kottayam. Shri Chandy happens to be the father of the assessee. Further, Shri Chandy had not, at any time, objected in serving the notice on him on behalf of the assessee. The learned representative of the assessee. Shri Lype John reiterated that the service of the notices on Shri M.M. Chandy, was not valid and hence the finding of the Dy. CIT(A) that the appeal was time-barred is to be set aside.” The Tribunal, after adverting to the decision of the Allahabad High Court relied on by the assessee, further observed as follows : “In the case before us, though Shri. M.M. Chandy is not a power of attorney holder of the assessee, he is the father of the assessee and also the managing partner of the firm M/s M.M. Chandy & Co., Kottayam, in which the assessee is also a partner. Further, when the hearing notice was first served on Shri Chandy, he had not objected to such service on behalf of the assessee. Shri Chandy, being father of the assessee, is a family member of the assessee. For all these reasons, we have no alternative except to hold that the service of notice on Shri M.M. Chandy, managing partner of M/s M.M. Chandy on behalf of the assessee was valid and proper. Therefore, we hold that the Dy. CIT(A) was justified in holding that the appeal was filed late by 13 years of the date of assessment order. The order of the Dy. CIT(A) is upheld.” According to us, the Tribunal has considered the question with reference to the provisions of s. 282 of the Act in the right perspective and found that there is sufficient compliance of the said provision in the peculiar facts of the case. We have already extracted the questions of law on which the notice was ordered in the appeal. However, on a consideration of the matter, we find that the only question which arises for consideration in this case is as to whether there was sufficient compliance of the provisions of s. 282 of the Act in the matter of serving the protective assessment order on the appellant and as to whether the Tribunal was justified in holding that the facts already found satisfy the said requirement. As we have already noted, the Tribunal has rightly held that there was sufficient notice to the appellant about the protective assessment order passed on 17th Jan., 1978. In the above circumstances, we are fully in agreement with the appellate order of the Tribunal. There is no merit in this appeal and it is accordingly dismissed.
[Citation : 260 ITR 385]
