Delhi High Court
Cit-Ii vs Jagdamba Marbles Ltd. on 4 September, 2009
Author: Vikramajit Sen
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ ITA No.349/2009
CIT-II ..... Appellant
Through: Mr.N.P. Sahni, Sr.
Adv. with Mr. P.C.
Yadav, Adv.
versus
JAGDAMBA MARBLES LTD. ....Respondent
Through: Mr. Satyen Sethi with
Mr. Johnson Bara,
Advs.
% Date of Hearing : August 28, 2009
Date of Decision : September 04, 2009
CORAM:
* HON'BLE MR. JUSTICE VIKRAMAJIT SEN
HON'BLE MR. JUSTICE RAJIV SHAKDHER
1. Whether reporters of local papers may be
allowed to see the Judgment? Yes
2. To be referred to the Reporter or not? Yes
3. Whether the Judgment should be reported
in the Digest? Yes
VIKRAMAJIT SEN, J.
1. This is an Appeal under Section 260 A(1) of the Income Tax
Act, 1961 („IT Act‟ for short) assailing the Order of the Income Tax
Appellate Tribunal (ITAT), New Delhi passed on 4.7.2008 in
respect of the Block Assessment period 1.4.1990 to 30.10.2000.
Section 158BE(2b) prescribes that the period of limitation for block
assessments shall be two years from the end of the month in which
the notice under Chapter XIV-B of the IT Act came to be served on
the assessee concerned. The ITAT has found that "admittedly" the
notice under Section 158BD dated 24.1.2002 was dispatched to the
assessee on 28.1.2002 as per the postal receipt. The ITAT has
further returned a finding of fact that this notice was served upon
the assessee on 30.1.2002. The Block Assessment Order came to
be passed on 5.2.2004 and ,therefore, lacked jurisdiction inasmuch
as the last date on which it could have been passed was 31.1.2004.
The Assessment Order records the address of the
Respondent/Addressee as C-4/127, S.D. Area, New Delhi. However,
according to learned counsel for the Respondent/Assessee the
Assessee has shifted to 27, Sadhana Enclave, New Delhi around
December-January, 2002. The ITAT has noticed that the
aforementioned notice under Section 158BD dated 24.1.2002 was
dispatched through Speed Post to the correct address, that is, 27,
Sadhana Enclave, New Delhi. The envelope or any part of its
enclosures enclosed alongwith Notice dated 24.1.2002 had not
been returned to the Department raising the inference that it had
been served on the Asseessee. A copy of the Notice dated
15.2.2002, alongwith postal receipts and the returned envelope,
have been placed on record. There is sufficient reason, therefore,
for the assumption that the Notice was duly served on the
Assessee. We have perused the Assessment Order dated 5.2.2004
passed by Shri Sanjay Gupta, Deputy Commissioner of Income
Tax, Central Circle-18, New Delhi, noting that the Notice under
Section 158BD read with Section 158BC was issued on 5.2.2002
and that the Block Return had been filed by the Assessee on
22.3.2002. Beyond this, there is no discussion on the aspect that
the Assessment Order was passed within the time prescribed by
law.
2. The CIT(A)-III, New Delhi, in the Order dated 14.1.2005, has
recorded that "as per the A.O. the notice u/s 158BD dated
24.1.2002 was served upon the appellant on 15.2.2002. Though the
appellant submitted that aforesaid notice was served on him on
30.1.2002, however, it could not bring on record any corroborative
evidence to justify the same i.e. copy of speed post envelop or
receipt showing date of service. Therefore, the ground raised by
the appellant remained unsubstantiated and as the notice was
served on 15.2.2002, the limitation for completion of block
assessment proceedings comes to February, 2004".
3. It was in this factual background that learned counsel for the
Respondent has placed on record the Notice dated 24.1.2002 with
the envelope thereof, as well as Notice dated 15.2.2002 with its
envelope, together with Memorandum of Appeal in Form-35 filed
before the CIT(Appeals), which categorically makes a mention of
the Notice dated 24.1.2002. On a scrutiny of the Notice dated
24.1.2002, as well as the envelope, we are unable to arrive at any
conclusion other than that it was duly dispatched and received by
the Assessee on or before 30.1.2002. This is despite the fact that
the Response/Return was filed only on 22.3.2002. Mr. Sahni,
learned Senior Counsel for the Department, had submitted that the
Notice dated 15.2.2002 was dispatched on 21.2.2002 but was
returned to the Department with the endorsement that no such
company existed at that address. According to him, the Notice
dated 15.2.2002 was again issued on 4.3.2002. Meanwhile, the
Return had been filed on 22.3.2002, which, in no way, excludes the
possibility of service of the notice on the Assessee on or before
30.1.2002.
4. Our attention has been drawn to the decision of the Division
Bench of this Court in CIT -vs- Shanker Lal Ved Prakash, [2008]
300 ITR 243, but we are unable to find any relevance. In that case,
we had held that the burden lies on the assessee to prove that the
service was not affected within time. In any event, the decision
goes against the Department in view of the positive assertion by
the Assessee that the Notice admittedly dispatched on 28.1.2002
had been received by the Assessee on 30.1.2002. Poignantly, it
had been observed that "it would be fair for the Court to presume
that a local letter would reach the asseessee within three days....".
Similarly, CIT -vs- Vins Overseas India Ltd., [2008] 305 ITR 320
definitively assists the case of the Respondent/Assessee inasmuch
as it affirms that if a notice is properly addressed and dispatched
through registered post, there is a presumption that it had been
served on the assessee. The observation that there was no proper
rebuttal of the presumption of valid service of notice militates
against the case now set-out on behalf of the Department.
5. There is a disturbing feature of the case which we need to
comment upon. Till the production of the Notice dated 24.1.2002
as well as the envelope in which it was contained, the Department
had adhered to the position that no such notice had been issued.
We had made a comparison of the signatures on the photocopy of
the Notice dated 24.1.2002 with those obtaining in other
documents and had come to the prima facie conclusion that
contrary to what the Department would have us believe there was
no plausible reason, whatsoever, for harbouring suspicion that the
Notice dated 24.1.2002 had been manufactured by the Assessee.
For this reason, we had summoned the Chief Commissioner of
Income Tax as well as the Assessing Officer, both of whom have
filed Affidavits. The Chief Commissioner stated in her Affidavit that
no office copy of the Notice dated 24.1.2002 was available in the
files of the Department. This Affiant has asseverated that the
Notice dated 15.2.2002 had come back unserved and that,
therefore, a Notice was again issued on 4.3.2002, in response to
which the Assessee filed the Return of Income on 22.3.2002. The
Assessing Officer, however, has now affirmed that he had issued
the Notice dated 24.1.2002 which learned counsel for the
Department has admitted was duly dispatched. The explanation in
the Affidavit of the Assessing Officer dated 20.7.2009 states that
the second Notice dated 15.2.2002 was thought by him to be
necessary since he had not recorded his satisfaction prior to the
issuance of the Notice dated 24.1.2002. Prima facie, this
explanation comes in the wake of the Department being put in the
corner because of the filing by the Assessee/Respondent of the
Notice dated 28.1.2002 and its envelope. It is distressing that the
Department should be privy to such shifting stands.
6. We find no error, whatsoever, in the conclusion arrived at by
the ITAT in the impugned Order, namely, that since the Order
dated 5.2.2004 has been passed beyond the permissible statutory
period which expired on 31.1.2004, it is, therefore, legally non est.
7. Appeal is without merit and is dismissed with costs of
Rupees 5,000/- to be deposited within four weeks with the Prime
Minister‟s Relief Fund.
( VIKRAMAJIT SEN )
JUDGE
September 04, 2009 ( RAJIV SHAKDHER )
tp JUDGE
