Madras High Court
Commissioner Of Income Tax vs Smt.Sushila Devi on 7 April, 2014
Author: Chitra Venkataraman
Bench: Chitra Venkataraman, T.S.Sivagnanam
IN THE HIGH COURT OF JUDICATURE AT MADRAS Dated :07.04.2014 Coram The Honourable Mrs.Justice CHITRA VENKATARAMAN and The Honourable Mr.Justice T.S.SIVAGNANAM Tax Case (Appeal) No.2720 of 2006 Commissioner of Income Tax Chennai. ... Appellant -vs- Smt.Sushila Devi ...Respondent Prayer: Tax Case Appeal filed under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal, New Delhi "G" Bench dated 21.03.2006 passed in ITA No.1511/Mds/1999 relating to the assessment year 1994-95. For appellant : Mr.T.Ravikumar Standing Counsel for the Income Tax Department For respondent : No appearance JUDGMENT
(The Judgment of the Court was made by CHITRA VENKATARAMAN.J.,) Revenue is on appeal as against the order passed by the Income Tax Appellate Tribunal relating to the assessment year 1994-95 and the Tax Case (Appeal) is admitted on the following substantial questions of law:
1. Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in quashing the assessment for the assessment year 1994-95 on the ground that the notice under section 143(2) has not been served on the assessee within the statutory time limit, when in fact it had been served at the address given by her in her return?
2. Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in holding that no service of notice under Section 143(2) had been made on the assessee even though the notice had been served at the address mentioned in the return of income for assessment year 1994-95 and no change of address had been intimated to the Income Tax Authorities?
3. Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in accepting the contention of the assessee that due to family dispute the notice under Section 143(2) did not reach the assessee and on this ground cancelling the assessment made by the Assessing Officer?
4. Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in ignoring the fact that the Assessing Officer had issued the notice under Section 143(2) in time and at the given address and that the assessee had not intimated that the notice should not be served at the given address in view of the family dispute and also failed to furnish any alternative address?
5. Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in placing the onus on the Assessing Officer for receipt of notice by the assessee even though the Assessing Officer had no means of knowing that the service at the given address would be infructuous?
2. Inspite of service of notice on the assessee and the vakalat filed through an Advocate, who represented her interest, there is no representation as of today or on any other day earlier. The assessment year under question is 1994-95.
3. It is seen from the order of assessment that on a service of notice under Section 143(2) of the Income Tax Act, 1961 on 15.12.1994, the assessee represented by one V.D.Agarwal filed a letter on 07.10.1996 objecting to the service of notice under Section 143(2). The assessee was informed that the notice was served in the address given by her. Subsequently, the assessee's representative filed a letter on 12.03.1997 and after hearing the assessee's representative the assessment was finalised.
4. For the purpose of considering the merits of the Tax Case (Appeal), we are not going into the details of the assessment made since the question raised is purely on the service of the notice. Aggrieved by the said order, the assessee went on appeal before the Commissioner of Income Tax (Appeals) where the assessee was represented by M/s.Sashi Prakash Khemka and V.D.Agarwal, CA. In the written submission filed, the assessee pointed out that the assessee was not having any records and due to personal dispute with one Ravi Prakash Khemka, the assessee could not receive the earlier records. Then on inspection of the Assessing Officer's records the assessee contended that there was no valid service of notice on the assessee and the certified copy of the document in evidence of service of notice was not submitted; that the service was not made either at the old address or at the new address of the assessee; that the Department was aware of the new address of the assessee at M-47, Greater Kailash Part I, New Delhi; since no valid notice was served at the known address of the assessee, the assessee contended that the entire assessment was non-est in the eye of law. To this, the Assessing Officer filed written submission pointing out that notice under Section 143(2) of the Act was served on the assessee within the period of limitation and it was served on 16.12.1994 enclosing a copy of the acknowledgement as evidence of service. The Assessing Officer pointed out that the same was served in the address given by the assessee. The assessee had not notified any change of address and the notice under section 142(1) of the Act, for the assessment year 1992-93 along with the letter dated 15.07.1997 was sent to the address given in the returns filed and the same was received by the person who had acknowledged the receipt of notice under Section 143(2) of the Act for the year under consideration. The notice sent to the assessee as well as to other family members in the given address was received by them through the same person, who was representing them in all the proceedings before the Assessing Officer. The assessee and the other family members complied with the directions to the various letters given in the notice. However, in order to escape the liability the present plea had been taken by the assessee. Thus, on the basis of the address given in the return, the notice was rightly served on the assessee. The First Appellate Authority considered the entire matrix and on going through the relevant notice, the documents and the objections of the assessee, held that notice under Section 143(2) of the Act was served on the assessee on 25.03.1995 at the address given in the return of income; that the assessee had failed to notify any change of address. Consequently, it was not open to the assessee to say that the notice was not properly served and it is further pointed out that the notice was served on the person who was regularly receiving the notices on behalf of the assessee and other family members and on earlier occasions all the letters and notices were complied with by the said representative. Consequently, the contention that there was no valid service, was rejected.
5. Aggrieved by this, the assessee went on appeal before the Income Tax Appellate Tribunal. So too, the yet another assessee Mr.Shashi Prakash Khemka.
6. A reading of the order of the Income Tax Appellate Tribunal show that the contentions taken by the respective assessee were one and the same. The Tribunal allowed the appeal filed by the assessee by following the order in the case of Shashi Prakash Khemka. It observed that for proving the service of notice, the Department had not filed proof of service of notice upon the assessee. It further pointed out that the assessee contended that the notice had been served on an imaginary recipient instead of the assessee. The acknowledgement did not have proper address. Consequently, the assessment being a time barred one not valid in the eye of law.
7. A reading of the order of the Tribunal shows that no where the assessee had contended that the notice was served in the address different from what was given in the return nor were there any explanation as to why the assessee had not given intimation as regards the change of address, assuming for a moment that the assessee had shifted her place of residence. The assessee did not deny as a matter of fact that her interest was represented by the person, who had been representing the interests of other family members also in all the proceedings before the Department and the present notice was also received only by the said person, viz.,Sashi Prakash Khemka.
8. In order to find out whether the notice was in fact served at all or not on the assessee, we directed learned Standing Counsel for the Department to find out about the records pertaining to the assessee.
9. Learned Standing Counsel produced the letter from the Income Tax Officer, New Delhi, Ward-23(1) to whom the records pertaining to the assessee were transferred vide Notification Nos.7/98-99 dated 08.10.1998 and 14/2000-2001 dated 1.8.2000. The Income Tax Officer pointed out that the records pertaining to the assessee were not available and the case records along with the arrears demand had already been transferred to ITO(Ward) 15(8), New Delhi. We find from the reading of the letter written by the Deputy Commissioner of Income Tax, Central Circle-I(1), Chennai-34 dated 14.02.2001 that the records pertaining to the NEPC group cases in which the assessee also figured in, were transferred to the jurisdictional office at New Delhi in accordance with the Notification Nos.7/98-99 dated 08.10.1998 and 14/2000-2001 dated 1.8.2000 issued by the Director General of Income Tax (Investigation) Chennai-34 and the case records along with the arrears demand had already been transferred to ITO, Ward 15(8), New Delhi and DCIT(Inv), Circle 15(1), New Delhi.
10. Thus with the original records transferred to New Delhi, we once again requested learned Standing Counsel for the Department to find out from the concerned authority at New Delhi to secure the records. Inspite of several opportunities granted, the one and only reply that could be given by the Department was that by reason of transfer of record nothing was available at the Chennai Office and so too in New Delhi and hence, they were not in a position to trace the records. However as before the Tribunal, learned Standing Counsel produced the photo copy of the service of notice which evidences, the receipt of the said notice under Section 143(2) on the assessee's representative on behalf of the assessee and the reply given by Mr.Sashi Prakash Khemka who had been representing the assessee's case to this notice.
11. We find from the facts culled out from the records placed that the said Sashi Prakash Khemka had been consistently representing the case of the assessee and he had also acknowledged the receipt of the notices, photocopy of the acknowledgement for the service of notice and there being no denial by the assessee that the said Sashi Prakash Khemka was representing the interests of the assessee before the Income Tax Authorities, we hold that it is too late in the day for the assessee to state that the service of notice was not on a proper person.
12. The burden is on the assessee to show that the person who received the notice was not an authorised representative. Even in the absence of a written authorisation, when in all the earlier proceedings, the assessee was represented by a particular person and all action had been taken based on the representation of the said person and the said person alone was representing the interest of the assessee, it is not open to the assessee in future to contend that there was no authorisation on such person to represent the case of the assessee.
13. We may note that in the case on hand, the said Sashi Prakash Khemka had represented the assessee not only for this year but even in the earlier years too. The fact was recorded by the Assessing Officer as well as the before the Tribunal. In the context of the above said fact, we have no hesitation in holding that the Income Tax Appellate Tribunal was not correct in coming to the conclusion that there was no proper service of notice on the assessee.
14. As regards the contention of the assessee that she had changed the address and the same was also intimated to the Revenue too, evidently before us or before the lower authorities, no records were placed by the assessee to show that such intimation was given to the Revenue about the change of address. In fact, the notices were sent to the address given in the return filed by the assessee. Consequently, here too, we find that the Tribunal had committed grave error in taking a view that the notice had not been properly addressed to the change of address.
15. In the background of the above few facts, the question arises as to whether we can reject the case of the Revenue solely on the ground that there was no production of the original files before the Tribunal or before this Court for that matter. It is no doubt true that inspite of earnest efforts made by the Department, the Department could not get the original records and only photocopy of the acknowledgement was produced before the Tribunal. It is a matter of record that the acknowledgement in photocopy produced before the Tribunal was not denied by the assessee as not pertaining to the assessee. Although the photocopy could only be of the secondary evidence on the service of notice, yet when there was no denial from the assessee as regards the photo copy of the acknowledgement as relatable to the assessee's case and that in subsequent communication between the assessee and the Revenue, the notice sent by the Revenue was also acknowledged by the said Sashi Prakash Khemka, the contention of the assessee that there was no proper service on the assessee can only be seen as an after thought to wriggle out of the assessment proceedings.
16. In the context of the materials thus available, and satisfying ourselves as to the stand of the Revenue and after going through the records produced before the Tribunal, we have no hesitation in allowing the Tax Case(Appeal) filed by the Revenue and thereby set aside the order of the Income Tax Appellate Tribunal in holding that there was proper service of notice on the assessee.
17. In the result, the Tax Case(Appeal) is allowed. No costs.
(C.V.,J) (T.S.S.,J)
07.04.2014
Index:Yes/No
Internet:Yes
vj2
To
1. The Assistant Commissioner of Income Tax
Central Circle I(1), Chennai
2. The Commissioner of Income Tax
(Appeals-II), Chennai.
3. The Income Tax Appellate Tribunal, Delhi Bench 'G' New Delhi.
CHITRA VENKATARAMAN, J.
and
T.S.SIVAGNANAM, J.
vj2
Tax Case (Appeal) No.2720 of 2006
07.04.2014