Income Tax Appellate Tribunal - Indore
Swastik Coal Corporation (India) Ltd., ... vs The Addl. Cit Range-5, Indore on 20 May, 2021
आयकर अपील य अ धकरण, इंदौर यायपीठ, इंदौर
IN THE INCOME TAX APPELLATE TRIBUNAL,
INDORE BENCH, INDORE
HON'BLE MANISH BORAD, ACCOUNTANT MEMBER
AND
BEFORE HON'BLE MADHUMITA ROY, JUDICIAL
MEMBER
ITA No.477/Ind/2013
Assessment Year 2005-06
M/s. Swastik Coal
Corporation Pvt. Ltd,
21/3, Swastik House,
Ratlam Kothi, Indore : Appellant
PAN : AABCJ3196N
V/s
ACIT- Range-5,
Indore : Respondent
Revenue by Shri Harshit Bari, Sr.DR
Assessee by Shri Girish Agrawal, Shri Vijay
Bansal & Miss Nisha Lahoti, ARs
Date of Hearing 05.04.2021
Date of Pronouncement 20.05.2021
ORDER
PER MADHUMITA ROY, J.M
The instant appeal filed by the assessee is directed against the order dated 28.03.2013 passed by the Ld. CIT(A)-II, Indore arising Swastik Coal Corporation Pvt. Ltd ITA No.477/Ind/2013 out of the order dated 29.12.2010 passed by the Ld. ACIT, Range-5, Indore (M.P) u/s 143(3) of the Income Tax Act, 1961 (hereinafter called "The Act") for Assessment Year 2008-09. Addition to the tune of Rs. 1,14,00,000/- u/s 68 and Rs.4,49,316/- on account of expenditure disallowed on exempted income upon application of Rule 8D have been challenged before us.
However, before arguing the matter on merit, the Ld. Counsel appearing for the assessee raised preliminary objection in regard to the serving of notice u/s 143(2) of the Act dated 31.08.2009 while initiating the assessment proceedings. The assessee company filed its return of income on 30.09.2008. It is submitted by the Ld. Counsel appearing for the assessee that the impugned assessment order u/s 143(2) of the Act was claimed to have been passed after due process of the law by serving notice in due time in terms of proviso to Section 143(2) but the same has not been served in terms of the procedure laid down by the provision under section 282 of the Act. In that view of the matter, it was ultimately contended by the Ld. AR that the impugned order is bad in law and is liable to be quashed.
2 Swastik Coal Corporation Pvt. Ltd ITA No.477/Ind/2013
2. On the contrary Ld. DR contended that the notice dated 03.09.2009 u/s 143(3) of the Act was duly discharged through speed post followed by another notice by the notice servers namely Shri Prem N. Joshi on 4.9.2009. The proof of the two services are on record before the revenue and duly submitted before the Ld. Tribunal and therefore, according to the Ld. DR it has been assumed that the notice served was entered in the scrutiny pendency register. Hence, the plea of the order being passed without due process of law is not tenable.
3. We have heard the rival submissions made by the respective parties on the ground of maintainability of the assessment proceedings. We have also perused the available records. The case of the assessee is this that the notice u/s 143(2) and 142(1) of the Act was received for the first time in 21.7.2010 by and under the notice dated 14.07.2010 fixing the date of hearing on 12.8.2010. Such fact was brought to the notice of Ld. A.O by and under a letter dated 12.8.2010 issued by the assessee as appears at page 55 of the paper book submitted before us. Such objection was also filed on 03.09.2010 owing to non availability of Ld. A.O. In fact certified 3 Swastik Coal Corporation Pvt. Ltd ITA No.477/Ind/2013 true copy of the assessment proceedings was also obtained from ACIT-5(1), Indore who issued the alleged first notice issued u/s 143(2) of the Act. It appears that the said revenue officer himself admitted that said first notice u/s 143(2) of the Act was not served on time before 30.09.2009, as it reflects at page 54 being the memo dated 30.09.2010 under the signature of ACIT-5(1), Indore written to the appellant company. It was further contended by the said Revenue Officer that the notice u/s 143(2) of the Act for the assessment proceedings for the relevant Assessment Year was sent by speed post on 03.09.2010 vide dispatch No.1221/03.09.2009 as well as through notice server by the Office of the Ld. ACIT-5(1), Indore and claimed to have been duly served upon the very next day i.e. 04.09.2010. This memo dated 30.09.2010 was issued while replying the objection as it is evident from page 55 of the paper book submitted before us. The assessee raised his objection on 12.08.2010 challenging the veracity of the proceeding since the notice under Section 143(2) and 143(1) of the Act both dated 14.07.2010 for Assessment Year 2008-09 was received only on 17.07.2010. It was contended by the assessee that the same ought 4 Swastik Coal Corporation Pvt. Ltd ITA No.477/Ind/2013 to have been served u/s 143(2) of the Act before 30.09.2009. It is relevant to mention that the proviso to Clause II sub section (2) of Section 143 speaks as follows:-
"provided that no notice under this sub-section shall be served upon the assessee after the expiry of six months from the end of financial year in which return is furnished".
Therefore, admittedly the notice issued is beyond the period as stipulated under proviso of Section 143(2) of the Act and the entire proceedings was, thus, prayed to be dropped by the appellant. It is surprised to note that the photo copy of the Speed Post envelope dispatch No.1221 was placed on record by the revenue. With our limited understanding, w failed to follow that if the said envelope containing the notice is sent to the assessee and received by them then as to how the same could reach the sender i.e. the office of the concerned Revenue Officer and this could be kept in the file. Secondly the notice which has been claimed to have been served upon the assessee through office server the acknowledgement whereof speak about the details of the person receiving the same. In fact the notice server Shri Prem N Joshi failed to prove on record the Name/designation/identification of the person to whom the 5 Swastik Coal Corporation Pvt. Ltd ITA No.477/Ind/2013 same was delivered. It was contended by the appellant that the signature of the impugned notice does not belong to any of the officer/Director or employee of the company. It is relevant to note that this fact has not been controverted by the revenue. No such evidence indicating receiving notice genuinely on behalf of the assessee is forthcoming from the revenue in order to substantiate that the service has actually been affected. The Ld. DR has not been able to satisfy us on this aspect. In that event we do not hesitate to conclude that the provision of service of notice as stipulated under Section 282 of the Act as if it is a summon issued by a court under the code of civil procedure, 1908 (5 of 1908) has not been complied with in its true spirit, in the absence of disclosure of identification of the person to whom the service was ultimately effected. The Ld. A.O failed to bring any material on record to show that the notice u/s 143(2) of the Act was served on the assessee within the stipulated period i.e. 30.09.2009 before the expiry of 6 months from the end of the financial year in which the return is furnished. Thus, it cannot be held to be a valid service of notice on the 6 Swastik Coal Corporation Pvt. Ltd ITA No.477/Ind/2013 assessee. In this regard we have considered the judgment relied upon by the Ld. AR some of which are discussed herein below:-
The Hon'ble Delhi High Court in the case of M.L. Narang/ R.L. Narang reported in (1981) 6 Taxmann 61 (Delhi). In this particular case Revenue has failed to show that the services was effected on 3.2.1969 either on the assessee concerned or in any other employees, relatives or any other authorised representatives. There was nothing on record to show the identity of the person on whom the service was effected and thus it was held that the service was not effected on the assessee concerned on 3.02.1969.
On an identical situation the Hon,ble High Court of Allahabad in the case of Dr. Y.D. Singh, B.R.D. Medical College reported in (2012) 20 taxmann.com 174(All.), observed at para 5 that "it was claimed that the said notice was served on Shri Murli Dhar Vaish" - no such claim made by the Department that it was served on certain specific person. Later the server Inspector did not state any specific person on whom he made the delivery. It was further observed that personal service would not be a valid service of 7 Swastik Coal Corporation Pvt. Ltd ITA No.477/Ind/2013 notice, if it has not been made either on the person mentioned there or an agent duly authorised to receive notice as provided under Section 282 of the Act. Finally, since there have been no entry in the order sheet regarding the issuance and service of notice u/s 143(2) of the Act, the contention of the assessee that no such service was ever issued what is to say of service of the same on the assessee or on his authorised representative has been accepted by the court.
In another judgment the Hon'ble Tribunal, Lucknow Benches in the case of Nripendra Mishra reported in (2009) 121 TTJ 701 (Lucknow) held in para 11 that "In fact the revenue had not proved the identity of person. Thus the revenue had not proved on record that the notice under section 143(2) was served upon the agent of the assessee. In such circumstances, the assessment order passed by the Assessing Officer had to be annulled" .
4. Thus, taking into consideration of the entire aspect of the matter we are of the considered view that unless there is service of notice in accordance with provision under Section 282 of the Act 8 Swastik Coal Corporation Pvt. Ltd ITA No.477/Ind/2013 separately specifying mode of service of notice, it cannot be treated as valid service of notice. In the case in hand the Revenue has failed to show, that service of notice under Section 143(2) of the Act effected within the stipulated time under the provisions of Section 143(2) of the Act on the assessee or on any of their employees/ relatives or any authorized representatives particularly in adherence to provision under Section 282 of the Act either by post or as if it were a summons issued by a Court under the Code of Civil Procedure, 1908 (5 of 908). In that view of the matter the service of notice under Section 143(2) of the Act, in our considered opinion is no service. Since the initiation of the proceeding is not in adherence to the prescribed rules, the entire proceeding is vitiated and hence quashed. Consequently, all action taken there under is bad. The impugned addition, made by the Revenue is, thus, hereby deleted.
5. In the result appeal of the assessee is allowed.
9 Swastik Coal Corporation Pvt. Ltd ITA No.477/Ind/2013 The order pronounced in the open Court on 20.05.2021 Sd/- Sd/- (MANISH BORAD) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER दनांक /Dated : 20th May, 2021 /Dev Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By Order, Asstt.Registrar, I.T.A.T., Indore 10