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Judgment
Arindam Mukherjee, J.
1) The petitioner no. 1, namely, Co-ordination Vanijya Pvt. Ltd. (hereinafter referred to as the ‘CVPL’) and Ashok Kumar Poddar one of the
directors of petitioner no. 1 being the petitioner no. 2 in the writ petition has challenged an order passed by the Commissioner of Income Tax, Kolkata,
I being the respondent no. 2, dated 14th January, 2013 under the provisions of Section 263 of the Income Tax Act, 1961 as also the notices dated 11th
February, 2014 and 28th February, 2014 issued consequent upon the said order dated 14th January, 2013 being passed.
2) The petitioners say that the order dated 14th January, 2013 has been passed without serving due notice upon the petitioner and without affording an
opportunity to the petitioner no.1 (the assessee) of being heard. The petitioners say that the Income Tax Officer, Ward 1(2), Kolkata, being the
respondent no. 1 has assessed the return filed by Sadabahar Vanijya Pvt. Ltd. having its registered office at P-41, Princep Street, 6th Floor, Kolkata-
700072 for the Assessment Year 2007-2008 and passed an assessment order in respect thereof on 28th April, 2010.
The said Sadabahar Vanijya Pvt. Ltd (hereinafter referred to as the ‘Sadabahar’) had the Permanent Account Number (in short ‘PAN’)
AAJCS9856J. Subsequently, the name of Sadabahar has been changed to that of the petitioner no. 1, that is, CVPL. The income tax authorities had
issued a PAN Card to CVPL on 7th March, 2006 with PAN AAJCS9856J being the same PAN that of Sadabahar. The petitioners show that the
income tax return for the Assessment Year 2010-11 filed by Sadabahar appearing at page-20 of the writ petition and that filed by CVPL for the
Assessment Year 2011-12 has the same PAN. The advocate for the petitioner by showing the two returns submit that Sadabahar had become CVPL
was known to the respondent nos. 1 and 2 prior to 14th January, 2013 when the respondent no. 2 passed an order under the provisions of Section 263
of the Income Tax Act, 1961 and this knowledge will appear from the fact of issuance of the PAN Card to CVPL with the same PAN as also
assessing CVPL for the subsequent assessment years with the same PAN that of Sadabahar. The petitioners submit that it was, therefore, incumbent
upon the respondent no. 2 to serve a notice to CVPL and after affording CVPL an opportunity of hearing should have passed the order dated 14th
January, 2013. Having not done so, the said order should be set aside and a fresh order should be passed after hearing CVPL.
3) The advocate for the petitioner then submit that the Commissioner of Income Tax is competent under Section 263 of the Income Tax Act 1961 to
re-assess the order passed by the Assessment Officer but after giving the assessee an opportunity of being heard. Any attempted service on
Sadabahar after it had came to be known as CVPL cannot be held to be a proper and valid service and the Court should set aside such order directing
rehearing of the matter after giving CVPL an opportunity of hearing.
4) The petitioners relied upon the Certificate of Incorporation issued by the Government of India, Ministry of Corporate Affairs, Registrar of
Companies, West Bengal dated 27th October, 2010 to show the change in name of Sadabahar to CVPL was also known to the concerned ministry
and two un-reported judgments of this Court passed respectively on 10th March, 2015 and 1st December, 2016 in W.P. NO.6103 (W) of 2015 ( Corus
Steel Private Limited & Anr. versus Income Tax Officers & Ors.) and W.P. 441 of 2014 (M/s. Golden Investment Management Pvt. Ltd. & Anr.
versus Income Tax Officer, Ward 1(4), Kolkata & Ors.) in support of their submission that in similar situation the orders passed by the Commissioner
has been set aside.
5) The advocate appearing for the respondents submit that notice was sent to Sadabahar by post at its last known address being P-41 Princep Street,
Kolkata-700072 calling upon them to appear before the respondent no. 2 before passing the order under Section 263 of the Income Tax Act, 1961.
The said notice came back with the postal endorsement “not knownâ€. Thereafter, the department by affixation, at the said premises no. P-41
Princep Street, Kolkata-700072 served the notice. It is then contended that having been served with the notice Sadabahar chose not to appear at the
hearing and, as such, the order dated 14th January, 2013 was passed in their absence after affording them an opportunity to be present before the
Commissioner to advance its case.
6) In reply, the advocate on behalf of the petitioners submit that any attempt of service on Sadabahar in 2013 cannot be said to be a due or proper
service as Sadabahar had ceased to exist by then and has come to be known as CVPL, with its registered office at a different premise. The
respondents ought to have served CVPL instead of attempting to serve Sadabahar when they were aware of the fact that Sadabahar is now known
as CVPL. The petitioners are only seeking an opportunity to place their case before the competent Commissioner of Income Tax so that a fresh order
may be passed after hearing the petitioner and are not doubting the authority of the Commissioner given under Section 263 of the Income Tax Act,
1961. The petitioners shall suffer irreparable loss and injury if the order dated 14th January, 2013 is not set aside and/or rescinded.
7) After considering the materials on record, the provisions of Income Tax Act,1961 and the two orders referred to by the writ petitioners, I find much
of a substance in the submissions made by the petitioners seeking setting aside of the order of the Commissioner dated 14th January, 2013 for the
following reasons:-
i) The provisions of Section 282 of the Income Tax Act, 1961 provides for serving of notice as per the provisions enumerated in the Code of Civil
Procedure, 1908. Order 5 Rule 17 of the Code of Civil Procedure,1908 provides for the procedure when the defendant refuses to accept service or
cannot be found. In the instant case, the notice issued by the department was returned with the endorsement “not knownâ€, which gives rise to a
presumption that the assessee cannot be found. In such circumstances, in view of the procedure laid down under Order 5 Rule 17 of the Code of Civil
Procedure, 1908, it was open to the department to affix a copy of the notice on the outer door or some other conspicuous part of the house in which
the assessee ordinarily carries on business. The department as stated hereinabove, had affixed a copy of the notice at the office premises of
Sadabahar and, as such, it cannot be said that service on Sadabahar had not been attempted to be made or made. At the same time, one should keep
in mind that, much prior to 2013 Sadabahar had came to be known as CVPL and income tax returns since the Assessment Year 2011-2012 has been
filed by CVPL using the same PAN that of Sadabahar. Moreover, the Income Tax Department itself had issued PAN Card to CVPL with the same
PAN that of Sadabahar. Though the Certificate of Incorporation relied upon by the petitioners mentioned an address of P-41 Princep Street, Kolkata-
700072 to be that of CVPL but such document has been issued on 27th October, 2010 and, subsequent thereto, returns for Assessment Year 2011-
2012 onwards have been filed by CVPL giving its address as 12B Cossipore Road, Kolkata-700002.
ii) It can, therefore, be safely concluded that respondents were aware that Sadabahar is now known as CVPL with its registered office at 12-B
Cossipore Road, Kolkata-700002 and not with its address at P-41 Princep Street, Kolkata-700072. Any affixation of notice at premises no. P-41
Princep Street, Kolkata-700072 cannot, therefore, be said to be a notice upon CVPL in the year 2012-2013. CVPL has, therefore, not been served
though entitled to before the Commissioner passed his order dated 14th January, 2013 and, as such, there is violation of principles of natural justice.
Moreover, when the statute is very clear that the Commissioner should afford an opportunity to the assessee of being heard, CVPL should have been
heard when Sadabahar much prior to 2012-13 has become CVPL and is the assessee or representing the interest of Sadabahar, the assessee. The
word ‘may’ used in Section 263 should be presumed to be shall or otherwise interpreting the word “may†as not mandatory, orders can be
passed even without affording an opportunity to the assessee of being heard while the Commissioner exercises his jurisdiction under Section 263 of the
Income tax Act, 1961 thereby violating the principles of natural justice.
iii) After going through the two orders referred to by the petitioners and relating the facts and the reasoning therein to the facts of the instant case the
view to set aside the order of the Commissioner passed on 14th January, 2013 is further strengthened. It is established that the actual assessee, that is,
CVPL (petitioner no. 1) was prevented by sufficient cause from appearing before the Commissioner when the order dated 14th January, 2013 and
that there was no valid service of notice to it. In absence of service of notice or opportunity of hearing, the order has been passed in violation of the
principles of natural justice.
iv) It further appears that the petitioners upon receiving notice dated 11th February, 2014 from the respondent no. 1 came to know about the order
passed by the Commissioner dated 14th January, 2013 and have approached this Court sometimes in the month of March, 2014 after making
correspondences with the respondent no. 2 and, as such, have approached this Court without any delay.
v) The said two notices, however, are addressed to Sadabahar at P-41 Princep Street, 6th Floor, Kolkata-700072. It is not clear how these two notices
were received by the petitioners, though addressed to Sadabahar at its last known address. However, CVPL in reply to the said notice dated 14th
February, 2014 by its letter dated 21st February, 2014 requested the respondent no. 1 to supply a copy of the order under Section 263 specifically
mentioning therein that the name of Sadabahar has been changed to CVPL, and that the registered office of CVPL is situate at 12-B Cossipore Road,
Kolkata-700002. This letter has been received by the respondent no. 1 on 26th February, 2014 as will appear from the stamp affixed thereon the
photocopy whereof is annexed to the writ petition. Even thereafter, the notice dated 28th February, 2014 has been issued by the respondent no. 1 to
Sadabahar at P-41 Princep Street, 6th Floor, Kolkata- 700072 instead of CVPL. This goes on to show that the respondent no. 1 without appreciating
the letter dated 21st February, 2014 from CVPL received by him on 26th February, 2014 has proceeded to issue notice dated 28th February, 2014 to
Sadabahar at P-41 Princep Street, Kolkata-700072 instead of addressing the same to CVPL at 12-B Cossipore Road, Kolkata-700002. It, therefore,
appears that the respondents are treating Sadabahar to be still in existence though they are specifically aware of the fact that Sadabahar had become
CVPL. This conduct of the respondent no. 1 is not appreciated. Since I have already held that service of notice on Sadabahar is not enough, the
receipt of notice dated 14th February, 2014 by CVPL addressed to Sadabahar at P-41, Princep Street, Kolkata-700072 should be construed as CVPL
being aware of the notice issued to Sadabahar before passing of the order dated 14th January, 2013.
7) In the circumstances, as aforesaid, the order dated 14th January, 2013 passed by the respondent no. 2 as also the two notices respectively dated
11th February, 2014 and 28th February, 2014 issued by the respondent no. 1 pursuant thereto are set aside.
8) As the order and the two notices under challenge are set aside, all consequential steps taken subsequent to the order dated 14th January, 2013 or in
pursuance thereof are also set aside. The department should not also emphasise or rely upon the letter written by CVPL on 12th March, 2014. This
will, however, not prevent the respondent no. 2 from proceeding under Section 263 of the Income Tax Act, 1961 afresh against the petitioner no. 1 for
the Assessment Year 2007-2008.
The Department shall serve a fresh notice upon the petitioner no. 1 and proceed to fix a hearing date in exercise of his jurisdiction under Section 263
of the Income Tax Act by giving the petitioners a reasonable opportunity of being heard. The entire proceedings under the provisions of Section 263 of
the Income Tax Act, 1961 should be completed within a period of three months from the date without granting any unnecessary adjournments to either
of the parties. The writ petition is accordingly allowed. There shall, however, be no order as to costs.