Commissioner of Income Tax vs Vishnu and Co. P. Ltd.

The assessee filed the return of his income on September 28, 2001, in respect of the assessment year 2001-02. The last date for issuing of notice u/s 143(2) was September 30, 2002, i.e., within 12 months from the month in which the return had been filed.

Admittedly, no steps were initiated by the Assessing Officer before September 30, 2002. The first ever notice u/s 143(2) was prepared on the last date, i.e., September 30, 2002, only for service upon the respondent/assessee. That too at the fag end of working hours and, therefore, steps were taken to serve the assessee after working hours. It was taken by the Inspector of the Department to the premises of the assessee and as per the report of the Inspector, itself, he reached the premises at 7.15 p.m. By this time the entire staff of the assessee-company had left the premises. It was thus clear from the report of the Inspector that at that time in the office only some security staff was there and that too, the security staff of one M/s. Jupiter Securities, which the assessee-company had engaged for the security arrangement. Thus, there was no authorised person to receive the notice at the premises as the Inspector reached much after the working hours. The Inspector affixed the notice on the front gate of the premises of the assessee-company. It is rightly held by the Income Tax Appellate Tribunal that it was not a proper service of the notice upon the assessee. Since September 30, 2002, was the last date by which such a notice u/s 143(2) of the Act had to be served, the proceedings which were taken thereafter were clearly time barred and without jurisdiction.

The only submission of learned Counsel for the appellant (Revenue) in such circumstances is that as the assessee had appeared in the assessment proceedings, it should be treated as valid service.

The counsel for the Revenue could not disclose as to when the assessee had appeared, namely, whether the assessee had appeared on October 10, 2002, pursuant to the aforesaid affixation or the assessee had appeared on a later date after the alleged service of subsequent notice. In any case, even such appearance by the assessee, on a date when the proceeding had become time barred because of no proper service of notice, would be of no consequence. This particular aspect is specifically dealt with by a Division Bench of this Court in the judgment dated April 15, 2009, in a batch of appeals, viz., in I. T. A. No. 200/2008 Commissioner of Income Tax Vs. Pawan Gupta,

Finally, she submitted that in all the appeals, the assessee had participated in the block assessment proceedings. It is not the case that no opportunity of being heard had been given to the assessee. Virtually in all the cases the Assessing Officer had issued notices to the assessees requisitioning some material or the other. Since there is no specific pro forma prescribed for the issuance of a notice u/s 143(2), such notices/letters could be treated as having been issued u/s 143(2). She submitted that even if Section 143(2) is made applicable to block assessment proceedings by virtue of Section 158BC, the proviso would not be applicable to such proceedings. While we do not entirely agree with the analysis that the provision becomes mandatory or directory depending upon what action the Assessing Officer takes, we are in agreement with the conclusion arrived at by the Gauhati High Court. We are of the view that Section 143(2) is a mandatory provision whether we look at it from the standpoint of a regular assessment or from the standpoint of an assessment under Chapter XIV-B. If the Assessing Officer, on receipt of the return of undisclosed income in Form 2B from the assessee, is satisfied with the same as reflecting the true state of affairs then it is not necessary for him to embark upon any further enquiry or investigation. No further information or explanation is called for from the assessee. In such an eventuality he can straightaway pass the order u/s 158BC of the said Act. And, if he does so, the assessee cannot be heard to complain that no notice u/s 143(2) was served upon him because his return as filed has been accepted. It is here that the expression "so far as may be apply" comes into play. Section 143(2) has no application in such a situation and, therefore, no notice under that provision would be necessary. If the Assessing Officer makes the assessment order in terms of the return of undisclosed income filed by the assessee without issuing a notice u/s 143(2) then he would not have committed any mistake. This is a situation where the Section 143(2) notice would not be necessary at all.

No substantial question of law arises, for consideration of this Court. The appeal is dismissed.