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Judgment
M.R. Shah, J.—By way of this petition under article 226 of the Constitution of India, the petitioner-assessee has prayed for an appropriate order to hold that the notice u/s 143(2) of the income tax Act, 1961 (hereinafter referred to as "the Act" for short), dated September 26, 2012, is illegal and void as beyond the period mentioned in the first proviso to section 143(2) of the Act. It is also further prayed to quash and set aside the consequent assessment order passed for the assessment year 2010-11, dated March 26, 2013, computing the total income of Rs. 3,47,63,560 and raising a demand of Rs. 1,48,72,320 and that the penalty proceedings under the notice dated March 28, 2013, u/s 274 read with section 271(1)(c) of the Act. At the outset, it is required to be noted that the impugned notice issued 2 u/s 143(2) of the Act and the consequent assessment order for the assessment year 2010-11 dated March 26, 2013, are mainly challenged on the ground that the notice issued u/s 143(2) of the Act dated September 26, 2012, has been issued beyond the period mentioned in the first proviso to section 143(2) of the Act. No other submissions have been made.
It is the case on behalf of the petitioner that the return of income for the 3 assessment year 2010-11 claiming exemption of Rs. 5,09,70,716 was filed on April 29, 2011. That the said return was processed u/s 143(1) of the Act on August 30, 2011. That notice u/s 143(2) of the Act came to be issued by the respondent on September 26, 2012, which actually came to be served upon the petitioner-assessee on October 1, 2012. It is the case on behalf of the petitioner that considering the first proviso to section 143(2) of the Act, notice u/s 143(2) of the Act was required to be served within a period of six months from the end of the accounting year only in which returns were filed and, therefore, notice was required to be served by the petitioner-assessee on or before September 30, 2012. However, the said notice was served on the petitioner on October 1, 2012, i.e., beyond the period prescribed in the proviso to section 143(2) of the Act, and, therefore, the said notice u/s 143(2) of the Act is invalid and consequent assessment order dated March 26, 2013, passed on the basis of the aforesaid in valid notice deserves to be quashed and set aside.
Mr. Manish K. Kaji, learned counsel appearing on behalf of the petitioner, has heavily relied upon the decision of the Division Bench of this court in the case of Dy. Commissioner of Income Tax Vs. Maxima Systems Ltd., and in the case of Dy. Commissioner of Income Tax Vs. Mahi Valley Hotels and Resorts, He has also relied upon the decision of the hon''ble Supreme Court in the case of Assistant Commissioner of Income Tax and Another Vs. Hotel Blue Moon,
3.01 Mr. Kaji, learned counsel appearing on behalf of the petitioner, has submitted that in the case of Maxima Systems Ltd. (supra), relying upon the decision of the hon''ble Supreme Court in the case of Hotel Blue Moon (supra) and the decision of the Division Bench of this court in Mahi Valley Hotels and Resorts (supra), the Division Bench has held that according to the proviso to section 143(2) of the Act, no notice u/s 143(2) can be served on the assessee after the expiry of 12 months from the end of the month in which the return is furnished. It is submitted that it is further observed and held in the said decision that the jurisdiction to frame the assessment u/s 143(3) pursuant to the notice u/s 143(2) can be assumed only if the notice is served on the assessee within a period of 12 months in which the return was filed. It is submitted that by holding so and as it was found that the notice issued u/s 143(2) of the Act was served upon the assessee, after the expiry of the prescribed period mentioned in section 143(2) of the Act, the Division Bench confirmed the order passed by the income tax Appellate Tribunal quashing and setting aside the order of the Commissioner of income tax (Appeals) confirming the order of assessment.
By making the above submissions and relying upon the above decisions, it is requested to allow the present special civil application and grant the reliefs as prayed for.
The present petition is opposed by Mr. M.R. Bhatt, learned counsel appearing on behalf of the Revenue. It is submitted that as such in the facts and in the circumstances of the case, the decisions relied upon by the learned counsel appearing on behalf of the petitioner shall not be applicable. It is submitted that as such notice u/s 143(2) of the Act was in fact issued on September 26, 2012, which was sent to the asses-see by speed post as one of the modes as mentioned in section 282 of the Act and September 30, 2012 (last date of service of the notice) was Sunday and the postal department was closed and, therefore, on the very next available day, i.e., on October 1, 2012 (Monday), notice u/s 143(2) of the Act has been served. Therefore, relying upon section 10 of the General Clauses Act and applying the analogy/logic of section 10 of the General Clauses Act, it can be said that the notice has been served within the prescribed period mentioned under the proviso to section General Clause of the Act and, therefore, the said provision has been strictly complied with. In support of his above submissions, Mr. Bhatt, learned counsel appearing on behalf of the Revenue, has heavily relied upon the decision of the hon''ble Supreme Court in the case of HUDA and Another Vs. Babeswar Kanhar and Another, and in the case of Mohd. Ayub Vs. State of U.P. and Others, and in the case of H.H. Raja Harinder Singh Vs. S. Karnail Singh, . Relying upon the aforesaid decisions of the hon''ble Supreme Court it is further submitted by Mr. Bhatt, learned counsel appearing on behalf of the Revenue, that, as observed by the hon''ble Supreme Court, in the said decisions, it is the general principle that the party prevented from doing any act by some circumstances beyond his control, can do so at the first opportunity. It is submitted that, it is further observed by the hon''ble Supreme Court that law does not compel performance of impossibility. It is submitted that in the present case service of notice upon the assessee on September 30, 2012, was beyond the control of the Department as September 30, 2012, was a holiday and the postal department was closed and on the very next day, i.e., the first subsequent opportunity, i.e., on October 1, 2012 - Monday, notice has been served and, therefore, notice u/s General Clause of the Act can be said to have been served within the prescribed period mentioned in breach to section General Clause of the Act.
By making the above submissions and relying upon the above decisions, it is requested to dismiss the present special civil application.
Heard the learned counsel appearing on behalf of the respective parties at length. The short question which is posed for consideration of this court in the present petition is, whether, in the facts and in the circumstances of the case, when notice u/s 143(2) of the Act which was required to be served upon the assessee on or before September 30, 2012 (considering the proviso to section 143(2) of the Act) is actually served upon the assessee on October 1, 2012, i.e., on Monday - September 30, 2012, was a holiday and the postal department was closed, can it be said that notice u/s 143(2) of the Act upon the assessee has been served within the period mentioned in the first proviso to section 143(2) of the Act and can it be said that there is sufficient compliance of proviso to section 143(2) of the Act?
5.01 At the outset, it is required to be noted and it is not in dispute that the notice u/s 143(2) of the Act was in fact issued by the Department on September 26, 2012, and the same was sent by speed post as one of the modes prescribed u/s 282 of the Act. It is not in dispute that considering the proviso to section 143(2) of the Act, notice u/s 143(2) of the Act was required to be served upon the assessee on or before September 30, 2012. However, September 30, 2012 was the holiday and the postal department was closed and, therefore, notice u/s 143(2) of the Act was served upon the assessee on the first subsequent opportunity, i.e., on the next working day on October 1, 2012, i.e., on Monday. It is not in dispute that September 30, 2012, being Sunday was a holiday. It also cannot be disputed that when the notice was issued by the Department on September 26, 2012, by speed post and the same was dispatched on September 27, 2012, under normal circumstances and if September 30, 2012, would not have been holiday - Sunday, notice as such would have been served upon the assessee on or before September 30, 2012. However, as September 30, 2012, being Sunday was a holiday, notice upon the assessee could not be served on that day and in fact the same could be served upon the assessee on the very next working day, i.e., October 1, 2012 - Monday. The learned counsel appearing on behalf of the Revenue has heavily relied upon section 10 of the General Clauses Act, which reads as under:
Computation of time.--(1) Where, by any Central Act or regulation made after the commencement of this Act, any act or proceedings is directed or allowed to be done or taken in any court or office on a certain day or within a prescribed period, then, if the court or office is closed on that day or the last day of the prescribed period, the act or proceedings shall be considered as done or taken due to time if it is done or taken on the next day afterwards on which the court or office is open:
Provided that nothing in this section shall apply to any act or proceeding to which the Indian Limitation Act, 1877 (15 of 1877), applies.
(2) This section applies also to all Central Acts and regulations made on or after the fourteenth day of January, 1887.
5.02. Identical question came to be considered by the hon''ble Supreme Court in the case of Dr. Babeswar Kanhar (supra) and Mohd. Ayub (supra) and somewhat in a similar set of facts, it is observed and held by the hon''ble Supreme Court that logic and analogy of section 10 of the General Causes Act can be applied. In the case before the hon''ble Supreme Court in the case of Dr. Babeswar Kanhar (supra), the allottee was required to intimate/convey in writing about non-acceptance by him within a period of 30 days failing which there shall be forfeiture of earnest money deposited and as such by letter dated November 28, 2001 (within a period of 30 days) the allottee conveyed the non-acceptance. However, HUDA office was closed on December 1, 2001, and December 2, 2001, and November 30, 2001, being a postal holiday and, therefore, on the next day, after the closure period, i.e., December 3, 2001, letter was served on HUDA and to that applying analogy/logic of section 10 of the General Clauses Act, it was held by the hon''ble Supreme Court that there is sufficient compliance by the allottee and it was held that there was a valid performance and sufficient compliance by the allottee. While holding so, in paragraph 5 it is observed and held as under:
What is stipulated in clause 4 of the letter dated October 30, 2001, is a communication regarding refusal to accept the allotment. This was done on November 28, 2001. Respondent No. 1 cannot be put to loss for the closure of the office of HUDA on December 1, 2001, and December 2, 2001, and the postal holiday on November 30, 2001. In fact he had no control over these matters. Even the logic of section 10 of the General Clauses Act, 1897, can be pressed into service. Apart from the said section and various provisions in various other Acts, there is a general principle that a party prevented from doing an act by some circumstances beyond his control, can do so at the first subsequent opportunity (see Sambasiva Chari Vs. Ramaswami Reddi, The underlying object of the principle is to enable a person to do what he could not done on a holiday, on the next working day. Where, therefore, a period is prescribed for the performance of an act in a court or office, and that period expires on a holiday, then the act should be considered to have been done within that period if it is done on the next day on which the court or office is open. The reason is that law does not compel the performance of an impossibility (See Donzelle Vs. Hossein Ally, Every consideration of justice and expediency would require that the accepted principle which underlies section 10 of the General Clauses Act should be applied in cases where it does not otherwise in terms apply. The principles underlying are lex non cogit ad impossibilia (the law does not compel a man to do the impossible) and act us curiae neminem gravabit (the act of court shall prejudice no man). Above being the position, there is nothing infirm in the order passed by the forums below. However, the rate of interest fixed appears to be slightly on the higher side and is reduced to 9 per cent. to be paid with effect from December 3, 2001, i.e., the date on which the letter was received by HUDA.
5.03. Identical question also came to be considered by the hon''ble Supreme Court in the case of Mohd. Ayub (supra) and in the said decision a similar view is taken and it is held that there is a general principle that a party prevented from doing an act for some reasons beyond his control can do so at the first subsequent opportunity. It is further held that the said principle is based on the doctrine law does not compel performance of an impossibility.
5.04. Considering the aforesaid decisions of the hon''ble Supreme Court and the observations made therein and the facts of the case on hand, the ratio laid down by the hon''ble Supreme Court in the aforesaid decisions is squarely applicable to the facts of the present case. As stated above, the notice was in fact issued on September 26, 2012, which was sent by speed post and the last date for service of the notice u/s 143(2) was September 30, 2012, which was a postal holiday-Sunday and, therefore, notice u/s 143(2) of the Act came to be served upon the assessee on the very next working day, i.e., on October 1, 2012-Monday and, therefore, applying the logic of section 10 of the General Clauses Act and the aforesaid decisions it cannot be said that the notice is barred by the period stipulated in section 143(2) of the Act. In the aforesaid facts and circumstances of the case, it can be said that there is sufficient compliance with section 143(2), more particularly the first proviso to section 143(2) of the Act and, therefore, it cannot be said that the notice u/s 143(2) of the Act is invalid and, consequently, it cannot be said that the assessment order is bad on the aforesaid ground.
5.05. Now, so far as the reliance placed upon the decisions of this court in the case of Maxima Systems Ltd. (supra) and in the case of Mahi Valley Hotels and Resorts (supra), are concerned, on facts the said decisions shall not be applicable and/or of any assistance to the petitioner. In the aforesaid two cases, such a controversy of serving notice on the first available day after the last date of service was not there. In the aforesaid cases, no such controversy was there which has arisen in the present case. In the aforesaid two decisions, applicability of section 10 of the General Clauses Act and/or applying the logic of section 10 of the General Clauses Act was not there. It appears that even in the case of Mahi Valley Hotels and Resorts (supra), notice u/s 143(2) was issued after the expiry of the period of limitation and to that, it was held that assessment was void ab initio. Under the circumstances, the aforesaid two decisions would not be of any assistance to the petitioner.
In view of the above and for the reasons stated above, as it has been found that there is sufficient compliance with section 143(2) of the Act, more particularly as the notice u/s 143(2) of the Act has been served on the first available working day, i.e., on October 1, 2012, being Monday, it can be said that the notice has been issued within the prescribed period as mentioned in the first proviso to section 143(2) of the Act and, therefore, there is sufficient compliance and, therefore, notice issued u/s 143(2) of the Act is not invalid and, therefore, consequential order of assessment is not bad on the aforesaid ground. Under the circumstances, the present special civil application fails and the same deserves to be dismissed and is accordingly dismissed.