SURESH UPADHYAY AND SONS,JABALPUR vs. INCOME TAX OFFICER WARD 2(5),

Per Bench This is a set of four Appeals by two different, albeit related, assessees, agitating the order/s under section 263 of the Income Tax Act, 1961 („the Act‟,

1 | P a g e

ITA Nos. 19-21/JAB/2017 (A.Ys. 2010-11 to 2012-13) ITA No.22/JAB/2017 (A.Y. 2012-13) Suresh Kumar Upadhyay & Sons and Ano. v. ITO hereinafter) dated 31/3/2017 for different Assessment Years (AYs.) in their respective cases. The appeals raising the same issue/s, were heard together, and are accordingly being disposed of per a common, consolidated order.

ITA Nos. 19-21/JAB/2017 (A.Ys. 2010-11 to 2012-13) ITA No.22/JAB/2017 (A.Y. 2012-13) Suresh Kumar Upadhyay & Sons and Ano. v. ITO which reads as under, is bad in law inasmuch as they were all dispatched only 07 days later, i.e., as on April 7, next following:- Revision of orders prejudicial to revenue. 263(1) x x x x x x x x x x (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. Copy of the postal receipt and the tracking report reflecting the date of dispatch of the corresponding consignment, are placed on record to exhibit the same. On its basis, it is stated that the said orders, though dated March 31 of the relevant year, were released and went out of control of the authority making the order only on April 7 next following, so that they were actually issued only on that date in terms of trite law for which reliance stands placed on the following case law: 1. State of Punjab vs. Khemiram (AIR 1970 SC 214) 2. Raj Harish Chandra Raj Singh vs. Dy. Land Acquisition Officer (AIR 1961 SC 1500) 3. B.J. Shelat vs. State of Gujarat (AIR 1978 SC 1109) 4. Jefferry and Karim v. ITO [1999] 240 ITR 587 (Ker)

3.2 The Revenue‟s case, on the other hand, as presented by Shri Mishra, the ld. CIT-DR, is that though there is no ambivalence in or disputing the law in the matter, the date of dispatch is by itself not conclusive of the matter, so that it may well be that the order is released and, therefore, issued earlier. The date of dispatch follows a process. It is only a proper verification of records that the date of issue, assuming it to be not on March 31, ascertained. At this stage, the Bench, allowing time, required the parties to respond qua the recent decision by the Apex Court in CIT v. Mohammed Meeran Shahul Hameed [2021] 438 ITR 288 (SC). Per the same, it has been clarified by the Apex Court, in the context of s. 263(2), that the date of receipt of the order, or even of its dispatch, cannot be equated with or understood to be the date of its making or issue. Toward this, it invoked, what it

ITA Nos. 19-21/JAB/2017 (A.Ys. 2010-11 to 2012-13) ITA No.22/JAB/2017 (A.Y. 2012-13) Suresh Kumar Upadhyay & Sons and Ano. v. ITO called the cardinal principle of interpretation of statutes, whereby, the provision of the statute/Act is to be read as it is, and nothing is to be added or taken away from the provision of the statute (page 295). Shri Ghai would respond on the next date by stating that in the facts of the case, the orders dated 26/03/2012 were dispatched on 28/03/2012, i.e., well within the limitation period of up to 31/03/2012. The decision by the Apex Court is to be understood in that context and in that factual background. 4. We have heard the parties, and perused the material on record. There is no doubt, and there could be no quarrel about the law in the matter. That is, that it is only on its release, i.e., when it goes out of the control of the person/authority making the order, that it can be in law regarded as made or passed or issued, and for which, apart from the decisions relied upon before us, we may cite another (Upadhyaya v. Shanabhai P. Patel [1987] 166 ITR 163 (SC)). The issue, however, is the date on which the impugned order/s in the instant case/s stands issued, a matter of fact. Toward this, while the assessee relies on the date of dispatch, the Revenue does on the date of the order, and on which it was signed or, at worst, apparently so. The onus of proving that the apparent was not real is on the party who claims it to be so, is trite law (CIT v. Daulat Ram Rawatmull [1972] 87 ITR 349 (SC), and remains completely undischarged in the instant case. There is nothing on record to show that the orders were either not signed on the 31st day of March, 2017, i.e., the date subscribed on the order/s, or even if signed on that date, was not released by the authority signing the order, but actually retained by it, so that, suggesting so, as the assessee does, would be presumptuous. The presumption in law rather is that all the official and judicial acts or regularly performed (sec. 114(e) of the Indian Evidence Act, 1872). There could be several steps or reasons for the delay in dispatching the orders under reference. Our concern, however, is not the date of despatch per se, but that of it‟s signing and, upon it, being handed over to the secretarial staff for follow-up 4

ITA Nos. 19-21/JAB/2017 (A.Ys. 2010-11 to 2012-13) ITA No.22/JAB/2017 (A.Y. 2012-13) Suresh Kumar Upadhyay & Sons and Ano. v. ITO measures, viz. making corrections, vetting, and taking copies, certifying them, and then giving it to the postal department, who act as agents of the Revenue for the purpose, which therefore may not necessarily be on the same date. The movement of a file would surely be recorded, i.e., from the date on which the secretarial staff of the authority issuing the order receives the signed copy thereof, to when it is finally given through the despatch section to the representative of the postal department, which, as Sh. Mishra indicated, may not be readily available after several years. We think that the assessee, where he intends to press home an „advantage‟ of such nature, ought to have taken steps in time, under RTI Act, seeking specific information in the matter, which the Revenue, a public office, was bound to provide. In the absence of any material on record, it would though be presumptuous on our part to hold that the order/s was either not signed on the date it purports to be, or that, though signed thereat, withheld by the authority passing the order. This is particularly so as the order/s is passed on the last day of the financial year, whereat, on account of time limitation, there is a much higher turnout and, consequently, workload on the secretarial and ministerial staff, consuming inordinate time. Why, in Mohammed Meeran Shahul Hameed (supra), the order, claimed to be dispatched on 28/03/2012, was claimed to be received on 29/11/2012, i.e., over 08 months later. It was in this context that the Apex Court clarified therein that neither date of receipt nor dispatch was relevant. It is the ratio of the decision, the legal proposition advanced, upon which, applying the same, decision in the peculiar facts and circumstances of a case is made, that is binding, and which in the cited case itself relates to the settled principle of interpretation of statutes (refer, inter alia, CIT v. Calcutta Knitwears [2014] 362 ITR 673 (SC)). The reliance on Mohammed Meeran Shahul Hameed (supra), wherein the Apex Court invokes the same principle of law, was made only for the reason that the same is in respect of the same question of law that arises in the instant case, i.e., the date of issue or making of an order, in view and context of the time limitation attending the same, as well as that an issue or passing an order 5

ITA Nos. 19-21/JAB/2017 (A.Ys. 2010-11 to 2012-13) ITA No.22/JAB/2017 (A.Y. 2012-13) Suresh Kumar Upadhyay & Sons and Ano. v. ITO necessarily implies the same being removed from the control of the person passing the same. The said decision thus clarifies that the word „issue‟ cannot be understood or extended to the incident of either receipt (by the person to whom it is issued) or despatch (by the person issuing the order). It is easy to see that the matter is purely factual and, to our mind, that is precisely the legal issue or the ratio decidendi of the said decision, and for which reliance is placed on the decision in The Mavilayi Service Coop. Bank Ltd. v. CIT [2021] 431 ITR 1 (SC). In other words, it being a matter of fact, would have to be necessarily decided by issuing a finding of fact, and not be applying any legal notion, i.e., in the absence of any legal fiction or anything in the clear language of law to so suggest. This in fact is also the premise of the decision in Bhagwan Das Oil Mills vs. CCIT 2016 (28) STG 620 (MP). Copy of this order we find as placed on file by the Revenue on 07/03/2018, i.e., on an earlier occasion. Though not referred to during hearing, being by the Hon'ble jurisdictional High Court, it becomes incumbent on us to take note and accord due deference thereto, allowing though opportunity of being heard to the opposite side where so deemed fit and proper in the interest of natural justice. The facts of this case are very similar to that in Mohammed Meeran Shahul Hameed (supra); the order being received by the assessee over two years after the date of order. This then becomes supportive of the view expressed based on the principle of interpretation of statues as explained by the Hon‟ble Apex Court. The only material brought on record by the assessee in the instant case is as to the date of dispatch by the postal department, which, in our view, does not, for the reason of its variance with the date of the order, dislodge the statutory presumption (under the Evidence Act) of the date of it‟s issue. That is, cannot be regarded as conclusive of the matter. The Tribunal, as indeed any fact finding authority, has necessarily to go by the material on record, and it‟s findings are to be based on relevant material (CIT v. Radha Kishan Nandlal [1975] 99 ITR 143 (SC); Daulat Ram Rawatmull (supra); Oman Salay Mohammed Sait v. CIT [1959] 37 ITR 151 (SC); Dhirajlal Girdhari Lal v. CIT [1954] 26 ITR 736 (SC)). We 6

ITA Nos. 19-21/JAB/2017 (A.Ys. 2010-11 to 2012-13) ITA No.22/JAB/2017 (A.Y. 2012-13) Suresh Kumar Upadhyay & Sons and Ano. v. ITO have already indicated of a much higher workload attending the year-end, which may explain the time lag of a few days between the date of its passing and the date of its despatch, which is of a certified copy thereof, prepared by the staff. Under the circumstances, given the clear law in the matter, we do not think that it could be said that the date of issue of the impugned order/s is not the date on which the same is apparently signed, i.e., 31/3/2017. The assessee‟s challenge, therefore, fails.

ITA Nos. 19-21/JAB/2017 (A.Ys. 2010-11 to 2012-13) ITA No.22/JAB/2017 (A.Y. 2012-13) Suresh Kumar Upadhyay & Sons and Ano. v. ITO 6. Per Gds. 3 & 6, the assessee contests the impugned order/s on merits. The same, again, admits of no two views. The revision in the instant cases has been for the reason of lack of enquiry, i.e., as regards sale of immovable property valued at Rs. 30 lacs or more, information in respect of which came to the notice of the Revenue, while the sale value disclosed in the return filed was much lower. Or, in other cases, on account of discrepancies observed due to sale being not registered. No serious contention was in fact raised before us in this regard. That absence of proper enquiry, i.e., as warranted in the facts and circumstances of the case, would make an order erroneous inasmuch as there is no proper application of mind, is trite law. The same is among the four tests; the other three being: wrong assumption of facts; incorrect application of law; and omission to observe the principles of natural justice, laid down by the Apex Court, as in Malabar Indl. Co. Ltd. vs. CIT [2000] 243 ITR 83 (SC). The same has in fact always been understood to be the law. Case law in the matter is legion, with several by the Apex Court, both before and after Malabar Indl. Corp. Ltd. (supra), as well by Hon‟ble High Courts across the country, including by their larger benches, as in CIT vs. Jawahar Bhattacharjee [2012] 341 ITR 434 (Gau)(FB). We may though refer to some by the Hon‟ble jurisdictional High Court, explaining the law in different fact settings, as indeed is the case in all the decisions, viz. CIT vs. Deepak K. Garg [2008] 299 ITR 435 (MP); CIT v. Mahavar Traders [1996] 220 ITR 167 (MP); H.H. Maharaja Raja Pawar Dewas v. CIT [1982] 138 ITR 518 (MP). Rather, the law, as amended w.e.f. 01/6/2015, statutorily deems an order made without inquiry which should have been made as liable for revision on that account. That is treats the order per se erroneous and prejudicial to the interests of the Revenue for that reason, as explained decades ago in Gee Vee Enterprises v. CIT (Addl.) [1975] 99 ITR 375 (Del). The plea is without merit.

ITA Nos. 19-21/JAB/2017 (A.Ys. 2010-11 to 2012-13) ITA No.22/JAB/2017 (A.Y. 2012-13) Suresh Kumar Upadhyay & Sons and Ano. v. ITO 143(2); and for which Shri Ghai would take us through the same, stating that there is no mention therein of the issue of notice u/s. 143(2). The assessments being, thus, bad in law, could not be revised. We are, again, unable to persuade ourselves to agree with him. Yes, an assessment u/s. 143(3) would normally arise only on the service of notice u/s. 143(2) in the matter inasmuch as the same, as explained in Asst. CIT v. Hotel Blue Moon [2010] 321 ITR 362 (SC), assumes the nature of a jurisdictional notice. The decision of this aspect, i.e., if it, in the given facts and circumstances, represents a jurisdictional fact, would therefore need to be ascertained; there being „contrary‟ decisions as well where the Hon'ble Court have otherwise. This is in view of the words „so far as may be‟ occurring in s. 148(1). A non-issue or non-timely issue of a notice u/s. 143(2) may not therefore operate to disturb the jurisdiction already assumed by the AO to frame the assessment u/s. 147 upon verification of the assessee‟s claims (CIT v. Madhya Bharat Energy Corp. Ltd. [2011] 337 ITR 389 (Del); CIT v. Ram Narain Bansal [2011] 202 Taxman 213 (P&H); CIT v. Areva T & D India Ltd. [2010] 327 ITR 183 ([2007] 294 ITR 233) (Mad); K.J. Thomas v. CIT [2008] 301 ITR 301 (Ker)). That apart, the fact of non-issue of notice u/s. 143(2) itself is not conclusively established, i.e., as a fact, inasmuch as non-mention of issue of notice u/s. 143(2) in the order cannot by itself be regarded as conclusive of the said fact. It is only thereupon that we could proceed to examine the issue of the same resulting in an absence or otherwise of a valid assumption of jurisdiction to frame an assessment. These, it may be appreciated, are collateral proceedings. Only proved or admitted facts in the proceedings could therefore be taken into account in the instant proceedings, the scope of which cannot be extended to decide the factual or legal aspects attending the former, which has to be taken as having assumed finality. The finality of concluded proceedings cannot be lightly, if at all, disturbed (CIT v. Mtt. Ar. S. Ar. Arunachalam Chettiar [1953] 23 ITR 180 (SC); Hindustan Coca-Cola Beverage (P.) Ltd. v. CIT [2007] 293 ITR 226 (SC)), much less by raising contentious issues (also see: CIT v. D & H Sacheron Electrodes Ltd. [2008] 301 9

ITA Nos. 19-21/JAB/2017 (A.Ys. 2010-11 to 2012-13) ITA No.22/JAB/2017 (A.Y. 2012-13) Suresh Kumar Upadhyay & Sons and Ano. v. ITO ITR 20 (MP)). The Courts are in fact, even in the relevant proceedings, slow to adopt a construction which deprives the parties of valuable rights inasmuch as when the right of appeal is not preferred within the time prescribed therefor, the other side acquires a valuable right (refer, inter alia, Mela Ram & Sons v. CIT [1956] 29 ITR 607 (SC)). The plea is, for the reasons afore-stated, without basis, both on facts and in law.

(VUKKEM RAMBABU) Sr. Private Secretary, ITAT, Jabalpur. 10