THE DCIT, 1(1), INDORE vs. M/S. HINDUSTAN CONTINENTAL PVT LTD., MUMBAI

O R D E R PER SHRI KUL BHARAT, JM The above appeal filed by the Revenue and cross-objection filed by the assessee are directed against the common order of ld. CIT(A)-I, Indore dated 31.3.2014.

Hindustan Continental 2 ITA 461 of 2014 and CO 64 of 2015

“On the facts and in circumstances of the case, ld. CIT(A) has erred in: - 1. holding the assessment order u/s 144 r.w.s. 143(3) for the assessment year 2009-10 as bad in law on the ground that the Assessing Officer did not have the proof of service of notice u/s 143(2) either directly or through post without appreciating the fact that the corroborative evidences in the shape of office copy of notice u/s 143(2) and the entry recorded in the Dispatched Register clearly establish that the notice under this Section was issued and served through postal authorities upon the assessee at the address mentioned by the assessee in the return of income itself within the time specified under the Section. 2. holding the assessment order u/s 144 r.w.s. 143(3) for the assessment year 2009-10 as bad in law on the ground that the Assessing Officer did not have the proof of service of notice u/s 143(2) either directly or through post as inferred by him on the basis of remand report submitted during the course of appellate proceedings as the corroborative evidences in the shape of the entry of dispatch of notice u/s 143(2) recorded in the Dispatch Register was not traceable in the office of the ITO Ward-1(1), Indore and which has now been traced out and available with the Assessing Officer.”

The Assessing Officer filed letter dated 15.1.2014 (remand report) submitting that: -

“The assessee had filed its return of income on 30.9.2009 in Ward- 1(1), Indore. In the return of income, it had shown its address as under: A-01, Ground Floor, Kalyan Bhawan, Hindustan Continental 3 ITA 461 of 2014 and CO 64 of 2015 Plot No.406, andheri East, Mumbai (Maharashtra – 400069) The ITO, Ward-1(1), Indore has issued the notice u/s 143(2) dated

18.8.2010 by post at the above address as mentioned in the order u/s 144 dated 29.12.2011. Subsequently, as per records, the ITO,

Ward-1(1), Indore gathered from the ROC’s website that the assessee had changed its address to the following address: -

F-71, Solaris, Sakhi Vihar Road,

Andheri East, Mumbai (Maharashtra)

In view of the above, the ITO, Ward-1(1), Indore had issued notice u/s 143(2) on 24.9.2010 and 08.9.2010 by post. As per records, the aforesaid notices were not found to be not returned unserved. From this, it follows that the notices u/s 143(2) were served upon the assessee at the addresses provided by it in the return of income and its ROC’s website. It may further be mentioned that the aforesaid facts were duly mentioned in the order passed u/s 143(3) on 29.12.2011.”

Thereafter, the ld. CIT(A) sent another letter dated 17.1.2014 to the Assessing Officer asking to furnishing the proof of service of notice us/

Hindustan Continental 4 ITA 461 of 2014 and CO 64 of 2015 143(2). Therefore, the Assessing Officer filed another letter dated 20.2.2014, which is reproduced hereunder:

“In this connection reference is invited to this office report on the service of notice u/s 143(2) of the Income Tax Act upon the assessee. As reported earlier it may be mentioned that the statutory notice u/s 143(2) for the assessment year 2009-10 was issued by the ITO Ward-1(1), Indore on 18.8.2010 at the address provided in the return of income. Subsequently, the Assessing Officer (ITO

Ward-1(1), Indore) issued the notice u/s 143(2) and sent the same to the assessee at the address gathered by him from the ROC’s website as mentioned in this office report dated 15.1.2014 mentioned above.

On enquiry from the ITO-1(1), Indore by the undersigned and by the respected Joint Commissioner of Income Tax, R-1, Indore about the service of the above notice u/s 143(2) it is gathered that presently the acknowledgement of the service of notice is not traceable. It is also verbally reported by him that the above notices were sent by the then ITO Ward-1(1), Indore by post.”

In view of the above, the ld. CIT(A) held the assessment proceeding as bad in law recording that from the above letters (remand report) of the Assessing Officer, it is clear that the Assessing Officer does not have Hindustan Continental 5 ITA 461 of 2014 and CO 64 of 2015 any proof of service u/s 143(2) of the Income Tax Act. Being aggrieved, the Revenue is in appeal before us.

Further, the ld. CIT/DR argued that it was the duty of the assessee to intimate the Assessing Officer about the change of address and therefore, the Assessing Officer was justified in issuing the notices on the addresses available on record. The Assessing Officer tried his best to serve the notice upon the assessee as is evident from the remand report furnished by the Assessing Officer through the aforesaid letters

Hindustan Continental 6 ITA 461 of 2014 and CO 64 of 2015 wherein the Assessing Officer submitted that the ITO, Ward-1(1), Indore had issued the notice u/s 143(2) dated 18.8.2010 by post at the address as mentioned in the order u/s 144 dated 29.12.2011 and subsequently, as per records, the ITO, Ward-1(1), Indore gathered from the ROC’s website that the assessee had changed its address to the new address as mentioned in the remand report. Thus, the assessee was in default not to intimate the address to the Revenue Authorities and ld. CIT(A) failed to appreciate this aspect. Accordingly, ld. CIT/DR requested that the Revenue may be given one more chance before the ld. CIT(A). On the other hand, ld. counsel for the assessee contended that the ld. CIT(A) was justified in holding the assessment proceeding as bad in law as from the remand report itself submitted by the Assessing Officer, it is clear that the Assessing Officer does not have any proof of service u/s 143(2) of the Income Tax Act.

Further, the ld. CIT/DR argued that it was the duty of the assessee to Hindustan Continental 7 ITA 461 of 2014 and CO 64 of 2015 intimate the Assessing Officer about the change of address and therefore, the Assessing Officer was justified in issuing the notices on the addresses available on record. The ld. CIT/DR also argued that the Assessing Officer tried his best to serve the notice upon the assessee at the available addresses as mentioned in the order u/s 144 dated 29.12.2011 and subsequently, on the new address gathered from the ROC’s website, thus, the Assessing Officer was not on default but the assessee was in default by not intimating the changed address to the Revenue Authorities and ld. CIT(A) failed to appreciate this aspect. We, therefore, considering the above rival submissions and material available on record, are of the view that in the interest of justice and fair play, the Revenue deserves one more opportunity. Therefore, we deem it appropriate to set aside the order of the ld. CIT(A) on this issue. The appeal is remanded back to the file of the ld. CIT(A) with direction to consider the submissions of the Revenue afresh. The ld. CIT(A) would decide the appeal in terms as indicated hereinabove after affording due opportunity of being heard to both the parties as per law. Accordingly, the appeal filed by the Revenue is allowed for statistical purposes only.

CO No.64/Ind/2015 filed by the assessee

Hindustan Continental 8 ITA 461 of 2014 and CO 64 of 2015 CIT(A) and grounds related to which have already been remanded to the file of the ld. CIT(A) and on the other hand, it is filed on the grounds that the grounds need adjudication on merits of the case. However, looking to our above finding, this Cross-objection filed by the assessee is also remanded to the file of the ld. CIT(A) who after deciding the legal issue of service of notice u/s 143(2) may decided the grounds on merits as per circumstances and under the law.

Order was pronounced in the open court on 25.3.2019.