DEVENDER GUPTA

IN THE HIGH COURT OF DELHI AT NEW DELHI . . . ITA 436/2012 . . . DEVENDER GUPTA ..... Appellant . Through: Mr. Salil Aggarwal with Mr. Prakash Kumar, Advocates. . versus . . . CIT ..... Respondent . Through: Mr. Sanjeev Sabharwal, Sr. Standing Counsel. . . . CORAM: . HON'BLE MR. JUSTICE S. RAVINDRA BHAT . HON'BLE MR. JUSTICE R.V.EASWAR . . . O R D E R . 06.08.2012 . . . The only ground is that the assessment made u/s. 143 (3) of the Income Tax Act, 1961 (?Act?, for short) is invalid as there was no valid service of notice under Section 143(2) of the Income Tax Act, 1961 (?Act?, for short). The counsel urged that the Tribunal fell into error in holding that there was valid service of notice, overlooking that in the present case the service was upon a person not authorised to receive it, and also erred in not admitting the additional ground sought to be raised by the assessee challenging the validity of the assessment on the ground of non-service of notice. . The assessment order, in this case, is in respect of assessment year 2005-2006 made on 12.12.2007. The assessee had approached the CIT (Appeals) urging nine grounds in the appeal against the assessment order . dated 12.12.2007. None of these grounds pertain to service of receipt of notice. Thus the ground appears to have been urged for the first time before the Tribunal. . In the impugned order the Tribunal went into the question and analysed the factual as well as legal submissions in the appeal. As regards the issue whether the assessee can raise the point of the validity of the service of the notice under Section 143(2) and while holding that the assessee cannot, the Tribunal held as follows: - . . . ?7. It is not in dispute that an appellate authority can allow a question to be raised for the first time even if such question was not raised at a lower forum but the discretion to do so has to be exercised in the interest of justice in the facts and circumstances of a given case and not mechanically. Normally, a question of fact may not be allowed to be raised for the first time as it may prejudice the other side. If such question is raised at the earliest opportunity, the other side can lead evidence which it may not be able to do if such question is raised for the first time before the appellate authority. Of course, there can be no total bar on such question being allowed, if interest of justice so requires. In the decision of Hon?ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. CIT (1998) 229 ITR 383 (SC), it has not been laid down that in every case a question of fact can be mechanically allowed to be raised for the first time. In the present case, dispute is with regard to the question as to whether notice issued under sec. 143(2) by the A.O. has been served upon the assessee within the stipulated time. This question can be decided after examining and verifying the facts of the present case. It is not a pure question of law but it is based on a finding of fact, whether the notice issued u/s 143(2) was served upon the assessee within the stipulated time. From perusal of the assessment order, we find that the assessment was completed u/s 143(3) of the Act. In the course of assessment proceedings, Shri M.L. Aggarwal, FCA and Shri Tarun Kumar Gupta, FCA had appeared before the AO and filed details/information as required by the AO from time to time. We have gone through the order-sheet maintained by the AO. In the course of assessment proceedings, Shri Tarun Kumar Gupta, FCA had appeared before the AO and he was asked to furnish certain details, which were furnished by him from time to time. Subsequently, Shri M.L. Aggarwal, FCA along with Shri Tarun Kumar Gupta, FCA had appeared before the AO and filed certain details. Thereafter, the assessment was completed u/s 143(3) on 12.12.2007. In the course of assessment proceedings neither Shri Tarun Kumar Gupta, FCA nor Shri M.L. Aggarwal, FCA had raised any objection that notice u/s 143(2) issued by the AO was not served upon the assessee within the statutory time limit. Rather, they had appeared before the AO and participated in the assessment proceedings and submitted various details. Being aggrieved with a various additions made by the AO in the assessment order, the assessee filed an appeal before the learned CIT(A), and before the learned CIT(A), no such ground regarding the non-service of notice under sec. 143(2) upon the assessee within the statutory time limit was raised. It is for the first time that the assessee had taken this ground before the Tribunal after obtaining certain information from the AO under RTI Act, 2005. . . . 8. In reply to the assessee?s application under the RTI Act, 2005, the AO furnished a copy of notice issued u/s 143(2) and also a copy of order- sheet recorded during assessment proceedings. A copy of notice issued u/s 143(2) is dated 28.08.2006, which was served upon one Shri Tarun Kumar Gupta on 30.08.2006. A report from process server dated 5.09.2006 stating that no person was available at the given address, has also been given. In the course of argument of this appeal, the learned counsel for the assessee has contended that the notice u/s 143(2) served upon Shri Tarun Kumar Gupta on 30.08.2006 is not a valid service inasmuch as Shri Tarun Kumar Gupta was not properly authorized to receive the notice for and on behalf of the assessee. The question, whether Shri Tarun Kumar Gupta was authorized by the assessee to receive notice for and on his behalf, is a question of fact to be decided. In order to decide this question an enquiry is required to be made from Shri Tarun Kumar Gupta as well as from the assessee and other surrounding circumstances of the case are to be brought on record. This fact of service of notice on Shri Tarun Kumar Gupta on 30.08.2006 was never challenged by the assessee before the AO nor by Shri Tarun Kumar Gupta, CA, when he appeared before the AO in the course of assessment proceedings for and on behalf of the assessee. Thus, all the facts to decide the question as to whether Shri Tarun Kumar Gupta was properly authorized to receive notice for and on behalf of the assessee, are not available on record. Thus, this question cannot be allowed to be raised at this stage. . . . 9. Further, in the assessment order, it has been clearly stated by the AO that notice u/s 143(2) dated 31.5.2006 was issued and same was sent by registered post vide acknowledgement receipt No.RLA5095 dated 31.05.2006, which postal receipt was pasted on the back side of the notice, fixing the case for hearing on 8.06.2006. This notice remained unattended. These facts are specifically stated by the AO in the assessment order. The assessee has not denied that the statement so made in the assessment order is incorrect. Therefore, the question as to whether the notice sent by registered post on 31.05.2006 has been served upon the assessee or not, is a question of fact to be decided after examining the postal records and other relevant materials. No objection was ever raised by the assessee before the AO or before the CIT(A) that notice sent by registered post on 31.05.2006 was not received by the assessee. Therefore, the question of verifying the fact that whether notice u/s 143(2) sent on 31.05.2006 was not received by the assessee, cannot be entertained at this stage by raising a fresh question before the Tribunal. In order to decide this issue, certain enquiries are required to be made and all the facts relating to the dispatch of notice are to be brought on record. Thus, the question raised in this case is a question of fact, which should not be allowed to be raised for the first time as it would prejudice the department. This question should have been raised by the assessee at the earliest opportunity when assessee?s AR Shri Tarun Kumar Gupta, FCA had appeared before the AO for the first time and requested for adjournment and when the matter was then adjourned to . 19.07.2007. In this view of the matter, we are, therefore, of the considered view that the question about the factum of service of notice u/s 143(2) upon the assessee within the stipulated time, cannot be allowed to be raised at this belated stage of appeal filed before the Tribunal particularly in view of the fact that this question was never raised by the assessee either before the AO nor before the learned CIT(A). The view we have taken above gets support from the subsequent legislative amendment adding sec. 292BB of the Act by the Finance Act, 2008 with effect from 1.04.2008 providing that where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was not served upon him; or not served upon him in time; or served upon him in an improper manner. However, this provision shall not apply where the assessee has raised such objection before the completion of such assessment or reassessment. We make it clear that we have decided this issue on its own merit without relying upon the provisions of sec. 292BB which is applicable from 1.04.2008 but the provision of sec. 292BB has been referred to just to support the view we have taken. We, therefore, reject ground No.1 raised by the assessee as not admitted.? . . . As regards the question whether the notice was served on a person authorised to receive it, the Tribunal while holding that the person was authorised to receive it, pertinently observed as under: - . . . ?11. In the course of hearing of this appeal, the learned counsel for the assessee has produced a copy of notice u/s 143 (2) of the Act dated 28.08.2006 fixing the date of hearing on 12.09.2006. This notice was served upon Shri Tarun Kumar Gupta on 30.08.2006. However, this notice was also sent through process server but the process server reported that no such person was available at the given address vide his report dated 05.09.2006. Here, the concerned notice is dated 28.08.2006, which has been served upon Shri Tarun Kumar Gupta on 30.08.2006. In the course of hearing of this appeal, the learned counsel for the assessee has submitted that Shri Tarun Kumar Gupta was not authorized by the assessee to accept any notice for and on behalf of the assessee and therefore, the notice served upon him on 30.08.2006 was not a valid service. In this regard, he invited our attention to the noting in the order-sheet when Shri Tarun Kumar Gupta first appeared before the AO, and from that noting it is seen that Shri Tarun Kumar Gupta had appeared before the AO on 03.07.2007 and requested for adjournment. The adjournment was granted by the AO and Shri Tarun Kumar Gupta, FCA was requested to file the power of attorney and other details. The case was then adjourned to 19.07.2007. From this order-sheet, it is proved and established that Shri Tarun Kumar Gupta was allowed to appear before the AO and to seek adjournment, and adjournment was also allowed without there being any power of attorney . being filed on that date. He was requested to file power of attorney being filed on that date. He was requested to file power of attorney and other details and the case was adjourned to 19.07.2007. It is, thus established that Shri Tarun Kumar Gupta had appeared for and on behalf of the assessee without filing any power of attorney, and his appearance on the very first day before the AO has not been objected to by the assessee. This goes to establish that Shri Tarun Kumar Gupta was an authorized representative of the assessee when he first appeared before the AO even though the power of attorney was not filed by him on that date. In the course of hearing we invited the learned counsel for the assessee to show and point out any statement from Shri Tarun Kumar Gupta that he was not authorized to accept the notice for and on behalf of the assessee, or to explain as to why the notice was received by him if it was a case that he was not authorized by the assessee to accept the notice for and on behalf of the assessee. In reply thereto, the learned counsel for the assessee has merely stated that the notice was served upon Shri Tarun Kumar Gupta on 30.08.2006 when no power of attorney in writing was filed before the AO, and thus it was not a proper and valid service of notice. In the present case, from the conduct of the assessee and from the conduct of Shri Tarun Kumar Gupta, who is a Chartered Accountant, it is fully established and proved that Shri Tarun Kumar Gupta was authorized by the assessee to appear for and on behalf of him before the AO and to do all other acts and deeds necessary for the completion of the assessment of the assessee. Shri Tarun Kumar Gupta or the assessee at no stage of proceedings had raised any objection that Shri Tarun Kumar Gupta was not authorized by the assessee to appear before the AO and accept the notice for and on his behalf. The assessee has filed an affidavit dated 25.07.2011 merely stating one line in the affidavit that no notice u/s 143 (2) of the Act pertaining to the Assessment Year 2005-06 was served on him by 31.10.2006. In this affidavit, he has nowhere stated that the notice served upon Shri Tarun Kumar Gupta on 30.08.2006 was not a valid service, and that Shri Tarun Kumar Gupta was not authorized by him to accept the notice for and on his behalf. The affidavit filed by the assessee is general one stating merely that notice u/s 143(2) was not served on the assessee by 31.10.2006. There is no specific denial made by the assessee in the affidavit about the factum of service of notice on Shri Tarun Kumar Gupta on 30.08.2006. It is also not in dispute that Shri Tarun Kumar Gupta is a regular counsel and authorized representative of the assessee and had appeared for the assessee before the AO from time to time even without filing power of attorney on the very first day of his appearance. It is not the assessee?s case that Shri Tarun Kumar Gupta was not the assessee?s regular counsel and authorized representative to represent him before the AO for the purpose of assessment to be made under the Act. Since Shri Tarun Kumar Gupta was authorized and empowered by the assessee to appear and act for and on his behalf, mere fact of filing of the power of attorney on subsequent dates, cannot by itself be a basis to hold that he was not authorized by the assessee on 30.08.2006 to accept service of notice for and on behalf of the assessee. It is an admitted position that Shri Tarun Kumar Gupta is a qualified Chartered Accountant and has been appearing before the AO. It is not understood as to why the Chartered Accountant duly authorized by the Chartered Accountant Act to represent any assessee before any assessing authority would appear before . the AO and accept the service of notice for and on behalf of the assessee unless he was so instructed by the assessee, particularly in view of the fact that neither Shri Tarun Kumar Gupta has filed any objection that he was not authorized to accept the service of the notice for and on behalf of the assessee nor the assessee in the affidavit has stated that Shri Tarun Kumar Gupta was not authorized by him to accept the notice for and on behalf of the assessee and to appear before the AO. Having regard to the conduct of the assessee as well as of Shri Tarun Kumar Gupta, it is proved and established beyond any doubt that the notice served upon Shri Tarun Kumar Gupta on 30.08.2006 was a valid service inasmuch as service on an agent empowered to accept service is sufficient valid service. We, therefore, reject the contention of the learned counsel for the assessee that notice u/s 143(2) served upon Shri Tarun Kumar Gupta on 30.08.2006 was not a valid service as it was served upon the proper person. . . . 12. Even if we look to the issue from one more angle, it would clear and establish that there was a proper service of notice issued under sec. 143(2) upon the assessee with reference to the notice dated 31.05.2006 sent by registered post vide acknowledge receipt No.RLA5095 dated 31.05.2006. In the assessment order, it has been clearly stated by the AO that notice u/s 143(2) dated 31.05.2006 was issued and the same was sent by registered post vide acknowledgement receipt No.RLA5095 dated 31.05.2006. The AO has also stated that this notice remained unattended. It is not the case of the assessee that this notice sent by registered post had returned back unserved, or otherwise it was not properly stamped and addressed. In the present case, the assessee?s address shown in the assessment order as 7/26, Ansari Road, Darya Ganj, New Delhi, has not been found to be incorrect address. The notice has been sent to the assessee?s address by registered post. This notice has not been returned unserved. As per Proviso to O.5, R-9 of the Code of Civil Procedure, where the summons were properly addressed, pre-paid and duly sent by registered post acknowledgement due, the declaration by the court that the summons had been duly served on the defendant shall be made notwithstanding the fact that the acknowledgement having been lost or mislaid or for any other reason, has not been received by the court within 30 days from the date of issue of summons. Therefore, in the present case, when notice was properly addressed, pre-paid and duly sent by registered post acknowledgement due, it shall be presumed that the notice has been served upon the assessee in the normal course of time. The AO is stationed at New Delhi and the notice has also been sent to the assessee at New Delhi. Therefore, it shall be presumed that notice sent on 31.05.2006 fixing the date on 08.06.2006 has been served upon the assessee within the normal time of 2 to 3 days from the date of dispatch. The assessee has no where stated in the affidavit that no such notice u/s 143(2) dated 31.05.2006 was sent by registered post acknowledgement due on 31.05.2006 and the same was actually not received by the assessee. The presumption that the notice has been served upon the assessee in the normal course of time when the same was sent by registered post acknowledgement due and was properly stamped and addressed to the assessee, can be rebutted by the assessee by adducing and furnishing material to the contrary or by denying the same by way of an affidavit. . In the affidavit, the assessee has made a general statement without specifically denying the fact about the dispatch of notice by registered post acknowledgement due to the assessee on 31.05.2006. In the light of these facts, it is thus clear that notice u/s 143(2) dated 31.05.2006 sent by registered post acknowledgement due properly stamped and addressed shall be presumed to have been served upon the assessee.? . . . . . In view of the above and the further fact appearing from the record that the assessee had filed return on 31.10.2005, and the notice was served through registered post upon the assessee on 31.05.2006, a fact deduced by the Tribunal having regard to the order sheet and the fact of dispatch of the notice and acknowledgement placed on the file, this Court is of the opinion that the assessee was precluded from urging this ground in appeal before the ITAT. No substantial question of law arises. The appeal is, therefore, dismissed. . . . . . . . S. RAVINDRA BHAT, J . . . . . . . R.V.EASWAR, J . AUGUST 06, 2012 . hs . . . . . $ 2 .