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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM
सुनवाई क� तार�ख / : 05.03.2018 Date of Hearing घोषणा क� तार�ख / : 21.05.2018 Date of Pronouncement आदेश / O R D E R Per Shamim Yahya, A. M.: This appeal by the assessee is directed against order of the ld. Commissioner of Income Tax (Appeals) dated 23.02.2017 and pertains to assessment year 2006-07.
The grounds of appeal read as under: 1.(a) The Learned Commissioner of income-tax (Appeals) erred in upholding the reopening of the assessment by issue of notice u/s 148 for AY 2006-07 without
M/s. Vimani Estates Pvt. Ltd. appreciating the fact that notice u/s 148 not served/ not served property and notice u/s 148 was booked with postal authorities and delivered/served on the appellant beyond limitation period of 6 years, ignoring the evidence of posting and service by the Postal Authorities, and reassessment made consequent thereto was without jurisdiction, and (b) further erred in upholding the reopening when the reason supplied shows appellant as beneficiary of alleged loans & advances from M/s Empire Commercial Co. Pvt. Ltd. of Rs.600,000/- for AY 2006-07 when there were no loan & advances from M/s Empire Commercial Co. Pvt. Ltd. during the A.Y. 2006-07.
2. Without Prejudice to ground no. 1: The Learned CIT (A) erred in confirming addition of Rs.700000/- u/s 68 being un explained cash credit when loan of Rs.600000/- from M/s Basant Marketing Pvt. Ltd. was not credited during the year but balance of earlier year brought forward. And Rs.1000007- loan from M/s Hary Construction for want of confirmation.
The first issue raised in this appeal relates to the validity of notice, inasmuch as it is the contention of the assessee that notice was issued and served beyond the limitation period which ended on 31.03.2013. The details of this proposition are brought out by the assessee submissions before the learned CIT-A which read as under:
a. The notice u/s 148 is dated 30.03.2013 posted on 01.04.2013 vide EMS Speed Post Churchgate Mumbai 20 BNPL A/c No. MR/SP/DA-S 673 stamp dated 01.04.2013 and Speed Post EM 882397438IN track details online showing item booked on 01.04.2013 at 20.44 p.m. and same was delivered 03.04.2013 at 14.25 p.m. Which clearly shows that the notice was issued posted and delivered beyond limitation period of 6 years as provided u/s 149. Limitation period for AY 2006-07 expired on 31.03.2013. A copy of notice u/s 148, copy of Envelop in which Speed Post item posted and delivered and Speed Post Detaiied Track events for EM8S2397438IN are attached herewith, which dearly shows that the notice was issued and posted and delivered beyond period of 6 years from the assessment year AY 2006-07 hence not a valid notice. Assessment made in pursuance to the said notice is not a valid assessment and requires to be cancelled and demand should be cancelled. A copy of Notice u/s 148 and letter dtd.17.4.13Postal Track report attached on.. Page no. 16 to 20. b. The appellant further submit for making assessment u/s 147 Service of notice u/s 148 is prerequisite wherein the assessee is required to furnish return of M/s. Vimani Estates Pvt. Ltd. income within such period as specified. The notice contemplated u/s 148 is jurisdictional notice. In section 149(1)(b) No notice u/s 148 shall be issued foi the relevant assessment year shall be read with section 148(1) where in.,.. "Before making the assessment, reassessment or recomputation u/s 147, the Assessing Officer shall serve on the assessee a notice........,". The combined reading of the same makes it mandatory upon the assessing officer to serve the notice within time to be a valid notice failing which he does not have the jurisdiction. c. The appellant has objected to the notice u/s 148 served upon them on 03.04.2013 for AY 2006-07 when the it has to be served on or before 31.03.2013 thus the notice was issued & served beyond limitation period and as such invalid notice and when the assessing officer does not have the jurisdiction in the absence of valid notice, the assessment is bad in law and requires quashing of the same.
Against the above challenge made by the assessee, the ld. Commissioner of Income Tax (Appeals) has rejected the same by holding as under:
2.4.1 Ground No. 1 is against the re-opening of assessment u/s 147. The appellant has objected to the AO's action initiating the reassessment proceedings saying that the notice u/s 148 of the Act was posted and served beyond the time limit available as per section 153 of the IT Act. The objections were rejected by way of a detailed communication dt 27-02-2014 to the appellant, the contention of the appellant is that the assessment has been reopened after six years which is not maintainable under the statute. Ld. AO has stated that the notice u/s 148 was initiated on 30-03-2013 and has been served on 31-03-2013 by way of affixture duly following the procedure in this regard. As per the provisions of section 149 of the Act, notice u/s 148 was 31.03.2013. As it was served within the time limit of six years, the reopening u/s 147 has to be " held to be in order. The contention of the appellant is therefore not maintainable from the perspective of procedural aspect.
I have heard both the counsel and perused the records. I find that the assessee's case in this case is that the notice was served beyond the limitation period which ended on 31.03.2013, the evidence from postal authorities have been mentioned by the assessee.
They indicate that notice was issued through postal department on 01.04.2013 and the same was served on the assessee on 03.04.2013. To counter this submission of the M/s. Vimani Estates Pvt. Ltd. assessee, it is the contention of the assessing officer that notice was also served by affixture on 30.03.2013 which happened to be a Saturday.
I find that there is no cogent evidence to back this claim of the Revenue.
Moreover, the circumstances which led to the assessing officer resorting to affixture of notice have not at all been brought on record. The assessing officer has inter alia referred to the provisions of section 292 BB to reject the challenge of the assessee.
I find that the provisions of section 292BB are not at all applicable here as the proviso to the said section clearly carves out an exception where the assessee challenges the service of notice before the assessment. Moreover, in my considered opinion, service of notice beyond the limitation period is fatal error. In this case I find that from the postal details submitted, it is undisputed that notice was issued and served beyond the limitation period. The story of service by affixture is clearly meant to suppress the fatal error committed by the assessing officer by issuing notice beyond the limitation period. Hence, in the background of these facts and circumstances, I am of the considered opinion that assessment in this case is devoid of valid jurisdiction inasmuch as the notice was issued as well as served beyond the limitation period.
Accordingly, I have no hesitation in quashing the assessment order passed in this case. Since the reassessment has been quashed on the jurisdiction itself, the adjudication on merit is only of academic interest and I am not engaging into the same.
M/s. Vimani Estates Pvt. Ltd. 9. In the result, the assessee’s appeal stands allowed. प�रणामतः �नधा�रती क� अपील �वीकृत क� जाती है ।
Order pronounced in the open court on 21.05.2018 Sd/- (Shamim Yahya) लेखा सद�य / Accountant Member मुंबई Mumbai; �दनांक Dated : 21.05.2018 व.�न.स./Roshani, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. आयकर आयु�त(अपील) / The CIT(A) 3. आयकर आयु�त / CIT - concerned 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard File 6. आदेशानुसार/ BY ORDER,