Director of Income Tax Vs Society For Worldwide Interbank Financial (Delhi High Court)
The Delhi High Court dismissed the Revenue’s appeal against the Income Tax Appellate Tribunal’s order dated 27.02.2009 concerning Assessment Year 1997-98. The only issue before the Court was the validity of the assessment proceedings. The assessee filed its return of income on 27.03.2000, while the assessment was completed on 31.03.2000. The Commissioner of Income Tax (Appeals) and the Tribunal had concurrently found that the notice under Section 143(2) of the Income Tax Act, 1961 was issued on 23.03.2000 and served on the assessee on 27.03.2000. Since the notice preceded the filing of the return, the lower appellate authorities held that it was invalid and consequently set aside the assessment.
Before the High Court, the Revenue contended that the date of 23.03.2000 mentioned in the notice was a mistake and that the notice was actually issued on 27.03.2000, the date on which the assessee filed its return. Reliance was also placed on Section 292B of the Income Tax Act. The Court examined the assessment order, the orders of the Commissioner (Appeals) and Tribunal, and the submissions of the Revenue.
The High Court noted that the Tribunal and Commissioner (Appeals) had recorded concurrent and clear findings that the notice under Section 143(2) was issued on 23.03.2000. The Revenue’s contention that the notice was actually issued on 27.03.2000 had not been raised before the lower appellate authorities and, therefore, could not be raised before the High Court for the first time.
The Court further held that even if the Revenue’s contention were accepted, it would not improve its case. According to the Revenue’s own statement in the memorandum of appeal, the notice was served by hand on the assessee’s authorised representative when he came to file the return on 27.03.2000, although the notice mistakenly mentioned 23.03.2000 as its date.
The Court examined Section 143(2), observing that the provision contemplated service of notice after the Assessing Officer had examined the return filed by the assessee. On the Revenue’s own version, the notice was already prepared and served when the authorised representative came to file the return. The Court held that this amounted to a gross violation of the scheme of Section 143(2).
The Court also declined to accept the submission that the notice was issued on 27.03.2000, particularly since the Tribunal had already recorded a finding that it was issued on 23.03.2000. Accordingly, the Court found no reason to interfere with the Tribunal’s order holding the assessment invalid.
The Court held that no substantial question of law arose for consideration and dismissed the Revenue’s appeal.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
CM No. 3927/2010
The delay in re-filing the appeal is condoned.
This application stands disposed of.
ITA 441/2010
1. The Revenue is in appeal against the Income Tax Appellate Tribunal’s order dated 27.02.2009 in ITA No.2512/DEL/2001 pertaining to the Assessment Year 1997-98.
2. The only issue sought to be raised before us is with regard to the validity of the assessment proceedings. The admitted position is that the assessee filed the return of income on 27.03.2000 and the assessment was completed on 31.03.2000. The learned counsel for the appellant/revenue contended before us that both the Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal have returned findings of fact that the notice under Section 143(2) of the Income Tax Act, 1961 was issued on 23.03.2000, whereas the return of income was filed on 27.03.2000 and was served on the same date on the assessee.
3. The submission is that there was a mistake in the notice which recorded the date of issuance as 23.03.2000 whereas it was actually issued on 27.03.2000. He also placed reliance on Section 292 B of the said act.
4. We have examined the assessment order, the order passed by the Commissioner of Income Tax (Appeals) as well as impugned order passed by the Tribunal and have heard the submissions made by the learned counsel for the appellant / revenue.
5. We are of the view that the impugned order does not call for any interference. Both the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal have returned a concurrent and clear finding of fact that the notice under Section 143 (2) was issued on 23.03.2000 and since the return was filed on 27.03.2000, the notice was not a valid one and, therefore, the assessment completed on the basis of the notice was also invalid and was consequently set aside. It is for the first time before us that the learned counsel for the appellant contends that the notice, in fact, was the notice itself. No such contention was raised before the Lower Appellate Authorities. Consequently, the said contention cannot be raised before us for the first time.
6. However, even if we accept what the learned counsel for the appellant / revenue submits, it does not make the case any better for him. In para 3.4 of the memorandum of appeal, the appellant has stated that the return was filed by the assessee on 27.03.2000 and the notice under Section 143(2) was served upon the Authorized Representative of the assessee by hand when the Authorized Representative of the assessee came and filed return. However, the date of the notice was mistakenly mentioned as 23.03.2000.
7. Assuming the aforesaid to be true, the notice was served on the Authorized Representative simultaneously on his filing the return which clearly indicates that the notice was ready even prior to the filing of the return. Section 143(2) of the said Act clearly indicates that where a return has been furnished under Section 139, or in response to a notice under Section 142(1), the Assessing Officer shall-
(i) Where he has reason to believe that any claim of loss, exemption, deduction, allowance or relief made in the return is inadmissible, serve on the assessee a notice specifying particulars of such claim of loss, exemption, deduction, allowance or relief and require him, on a date to be specified therein to produce, or cause to be produced, any evidence or particulars specified therein or on which the assessee may rely, in support of such claim.
(ii) Not with standing the aforesaid, if the to ensure that the assessee has not under-stated the income or has not computed excessive loss or has not under-paid the tax in any manner, he may serve the assessee a notice requiring him, on a date to be specified therein, either to attend his office or to produce, or cause to be produced, any evidence on which the assessee may rely in support return.”
8. The provisions of Section 143(2) make it clear that the notice can only be served after the Assessing Officer has examined the return filed by the assessee. Whereas what para 3.4 indicates is that when the assessee came to file the return, the notice under Section 143(2) was served upon the Authorized Representative by hand. Thus, even if we take the statement of the Assessing Officer at face value, it would amount to gross violation of the scheme of Section 143 (2) of the said Act.
9. In any event, we do not agree with the contentions raised by the learned counsel for the appellant that the notice was issued on 27.03.2000 in as much as the Tribunal has already returned a finding that the notice was issued on 23.03.2000. That being the case, no interference with the impugned order is called for.
No substantial question of law arises for our consideration.
The appeal is dismissed.
