Case Law Details

Case Name : CIT Vs Harinder Sachdev (Delhi High Court)
Appeal Number : ITA No. 608/2011
Date of Judgement/Order : 01/12/2011
Related Assessment Year :
Courts : All High Courts (3632) Delhi High Court (1148)

CIT Vs. Harinder Sachdev (Delhi HC) – A Division Bench of this Court in the case of Commissioner of Income Tax Vs. Lunar Diamonds Ltd. [2006] 281 ITR 1 (Del.) has held that service of notice within the time as stipulated in the proviso to Section 143(2) is mandatory. In case service is not effected within the time stipulated in the proviso, this would render the assessment void. The aforesaid decision in the case of Lunar Diamonds Ltd. (supra) has been followed in CIT Vs. Vardhman Estates P. Ltd., [2006] 287 ITR 368 (Del.) and CIT Vs. Bhan Textiles P. Ltd., [2006] 287 ITR 370 (Del.).

Learned counsel for the appellant has submitted that Section 292 BB is applicable and the principle of estoppel enshrined therein should be applied. The said section was incorporated by the Finance Act, 2008 with effect from 1st April, 2008. In this connection, we may notice that the Assessing Officer had not applied Section 292 BB and in fact, as noticed above, the assessee had not cooperated in the assessment proceedings and best judgement assessment order under Section 144 was passed. The CIT (Appeals) had examined the aspect in great detail and has recorded that after the assessee came to know about the  proceedings, he had objected to the same on the ground that the requirements contemplated by Section 143(2) of the Act were not satisfied. Once objection is raised, then proviso to Section 292 BB comes into operation and rescue of the respondent-assessee. It may interesting to note that the Revenue in the appeal filed before the tribunal did not specifically raise any such ground or urge and rely upon Section 292 BB before the tribunal. It may be noticed that the respondent-assessee as per the findings of the CIT (Appeals) had appeared pursuant to the notice under Section 143(2) issued on 27th October, 2008, which was served on the respondent on 29th October, 2008. This notice did not refer to any prior notice under Section 143(2) dated 17th July, 2007. The notice dated 27th October, 2008 is again beyond the statutory time. The assessee had specifically raised the question of validity of service of notice within a period of 12 months as is clear from the order passed by the CIT (Appeals). The said findings are not disputed or denied on the ground of perversity. 6. In these circumstances, we do not find any merit in the present appeal and the same is dismissed without any order as to costs.

HIGH COURT OF DELHI

ITA No. 608/2011

CIT versus HARINDER SACHDEV

 O R D E R

This appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961 (Act, for short) impugns order dated 10th September, 2010 passed by the Income Tax Appellate Tribunal (for short, the tribunal) in the case of Harinder Sachdev. The assessment year in question is 2006-07.

2. Learned counsel for the appellant has not disputed and denied the fact that notice under Section 143(2) dated 17th July, 2007 was not served on the assessee at the address mentioned by her in the return of income for the assessment year 2006-07. It is noticed that Assessing Officer had tried to serve the said notice at a different address i.e. at 49, Golf Links, New Delhi, instead of 10, Netaji Subhash Marg, Darya Ganj, New Delhi, which was mentioned by the assessee in her return of income filed on 31st July, 2006. It is interesting to note that in the return of income, the respondent had stated that during the financial year relevant to the assessment year, property No.49, Golf Links, New Delhi was sold by her to a third party and the consideration received was disclosed as income from long term capital gains.

3. A Division Bench of this Court in the case of Commissioner of Income Tax Vs. Lunar Diamonds Ltd. [2006] 281 ITR 1 (Del.) has held that service of notice within the time as stipulated in the proviso to Section 143(2) is mandatory. In case service is not effected within the time stipulated in the proviso, this would render the assessment void. The aforesaid decision in the case of Lunar Diamonds Ltd. (supra) has been followed in CIT Vs. Vardhman Estates P. Ltd., [2006] 287 ITR 368 (Del.) and CIT Vs. Bhan Textiles P. Ltd., [2006] 287 ITR 370 (Del.).

4. Admittedly, in the present case the notice under Section 143(2) dated 17th July, 2007 was not served on the assessee within the statutory period stipulated in the proviso at the correct address i.e. the address, which was mentioned in the return of income. It may be noticed that in the present case the assessment order was passed under Section 144 of the Act i.e. best judgement assessment.

5. Learned counsel for the appellant has submitted that Section 292 BB is applicable and the principle of estoppel enshrined therein should be applied. The said section was incorporated by the Finance Act, 2008 with effect from 1st April, 2008. In this connection, we may notice that the Assessing Officer had not applied Section 292 BB and in fact, as noticed above, the assessee had not cooperated in the assessment proceedings and best judgment assessment order under Section 144 was passed. The CIT (Appeals) had examined the aspect in great detail and has recorded that after the assessee came to know about the proceedings, he had objected to the same on the ground that the requirements contemplated by Section 143(2) of the Act were not satisfied. Once objection is raised, then proviso to Section 292 BB comes into operation and rescue of the respondent-assessee. It may interesting to note that the Revenue in the appeal filed before the tribunal did not specifically raise any such ground or urge and rely upon Section 292 BB before the tribunal. It may be noticed that the respondent-assessee as per the findings of the CIT  (Appeals) had appeared pursuant to the notice under Section 143(2) issued on 27th October, 2008, which was served on the respondent on 29th October, 2008. This notice did not refer to any prior notice under Section 143(2) dated 17th July, 2007. The notice dated 27th October, 2008 is again beyond the statutory time. The assessee had specifically raised the question of validity of service of notice within a period of 12 months as is clear from the order passed by the CIT (Appeals). The said findings are not disputed or denied on the ground of perversity.

6. In these circumstances, we do not find any merit in the present appeal and the same is dismissed without any order as to costs.

DECEMBER 01, 2011

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