Case Law Details
Priyal Kauhshal Shah Vs ITO (ITAT Ahmedabad)
ITAT Ahmedabad held that as per provisions of section 10 General Clause Act, if last working day happens to be a holiday then the authorities concerned have been given power to make the necessary compliance on the next working day.
Facts- The assessee is an individual and engaged in the business of trading in shares, securities and derivatives transactions. As per the assessee, the notice u/s. 143(2) of the Act was digitally signed by the AO dated 30 September 2018 but the same was put into the process of service 1 October 2018. According to the assessee, the AO was duty-bound to serve the notice u/s. 143(2) of the Act before the stipulated time i.e. 30 September 2018 but the AO has failed to do so. Accordingly, the assessment framed u/s. 143(3) of the Act is invalid and not maintainable.
CIT (A) rejected the contention of the assessee. Being aggrieved, the present appeal is filed.
Conclusion- Undeniably, it was holiday dated 30 September 2018 being Sunday which was also the last working day for the service of notice under the provisions of section 143(2) of the Act for the year under consideration. In such situation the provision of section 10 General Clause Act provides if last working day happens to be a holiday then the authorities concerned have been given power to make the necessary compliance on the next working day. Thus apparently, it appears that the AO has made sufficient compliance by issuing the notice on the next working day being 1 October 2018 despite the fact that the office of the income tax was operational dated 30 September 2018 and the notice was digitally sign by the AO on 30 September 2018. To our understanding the Sunday being a holiday cannot be assumed or working day like any other day of the work.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The captioned appeal has been filed at the instance of the assessee against the order of the Learned Commissioner of Income Tax (Appeals), Ahmedabad NFAC, Delhi, dated 28/07/2022 arising in the matter of assessment order passed under s. 143(3) of the Income Tax Act, 1961 (here-in-after referred to as “the Act”) relevant to the Assessment Year 2017-18.
2. The assessee has raised following grounds of appeal:
1. The Ld.AO grossly erred in law and facts in passing assessment order u/s.143(3) without issuing the notice u/s.143(2) within the statutory time limit as contemplated under the law.
2. The appellant craves liberty to add/alter any ground of appeal, if required.
3. The assessee in the ground of appeal has challenged the validity of the assessment framed under section 143(3) of the Act on the reasoning that the notice under section 143(2) of the Act being jurisdictional requirement was served beyond the stipulated time provided therein.
4. The facts in brief are that the assessee in the present case is an individual and engaged in the business of trading in shares, securities and derivatives transactions. As per the assessee, the notice under section 143(2) of the Act was digitally signed by the AO dated 30 September 2018 but the same was put into the process of service 1 October 2018. According to the assessee, the AO was duty-bound to serve the notice under section 143(2) of the Act before the stipulated time i.e. 30 September 2018 but the AO has failed to do so. Accordingly, the assessment framed under section 143(3) of the Act is invalid and not maintainable.
5. However, the learned CIT (A) rejected the contention of the assessee by observing as under:
12.1 Apropos the above, the appellant has submitted that the appellant filed the return o f income for AY 2017-18 under consideration on 28.01.2017 and therefore, for the purposes of making the assessment, notice u/s 143(2) was required to be served upon the appellant on or before 30.09.2018, but according to the appellant, the said notice was served only on the following day, i.e. on 01.10.2018. In support thereof, the appellant has furnished a screenshot of the Income-tax e-filing portal which mentions 01.10.2018 and not 30.09.2018.
12.2 The issue, being purely legal, was taken up for preliminary examination at the appellate stage without even asking for a report from the AO in this behalf. From a cursory look at the Calendar tor the month of September, 2018 & October, 2018, it is observed that the date 30.09,2018 fell on “SUNDAY” which is a closed day and the following day being 1st October, 2018 was Monday ( a working day ) on which the notice u/s 143(2) was duly served upon the appellant which has not been denied by the appellant. It is the settled proposition of law that when a due date falls on a date which happens to be a holiday, the due compliance made on the immediately following working day will be sufficient compliance with the due date. This may be discerned from the provisions o f section 10 of the General- Clauses Act, which reads as under:—
“10. Computation of time.—(1) Where, by any Central Act or regulation made after the commencement of this Act, any act or proceedings is jj directed or allowed to be done or taken in any court or office on a-I certain day or within a prescribed period, then, if the court or office is \ closed on that day or the last day of the prescribed period, the act or proceedings shall be considered as done or taken due to time if it is done or taken on the next day afterwards on which the court or office is open:
Provided that nothing in this section shall apply to any act or proceeding to which the Indian Limitation Act, 1877 (15 of 1877), applies.
(2) This section applies also to all Central Acts and regulations made on or after the fourteenth day of January, 1887.”
12.3 The underlying object of the above principle is to enable a person to do, what he could not have done on a holiday, on the next working day. Where, therefore, a period or due date is prescribed for the performance of an act, and that period or due date expires on a holiday, then the act should be considered to have been done within that period if it is done on the next day on which the court or office is open. The reason is that law does not compel the performance of an impossibility.
12.4 In view of the aforesaid legaf principles, I find no substance in the additional ground of appeal preferred by the appellant aid hence, the same is dismissed.
6. Being aggrieved by the order of the learned CIT (A), the assessee is in appeal before us.
7. The learned AR before us submitted that the income tax office was working as on 30 September 2018 despite the fact that it was the holiday being Sunday. This fact can be evident from the fact that notice under section 143(2) of the Act was digitally signed by the AO on 30 September 2018 and therefore the notice under section 143(2) should have been issued through the email on the same date. But the notice has been served on the next day and therefore the jurisdiction acquired by the AO for carrying out the assessment under section 143(3) of the Act is invalid and consequently the assessment framed on such notice cannot be held as maintainable. Thus the same should be quashed.
8. On the other hand the learned DR submitted that the last working day 30 September 2018 was the holiday and therefore there was no possibility of issuing/serving the notice on holiday to the assessee. Accordingly the learned DR, the relevant clause of the General Clause Act provides that where, by any [Central Act] or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open Provided that nothing in this section shall apply to any act or proceeding to which the Indian Limitation Act, 1877 (15 of 1877) , applies. Thus, as per the learned DR, the notice served upon the assessee i.e. 1 October 2018 being the next working day cannot be held as barred by time. The learner DR vehemently supported the order of the authorities below.
9. We have heard the rival contentions of both the parties and perused the materials available on record. Undeniably, it was holiday dated 30 September 2018 being Sunday which was also the last working day for the service of notice under the provisions of section 143(2) of the Act for the year under consideration. In such situation the provision of section 10 General Clause Act provides as under:
Where, by any [Central Act] or Regulation made after the commencement of this Act, any act or proceeding is directed or allowed to be done or taken in any Court or office on a certain day or within a prescribed period, then, if the Court or office is closed on that day or the last day of the prescribed period, the act or proceeding shall be considered as done or taken in due time if it is done or taken on the next day afterwards on which the Court or office is open: Provided that nothing in this section shall apply to any act or proceeding to which the Indian Limitation Act, 1877 (15 of 1877) , applies.
9.1 From the above provisions, there remains no ambiguity to the fact that if last working day happens to be a holiday then the authorities concerned have been given power to make the necessary compliance on the next working day. Thus apparently, it appears that the AO has made sufficient compliance by issuing the notice on the next working day being 1 October 2018 despite the fact that the office of the income tax was operational dated 30 September 2018 and the notice was digitally sign by the AO on 30 September 2018. To our understanding the Sunday being a holiday cannot be assumed or working day like any other day of the work. In-fact, the officers were working even on the Sunday for the reason that there was cut-off date for framing the assessment as well as for filing the income tax return. In other words, there was more workload on the Government Officers and therefore they had to work even on the holiday. But that does not mean that such holiday shall be presumed as a working day like any other normal day. As such, the object of working on the holiday was to reduce the workload. Thus, the benefit granted under the General Clause Act as discussed above cannot be deprived to the Revenue. Accordingly, we hold that the notice, though digitally signed on 30 September and the same was put to service dated 1 October 2018, has been served after the sufficient compliance under the law and therefore in the given facts and circumstances, the assessment framed cannot be held as not maintainable. Hence, the ground of appeal of the the assessee is hereby dismissed.
10. In the result appeal filed by the assessee is hereby dismissed.
Order pronounced in the Court on 15/03/2023 at Ahmedabad.
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