Case Law Details

Case Name : Badaram B. Mali Vs. Income Tax Officer (ITAT Mumbai)
Appeal Number : ITA No. 6163/Mum/2008
Date of Judgement/Order : 2005- 06
Related Assessment Year :

Gist of decision:

Provisions of s. 124(3) are self-explanatory. No person shall be entitled to call in question the jurisdiction of an AO after the expiry of one month from the date on which he was served with a notice or after the completion of the assessment, whichever is earlier. Undisputedly, assessee did not raise this issue either after the expiry of one month from the date on which he was served with the disputed notice under sub-s. (2) of s. 143 or after the completion of the assessment.

Further, undisputedly, these issues were raised for the first time only during the first appellate proceedings i.e., after making of the assessment under s. 143(3). Sub-s. (3) of s. 124 refers to ‘after expiry of one month’ and this one month starts from the date on which the assessee was served with a notice. Thus, the date of service of the notice is a referral point. In the circumstance, where such referral point itself is in dispute, the determining of the period of one month becomes impossible. However, considering the fact that the assessee did not raise the jurisdictional grounds even before the completion of the assessment, the date of notice or its service is irrelevant in this instant case. However, it is relevant to mention that the provisions of s. 124 relating to the jurisdiction of the AOs revolve around the issues in respect of the area jurisdiction and not relating to the intricacies of the assessment per se. Before adjudicating on the applicability of the provisions of s. 124(3), it is legal necessity to give a finding on the validity of the notice and its service. The issues such as,

(i) satisfaction of the AO on the requirements of service by affixture,

(ii) direction of the AO to the Inspector or the notice server for such service by affixture,

(iii) need of the independent witnesses for such service by affixture etc., are the valid objections and they enjoy the strength of the various judicial pronouncements as argued by the counsel for the assessee.

As seen from the orders, these objections have not been addressed to either by the AO in the remand report or the CIT(A) in their respective orders. CIT(A) has summarily decided the issue merely relying on the provisions of s. 124(3) without giving rebuttal to the objections raised by the assessee.

Illness of assessee’s mother constituted sufficient cause within the meaning of r. 46A; CIT(A) is directed to admit the additional evidence filed by the assessee.


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  1. N.DEY says:

    The artcle has no relevance at all since there is no supervision at any level whatsoever in the income tax department to ensure that there is documentary evidence of proper service of any notice on the addressee. Hearing notices are mostly typed and sent by ordinary post or through corrupt notice servers or never despatched at all. Only a copy is sent on record and in any case assessment proceedings in 90% of cases of salary or individual cases are taken up in November-one or two notices are shown as sent (never served) and ITOs pass orders by making huge additions and ex parte-and even demand notices are not duly “served”. Credit for TDS also is never given. And in March, the bank a/cs of all these persons are attached, so that these people run to the ITOs and then make the necessary (and huge) payments to get required faforable (and legal) action taken to undo the damage done to remedy the illegal action. It is exactly what was commented by one BIDUP a few days ago in this site. And, as in the higher/highest forums, the ITOs and their bosses also first calculate the toatal tax plus interest plus penalties leviable for this illegal action and charge a minimum of 10% for undoing the damage-the amounts demanded are many times mindboggling and are shared by even the top people for keeping officers in the wet posts, as per the demand of the unions (with Left support, of course). [Refunds of excess tax paid costs separately and the charges are higher.] Ombudsmen do NOT perform, everybody is happy. CBDT knows but is not bothered-nor is it empowered to do anything as all postings and transfers in the department at all levels are auctioned. And the income tax department’s vigilance section postings, like the postings in the trust circles are most costly.
    The reasons are clear Any impartial enquiry into the history of transfers and postings at least of class I officers of the IRS in the last 20 years will establish how some officers commute between Bombay and Delhi, or Pune and Bangalore, etc. and even if they are posted out of Delhi, they are transferred back to Delhi in one year whereas there are officers rotting at faraway stations (from hometowns) for decades. All for money only.
    The summary is this:there is no sanctity of the law in the IT department and even Ombudsmen and Chief Commissioners do not care about the legal provisions about service of statutory notices.
    Instead, I would suggest that you invite aggrived tax payers to upload stories of their agonies at the hands of the IT deptt as well as ITAT and Ombudsman-a useless institution merely to provide post-retirement paid rest, with executive class travels, govt. quarters, freebies of all sorts, free holiday trips, etc., for certain persons.
    There is no Income Tax Act now, it os only a money making and black money making machinery (latter for big time business houses, politicians, corrupt officials, film persons, etc.).

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