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.