Notice served by ‘speed post’ is as valid as ‘registered post’ in the eyes of Law

Brief of the Case

ITAT Mumbai In the case of Color Craft v ITO held that the notice sent through the ‘speed post’ is totally valid in the eyes of law as ‘registered post’. The Hon’ble Tribunal while substantiating their decision relied on section 27 of General Clauses Act which mentions about ‘service by post’ and also on section 114(f) of the Evidence Act where the ‘presumption about the proper maintaining of records have been mentioned’.

Facts of the Case

The assessee is a partnership firm, doing the business of offset and screen printing. A, notice u/s 143(2) was issued on 23.08.2010. The service of this notice was the subject matter of dispute. The assessee gave response to notice u/s.142(1) of the Act dated 09.11.2011, requiring it to attend on 18.11.2011, raised an objection to the service of notice u/s.143(2) on 17.11.2011. The notice under reference having been sent per registered post, as evidenced by the speed post dispatch folder dated 30.08.2010, which was maintained by the office of the AO, at the assessee’s registered address, which remain unchanged and which had came back un served and, beside this there was a evidence of receipt duly received from the Postal Department.

Contention of the Revenue

The Revenue while substantiating their claim that the notice was served within time, relied on the Judgment of Hon’ble High court in the case of Milan Poddar vs. CIT [2013] 357 ITR 619 (Jharkhand), in which the evidences in the form of register of dispatch maintained by the office of the concerned Assessing Office and the acknowledgment received from the postal authorities, besides the provisions of section 27 of the General Clauses Act, 1897 and section 114 of the Indian Evidence Act, 1882 was considered. Also, on the factual basis the ld. Counsel for the Revenue contended that the service in another case, whose name appears at sr. No. 139 of the dispatch list which authenticate the same list in which the Assessee’s name is listed at sr. No. 138.

Contention of the Assessee

The Assessee contended that there is no justification for the time lag between date of issue of the notice and date of service as contended by ld. A.O. Then, there is no evidence of the issue of the notice to prove the service. Also, no evidence was produced by Ld. AO which could prove the service of the notice on the specified person. In rejoinder filed by the Assessee relied on section 21 of the Evidence Act, defining the circumstances when an admission could be proved by and on behalf of the assessee making it. The register of dispatch maintained by the Department is an admission and, therefore cannot by itself prove it. Further, the ld. Counsel of the Assessee mentioned that the decision in the case of Milan Poddar (supra) would not apply, as in that case, there was no record of service with the Revenue, in which case therefore the presumption u/s.27 of the General Clauses Act and section 114 of the Indian Evidence Act was applicable, while in the instant case the concerned recipient had denied the receipt of any notice from the IT Department.

Held by the Hon’ble Tribunal

The Hon’ble Tribunal observed that the service of notice is not denied but the only issue is that whether it was within the specified time period. Section 292BB clearly mentions the aspects of service which could be objected to before the completion of the assessment/reassessment proceedings. Section 282B of the Act clearly provides for service by post as one of the accepted modes of service of any communication under the Act. In the present case, the service has been made by ‘speed post’ and the issue is whether the same constitutes ‘registered post’. The Hon’ble Tribunal relied on the case of Milan Poddar(supra) in which it was held that registered post would take within its sweep not only ‘speed post’ but also all other mails forming part of the establish system of mails in which their receipt and movement is recorded to assure safe delivery. Further the Hon’ble Tribunal observed that section 27 of the General Clauses Act did not require the mail to be sent by registered post together with acknowledgment. The legal fiction of section 27 would, therefore, imply service within the time by which a speed post is in the ordinary course of business, delivered. Due to this the Tribunal held that the presumption of service by that date stands successfully and effectually rebutted by the Revenue itself by adducing evidence as to its service on 30.09.2010. The only ‘evidence’ produced by the assessee is that, the person whose signature and mobile number appear on the receipt, ‘denies’ having received the same. The fact of the service on another noticeee, on 01.09.2010, i.e., the date similarly specified on the receipt, similarly prepared by the Postal Department, lends credence to the claim of the dispatch list as prepared being genuine and authentic. Accordingly, the Hon’ble Tribunal held the same to be on the said date and, therefore, the service of notice u/s. 143(2) dated 23.08.2010 was within time. Further, the Hon’ble Tribunal observed that the person who received the notice does not deny either the receipt of the document; the signature on the receipt; or the phone number mentioned therein. He, after identifying himself, agrees to the likeness of his signature with that affixed on the receipt. There was no claim of forgery made and proved. Also, the Hon’ble Tribunal noted that how could he accept the documents of Color Craft (Assessee), a firm having its registered address located at the same address, and with which he denies any relation, he explains of possibly signing it, considering it as documents relating to his father’s business which Hon’ble tribunal considered as ludicrous as he was an educated person, a commerce graduate and then how could he accept a letter for the firm with whom he is having no relation. Therefore, the Hon’ble Tribunal found no merit in the claim of non service of the notice. Also, the register was properly maintained by the Revenue due to which Section 114(f) of the Indian Evidence Act is satisfied. Finally, the Tribunal held that there was a valid service under the sec. 27 of the General Clauses Act r/w s. 114(f) of the Evidence Act.