Brief of the case
In case of CIT Vs. Chetan Gupta, Delhi High Court held that where objection to effect, that notice for reassessment was not served on his last known address of assessee, was taken prior to completion of reassessment, proviso to Section 292BB was attracted and therefore, revenue could not take advantage of main portion of Section 292BB.
Facts of the case
- The assessee’s return of income assessed u/s 143.
- During reassessment proceedings the concerned officer has tabulated the information and some amount of credit totalling to Rs.40,49,77,905/- along with interest has been shown. The Assistant Commissioner of Income Tax (ACIT) issued a notice under Section 148 .The notice was addressed to the assessee but the address indicated therein was C/o Kiran Cinema, Sector-22, Chandigarh. It appears that the said notice was served upon one Mr. Ved Prakash, an Accountant at Kiran Cinema on that very date.
- The ACIT computed the assessment under Section 143(3)/148 and made an addition of Rs.30,50,48,745
Contention of Assesse
- The AO erred in law in framing the impugned assessment order “without assuming jurisdiction as per law and without serving the mandatory notices under Sections 143 & 148.
- The Assessee, inter alia, contended before the CIT(A) that service of notice had not been effected properly in accordance with the legal requirements specified under Section 282(1) of the Act; that Section 292 BB did not have retrospective operation and further that the Assessee had in any event raised an objection in that regard prior to the completion of re-assessment by the AO.
Held by CIT(A)
The CIT(A) rejected the above contentions by observing that the Assessee was silent on the issue as to why notices in the case of family members and other group cases were received at the address of Kiran Cinema. The CIT (A) concluded that it appeared that the Assessee and his group “for their own convenience prefer to receive notice at this place instead of so called address of care of Jagat Theatre.” The purpose of the notice was to make the Assessee aware of the proceedings and that purpose had been fulfilled. Further, Section 292BB was a procedural provision which had come into effect from 1st April, 2008 whereas the notice was issued thereafter and assessment had been made on 29th December, 2008. Accordingly, the above ground was rejected. Thereafter the CIT (A) proceeded to discuss the merits of the additions made and upheld it.
Contention of Revenue
In the order of dismissing the Assessee‟s appeal, the CIT(A) noted that a letter had been faxed by the ACIT, New Delhi to ACIT, Circle-3, Chandigarh regarding issue of notice under Section 148 of the Act. In response, the ACIT Chandigarh by a fax letter inter alia stated that notice in the name of the Assessee had been served “at the only available address of the Assessee, i.e. C/o Kiran Cinema, Sector-22, Chandigarh.” It was further stated that Mr. Ved Prakash who has been working as regular Accountant for the last five-six years received the notice on behalf of the Assessee as the Assessee himself is rarely available at the given address.” It was further mentioned that service of all notices pertaining to “the Assessee Group” was effected at the above address at Kiran Cinema and that different employees of Kiran Cinema had received the said notices. Further, in the case of Ms. Vandana Gupta, the Assessee’s daughter, service of notices had been effected at Kiran Cinema. Even in the other group case of M/s. Jagtumal Kundan Lal, C/o Jagat Theatre, service of notice had been effected at Kiran Cinema. It was accordingly asserted by the Revenue that proper compliance had been made.
Held by ITAT
The ITAT, by the impugned order, reversed the order of the CIT (A) and came to the conclusion that with the Assessee‟s contention that Ved Prakash is neither his employee nor his authorized representative remaining uncontroverted, and with that AO failing to take note of the Assessee‟s objections about non-service of notice under Sections 148 and 143 (2), it could not be said to be proper service upon the Assessee.
Held by High Court
