Case Law Details

Case Name : Avneesh Kumar Singh Vs Income-tax Officer (ITAT Agra)
Appeal Number : ITA No. 357/Ag/2007
Date of Judgement/Order : 21/05/2009
Related Assessment Year :
Courts : All ITAT (5168) ITAT Agra (84)

RELEVANT PARAGRAPH

27. I have carefully gone through the assessment order, order of CIT(A) and the orders of earned Judicial Member and Accountant Member and also gone through the material available n record of Tribunal. The copy of notice sent by the Revenue to the assessee and the copy of receipt issued by post office receiving that notice is placed at page 87 of the paper book filed by the assessee. Similar copy was also given by the Id. DR while submitting his arguments. Ld. DR has also produced the assessment record which was with him when he argued the case. The Id. AR also submitted that there was no dispute that notice u/s 148 was sent by registered/speed post. The only dispute is that it was not with acknowledgement due, as there is no evidence of service on the file of the Revenue. It has been submitted by him that as per the case of the department, as per section 27 of the General Clauses Act, if the notice is sent by registered post and it is correctly addressed and not returned back un-delivered then it will be presumed that there was valid service. It is submitted by the Id. AR that for this purpose the Revenue is relying on the power of attorney issued by the assessee in favour of Shri Naveen Kumar Agarwal, Chartered Accountant. But it is the case of the Id. AR that it is un-dated though the date of stamp purchased noted on the back of stamp is 09.04.2005, from which the department has argued that the assessee has participated in the proceedings and the notice is presumed to have been served. Thu, there is no dispute to the extent that the date of purchase of stamp for the purpose of giving power of attorney by the assessee to Shri Naveen Kumar Agarwal, C.A. is 09.04.2005. The text of power of attorney has already been reproduced in the above part of this order. This power of attorney is a specific power of attorney given for A.Y. 2000-01 whereby the assessee has authorized Shri Naveen Kumar Agarwal, CA to produce Income-tax proceedings of his scrutiny case for AY 2001-02. Thus, when this stamp paper was purchased i.e., on 09.04.05, it was purchased by the assessee to give power of attorney to Shri Naveen Kumar, CA. for his scrutiny case of A.Y. 2001-02.

28. On the basis of facts available on record it is difficult to accept the contention of the assessee that this power of attorney was not given for contesting the notice u/s. 148, but it was for the purpose of later on issued notices u/s. 142(1). The sequence of notices issued by the AO has already been narrated in para 3 of this order. After the issue of notice u/s. 148, the first notice issued by the AO u/s. 142(1) is dated 20.05.05. ff the contention of the assessee that the stamp for said power of attorney was purchased by the assessee for contesting the notices other than the notice u/s. 148, is examined in the light of these facts, then prior to 20.05.05, i.e., the date of issue of first notice u/s. 142(1), there was no need for the assessee to purchase stamp paper for giving power of attorney to Shri Naveen Kumar Agarwal, C.A. for contesting his case for the assessment year 2001-02. This fact itself makes it clear that the assessee had, in fact, received the notice u/s. 148 and for that reason the said stamp paper for power of attorney was purchased. This finding is further strengthened by the fact that notice sent bv the department to the assessee u/s. 148 has not been received back. It has already been mentioned that the notice was bearing proper address. Therefore, according to the facts on record, it has to be held that the notice u/s. 148 was received by the assessee, as on the receipt of notice, for the purpose of giving power of attorney, the assessee has purchased the stamp paper on 09.04.05. If the assessee had not received re-assessment notice, then the assessee must not have purchased the said stamp paper on 09.04.05.

29. The decision of Hon’ble Delhi High court in the case of Mayawati vs. CIT (Supra) shall be squarely applicable. In the said decision, the Hon’ble Delhi High court has referred all-the earlier decisions and this is the latest decision of Hon’ble Delhi High court. The ratio of this decision in is that according to section 27 of the General Clauses Act, a statutory presumption is to be drawn to the effect that if a letter is properly addressed, it must be deemed to have been served ft is observed by their Lordships that wherever the service of notice is essential or critical, experience shows that it is most difficult task to achieve. For arriving at a conclusion that such .statutory presumption is to be drawn regarding service of notice where a letter is properly addressed, reliance has been placed on certain decisions of Hon’ble Supreme Court and it will be relevant to reproduce the following observations of their Lordships :

“11. It is evident, therefore, that the petitioner declined to accept the notice -firstly at C-l/11, Humayun Road, New Delhi -110 003, secondly at Property No. 3, Survey No. 105, Nehru Road, Cantonment, Luc know, Uttar Pradesh and thirdly at 5, Kalidas Marg, Lucknow, Uttar Pradesh. All three addresses belonged to eth petitioner at the relevant lime.

12. Wherever service of a notice is essential or critical, experience shows that it is a most difficult task to achieve. It is for this reason that s. 27 of the General Clauses Act creates a statutory presumption to the effect that if a letter is pr9operly addressed, it must be deemed to have been served. Sec. 27 reads as follows :

“27. Meaning of service by post – Where any Central Act or regulation made after the commencement of this Act authorities or requires any document to be served by post, whether the expression ‘serve ‘ or either of the expressions give ‘ or ‘send’ or any other expression is used, then, unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting by registered post, a letter containing the document, and, unless the contrary is proved, to have been effected at the time at which the letter would he delivered in the ordinary course of post. “

13. In this regard, the observations made in Har Charan Singh vs. Shiv Rani AIR 1981 SC 1284 call for reproduction :

” 7. Sec. 27 of the General Clauses Act, 1897 deals with the topic- ‘Meaning of service by post’ and says that where any Central Act or regulation authorizes or requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by properly addressing, prepaying and posting it by registered post, a letter containing the document, and unless the contrary is proved. To have been effected at the time at which the letter would be delivered in the ordinary course of post. The section thus raises a presumption of due service or proper service if the document sought to be served is sent by properly addressing, prepaying and posting by registered post to the addressee and such presumption is raised irrespective of whether any acknowledgement due is received from the addressee or not. It is obvious that when the section raises the presumption that the service shall be deemed to have been effected it means the addressee to whom the communication is sent must be taken to have known the contents of the document sought to be served upon him without anything more. Similar presumption is raised under Illustration (J) to s. 114 of the Indian Evidence Act whereunder it is stated that the Court may presume that the common course of business has been followed in a particular case, that is to say, when a letter is sent by post by prepaying and properly addressing it the same has been received by the addressee. Undoubtedly the presumptions both under s. 2 7of the General Clauses Act as well as under s. 114 of the Evidence Act are rebuttable but in the absence of proof to the contrary the presumption of proper service or effective service on the addressee would arise. Ian the instant case, additionally, there was positive evidence of the postman to the effect that the registered envelope was actually tendered by him to the appellant on l(f Nov., 1966 but the appellant refused to accept. In other words, there was due service effected upon the appellant by refusal. In such circumstances, we are clearly of the view, that the High Court was right in coming to the conclusion that the appellant must be imputed with the knowledge of the contents of the notice which he refused to accept. It is impossible to accept the contention that when factually there was refusal to accept the notice on the part of the appellant he could not be visited with the knowledge of the contents of the registered notice because, in our view, the presumption raised under s. 27 of the General Clauses Act as well as under s. 114 of the Indian Evidence Act is one of proper or effective service which must mean service of everything that is contained in the notic4. It is impossible to countenance the suggestion that before knowledge of the contents .of the notice could be imputed, the sealed envelope must be opened and read by the addressee or when the addressee happens to be an illiterate person the contents should be read over to him by the postman or someone else. Such things do not occur when the addressee is determined to decline to accept the sealed envelope. It would, therefore, be reasonable to hold that when service is effected by refusal of a postal communication the addressee must be imputed with the knowledge of the contents thereof and, in out view, dti* follows upon the presumptions that are raised under s.27 of the General Clauses Act, 1897 ands. 114 ofthe Indian Evidence Act.”

14. In C.C. Alavi Haji vs. Palapetty Muhammed (2007) 6 SCC 555, their Lordships’ attention had been engaged on service of a notice under the Negotiable Instruments Act, 1881. It was observed thus :

“14. Sec. 27 gives rise to a presumption that service of notice has been effected when it is sent to the correct address by registered post. In view of the said presumption, when stating that a notice has been sent by registered post to the address of the drawer, it is unnecessary to further aver in the complaint that in spite of the return of the notice unserved, it is deemed to have been served or that the addressee is1 deemed to have knowledge of the notice. Unless and until the contrary is proved by the addressee, service of notice is deemed to have been effected at the time at which the letter would have been delivered in the ordinary course of business. This court has already held that when a notice is sent by registered post and is returned with a post post endorsement ‘refused’ or ‘not available in the house’ or ‘house locked’ or shop closed’ or addressee not in station’, due service has to be presumed. {Vide Jagdish Singh vs. Natthu Singh (1992) I SCC 647; Slate of MP. vs. Hiralal (1996) 7 SCC 523 and V. Raja Kumari vs. P. Subbarama Naidu (2004) 8 SCC 774]. It is, therefore, manifest that in view of the presumption available under s. 27 of the Act, it is not necessary to aver in the complaint under s. 138 of the Act that service of notice was evaded by the accused or that the accused had a role to play in the return of the notice unserved. “

15. In Jagdish Singh vs. Natthu Singh AIR 1992 SC 1604 the apex Court affirmed the conclusion of the High Court that the notice must be presumed to have been served on the addressee by virtue of the provisions of s.27 of the General Clauses Act despite the fact that they were ‘not actually served on the appellant as they had come back unserved upon the alleged refusal by the appellant to accept them “. Again, in V. Raja Kumari vs. P. Subbarama Naidu AIR 2005 SC 109 it has been held that the principle incorporated in s. 27 of the General Clauses Act can profitably be imported in a case where the sender has dispatched the notice by post with the correct address written on it. Then it can be deemed to have been served on the sendee unless he proves that it is not really served and that he was responsible for such non-service. Any other interpretation can lead to a very tenuous position as the drawer of the cheque who is liable to pay the amount would resort to the strategy of subterfuge by successfully avoiding the notice.

16. It is in view of this analysis that we have arrived at the firm conclusion that the petitioner has failed to disclose any grounds justifying the exercise of extraordinary jurisdiction vested in this Court by virtue of Art. 226 of the Constitution of India

17. Writ petition is dismissed There shall, however, be no order as to costs. “

30. The Id. AR has distinguished the same on the ground that in that case all the three addresses belong to the petitioner. But in the present case also, the address as mentioned earlier is the address of the assessee on which the assessee has filed the return of income and the assessment order also shows the same address and even power of attorney purchased by the assessee is also showing the same address. This decision being the latest decision of Hon’ble Delhi High Court will prevail over the earlier decisions and most of the earlier decisions^have been discussed in the above case. In fact, in the case of Mayawati vs. CIT (supra), it is nowhere mentioned that for drawing the presumption u/s. 27 of the General Clauses Act, there is necessity of acknowledgement due. Therefore, the argument of the Id. AR that the notice u/s. 148 should be held invalidity served only for the reason that the department could not prove that there was any acknowledgement due or the notice was sent with acknowledgement due. In my opinion such argument of Id. AR has no force in view of the aforementioned decision of Delhi High Court in the case of Mayawati vs. CIT (supra).

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Tags : ITAT Judgments (5352) power of attorney (12)

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