DELHI D BENCH DEPUTY CALS LTD. v. COMMISSIONER OF INCOME TAX August 25, 2006 JUDGMENT D.R.Singh, Judicial Member. - This is appeal filed by assessee against order of CIT(A) passed in AppealNo. 121/02-03, dated 11-9- 2003 on following effective ground:' "Thathaving regard to facts and circumstances of case, ld. CIT(A) has erredin law and on facts in confirming action of Assessing Officer inframing impugned assessment and that too without serving mandatorynotice under section 143(2) within statutorily allowable time." 2.Relevant material facts for disposal of this ground of appeal are that inthe instant case return of income declaring net loss of Rs. 10,09,360 was filed by assesseeon 31-10-2001. Subsequently assessee filed arevised return declaring loss of Rs. 2,62,396 on14-11-2002 and Assessing Officer completed assessment at net loss ofRs. 2,62,396 i.e., loss shownby assessee in its revised return of income. 3.Aggrieved with order of Assessing Officer assesseefiled appeal before CIT(A) and contended before him that in instantcase Assessing Officer has framed assessment under section 143(3)(i) without serving mandatory notice undersection 143(2)(i) without statutorilyallowable period because notice under section 143(2)(i)was not issued by Assessing Officer within one year from end of themonth in which return was filed on 31-10-2001 and instead notice undersection 143(2)(i) was to be issued andserviced upon assessee upto31-10-2002 but same was dispatched only on 30-10-2002 at 11.39 P.M. asevidenced from post office receipt on envelope and same wasreceived by assessee only on 1-11-2002 i.e.,after due date prescribed under Act i.e., 31-10-2002. In supportof his contention assessee also filed anaffidavit before CIT(A) and contended that in thismanner assessment framed under section 143(3) by Assessing Officer wasbad in law. He also placed reliance on certain citations which have beenreferred to in order of CIT(A). Afterconsidering submissions of assessee and obtainingthe remand report from ITO, CIT(A) held thatsince notice under section 143(2)(i) ofthe Income-tax Act, 1961 was dispatched by speed post on 30-10- 2002 i.e.,before expiry of one year from end of month in which returnof loss was filed, assessment framed by Assessing Officer was valid andaccordingly dismissed appeal of assessee onthis issue. 4.Before us, ld. AR for assessee submitted thatin instant case as per provisions of section 143(2)(i)the revenue was required to do service of notice issued under section143(2) upon assessee within statutory period ofone year from date of filing of return and since revenue hasfailed in establishing same upon assessee, onthe contrary, assessee has filed affidavitthat this notice was dispatched on 30-10-2002 by revenue and same wasreceived by assessee on 1-11-2002 i.e.,beyond statutory period of limitations of one year and hence assessmentframed by Assessing Officer under section 143(2) was bad in law and same isrequired to be quashed. 5.On other hand ld. DR for revenue except placing reliance given inthe order of CIT(A) was not able to show from record any evidence on thebasis of which Department could prove service of notice upon assessee within statutory period of limitation of oneyear i.e., on 30-10-2002. 6.We have considered rival submissions and find that in instant case theuncontroverted fact is that for issuing statutory notice under section 143(2)within statutory limitation period as provided in proviso to thesection 143(2) of Income-tax Act, Assessing Officer was required to servethe notice upon assessee on or before 31-10-2002.The notice was sent by Assessing Officer by speed post on 30-10-2002. Theonly proof of service of this notice upon assesseeis speed post receipt. Assessing Officer has failed to bring on recordthe date of service of notice upon assesseeon or before 31-10-2002. From orders of tax authorities below they seem tohave come to conclusion that since assessee hasfiled affidavit stating therein that notice was sent to assessee by speed post on 30-10-2002 and thereafter assessee revised his return to rectify original returnby reducing its claim of loss there was sufficient compliance by theAssessing Officer in regard to issuance of notice under section 143(2) within astatutory period of limitation which was to expire on 31-10-2002. 7.However, tax authorities below in their orders have not recorded specificfinding that requisite notice was served upon assesseeon or before 31-10-2002 and in what manner they claim to have served sameupon assessee within statutory period oflimitation. On other hand, we are of opinion that except assertionmade in affidavit regarding having received notice on 1-11-2002, on thebasis of his own endorsement made on notice received by him, indicating thereceipt of notice on 1-11-2002 no other better evidence could have beenfiled by assessee before Assessing Officer toprove service of notice upon him on 1-11-2002. Whereas, on thecontrary, best evidence for department for proving date of serviceof notice upon assessee was evidence ofreceipt of notice by department from postal authorities. In this case theAssessing Officer has failed to place on record any evidence for proving thedate of service of notice upon assessee sent on30-10-2002. 8.Hence in our opinion that mere issuance of notice cannot be deemed to have beenserved upon assessee on or before 31-10-2002 incase same is sent to post office on 30-10-2002 in night at 11.39 PMto be served locally by speed post. This means that exact date of serviceof notice within particular time cannot be presumed, more so, when in theinstant case even presumption of date of notice stands rebutted by assessee in his affidavit categorically stating that thenotice was received on 1-11-2002. 9.We may also mention here that as per provisions of section 143(2) statutorynotice under section 143(2) of Act is not only required to be issued within12 months from end of month in which return has been filed but itis mandatory that requisite notice is required to be served on assessee within 12 months from end of month inwhich return has been filed. It means that onus to prove service ofthe notice on assessee within statutoryperiod is upon Assessing Officer and not upon assessee.In instant case Assessing Officer has failed to discharge onus ofproving service of notice upon assesseeunder section 143(2) of Act within statutory period of limitation i.e.,31-10-2002, whereas on basis of uncontroverted affidavits filed on recordby assessee it is held that notice undersection 143(2) of Income-tax Act, 1961 is served upon assessee on 1-11-2002 and so same was barred by periodof limitation. In instant case Assessing Officer even while submittinghis remand report called by CIT(A) had not madeany enquiry with postal authorities for verifying date of delivery ofthe envelope containing notice of service issued upon assessee under section 143(2) of Income-tax Act, 1961. 10.Now coming to second point we find that in case revenue has failed toestablish service of notice upon assesseeunder section 143(2) within statutory period of limitation provided underthe proviso to section 143(2) then assessment proceedings completed by theAssessing Officer in violation of statutory provision of section 143(2) areliable to be cancelled/quashed. In our above view we find support from thedecision of Special Bench of Tribunal in case of Raj Kumar Chawla v. ITO [2005] 94 ITD 1 (Delhi) (SB)wherein Tribunal held as under: "Thoughthe appellants were not able to state exact date of service of notice butthe admitted fact was that notice under section 143(2) in respect of theappellants had been served after expiry of period of 12 months as providedunder proviso to section 143(2). Since assessing authority had failed toserve notices within statutory period provided under section 143(2),the Assessing Officer had lost its jurisdiction to make assessment undersection 143(3), read with section 147." 11.Similarly, in case of Whirlpool India Holdings Ltd. v. Dy. CIT[2005] 26 ITR 214 (ITAT-Delhi) (NOC) Tribunal held - "that afteramendment of section 143(2) notice was required to be served within 12months from end of month of filing of return and not onlyissued. Tribunal quashed assessment as well as demand raised alongwith levy of interest." 12.In case of World Wide Exports (P.) Ltd. v. ITO [2004](Delhi), Tribunal also held that:' "Asthe department had not been able to demonstrate that notice under section143(2) was served upon assessee within 12 monthsfrom date of furnishing of return, assessment made on basis ofsuch invalid notice could not be treated to be valid assessment and hencesuch assessment order was to be treated as null and void ab initio and was liable to be quashed andannulled." 13.Similarly in case of CIT v. Lunar Diamonds Ltd. [2005] DelhiHigh Court, their Lordships have upheld order of Tribunal, annullingthe assessment framed pursuant to notice issued under section 143(2) andserved upon assessee beyond period oflimitation of 12 months. 14.Hence, respectfully following decisions (supra) it is held that asthe notice under section 143(2) has not been served upon assessee within statutory period of limitation as providedunder section 143(2) of Act so instant assessment framed by theAssessing Officer is invalid and same is hereby cancelled/quashed. 15.In view of our findings given hereinabove, impugned order of CIT(A) is set aside and ground of appeal taken by assessee is allowed. 16.In result appeal filed by assessee isallowed. 17.Order pronounced in open Court today i.e., 25-8-2006. *** Cals Ltd. v. Deputy Commissioner of Income-tax