$ 21 * IN HIGH COURT OF DELHI AT NEW DELHI Decided on: 11th February, 2015 + ITA 18/2014 MOHAN S LAKHANI ..... Appellant Through Mr. K V S Gupta, Adv. versus INCOME TAX OFFICER & ANR. ..... Respondents Through Mr. Arjun Harkauli, Adv. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE R.K.GAUBA MR. JUSTICE S. RAVINDRA BHAT (OPEN COURT) % 1. question of law aggrieved by assessee is whether Income Tax Appellate Tribunal (hereinafter referred to as ITAT ) fell into error in holding that in circumstances of case notice under Section 143(2) was served within period of limitation so as to validate assessment proceedings of assessment year (AY) 2006-07. 2. brief facts of case are that assessee concededly filed its return for AY 2006-07. It did not receive any notice during statutory limitation period prescribed by law as it prevailed then. Assessing Officer (AO) nevertheless proceeded to frame and finalize assessment year seeking to bring to tax amounts, on 12.12.2008. assessee carried that order in appeal to CIT(Appeals), which confirmed additions. CIT(Appeals) rejected assessee s contentions with regard to its not ITA No.18/2014 Page 1 having received notice within limitation period. Commissioner was guided by revenue s assertions that notice had been issued to assessee through its chartered accountant. It is not in dispute that after 31.7.2007, notice was received by assessee as result of which it participated though under protest in assessment proceedings. ITAT noticed assessee s contentions with respect to its having participated in assessment proceedings though under protest, in following terms : Aggrieved by Order of A.O., assessee took up matter in appeal and submitted that notice u/s 143(2) could have been served on assessee latest by 31.07.2007 i.e. within 12 months of end of month in which return was furnished. first notice was served in month of October, 2007, and objection to that was filed vide letter dated 05.11.2007. first notice u/s 143(2) received in Oct. 2007. said objection was again reiterated vide letter dated 12.05.2008. However, assessee has participated in assessment proceedings stated to be under protest and it was pleaded that assessment made by AO. is null and void as no notice u/s 143(2) was served within statutory time. Nevertheless it rejected appeal holding as follows : Heard both sides, considered material on record as well as case law cited by rival sides. It is not in dispute that notice u/s 143(2) dated 28.06.2007 was sent through Shri KBS Gupta, CA, Ld. A.R. of assessee, who attended assessment proceedings from time to time and filed details called for. said notice was issued within one year from date of filing of return of income. All pleas raised before tribunal were duly raised before Ld. CIT(A) also who has dealt with issue in detail after considering facts and circumstances and case law cited by assessee, (and noted by first appellate authority) has passed impugned ITA No.18/2014 Page 2 order. Since no fresh material or evidence has been produced and order of Ld. CIT(A) is based on decision of Hon'ble Jurisdictional Court against which no direct decision of any High Court has been cited, therefore, no reasonable basis have been found to interfere in order passed by Ld. CIT(A). As such, while upholding order of Ld. CIT(A), appeal of assessee is dismissed. 3. It was argued that when consistent position of assessee was that it never received notice, nor was it proved to satisfaction of Tribunal that such service could be deemed to have been served in manner known to law, findings rendered by ITAT are in error of law. learned counsel stressed upon fact that participation in assessment proceedings was under-protest and could not have been taken as adverse fact against claim for not receiving notice. 4. This Court had directed revenue to produce original record of assessment. Carbon copies of notice are on record and such notices were alleged to have been sent to assessee before 31.7.2007, yet there is no material to show that they were dispatched. Another important aspect is that notice was not sent through registered post nor affixed at assessee s address known to revenue so as to allow presumption enacted under Section 7 of General Clauses Act to operate. In these circumstances notice issued after period of limitation could not be held against assessee as done by CIT(Appeals) which rejected appeal. Consequently, following previous rulings of this Court, [i.e. Shyam Gopal Charitable Trust V. Director of Income Tax (2006) 290 ITR 99 (Del.); BHPE KINHILL Joint Venture V. Addl. DIT (2008) 304 ITR and (AT) 285 Delhi; World wide Exports P. Ltd. Vs ITO (2005) 272 ITR 162 ITA No.18/2014 Page 3 (AT) (Del.)], it is held that revenue did not discharge burden of proving due service of notice which was caused by law upon it. Consequently, findings of ITAT and as well as CIT(Appeals) cannot be sustained. question of law is answered against revenue and in favour of appellant. 5. appeal is accordingly allowed in above terms. S. RAVINDRA BHAT (JUDGE) R.K.GAUBA (JUDGE) FEBRUARY 11, 2015 vld ITA No.18/2014 Page 4 Mohan S Lakhani v. Income-tax Officer & Anr