AFR Court No. - 3 Case :- INCOME TAX APPEAL No. - 11 of 2006 Appellant :- Smt. Gayatri Devi Respondent :- Commissioner Of Income Tax Agra And Another Counsel for Appellant :- Shah O.P. Agrawal, Rohit Agrawal Counsel for Respondent :- Manish Goyal With Case :- INCOME TAX APPEAL No. - 432 of 2012 Appellant :- Smt. Gayatri Devi Respondent :- Commissioner Of Income Tax Agra And Another Counsel for Appellant :- Sah O.P. Agarwal, Rohit Agarwal Counsel for Respondent :- SC, Manish Goyal And Case :- INCOME TAX APPEAL No. - 433 of 2012 Appellant :- Smt. Gayatri Devi Respondent :- Commissioner Of Income Tax Agra And Another Counsel for Appellant :- Sah O.P. Agarwal, Rohit Agrawal Counsel for Respondent :- Manish Goel Hon'ble Pankaj Mithal,J. Hon'ble Umesh Chandra Tripathi,J. Heard Sri S.O.P. Agarwal, learned counsel for assessee and learned counsel for Department. All these three appeals relates to same assessee in respect of assessment years 1992-93, 1993-94 and 1994-95 and since matters have been dealt with by common order by Income Tax Appellate Tribunal giving rise to common questions of law, we are taking up all three of them together. order of Income Tax Appellate Tribunal dated 26.08.2005 has been impugned in all three appeals. 2 Department came to know that assessee had constructed residential house, 7 Bank House, near Civil Court, Agra, which was completed in financial year 1993-94. Assessing Officer referred matter to Departmental Valuation Cell. year-wise break up of investment declared by assessee in construction of said house and amount estimated by valuer was as under :- Financial year Declared by assessee Estimated by AVO 1992-93 Rs.1,81,231/- Rs.1,72,800/- 1993-94 Rs.1,63,200/- Rs.2,38,200/- 1994-95 Rs.1,87,000/- Rs.2,72,900/- Assessing Officer added entire estimated investment in income of assessee under Section 69 of Income Tax Act, 1961 (hereinafter referred to as Act ). assessee preferred appeals against aforesaid additions. In appeals, one of grounds taken was that notices were issued after expiry of limitation period and were not validly served. Appellate Authority repelled above submissions but reduced additions to difference between estimated value and cost of construction declared by assessee, which is as under :- F. year Cost declared by assessee Cost estimated by AVO Difference 1992-93 Rs.1,18,231/- Rs.1,53,282/- Rs.35,052/- 1993-94 Rs.1,63,200/- Rs.2,11,585/- Rs.48,385/- 1994-95 Rs.1,87,000/- Rs.2,42,440/- Rs.55,440/- Total :- Rs.4,68,431/- Rs.6,07,308/- Rs.1,38,877/- Still not satisfied, assessee preferred appeals before Tribunal. Tribunal by impugned order dated 26 th August, 2005 affirmed additions as made by CIT (Appeals) to 3 tune of Rs.1,38,877/- being difference between estimated value and cost of construction declared by assessee for all three years but reduced it to Rs.1,10,000/- giving further relief of Rs.28,877/- as addition appeared to be slightly on higher side. above order of Tribunal is impugned in these appeals. On submissions of parties, only following two substantial questions of law arise for consideration:- (i) Whether notice issued under Section 148 of Act was validly served upon assessee ? (ii) Whether notice issued under Section 148 of Act on 26.03.2001 was within time in respect of above assessment year ? There is no dispute to fact that notice under Section 148 of Act in respect of all three years was issued on 26.03.2001. notice was sent to assessee by speed post and ITO took care to serve notice personally as well. notice sent for personal service was undoubtedly served on 29.03.2001 upon Ms. Priyanka, assessee's minor daughter. Section 148 of Act, which provides for issuance of notice to assessee where income has escaped assessment categorically lays down that before making any assessment, re-assessment or computation under Section 147 of Act, Assessing Officer shall serve on assessee, notice requiring him to furnish return within specified period. simple reading of above provision clearly reflects that notice contemplated therein is required to be served upon assessee and not upon any other person much less minor. Section 282 of Act specifically lays down manner of service of notices under Act. It provides that service of notice may be made by delivering or transmitting of copy thereof 4 to person named in notice either by post or courier service; or in manner provided under Code of Civil Procedure, 1908; or in form of any electronic record as provided in Chapter IV of Information and Technology Act, 2000; or by any other means of transmission of documents as provided by Rules made by Board in that behalf. reading of above provision also indicates that service of notice has to be effected upon person named in notice, i.e. upon assessee and not upon any other person. In view of above, service of notice, if any, upon minor daughter of assessee may not be valid service. Notwithstanding above service of notice was also resorted to by speed post. CIT (Appeals) had called for report from Assessing Officer regarding service of notice issued under Section 148 of Act. Assessing Officer vide his letter dated 14.08.2002 has replied and has stated in this connection, it is submitted that on perusal of records, it is noted that notices under Section 148 of Act for assessment years 1992-93, 1993-94 and 1994-95 dated 26.03.2001 issued in name of assessee Smt. Gayatri Devi wife of Sri Hari Shankar Mishra, Trans Yamuna Colony, Agra, were sent through speed post on 26.03.2001 vide postal receipt EE000092069 from Post Office Sanjay Place, Agra,.............. CIT (Appeals) after examination of entire material and on consideration of above report returned finding that Assessing Officer had sent notice through speed post, which was not returned by postal authorities, which means same was served upon assessee. aforesaid service of notice upon assessee by post is in accordance with procedure provided for service under Code of Civil Procedure, 1908. Section 27 of General Clauses Act, 1897 raises 5 presumption that notice sent by registered post to addressee at his correct address, if not returned undelivered, would be presumed to be served. In view of above presumption, which had not been rebutted by assessee, authorities below have rightly treated service of notice upon assessee to be sufficient. contention of Sri S.O.P. Agarwal that there could be no valid service of notice upon minor cuts no ice in light of deemed service of notice by post. Accordingly, question no.1 is answered against assessee and it is held that notice issued under Section 148 of Act was validly deemed to be served upon assessee. next submission of Sri S.O.P. Agarwal, learned counsel for appellant is that notice issued under Section 148 of Act was barred by time. Section 149 of Act prescribes time limit for issuing notice under Section 148 of Act. aforesaid provision was amended with effect from 01.06.2001 vide Finance Act of 2001 and it provides period of four years and extended period of six years from end of relevant assessment year for issuing notice under Section 148 of Act provided income chargeable to tax escaping assessment amounts to or is likely to amount one lakh rupees or more for that year. In event, income chargeable to tax escaping assessment is of higher amount, period of limitation is four years and is extendable to 16 years. However, we are not concerned with above limitation, which has been amended and provided by Finance Act, 2001, inasmuch as in case at hand, notice was issued on 26.03.2001 prior to its enforcement and at that time, unamended provisions of Section 149 of Act were in force. unamended provisions of Section 149 of Act, which were in existence prior to 01.06.2001 reads as under :- 6 Section 149. (1) No notice under Section 148 shall be issued for relevant assessment year :- (a) in case where assessment under sub- section (3) of section 143 or section 147 has been made for such assessment year,-- (i) if four years have elapsed from end of relevant assessment year, unless case falls under sub-clause (ii) or sub-clause (iii) ; (ii) if four years, but not more than seven years, have elapsed from end of relevant assessment year unless income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year ; (iii) if seven years, but not more than ten years, have elapsed from end of relevant assessment year, unless income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees one lakh or more for that year ; (b) in any other case.-- (i) if four years have elapsed from end of relevant assessment year, unless case falls under sub-clause (ii) or sub-clause (iii) ; (ii) if four years, but not more than seven years, have elapsed from end of relevant assessment year, unless income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees twenty-five thousand or more for that year ; (iii) if seven years, but not more than ten years, have elapsed from end of relevant assessment year, unless income chargeable to tax 7 which has escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year. Since, there was no assessment under sub-section 3 of Section 143 or Section 147, Clause (a) of unamended Section 149 would not be attracted and therefore, limitation in present case would be governed by sub-clause (b) of unamended Section 149 of Act. It means limitation for issuing notice under Section 148 of Act would be four years from end of relevant assessment year; four years but not more than 7 years from end of relevant assessment year, if income chargeable to tax escaping assessment is Rs.25,000/- or more for that year; 7 years but not more than 10 years from end of relevant assessment year, unless income chargeable to tax escaping assessment is likely to be Rs.50,000/- or more in that year. In this way, three periods of limitation have been prescribed depending upon amount chargeable to tax escaping assessment. In case we are dealing, relevant assessment years are 1992-93, 1993-94 and 1994-95. Therefore, limitation for issuing notice under Section 148 of Act in respect of these years would commence from end of these assessment years i.e. 31st March, 1993, 31st March, 1994 and 31st March, 1995. income chargeable to tax escaping assessment in these three years happened to be as under :- Financial Year Income chargeable to tax escaping assessment 1992-93 Rs. 35,052/-. 1993-94 Rs. 48,385/-. 1994-95 Rs. 55,440/-. Now, applying limitation as provided by Clause (b) of 8 unamended Section 149 of Act as in all three assessment years, income chargeable to tax escaping assessment was over Rs.25,000/- and in one of years above Rs.50,000/-, limitation to give notice under Section 148 of Act would be maximum of 7 years and 10 years. Thus, for assessment year 1992-93, wherein income chargeable to tax escaping assessment happens to be Rs.35,052/- and for assessment year 1993-94, where income chargeable to tax escaping assessment happens to be Rs.48,385/-, notice under Section 148 of Act would have been given within 7 years from end of relevant years, which in above cases would be 31st March, 2000 and 31st March, 2001. Similarly, in respect of assessment year 1994-95 as income chargeable to tax escaping assessment happens to be Rs.55,440/-, limitation for giving notice under Section 148 of Act would be 10 years from end of relevant assessment year i.e. 31st March, 2005. Admittedly, notice under Section 148 of Act for all three years was issued on 26.03.2001. Therefore, notice was beyond time in so far as assessment year 1992-93 is concerned but it is within limitation for assessment year 1993-94 and 1994-95. Accordingly, question no.2 is partly answered in favour of assessee and it is held that notice under Section 148 of Act for assessment year 1992-93 was barred by time and that for assessment year 1993-94 and 1994-95 to be within time. In view of aforesaid facts and circumstances, addition made under Section 69 of Act for assessment year 1992-93 is held to be illegal but that for assessment year 1993- 94 and 1994-95, it is upheld. All these three appeals stand decided accordingly. Order Date :- 18.09.2017 /Nadim Gayatri Devi v. Commissioner of Income-tax, Agra and Another