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Pr. Commissioner of Income Tax, Vadodara v/s Nexus Software Ltd.


Company & Directors' Information:- R S SOFTWARE (INDIA) LTD. [Active] CIN = L72200WB1987PLC043375

Company & Directors' Information:- NEXUS SOFTWARE LIMITED [Active] CIN = L72200GJ1992PLC017506

Company & Directors' Information:- C K SOFTWARE PRIVATE LIMITED [Active] CIN = U72501DL2000PTC106184

Company & Directors' Information:- K K SOFTWARE PRIVATE LIMITED [Active] CIN = U72900DL2009PTC193030

Company & Directors' Information:- A K C SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC128462

Company & Directors' Information:- P AND P SOFTWARE PRIVATE LIMITED [Active] CIN = U74899DL1994PTC057212

Company & Directors' Information:- SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72200GJ1995PTC025791

Company & Directors' Information:- N. D. SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TG1998PTC029778

Company & Directors' Information:- T AND H SOFTWARE PRIVATE LIMITED [Active] CIN = U72200UP2000PTC025638

Company & Directors' Information:- M S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC133997

Company & Directors' Information:- G A S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC127546

Company & Directors' Information:- B B SOFTWARE LTD [Strike Off] CIN = L30009WB1995PLC072361

Company & Directors' Information:- H K SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200WB2001PTC093967

Company & Directors' Information:- J SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TZ2000PTC009229

Company & Directors' Information:- NEXUS INDIA LIMITED [Strike Off] CIN = U74140DL1997PLC090151

Company & Directors' Information:- K S M SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2004PTC128463

Company & Directors' Information:- R B SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC140322

Company & Directors' Information:- SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72200RJ1995PTC010577

Company & Directors' Information:- R J SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC133815

Company & Directors' Information:- H J SOFTWARE PRIVATE LIMITED [Active] CIN = U72200TG2007PTC056351

Company & Directors' Information:- PR SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200MH2001PTC130374

Company & Directors' Information:- I & I SOFTWARE INDIA PRIVATE LIMITED [Strike Off] CIN = U72200TN2005PTC056262

Company & Directors' Information:- D F SOFTWARE INDIA PRIVATE LIMITED [Strike Off] CIN = U72200TZ2003PTC010629

Company & Directors' Information:- E. C. SOFTWARE INDIA PRIVATE LIMITED [Active] CIN = U72900TN2007PTC063486

Company & Directors' Information:- Q 3 INDIA SOFTWARE PRIVATE LIMITED [Active] CIN = U72900TN2007PTC065786

Company & Directors' Information:- K Y SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200DL2005PTC136072

Company & Directors' Information:- T M I SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200KA2005PTC036299

Company & Directors' Information:- B C L SOFTWARE (INDIA) PRIVATE LIMITED [Strike Off] CIN = U30007MH1999PTC117922

Company & Directors' Information:- C C M SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TG2000PTC034002

Company & Directors' Information:- M I S SOFTWARE PRIVATE LIMITED [Active] CIN = U72200TN2008PTC068694

Company & Directors' Information:- A. T. SOFTWARE PRIVATE LIMITED [Active] CIN = U72200TG1996PTC023841

Company & Directors' Information:- J A K SOFTWARE PVT LTD [Active] CIN = U72200DL2001PTC111929

Company & Directors' Information:- R R SOFTWARE PVT LTD [Under Process of Striking Off] CIN = U72200KL1991PTC006051

Company & Directors' Information:- A M H SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200DL2005PTC132410

Company & Directors' Information:- P D A SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900DL2003PTC123465

Company & Directors' Information:- K C SOFTWARE PRIVATE LIMITED [Active] CIN = U74899DL1989PTC036923

Company & Directors' Information:- NEXUS PVT LTD [Under Process of Striking Off] CIN = U31909WB1967PTC027100

Company & Directors' Information:- I SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72300MH2012PTC225903

Company & Directors' Information:- V M SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900PN2010PTC136847

Company & Directors' Information:- H M SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200HP2011PTC031756

Company & Directors' Information:- S N R SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72900DL2012PTC243073

Company & Directors' Information:- K A V SOFTWARE PRIVATE LIMITED [Active] CIN = U72200DL2005PTC144121

Company & Directors' Information:- C M S SOFTWARE PRIVATE LIMITED [Active] CIN = U74899DL2005PTC142352

Company & Directors' Information:- S M I T SOFTWARE COMPANY PRIVATE LIMITED [Strike Off] CIN = U74899DL2006PTC144816

Company & Directors' Information:- A D SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200KA2002PTC030722

Company & Directors' Information:- H. A. N. R. E. J SOFTWARE PRIVATE LIMITED [Strike Off] CIN = U72200TG2008PTC062044

    Tax Appeal No. 240 of 2017 (Arising out of order of ITAT Ahmedabad in ITA No. 1258 (Ahd.)

    Decided On, 11 April 2017

    At, High Court of Gujarat At Ahmedabad

    By, THE HONOURABLE MR. JUSTICE M.R. SHAH & THE HONOURABLE MR. JUSTICE B.N. KARIA

    For the Appellant: K.M. Parikh, Advocate. For the Respondent: -------------------



Judgment Text

M.R. Shah, J.

Oral:

1. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal "C" Bench, Ahmedabad (hereinafter referred to as "the learned tribunal") dated 18/10/2016 in ITA No. 1258/Ahd/2012 for the Assessment Year 2008-09 by which the learned tribunal has dismissed the said Appeal preferred by the revenue and has confirmed the order passed by the learned CIT(A) quashing and setting aside the assessment order under Section 143(3) of the Income Tax Act (hereinafter referred to as "the Act") on the ground that within the period of limitation provided under Section 143 of the Act no notice under Section 143(2) of the Act was served upon the assessee within the time prescribed under Section 143 of the Act, revenue has preferred the present Tax Appeal.

2. The facts leading to the present Tax Appeal in nutshell are as under;

2.1 The assessee filed the return of income on 30/09/2008 declaring the total income at Rs. 31,879/-. The case of the assessee was selected for scrutiny with prior approval of CCIT, Baroda and accordingly notice under Section 143(2) of the Act was issued on 29/09/2009. However, it appears that notice dated 29/09/2009 was dispatched to the postal authority for speed post on 30/09/2009. Nothing is on record and even otherwise it is not the case on behalf of the revenue that the notice issued on 29/09/2009, which was given to the postal authority on 30/09/2009, was served upon the assessee on or before 30/09/2009. Even the said notice was served upon the assessee or not is also not on record as the acknowledgment of the notice under Section 143(2) of the Act is not available. It appears that thereafter notice under Section 142(1) of the Act dated 17/02/2010 was served upon the assessee and at that time it came to the knowledge of the assessee that the case of the assessee was selected for scrutiny. The assessee - Company raised objection before the Assessing Officer that the notice under Section 143(2) was not validly served within the statutory limits, and therefore, it was requested not to proceed further with the notice under Section 143(2) of the Act. However, the Assessing Officer did not accept the same and treated the assessee having been served with the notice under Section 143(2) of the Act before the due date provided under Section 143(2) of the Act i.e. on or before 30/09/2009 and thereafter the Assessing Officer passed the scrutiny assessment order under Section 143(3) of the Act determining the return of income at Rs. 11,88,35,320/-.

2.2 Feeling aggrieved and dissatisfied with the scrutiny assessment order under Section 143(3) of the Act, the assessee preferred Appeal before the learned CIT(A). The learned CIT(A) allowed the said Appeal preferred by the assessee and set aside the scrutiny assessment order under Section 143(3) of the Act solely on the ground that the notice under Section 143(2) of the Act was not served upon the assessee within the prescribed period of limitation provided under Section 143(2) of the Act i.e. within the period of six months, and therefore, the assessment order is bad in law.

2.3 Feeling aggrieved and dissatisfied with the order passed by the learned CIT(A), revenue preferred Appeal before the learned tribunal and by the impugned judgment and order the learned tribunal has dismissed the said Appeal preferred by the revenue and has confirmed the order passed by the learned CIT(A).

2.4 Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned tribunal, revenue has preferred the present Tax Appeal with the following proposed questions of law;

(A) Whether the learned tribunal was right in law and on facts and circumstances of the case that notice under Section 143(2) of the Act was not served upon the assessee legally without appreciating the fact that notice under Section 143(2) of the Act was issued on 29/09/2009 well within the time limit and sent through speed post on 30/09/2009 on the address given by the assessee in its return of income for the Assessment Year 2008-09?

(B) Whether the learned tribunal was right in law and on facts and circumstances of the case that notice under Section 143(2) of the Act was not served upon the assessee legally without appreciating the fact that notice under Section 143(2) of the Act was issued on 29/09/2009 well within the time limit and the address of the assessee's premises was sealed by the Hon'ble Gujarat High Court since 25/02/2009?

(C) Whether the learned tribunal was right in law and on facts and circumstances of the case that notice under Section 143(2) of the Act was not served upon the assesee legally without appreciating the fact that the assessee was frequently changing its addresses and it did not intimate the Department regarding its change in addresses?

(D) Whether the learned tribunal was right in law and on facts and circumstances of the case that notice under Section 143(2) of the Act was not served upon the assessee legally without appreciating the fact that the assessee had given such address on its return for the year under consideration which was sealed by the Hon'ble Gujarat High Court on 25/02/2009?

(E) Whether the learned tribunal was right in law and on facts and circumstances of the case that notice under Section 143(2) of the Act was not served upon the assessee legally without appreciating the fact that the assessee did not prove the fact that the notice under Section 143(2) of the Act dated 29/09/2009 was issued beyond the time limit?

3. Shri K.M. Parikh, learned advocate has appeared on behalf of the revenue. It is submitted by Shri K.M. Parikh, learned advocate appearing on behalf of the revenue that in the facts and circumstances of the case, the learned tribunal has materially erred in confirming the order passed by the learned CIT(A) and in holding that the notice under Section 143(2) was not served upon the assessee on or before 30/09/2009.

3.1 It is further submitted by Shri K.M. Parikh, learned advocate appearing on behalf of the revenue that the learned tribunal has not properly appreciated the fact that as such notice under Section 143(2) of the Act was issued on 29/09/2009 at the address mentioned in the return of income, and therefore, it is ought to have been presumed that the assessee has been served with the notice under Section 143(2) of the Act within the prescribed limit of limitation under Section 143(2) of the Act. It is further submitted by Shri K.M. Parikh, learned advocate appearing on behalf of the revenue that the learned tribunal has not properly appreciated the fact that as such notice under Section 143(2) of the Act was issued on 29/09/2009 well within the prescribed time limit and was sent through speed post on 30/09/2009 at the address given by the assessee in its return of income for the Assessment Year 2008-09.

3.2 It is further submitted by Shri K.M. Parikh, learned advocate appearing on behalf of the revenue that the learned tribunal has not properly appreciated the fact that the notice under Section 143(2) of the Act was in fact issued on 29/09/2009 well within the prescribed time limit and in fact the premises of the assessee was sealed by the High Court since 25/02/2009. It is further submitted by Shri K.M. Parikh, learned advocate appearing on behalf of the revenue that the learned tribunal has not appreciated the fact that the assessee was frequently changing his address and did not intimate its change in address.

3.3 It is further submitted that therefore in the facts and circumstances of the case the learned tribunal ought not to have confirmed the order passed by the learned CIT(A) setting aside the scrutiny assessment order on the ground that the notice under Section 143(2) of the Act was not served upon the assessee on or before 30/09/2009 i.e. within the period of limitation prescribed under Section 143(2) of the Act. For the aforesaid, Shri K.M. Parikh, learned advocate appearing on behalf of the revenue has relied upon Section 27 of the General Clauses Act as well as the decision of the Hon'ble Supreme Court in the case of Banarsi Debi v. The Income-tax Officer, District IV, Calcutta reported in AIR 1964 SC 1742 and the decision of the Punjab and Haryana High Court dated 27/09/2011 passed in V.R.A. Cotton Mills (P) Ltd. v. Union of India and Others, (2013) 359 ITR 495 : 33 taxmann.com 675.

Making the above submissions and relying upon the above decisions, it is requested to admit /allow the present Tax Appeal.

4. We have heard Shri K.M. Parikh, learned advocate appearing on behalf of the revenue at length. It is not in dispute that as per Section 143(2) of the Act, for the Assessment Year 2008-09, notice under Section 143(2) of the Act was required to be served within the period of six months i.e. on or before 30/09/2009. It is not in dispute that for the first time notice under Section 143(2) of the Act was issued on 29/09/2009 and in fact dispatched to the postal authority to serve the service upon the assessee on 30/09/2009. Nothing is on record and /or there is no acknowledgment received on record to show and /or suggest that in fact the notice under Section 143(2) dated 29/09/2009 was served upon the assessee. Under the circumstances, notice under Section 143(2) of the Act was not served upon the assessee within the prescribed period of limitation provided under Section 143(2) of the Act i.e. on or before 30/09/2009. Under the circumstances, as such, the learned tribunal has rightly confirmed the order passed by the learned CIT(A) setting aside the assessment order under Section 143(3) of the Act on the ground that the notice under Section 143(2) of the Act has not been served upon the assessee within the prescribed period of limitation provided under Section 143(2) of the Act.

4.1 Now so far as the submission on behalf of the revenue that the learned tribunal has not properly appreciated the fact that the premises of the assessee was sealed by the High Court since 25/02/2009 and /or that the assessee was frequently changing its address and did not intimate the Department regarding the change of address is concerned, at the outset it is required to be noted that as such and so stated even in the assessment order that after the notice under Section 143(2) of the Act was issued on 29/09/2009 (which has not been served on or before 30/09/2009 and naturally could not have been served as the same was dispatched to the postal authority on 30/09/2009), first notice under Section 142(1) of the Act was issued on 17/02/2010 and the same was served upon the assessee - Company through speed post. In the assessment order it has been observed by the Assessing Officer that subsequently due to the change of the Assessing Officer and also due to the change of the address of the assessee, notices under Section 142(1) of the Act were issued on 19/07/2010, 23/07/2010, 10/08/2010, 02/11/2010 and 15/12/2010 respectively. Till the Assessing Officer issued the notice under Section 143(2) of the Act dated 29/09/2009 the Assessing Officer was not even aware and /or had no knowledge that the premises of the assessee has been sealed by the High Court since 25/02/2009, and therefore, the aforesaid factum shall not help the Assessing Officer /revenue.

4.2 Now so far as the submission on behalf of the revenue that as the notice under Section 143(2) of the Act was issued on 29/09/2009 and was sent to the postal authority to serve the notice upon the assessee on 30/09/2009, and therefore, it can be said to have been served upon the assessee within the prescribed period of limitation provided under Section 143(2) of the Act and reliance placed upon Section 27 of the General Clauses Act is concerned, it is required to be noted that in the facts and circumstances of the case, Section 27 of the General Clauses Act shall not be applicable and /or the same shall not be of any assistance to the revenue. There is no question of presumption of having been served the notice upon the assessee, when the notice itself was given /dispatched by the Assessing Officer on 30/09/2009 only. It is not believable that the assessee would have been served and /or presumed to have been served on 30/09/2009 itself. Identical question came to be considered by the Delhi High Court in the case of Nulon India Ltd. v. Income-tax Officer reported in (2010) 323 ITR 681 (Delhi). In the case before the Delhi High Court notice for assessment was sent by speed post on 30/10/2002 for the Assessment Year 2001-02 to the address mentioned in the return of income. The notice was redirected and was served at the redirected address on 06/11/2002. The learned tribunal held that the notice had been served within the prescribed period of limitation and the assessment made pursuant to the search was valid assessment. The matter was carried to the Delhi High Court. Before the High Court it was contented on behalf of the revenue that the notice under Section 143(2) of the Act was issued on 29/10/2002 and was sent by speed post on 30/10/2002, and therefore, it ought to have been treated as having been served with the notice. Even the revenue contended that it ought to have been presumed under law that any notice sent by speed post must have been delivered to the assessee. However, the Delhi High Court did not accept the same and allowed the Appeal preferred by the assessee on the ground that there is no presumption under the law that any notice sent by speed post must have been delivered to the assessee within 24 hours. In the present case also there cannot be any presumption that the notice which was dispatched to the postal authority for delivering it to the assessee on 30/09/2009 must have been delivered to the assessee on the same day i.e. 30/09/2009. Under the circumstances, even in the facts and circumstances of the case, Section 27 of the General Clauses Act shall not be of any assistance to the revenue.

4.3 Now so far as the reliance placed upon the decision of the Hon'ble Supreme Court in the case of Banarsi Debi (Supra) is concerned, on facts the same shall not be applicable to the facts of the case on hand. In the case of Banarsi Debi (Supra) Hon'ble Supreme Court was considering Section 34(1) of the Indian Income Tax Act, 1922 as well as subsequent amendment i.e. Section 4 of the Amending Act (Act 1 of 1959), where the word used were "notice issued" within the period of limitation but "served" upon the assessee subsequently. Under the circumstances, the aforesaid decision shall not be applicable to the facts of the case on hand.

4.4 Now so far as the reliance upon the decision of the Punjab and Haryana High Court in the case of V.R.A. Cotton Mills (P) Ltd. (Supra) is concerned, as such, in the case before the Punjab and Haryana High Court the notice was served upon the assessee by affixation at 11:20 p.m. on 30/09/2010. It was found to be a valid service in terms of the Code of Civil Procedure, and therefore, as such on facts the said decision shall not be applicable to the facts of the case on hand. However, we are not in agre

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ement with the view taken by the Punjab and Haryana High Court that the expressions "serve" and "issue" would have the same meaning. The word "served" used in Section 143(2) of the Act is very significant and very clear. However in appropriate case being made out within the four corners of the General Clauses Act, if the notices are issued before reasonable time of the prescribed period of limitation and it has been dispatched /sent for delivery within the reasonable time, in that case, there can be presumption under Section 27 of the General Clauses Act. However, in the facts and circumstances of the case, as the notice dated 29/09/2009 was given to the postal authority for speed post delivery on 30/09/2009, as observed herein above, there is no question of any presumption that the same must have been delivered to the assessee on the very day i.e. 30/09/2009. 5. In view of the aforesaid facts and circumstances of the case, it cannot be said that the learned tribunal has committed any error in confirming the order passed by the learned CIT(A) quashing and setting aside the assessment order under Section 143(3) of the Act on the ground that the notice under Section 143(2) of the Act was not served upon the assessee and/or was not served upon the assessee within the prescribed period of limitation provided under Section 143(2) of the Act. We are in complete agreement with the view taken by the learned tribunal. No substantial questions of law arise as suggested on behalf of the revenue. 6. In view of the above and for the reasons stated herein above, the present Tax Appeal fails and the same deserves to be dismissed and is accordingly dismissed.
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