Commissioner Of Income Tax Civil Lines, Raipur Chhattisgarh.(Respondent v. Cause-Title Taken From Case Information System

NAFR HIGH COURT OF CHHATTISGARH, BILASPUR WA No. 115 of 2024 1.Assistant Commissioner of Income Tax (Central)-2, Aaykar Bhawan,Civil Lines, Raipur, Chhattisgarh. (Respondent No. 1 in the WritPetition) Civil Lines, Raipur, Chhattisgarh. (Respondent No. 1 in the WritPetition) 2.Commissioner of Income Tax Civil Lines, Raipur Chhattisgarh.(Respondent No. 2 in the Writ Petition) ---- Appellants Versus M/s Ardent Steel Limited, Having its Registered Office At, A -40, LotusCorporate Park, Jay Coach Singal, Off East, Express Highway, GoregaonEast, Mumbai, Maharashtra - 400063, Through its Managing DirectorSanjay Gupta, (Respondent/assesses in Writ Petition) ---- Respondent Cause-title taken from Case Information System For Appellants : Ms. Naushina Afrin Ali and Mr. Ajay Kumrani, Advocates. Hon'ble Shri Ramesh Sinha, Chief JusticeHon'ble Shri Arvind Kumar Verma, JudgeJudgment on BoardPer Ramesh Sinha, Chief Justice01.03.2024 1.This is an intra Court appeal filed by the appellant being aggrieved bythe legality and validity of the order dated 16.01.2024 passed inReview Petition No. 2 of 2024 arising out of order dated 04.05.2018passed in Writ Petition (T) No. 168/2016 by the learned Single Judgein which the respondent/assessee herein had filed the aforesaidpetition against notice U/s 148 of the Income Tax Act, 1961 (for short,the IT Act’) dated 15.03.2016 and 13.04.2016 (Annexure-P/2) for theAssessment Year 2009-10 and communication rejecting objectionsdated 15.01.2016 (Annexure- P/9).the legality and validity of the order dated 16.01.2024 passed inReview Petition No. 2 of 2024 arising out of order dated 04.05.2018passed in Writ Petition (T) No. 168/2016 by the learned Single Judgein which the respondent/assessee herein had filed the aforesaidpetition against notice U/s 148 of the Income Tax Act, 1961 (for short,the IT Act’) dated 15.03.2016 and 13.04.2016 (Annexure-P/2) for theAssessment Year 2009-10 and communication rejecting objectionsdated 15.01.2016 (Annexure- P/9). 2.Learned counsel for the appellants submits that the order passed bythe learned Single Judge suffers from grave illegality and has beenpassed without proper appreciation of facts and law governing thefield hence deserve to be set aside by this Court in the interest ofjustice. She further submits that the learned Single Judge failed toappreciate the facts that once the assessee has filed its return inresponse to notice under Section 148 and has also participated inproceedings thereafter, by its conduct, abandoned its right to claimnon service of notice under Section 148. He also submits that thelearned Single Judge did not appreciate the ratio laid down in thecase of CIT vs. Three Dee Exim Pvt. Ltd. (Delhi) 55 DTR 147wherein it has been mentioned that if notice issued but not served onthe assessee due to address changed and as such copy of thenotice is given to the assessee before passing of the Assessmentorder, assessment cannot be treated as bad in law. the learned Single Judge suffers from grave illegality and has beenpassed without proper appreciation of facts and law governing thefield hence deserve to be set aside by this Court in the interest ofjustice. She further submits that the learned Single Judge failed toappreciate the facts that once the assessee has filed its return inresponse to notice under Section 148 and has also participated inproceedings thereafter, by its conduct, abandoned its right to claimnon service of notice under Section 148. He also submits that thelearned Single Judge did not appreciate the ratio laid down in thecase of CIT vs. Three Dee Exim Pvt. Ltd. (Delhi) 55 DTR 147wherein it has been mentioned that if notice issued but not served onthe assessee due to address changed and as such copy of thenotice is given to the assessee before passing of the Assessmentorder, assessment cannot be treated as bad in law. 3.Learned counsel for the appellants further submits that from perusalof Section 148(1) specifically mentions that before making theassessment, re-assessment or re-computation under Section 147 theIncome Tax Officer shall serve on the assessee a notice. Hence theorder impugned suffers from illegality with regards to service ofnotice for reopening of assessment under Section 147/148, asservice of notice is mandatory before completion of assessment/re-assessment proceedings. She also submits that it is an accepted factthat notice dated 15.03.2016 was issued to the respondent/assesseeon the basis of the address mentioned in the return filed by theassessee for A.Y. 2009-10. Issuance of notice on the wrong addressof Section 148(1) specifically mentions that before making theassessment, re-assessment or re-computation under Section 147 theIncome Tax Officer shall serve on the assessee a notice. Hence theorder impugned suffers from illegality with regards to service ofnotice for reopening of assessment under Section 147/148, asservice of notice is mandatory before completion of assessment/re-assessment proceedings. She also submits that it is an accepted factthat notice dated 15.03.2016 was issued to the respondent/assesseeon the basis of the address mentioned in the return filed by theassessee for A.Y. 2009-10. Issuance of notice on the wrong address would not completely render the entire proceedings redundant as theassessee has already accepted the notice and participated in the re-assessment proceedings and it is in accordance with the provisionsof Section 148(1) of the IT Act. 4. She also submits that the learned Writ Court did not appreciate thefact that the quantum of tax involved in the instant case isRs.4,50,00,000/- and at best the matter could have been remandedback for curing the defect of non-service of notice. The photocopy oforiginal records were produced before the learned Writ Court and theoriginal records were readily available for the perusal of the learnedWrit Court, but the same has been inadvertently overlooked whileallowing the Writ Petition. She also submits that the photocopy of theoriginal records of the assessment proceedings against therespondent/assessee was also perused by the Writ Court. Since theimpugned order suffers from legal infirmity and is contrary to theSection 148(1) of the IT Act, the same deserves to be setaside/quashed by this Court. 5.We have heard learned counsel for the appellants/revenue andperused the orders impugned passed by the learned Single Judgeand the materials available on record. perused the orders impugned passed by the learned Single Judgeand the materials available on record. 6.It was the case of the writ petitioner before the learned Single Judgethat on 13.04.2016, for the first time, he was served with notice underSection 148(1) of the IT Act through his Chartered Accountant and hewas never served with notice alleged to be issued under Section148(1) of the Act on 15.03.2016. Responding to the notice so issued,the writ petitioner filed return on 02.05.2016 and thereafter, soughtthat on 13.04.2016, for the first time, he was served with notice underSection 148(1) of the IT Act through his Chartered Accountant and hewas never served with notice alleged to be issued under Section148(1) of the Act on 15.03.2016. Responding to the notice so issued,the writ petitioner filed return on 02.05.2016 and thereafter, sought 6.It was the case of the writ petitioner before the learned Single Judgethat on 13.04.2016, for the first time, he was served with notice underSection 148(1) of the IT Act through his Chartered Accountant and hewas never served with notice alleged to be issued under Section148(1) of the Act on 15.03.2016. Responding to the notice so issued,the writ petitioner filed return on 02.05.2016 and thereafter, soughtthat on 13.04.2016, for the first time, he was served with notice underSection 148(1) of the IT Act through his Chartered Accountant and hewas never served with notice alleged to be issued under Section148(1) of the Act on 15.03.2016. Responding to the notice so issued,the writ petitioner filed return on 02.05.2016 and thereafter, sought reasons to believe from the assessing officer and thereafter, he wasserved with notice dated 04.05.2016 under Section 143(2) of the ITAct for the assessment year 2009-10. Thereafter, the writ petitionersought certain information by letter dated 09.05.2016 and ultimately,he filed objections against the reasons for reopening the completedassessment under Section 148 of the IT Act on 18.07.2016 clearlystating that he was never served with notice dated 15.03.2016 andhe had already changed his address duly updated in the PAN database and the address has been clearly mentioned in the tax returnsand request was made for closure of the case. But, thereafter, on05.08.2016, the objection against reassessment proceedingsinitiated under Section 148 of the IT Act for the said assessmentyear, was rejected indicating that notice was issued on 15.03.2016on the address shown in the tax returns and it has returned back on28.03.2016 to the office citing the reason to be "left". Questioningthe initiation of proceeding of reassessment under Section 148 of theIT Act, that writ petition has been preferred principally on the groundthat no notice was issued within the period of limitation as prescribedunder Section 149(1)(b) read with Section 148(1) of the IT Act and,therefore, the initiation of proceeding for reassessment is barred bylimitation and even otherwise, alternatively, no notice was served tothe writ petition under Section 148(1) of the IT Act, as such, initiationof proceeding for reassessment and the order deciding objectionsdated 05.08.2016 deserve to be quashed. 7.Return has been filed by the respondents/appellants herein statinginter alia that only objections have been rejected and the assessinginter alia that only objections have been rejected and the assessing officer has not arrived at a final decision to be communicated and therespondent has alternative remedy with it if it is not satisfied with theoutcome of the assessment proceeding and the writ petition asframed and filed is not maintainable. The writ petitioner has beenserved with notice dated 15.03.2016 through speed post and hasfiled its return of income in response to notice under Section 148 ofthe IT Act and also participated in the assessment proceedings andthereafter, by his conduct, abandoned the right to claim non-serviceof notice under Section 148. Thus, the irregularities, if any, got curedby the subsequent conduct of the assessee, as the writ petitionerhimself on 02.05.2016 filed its return mentioning the reference ofnotice under Section 148 of the IT Act dated 15.03.2016, whichclearly indicates the service of notice. Therefore, that writ petition asframed and filed is premature and deserves to be dismissed. 8.The learned Single Judge after considering the rival submissionsmade by learned counsel for the parties and after going through therecord with utmost circumspection has firstly considered whether thewrit petition challenging the show cause notice under Section 147read with Section 148 of the IT Act is maintainable in law or not. Thelearned Single Judge in the light of principle of law laid down inCalcutta Discount Co. Ltd. Vs. Income-Tax Officer, CompaniesDistrict I, Calcutta, reported in AIR 1961 SC 372 and Jeans KnitPrivate Ltd. Bangalore Vs. Deputy Commissioner of Income TaxBangalore, reported in 2016 SCC OnLine SC 1536 and consideringthe facts leading to challenge to the show cause notice, held that thewrit petition is maintainable to challenge the notice for reassessment issued under Section 147 read with Section 148 of the IT Act. 9.From perusal of the impugned order, it transpires that the learnedSingle Judge while allowing the writ petition has observed that from aperusal of documents, it appears that the no notice was served to therespondent under Section 148(1) of the IT Act and service of noticeto the Chartered Accountant of the writ petitioner’s Company is notservice at all and participation of the writ petitioner’s Company byfiling return and filing objection to the notice to the reasons to believecannot be held to be a valid service of notice as held by the DelhiHigh Court in Commissioner of Income-tax (Central)-I Vs. ChetanGupta, reported in (2015) 62 taxman.com 249 (Delhi), wherein ithas been clearly held that merely because an assessee may haveparticipated in the proceedings, the requirement of service of propernotice upon the person in accordance with the legal requirementunder Section 148 of the IT Act is not dispensed with andreassessment proceedings finalized by the Assessing Officer withouteffecting service of notice on the assessee under Section 148(1) ofthe IT Act and laid down the principles in this regard as under : “(i) to (iv) xxx xxx xxx (v) The mere fact that an Assessee or some otherperson on his behalf not duly authorised participated inthe reassessment proceedings after coming to know ofit will not constitute a waiver of the requirement ofeffecting proper service of notice on the Assesseeunder Section 148 of the Act. (vi) Reassessment proceedings finalised by an AOwithout effecting proper service of notice on theAssessee under Section 148 (1) of the Act are invalid and liable to be quashed. (vi) Section 292 BB is prospective. In any event theAssessee in the present case, having raised anobjection regarding the failure by the Revenue to effectservice of notice upon him, the main part of Section 292BB is not attracted.” 10.Learned Single Judge has further observed that it cannot be held thatthe writ petitioner was served with notice under Section 148(1) of theIT Act. Thus, held that neither notice under Section 148(1) of the ITAct within the period of limitation as prescribed in Section 149(1)(b)of the IT Act was issued to the respondent nor it was served in termsof Section 148(1) of the IT Act, therefore, the reassessmentproceedings initiated by the said notice and the order decidingobjection dated 05.08.2016 are without jurisdiction and withoutauthority of law and accordingly allowed the writ petition by quashingthe notices dated 15.03.2016 and 13.04.2016 and the order dated05.08.2016. It has been further directed that the writ petitioner wouldalso be entitled for a cost of Rs. 25,000/- which will be paid by therespondents therein within two weeks from that day. 11.Against the said order, the appellants had preferred an appeal beforethis Court in WA No. 503 of 2018, which was dismissed as withdrawnvide order dated 11.10.2023 with liberty to file review petition beforethe learned Single Judge for consideration of the document whichwas not filed before the Writ Court and had filed before this Court inthe appeal by way of additional document, i.e. notice dated15.03.2016.this Court in WA No. 503 of 2018, which was dismissed as withdrawnvide order dated 11.10.2023 with liberty to file review petition beforethe learned Single Judge for consideration of the document whichwas not filed before the Writ Court and had filed before this Court inthe appeal by way of additional document, i.e. notice dated15.03.2016. 12.Thereafter, the appellants have filed a review petition bearing Review Petition No. 02 of 2024 before the learned Single Judge, which cameto vide order dated 16.01.2024 observing as follows : “12. Having examined the power and jurisdiction of thisCourt to review its order passed in a proceeding underArticles 226 and 227 of the Constitution of India and thescope and ambit of that jurisdiction, the question is,whether the new documents which were not part ofthe writ petition can be considered in the reviewjurisdiction and whether that would constitute an errorapparent on the face of record warranting reviewjurisdiction. Admittedly, the application for takingadditional documents on record was filed by the reviewpetitioners before the writ appellate court on 21-10-2022and no reason has been assigned as to why documents'A' to 'R' filed before the writ appellate court, could not befiled before the writ court particularly when the return wasfiled by the review petitioners before the writ court on 11-12-2017. It is not the case of the review petitioners thatthese documents were not available to them when thereturn was filed and writ petition was heard. Theapplication for taking additional documents on recordfiled before the writ appellate court is conspicuouslysilent in this regard and the review petitioners wereobliged to state in the said application that thesedocuments could not be filed despite due diligence. Assuch, I do not find any error apparent on the face ofrecord warranting exercise of review jurisdiction. In thatview of the matter, the review petition deserves to be andis accordingly dismissed, in limine. No cost.” 13.It is the case of the appellants/respondent therein that notice wasissued under Section 148(1) of the IT Act by the officer concerned on15.03.2016 on the address shown in the return and it was sent fordelivery well within the period of limitation through speed post forissued under Section 148(1) of the IT Act by the officer concerned on15.03.2016 on the address shown in the return and it was sent fordelivery well within the period of limitation through speed post for delivering to the present petitioner, which is seriously disputed by thepetitioner and even prayed for production of said notice, butultimately, it has not been produced by the appellants/respondenttherein on record. The said notice was ultimately, said to have beenreturned unserved on 28.03.2016 and served to the petitionerthrough its Chartered Accountant on 13.04.2016 after the period oflimitation which is 31.03.2016. Had it been a case of the appellants/respondent therein that notice was served upon the assesse before31.03.2016, then why they have again issued notice throughChartered Accountant on 13.04.2016 is not understood andtherefore, this Court is of the opinion that notice under Section 148 ofthe IT Act for reassessing the assesse’s income for the assessmentyear 2009-10 has been served upon him through CharteredAccountant on 13.04.2016 i.e. after the period of limitation which isdated 31.03.2016. 14.Therefore, considering the submissions advanced by the learnedcounsel for the appellants and the finding recorded by the learnedSingle Judge while allowing the writ petition filed by the writ petitionerand also the finding recorded by him while dismissing the reviewpetition, we are of the considered opinion that the learned SingleJudge has not committed any illegality, irregularity or jurisdictionalerror in the impugned orders warranting interference by this Court. 15.Accordingly, the writ appeal being devoid of merit is liable to be andis hereby dismissed. No cost(s). Sd/- Sd/- (Arvind Kumar Verma)(Ramesh Sinha) Judge Chief Justice Chandra