Commissioner Of Income Tax Iv, Chennai. Appellant v. Subbu Shashank Respondent

Dated : 07.12.2009 Coram : THE HONOURABLE MR.JUSTICE K.RAVIRAJA PANDIAN and THE HONOURABLE MR.JUSTICE M.M.SUNDRESH Tax Case Appeal No.1341 of 2009 Commissioner of Income Tax IV,Chennai. Appellant v. Subbu Shashank Respondent Appeal filed under section 260A of the Income Tax Act against the order of the Income tax AppellateTribunal, Madras 'B' Bench, dated 19.06.2009 in ITA No.2152/Mds/2008 for the assessment year2005-06. For appellant : Mr.K.Subramaniam, Standing Counsel forIncome tax Department JUDGMENT (Judgment of the Court was deliveredby K.RAVIRAJA PANDIAN, J.) The revenue is on appeal by formulating the following question of law :Whether on the facts and in the circumstances of the case, the Income tax Appellate Tribunal wasright in holding that the assessment under section 144 of the Income Tax Act made on the assesseein the status of the resident on the basis of the details of stay available on record as per the statement filed by the assessee, was void ab initio, on the sole ground that the assessee claimed thatthe notice under section 143(2) of the Act was not received by him?" 2. The facts :The assessee filed his return for the assessment year 2005-06 on 30.06.2006 admittinga total income of Rs.2,05,280/-. It is the case of the revenue that the revenue issued notice undersection 143(3) of the Act, but there was no response. The assessment was completed under section144 on 24.12.2007 on a total turnover of Rs.37,32,880/- and a demand of Rs.17,22,990/- was made.The assessee is a flute artist. He claimed to be a non resident for the previous year 2004-05 andclaimed to have been in India only for a total period of 181 days, but that was not accepted by thedepartment by saying that the assessee has not proved by producing his stay outside India. On thatscore the assessee was held to be a resident and to be assessed on the world income. Accordingly,the foreign income to the tune of Rs.35,17,879/- was added to the admitted Indian income ofRs.2,06,524/-. Aggrieved by that, the assessee filed an appeal before the Commissioner of IncomeTax (Appeals) on the ground that before passing the order under section 144, no notice was receivedby the assessee. Accepting the contention, the Commissioner (Appeals) has passed an order that theorder passed under section 144 of the Act was invalid and ab initio void, allowed the appeal. Thedepartment carried the matter on further appeal to the Tribunal and sought to establish before itthat notice has been duly served and non service is only a technical default, which can be cured atany time, but the appeal so made to the Tribunal has been rejected on the ground that thedepartment has not established before the Tribunal about the issuance of notice. The correctness ofthe same has been agitated in this appeal before this Court. 3. Learned senior counsel for the department reiterated what has been stated before theCommissioner as well as before the Tribunal. The Tribunal has noted that the Commissioner ofIncome Tax (Appeals) has recorded a categorical finding and admission of the assessing officer inthe remand report that there is no proof of service that notice under section 143(2)/142(1) of the Actwithin limitation before the assessment order under section 144 was passed. Further, the factsstated by the assessee have not been controverted by the revenue by showing any record/evidence.The Tribunal has also called for the records so as to ascertain the facts in respect of issuance ofnotice and service of the same. But the fact reveals that the Tribunal was not able to find any proofof sending the notice on the alleged dates to the assessee and ultimately, the Tribunal recorded afinding that there was no record for the revenue to show that the notice was served upon theassessee. Thereupon, by following the decision of the Delhi High Court in the case of CIT v. SilverStreak Trading (P) Ltd., 216 CTR 261 affirmed the order of the Commissioner of Income Tax(Appeals).