Shri Sat Narain v. The Commissioner Of Income Tax, Jalandhar

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of decision : September 09, 2008 1. I.T.A No.484 of 2007 2. I.T.A No.485 of 2007 Shri Sat Narain vs The Commissioner of Income Tax, Jalandhar *** CORAM : HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY TEWARI *** Present :Ms. Radhika Suri, Advocate for the appellant. Mr.Vivek Sethi, Advocate for the respondent. *** 1. Whether Reporters of Local Newspapers may be allowed to see the judgment ? judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest ? *** AJAY TEWARI, J This order shall dispose of I.T.A Nos.484 and 485 of 2007, ascommon questions of law and facts are involved therein. For the sake ofconvenience, facts are being extracted from I.T.A No.484 of 2007. This appeal filed by the assessee proposes the followingquestions of law :- “i)Whether in the facts and circumstances of the case the notice under Section 148 of the Income Tax Act wasvalidly served on the assessee ? ii)Whether in facts and circumstances of the case theappellant was prevented by sufficient cause from appearing before the Assessing Officer and therefore theex-parte assessment under section 144 was liable to beset aside. Iii)Whether in the facts and circumstances of the casethe assessing officer could invoke the jurisdiction toinitiate the reassessment proceedings under Section 147of the Income Tax Act on the basis of the VDISdeclaration filed under 1997 Scheme contrary to clauses71 and 72 of the said Scheme and in opposition to Article20(3) of the Constitution of India under which no mancan be compelled to be witness against himself ? iv)Whether in the facts and circumstances of the casethe assessing officer could invoke the jurisdiction toinitiate the reassessment proceedings under Section 147of the Income Tax Act on the basis of the VDISdeclaration filed under 1997 scheme which was a nullity?The assessee had originally filed return for the assessment year1994-95 on 30.8.1994 declaring an income of Rs.34,800/-. In September1998, the Assessing Officer received information from the office of theAssistant Commissioner of Income Tax, Jalandhar in the form of a letteraddressed to the assessee pointing out that though the assessee had filed adeclaration under VDIS 1997 disclosing income of Rs.2 lacs in the form ofcash for the assessment year 1994-95 and Rs.2 lacs for the assessment year1995-96, it had not paid the due tax and, therefore, the said declaration wasdeemed not to have been filed as per the provisions of Section 67(2) of theVDIS, 1997. On the basis of this information, the Assessing Officer framed a fresh assessment vide separate orders dated 29.12.2000. The assessee's challenge to the re-assessment proceedings byway of appeal was rejected. In second appeal, the learned Tribunal heldthat it cannot be said that reassessment proceedings were initiated merely onthe basis of suspicion. The Tribunal also held on fact that service of noticeunder Section 148 of the Income Tax Act, 1961 was proper and further thatthere was no error in the order of the appellate authority in not setting asidethe exparte assessment. The appeal of the assessee was accordinglydismissed. Counsel for the appellant has urged that in view of non-depositof tax, the declaration under VDIS, 1997 was held to be no declaration and,thus, argued that no action could be taken on the basis thereof. framed a fresh assessment vide separate orders dated 29.12.2000. The assessee's challenge to the re-assessment proceedings byway of appeal was rejected. In second appeal, the learned Tribunal heldthat it cannot be said that reassessment proceedings were initiated merely onthe basis of suspicion. The Tribunal also held on fact that service of noticeunder Section 148 of the Income Tax Act, 1961 was proper and further thatthere was no error in the order of the appellate authority in not setting asidethe exparte assessment. The appeal of the assessee was accordinglydismissed. Counsel for the appellant has urged that in view of non-depositof tax, the declaration under VDIS, 1997 was held to be no declaration and,thus, argued that no action could be taken on the basis thereof. We are not persuaded by this argument, since the declarationhas been declared to be no declaration only for the purposes of the VDIS,1997. Apart from that we are in agreement with the view of the Tribunalthat the said document did not form the sole basis for the Assessing Officerto initiate re-assessment proceedings but he also took into consideration theletter written by the Assistant Commissioner of Income Tax, Jalandhar aswell as the fact that no return had been filed by the assessee for theassessment year 1995-96. Ms. Radhika Suri, learned counsel for the appellant furtherargued that the notice under Section 148 of the Income Tax Act was notvalidly served on the assessee and relied upon a judgment of the Delhi HighCourt in Commissioner of Income-tax Delhi-IVv. Hotline International (P)Ltd, (2007) 161 Taxman-Tax Reports 104 (Delhi). In the present case, thelearned Tribunal has held as follows :- “12. Apropos the issue of service of notice on the fatherof the assessee was not valid. However, it is seen that theservice of notice on one Sh. Vishnu, an employee of theassessee has not been disputed. Moreover, the father ofthe assessee had been receiving notices earlier also, onbehalf of his wife. In “A.K.M.Gobindswamy Chettier vsITO 148 CTR (Mad) 458, service of notice has been heldto be valid on a person, who normally receives the notice,even if not specifically authorized in this regard.Moreover, there is no requirement of serving the noticeon the assessee personally.” The judgment, relied upon by counsel for the appellant, relatesto refusal of service by the security guard and is, thus, clearlydistinguishable. In this view of the matter, the questions proposed in theseappeal do not arise. Consequently, the appeals are dismissed with no orderas to costs. ( AJAY TEWARI ) JUDGE September 09, 2008'kk' ( ADARSH KUMAR GOEL ) JUDGE