IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF APRIL, 2019 BEFORE THE HON’BLE MRS. JUSTICE S.SUJATHA W.P.No.2387/2019(T-IT) BETWEEN:
NITTUR VASANTH KUMAR MAHESH S/O G.VASANTH KUMAR AGED ABOUT 40 YEARS R/AT:#51/12-46 SANTOSHA NILAYA 20TH CROSS, 22ND MAIN BEHIND VIJAYANAGAR TTMC VIJAYANAGAR, BENGALURU-560 040 (BY SRI. GOUTAM S. BHARADWAJ, ADV.,) AND:
ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 3(2)(1), BMTC BUILDING 80 FEET ROAD, 6TH BLOCK NEAR KHB GAMES VILLAGE KORAMANGALA, …PETITIONER BENGALURU-560 095 …RESPONDENT (BY SRI. E.I.SANMATHI, ADV.,) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 19.12.2018 PASSED BY THE RESPONDENT AT BANGALORE AT ANNEXURE-A.
THIS PETITION COMING ON FOR PRLY. HEARING IN ‘B’ GROUP THIS DAY, THE COURT MADE THE FOLLOWING:
ORDER The petitioner-assessee has assailed the order dated 19.12.2018 passed by the respondent-Revenue, whereby the assessments are concluded under Section 144 of the Income Tax Act, 1961, relating to the Assessment Year 2016-17.
2. The petitioner, an income tax assessee, filed his returns for the Assessment Year 2016-17 which was selected for scrutiny and a Notice dated 24.08.2017 came to be issued under Section 143(2) of the Act, which was served on the petitioner on 19.12.2017 and the same was followed by the Notice under Section 142(1) of the Act requesting to produce certain documents. Further, notices were issued under Section 143(2) of the Act and finally on 19.12.2018, thereafter concluding exparte assessment, which is impugned herein.
3. The primary ground of challenge to the Assessment Order impugned herein is the Notice issued under Section 143(2) of the Act dated 24.08.2017 served on the assessee on 19.12.2017, is exfacie bad in law in view of the proviso to Section 143(2) of the Act. Learned counsel referring to the judgment of the Hon’ble Apex Court in the case of Assistant Commissioner of Income Tax and another –vs- Hotel Blue Moon reported in (2010) 3 SCC 259 submitted that omission on the part of the Assessing Authority to issue Notice under Section 143(2) of the Act within the time prescribed, cannot be a procedural irregularity and the same is not curable. Therefore, requirement of Notice under Section 143(2) of the Act cannot be dispensed with.
4. Learned counsel appearing for the Revenue would submit that the Notice dated 24.08.2017 was dispatched to the address of the assessee and the copy of the speed post acknowledgment has been placed on record for having dispatched the same. It is submitted that the e-Portal of the Income Tax Department showing the date of service as 19.12.2017 cannot be considered as the service date ignoring the service of notice made through speed post by the Department on 24.08.2017. Further, learned counsel refers to Section 292BB of the Act to contend that the petitioner- assessee has participated in the assessment proceedings and hence the grievance of the petitioner inasmuch as non-service of notice within the period of six months from the end of the financial year in which the return furnished is unjustifiable. In terms of Section 292BB of the Act, it is deemed that the service of notice is made upon him in terms of Section 143(2) of the Act under proviso thereof.
5. I have carefully considered the rival submissions of the parties and perused the material on record.
6. Proviso to Section 143(2) of the Act is extracted for ready reference which reads thus:
“Provided that no notice under this sub-section shall be served on the assessee after the expiry of six months from the end of the financial year in which the return is furnished.”
7. Section 292 BB is extracted herein for ready reference:
“292BB Where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was-
(a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner:
Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessement or reassessment.”
8. Notice under Section 143(2) of the Act dated 24.08.2017 is served on 19.12.2017 as per e-Filing Anywhere Anytime, Income Tax Department, Government of India portal (Annexure-D). Copy of the said document which is placed on record cannot be disputed by the Department on the ground that there is some technical error in the e-Portal maintained by the Department that too at this juncture. Copy of the speed post acknowledgment placed on record by the Department neither bears the signature of the assessee nor indicates the date of dispatch/service. Indeed, it is a vague and inchoate document. Hence, no reliance can be placed on the same.
9. Section 292BB of the Act contemplates, it shall be deemed that any notice under any provision of the Act, which is required to be served upon him (assessee) has been duly served upon him in time, in accordance with the provisions of the Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act, only where an assessee has appeared in any proceeding or co-operated in any inquiry relating to an assessment or re-assessment. Assessee’s appearance or co-operation is sine-qua-non to invoke Section 292BB of the Act. As could be seen from the material on record, the assessee neither appeared nor co-operated for inquiry during assessment. It is an exparte assessment concluded by the respondent–Authority, rejecting the time sought for by the petitioner to file objections to the Notices issued under Section 143(2) and under Section 142(1) of the Act. It is clear that service of notice has to be made on the assessee within a period of six months from the end of financial year in which return is furnished, not from the date or issuance of notice. The relevant factor is the date of service of Notice and the same if to be considered in accordance with the e-Portal maintained by the Department, an exception has to be taken with the order impugned herein. In such circumstances, Section 292BB would not attract and the arguments of the learned counsel for the revenue deserves to be negated.
10. Further, it is well settled legal principle that omission on the part of the Assessing Authority to issue proper notice under Section 143(2) of the Act cannot be a procedural irregularity and the same is not curable, which is referred in Hotel Blue Moon’s case (supra). The flaw found in the notice issued under Section 143(2) of the Act goes to the root of the matter and the same cannot be cured or dispensed with, to consider the case on merits. The Assessment Order is passed based on the invalid Notice, which does not survive. Notice is the foundation. Assessment Order built upon such defective notice would certainly fall to the ground.
11. For the reasons aforesaid, the writ petition is allowed. The order dated 19.12.2018 passed by the respondent marked at Annexure-A is quashed.
No order as to costs.
Sd/- JUDGE TL