Full Judgment Text
REPORTABLE
IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO.8132 OF 2019
(Arising out of SLP(C) No.3530/2019)
Principal Commissioner of Income Tax,
Mumbai …Appellant
Versus
M/s IVen Interactive Limited, Mumbai …Respondent
J U D G M E N T
M.R. SHAH, J.
Leave granted.
2. Feeling aggrieved and dissatisfied with the judgment and
order dated 27.06.2018 passed by the High Court of Judicature
at Bombay in Income Tax Appeal No.94 of 2016, by which the
High Court has dismissed the said appeal preferred by the
Revenue and has confirmed the orders passed by the learned
C.I.T (Appeals) as well as I.T.A.T quashing and setting aside the
assessment order for A.Y. 200607, the revenue has preferred the
present appeal.
1
3. That the respondent – assessee filed return of income for
the Assessment Year 200607 on 28.11.2006 declaring total
income of Rs.3,38,71,716/. The said return was filed under E
Module Scheme and thereafter a hard copy of the same was filed
on 05.12.2006. The return of income was accompanied with
balance sheet and profit and loss account. The return was
processed under Section 143(1) of the Income Tax Act, 1961
(hereinafter referred to as the ‘1961 Act’). That a notice under
Section 143(2) of the 1961 Act was issued to the respondent
assessee on 05.10.2007. The notice was sent at the assessee’s
address available as per the PAN database. That a further
opportunity was provided to the assessee vide notice under
Section 143(2) of the 1961 Act on 25.07.2008. The said notice
was also issued to the assessee at the available address as per
the PAN database. That thereafter, further notices under Section
142(1) of the 1961 Act were issued to the assessee on
23.01.2008, 25.07.2008 and 05.10.2008 along with
questionnaires calling for various details and were duly served on
the respondentassessee company. In response to the said
notice, the representative of the company appeared on
28.11.2008 and 04.12.2008. The assessee participated in the
2
proceedings before the Assessing Officer. However, the assessee
challenged the notice under Sections 143(2) and 142(1) of the
1961 Act on the ground that the said notices were not served
upon the assessee as the assesseecompany never received those
notices and the subsequent notices served and received by the
assesseecompany were beyond the period of limitation
prescribed under proviso to Section 143 of the 1961 Act.
3.1 That the Assessing Officer vide assessment order dated
24.12.2008 completed the assessment under Section 143(3) of
the 1961 Act by making disallowance of Rs. 8,91,17,643/ under
Section 14A of the 1961 Act, read with Rule 8 of the Income Tax
Rules and computed total income at Rs.5,52,45,930/.
3.2 Being aggrieved by the assessment order dated 24.12.2008,
the assessee preferred appeal before the learned C.I.T (Appeals).
The learned C.I.T (Appeals) allowed the appeal vide order dated
23.12.2010 holding, inter alia, that the Assessing Officer
completed the assessment under Section 143(3) of the 1961 Act,
without assuming valid jurisdiction under Section 143(2) of the
1961 Act, and therefore, the assessment framed under Section
143(3) of the 1961 Act was invalid. The learned C.I.T (Appeals)
observed that as the subsequent service of notice under Section
3
143(2) of the 1961 Act was beyond the period of limitation
prescribed under the proviso to Section 143 of the 1961 Act and
earlier no notices were served upon the assessee and/or received
by the assessee as the same were sent at the old address and in
the meantime companyassessee changed its address and
therefore the assessment order was bad in law. The Revenue
preferred appeal before the Income Tax Appellate Tribunal, which
came to be dismissed by the learned I.T.A.T. vide order dated
19.01.2015. The order passed the learned C.I.T (Appeals) as well
as I.T.A.T. have been confirmed by the High Court, by the
impugned judgment and order. Hence, the Revenue has
preferred the present appeal.
4. Shri H. Raghavendra Rao, learned Advocate appearing on
behalf of the Revenue has vehemently submitted that the
impugned judgment and order passed by the High Court
dismissing the appeal and thereby confirming the orders passed
by the learned C.I.T (Appeals) and I.T.A.T holding that the
assessment order was bad in law, is contrary to the provisions of
Section 143(2) of the 1961 Act.
4.1 It is further submitted that the Assessing Officer sent the
notice under Section 143(2) of the 1961 Act to the assessee at the
4
available address as per the PAN database. It is submitted that
as such there was no intimation by the assessee to the Assessing
Officer with respect to change of address. It is submitted
therefore that notice under Section 143(2) of the 1961 Act was
sent to the assessee on the available address as per the PAN
database. It is submitted therefore that once notice under
Section 143(2) of the 1961 Act was issued and sent to the
assessee on the available address as per the PAN database, it can
be said to be a sufficient compliance of the relevant provisions of
the 1961 Act, more particularly Section 143(2) of the 1961 Act.
4.2 It is further submitted that as such the High Court has not
properly appreciated the fact that the alleged communication
dated 06.12.2005 from the respondentassessee to the Assessing
Officer intimating new address of the assessee was never received
by the Assessing Officer. It is submitted that even today also the
assessee is not in a position to produce the said communication.
It is submitted therefore the respondentassessee has failed to
prove that the alleged communication dated 06.12.2005 was, in
fact, sent to the Assessing Officer, intimating about new address.
4.3 It is further submitted by the learned Advocate appearing on
behalf of the Revenue that, as such, the learned C.I.T (Appeals)
5
has heavily relied upon the alleged communication dated
06.12.2005 intimating the change of address to the Assessing
Officer by the assessee, however, the communication dated
06.12.2005 is not forthcoming and has not been produced. It is
submitted therefore that in the facts and circumstances of the
case the Assessing Officer was justified in sending the notices
under Section 143(2) of the 1961 Act at the available address as
per the PAN database. It is submitted therefore that the learned
C.I.T (Appeals), I.T.A.T and the High Court have committed a
grave error in holding that the assessment order is bad in law as
the notice under Section 143(2) of the 1961 Act was beyond the
period of limitation.
4.4 It is further submitted that as such thereafter the assessee
did participate in the assessment proceedings and therefore the
learned C.I.T (Appeals) ought to have considered the appeal on
merits and ought not to have set aside the assessment order
solely on the ground that the assessment order is bad in law.
4.5 Making the above submissions, it is prayed to allow the
present appeal.
5. Shri S.K. Bagaria, learned Senior Advocate appearing on
behalf of the respondentassessee has made strenuous efforts to
6
support the orders passed by the learned C.I.T (Appeals) and
confirmed by the I.T.A.T. and the High Court. It is submitted
that as such the Assessing Officer was aware of the new address
of the assessee and therefore the Assessing Officer was required
to send the notices on the new address. It is submitted that
instead the Assessing Officer sent the notice at the old address
and therefore the same was never served upon the assessee. It is
submitted that by the time the subsequent notice was served
upon the assessee, the notice under Section 143(2) of the 1961
Act was barred by limitation as provided under Section 143(2) of
the 1961 Act. Therefore, the learned C.I.T (Appeals), I.T.A.T and
the High Court are right in holding that the assessment order
was bad in law.
5.1 Learned Senior Advocate appearing on behalf of the
assessee has further submitted that as such the change of
address and change in the name of the assesseecompany was
intimated to the Registrar of Companies in Form18. It is
submitted therefore in fact the name of the company was
changed and the change in the address has been established and
proved.
7
5.2 Shri Bagaria, learned Senior Advocate has further
submitted that the Assessing Officer was in the knowledge of the
new address, which is evident from the fact that the Assessment
Orders for A.Y 200405 and A.Y. 200506 were sent at the new
address.
5.3 Relying upon the decision of this Court in the case of
Assistant Commissioner of Income Tax v. Hotel Blue Moon reported
, it is submitted by the learned Senior
in (2010) 3 SCC 259
Advocate for the assessee that as held by this Court the issuance
of the notice under Section 143(2) of the 1961 Act within the time
prescribed in the proviso to Section 143(2) of the 1961 Act is
must and mandatory. It is submitted that therefore when it was
found that notice under Section 143(2) of the 1961 Act was not
served upon the assessee within the time prescribed in the
proviso to Section 143(2) of the Act, the assessment order was
bad in law and the same was rightly set aside by the learned
C.I.T (Appeals), confirmed up to High Court.
5.4 Making the above submissions and relying upon the
aforesaid decision of this Court, it is prayed to dismiss the
present appeal.
8
6. We have heard the learned counsel for the respective parties
at length.
6.1 At the outset, it is required to be noted that notice under
Section 143(2) of the 1961 Act was sent by the Assessing Officer
to the assessee at the address as mentioned in the PAN database
on 05.10.2007 and the same was within the time limit prescribed
in proviso to Section 143(2) of the 1961 Act. However, it was the
case on behalf of the assessee that the said notice was not served
upon the assessee as the assessee changed its name and address
and shifted to new address prior thereto and therefore the said
notice was not served upon the assessee and by the time when
subsequently the notices were served upon the assessee, notice
under Section 143(2) of the 1961 Act was barred by the period
prescribed in proviso to Section 143(2) of the 1961 Act and
therefore the assessment order is bad in law. It was the case on
behalf of the assessee that vide communication dated 06.12.2005
the assessee intimated to the Assessing Officer about the new
address and despite the same the Assessing Officer sent the
notice at the old address. However, it is required to be noted that
the alleged communication dated 06.12.2005 is not forthcoming.
Neither the same was produced before the Assessing Officer nor
9
even the same has been produced before this Court. In the
affidavit also, filed in compliance with order dated 21.08.2019,
the assessee has stated that the alleged communication dated
06.12.2005 is not available. Thus, the assessee has failed to
prove the alleged communication dated 06.12.2005. The only
document available is Form No.18 filed with the ROC. Filing of
Form18 with the ROC cannot be said to be an intimation to the
Assessing Officer with respect to intimation of change in address.
It appears that no application was made by the assessee to
change the address in the PAN data base and in the PAN
database the old address continued. Therefore, in absence of any
intimation to the Assessing Officer with respect to change in
address, the Assessing Officer was justified in issuing the notice
at the address available as per the PAN database. Therefore, the
Assessing Officer cannot be said to have committed any error and
in fact the Assessing Officer was justified in sending the notice at
the address as per the PAN database. If that is so, the notice
dated 05.10.2007 can be said to be within the period prescribed
in proviso to Section 143(2) of the 1961 Act. Once the notice is
issued within the period prescribed as per the proviso to Section
143(2) of the Act, the same can be said to be sufficient
10
compliance of Section 143(2) of the 1961 Act. Once the notice is
sent within the period prescribed in the proviso to Section 143(2)
of the 1961 Act, in that case, actual service of the notice upon
the assessee thereafter would be immaterial. In a given case, it
may happen that though the notice is sent within the period
prescribed, the assessee may avoid actual service of the notice till
the period prescribed expired. Even in the relied upon case by
the learned Senior Advocate for the assessee in the case of Hotel
Blue Moon (supra) , it is observed that the Assessing Officer must
necessarily notice under Section 143(2) of the 1961 Act
issue
within the time prescribed in the proviso to Section 143(2) of the
1961 Act. Therefore, in the facts and circumstances of the case,
the High Court is not justified in dismissing the appeal and
confirming the orders passed by the learned C.I.T (Appeals) and
the I.T.A.T. setting aside the assessment order solely on the
ground that the assessment order is bad in law on the ground
that subsequent service of notice upon the assessee under
Section 143(2) of the 1961 Act was beyond the time prescribed in
the proviso to Section 143(2) of the 1961 Act.
7. Now so far as the observations made by the High Court
while concurring with the view of the learned Tribunal that
11
merely by filing of return of income with the new address, it shall
be enough for the assessee to discharge its legal responsibility for
observing proper procedural steps as per the Companies Act and
the Income Tax Act is concerned, we are of the opinion that mere
mentioning of the new address in the return of income without
specifically intimating the Assessing Officer with respect to
change of address and without getting the PAN database
changed, is not enough and sufficient. In absence of any specific
intimation to the Assessing Officer with respect to change in
address and/or change in the name of the assessee, the
Assessing Officer would be justified in sending the notice at the
available address mentioned in the PAN database of the assessee,
more particularly when the return has been filed under EModule
scheme. It is required to be noted that notices under Section
143(2) of the 1961 Act are issued on selection of case generated
under automated system of the Department which picks up the
address of the assessee from the database of the PAN. Therefore,
the change of address in the database of PAN is must, in case of
change in the name of the company and/or any change in the
registered office or the corporate office and the same has to be
intimated to the Registrar of Companies in the prescribed format
12
(Form 18) and after completing with the said requirement, the
assessee is required to approach the Department with the copy of
the said document and the assessee is also required to make an
application for change of address in the departmental database of
PAN, which in the present case the assessee has failed to do so.
8. Now so far as the submission on behalf of the assessee that
with respect to the Assessment Years 200405 and 200506,
communications and the assessment orders were sent at the new
address and therefore the Assessing Officer was in the knowledge
of the new address is concerned, the same has been sufficiently
explained by the Revenue.
9. In view of our findings, recorded hereinabove, the impugned
judgment and order passed by the High Court as well as the
orders passed by the learned C.I.T (Appeals) and the I.T.A.T
holding the assessment order bad in law on the aforesaid ground
cannot be sustained and the same deserve to be quashed and
set aside. As the learned C.I.T (Appeals) has not considered the
other grounds on merits and has not considered the appeal on
merits, the matter is required to be remanded to the learned C.I.T
(Appeals) to consider the appeal on merits, in accordance with
law.
13
10. Accordingly, the present Appeal is Allowed. The Impugned
Judgment and Order passed by the High Court as well as the
orders passed by the C.I.T (Appeals) and the I.T.A.T are hereby
quashed and set aside. The matter is remanded to the learned
C.I.T (Appeals) to consider the Appeal on merits on other
grounds, in accordance with law. No costs.
………………………………….J.
[UDAY UMESH LALIT]
………………………………….J.
[INDIRA BANERJEE]
NEW DELHI; ………………………………….J.
OCTOBER 18, 2019. [M.R. SHAH]
14