Service Of Notice U/s 143(2) For Making Assessment

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Section 143(2) of the Income-tax Act was interpreted in the latest judgement of the Supreme Court in INCOME TAX OFFICER, ETAWAH VERSUS DHARAM NARAIN CIVIL APPEAL NO(S). 2262 OF 2018.

The Supreme Court held in the judgement that the non-availability of the respondent – Assessee to receive the notice sent by registered post as many as on two occasions and service of notice on 19th October, 2006 on the authorized
representative of the respondent Assessee whom the respondent Assessee now disowns is sufficient to draw an inference of deemed service of notice on the respondent – Assessee and sufficient compliance of the requirement of Section 143(2) of the Income Tax Act, 1961.

This judgement of the Supreme Court is important on the law of service of notice u/s 143(2) of the Income-tax Act, 1961 as a precondition to making the assessment.

IN THE SUPREME COURT OF INDIA
CIVIL APPELLATE JURISDICTION
CIVIL APPEAL NO(S). 2262 OF 2018

[ARISING OUT OF SPECIAL LEAVE PETITION

(CIVIL) NO.9174 OF 2015

INCOME TAX OFFICER, ETAWAH …APPELLANT(S)
VERSUS
DHARAM NARAIN …RESPONDENT(S)
ORDER

1. Leave granted.

2. By the impugned order, the High
Court has quashed the notice dated 16th
October, 2006 issued under Section 143(2)
of the Indian Tax Act, 1961 to the
respondent – Assessee by allowing the writ
petition filed by the said Assessee.
Aggrieved, the Revenue is in appeal before
this Court.

3. Admittedly, under the provisions of
Section 143(2) of the Income Tax Act, 1961
(as then in force) the notice has to be
served on the respondent – Assessee latest
by 30th October, 2006. In the present case,
notice was issued on 16th October, 2006
which was dispatched on 18th October, 2006
by registered post. The materials on
record indicate that on two occasions the
notice sent by registered post could not
be served on the respondent – Assessee as
he was not available and that it was served
on the authorized representative of the
respondent – Assessee on 19th October, 2006.

The question, therefore, that arises in the
writ petition was whether in such
circumstances the requirement under Section
143(2) of the Income Tax Act, 1961 was met
by the Revenue. The High Court answered
the question in the negative taking the
view that what is required to be satisfied
by the Revenue is service of notice and not
mere issuance thereof.

4. It will not be necessary for us to
decide the aforesaid question in the
present case which is being kept open for
decision in an appropriate case. We have
taken the aforesaid view as the present
case is capable of being resolved on its
own peculiar facts.

5. The non-availability of the
respondent – Assessee to receive the notice
sent by registered post as many as on two
occasions and service of notice on 19th
October, 2006 on the authorized
representative of the respondent Assessee
whom the respondent Assessee now disowns,
in our considered view, is sufficient to
draw an inference of deemed service of
notice on the respondent – Assessee and
sufficient compliance of the requirement of
Section 143(2) of the Income Tax Act, 1961.

6. On the aforesaid view that we have
taken we are of the opinion that the High
Court was not right in coming to the
impugned conclusion in the facts of the
instant matter. We, accordingly, allow
this appeal and set aside the order of the
High Court.

………………..,J.
(RANJAN GOGOI)
……………….,J.
(R. BANUMATHI)

NEW DELHI
FEBRUARY 19, 2018