Micro Spacematrix Solution P Ltd vs. ITO (ITAT Delhi)

(i) It is well accepted proposition of law that the burden was on the Revenue to prove that notice was validly served on the assessee within the prescribed time limit as per the provisions of section 143(2) of the Act. A valid service of notice can be made only if:

(1) if it is cumulatively shown, by the support of reliable evidence, by the Revenue that the notice u/s 143(2) of the Act was issued to the assessee through any of the modes as per mandate of section 282 of the Act;

(2) the complete name and address of the assessee as written in the return of income was correctly written over the notice and the envelope containing the notice and properly stamped was handed over to the assessee providing reasonable time to the postal authorities for service upon the assessee prior to expiry of prescribed time limit;

(3) proof of handing over of said notice to the postal authorities should be established by placing on record the receipt and tracking number issued by the postal authorities at the time of handing over of envelope [containing notice]

(4) thereafter, neither the acknowledgment of receipt of notice by the assessee nor the notice is returned unserved then it shall be presumed that it was validly served upon the assessee.

(ii) The said presumption can only be made if the Revenue successfully established that the aforementioned four conditions have been categorically and cumulatively fulfilled and complied. At the same time, we may also point out that the said presumption is not permissible which demolished the case of the Revenue based on presumption of valid service of notice at any of the four stages mentioned above.

(iii) In our considered opinion, notice contains full address as per return of income is kept inside the envelope and the address of the assessee is mentioned on the envelope to indicate the addressee to the postal authorities and postal officer to whom envelope is handed over, notes the address from the envelope and if such address is incomplete or incorrect then the pre condition No. (2), as noted above, cannot be held as fulfilled and the presumption of valid service of notice cannot be made. In the present case, at the cost of repetition, we clearly observe that the address noted by the postal authorities [paper book page 5] is an incomplete address if compared with the address given by the assessee in the return of income for A.Y 2006-07 [paper book page 1] and thus we have no hesitation to hold that the first notice issued by non jurisdictional AO, ITO, Ward 32(4) was not handed over to the postal authorities with complete and correct address and thus a rebuttable presumption, which can be rebutted by filing and showing substantive and reliable facts, evidence and circumstances.

(iv) We may also point out that the same cannot be rebutted by self serving explanation and document or by merely uttering word of mouth in a casual manner that the assessee did not receive the notice and such lame excuses, self serving evidence and word of mouth are not sufficient for establishing rebuttal of said presumption.

(v) In the light of above noted propositions, when we logically analyze and test the fact of the present case, on the touch stone of well accepted principles on service of notice, preconditions for having presumption of valid service of notice and its rebuttal, then we observe that the notice issued by non jurisdictional ITO of Ward 32(4) dated 19.10.2007 was handed over to the postal authorities containing in an envelope and the address mentioned in the notice was as per return of income but the address noted by the postal authorities [paper book page 5] is incomplete and presumption of valid service of notice on the basis of copy of the postal record, as relied by the Revenue, available at assessee’s paper book page 5 cannot be made and thus we are inclined to accept contention of the assessee towards attempt of rebuttal of presumption that the first notice dated 19.10.2007 was issued by the non jurisdictional AO and the notice was handed over to the postal authorities containing incomplete and incorrect address on the envelope as address mentioned by the AO in the copy of the notice dated 19.10.2007 [paper book page 6] is “Micro Spacematric Solution Private Limited, 32/205, First Floor, Vikram Vihar, Lajpat Nagar IV, New Delhi 110 024” whereas thë address noted by the postal clerk from the envelope was “Micro Spacematrix Solution, Sohel, 32/205, Vikram Vihar, which clearly shows that the address noted by the postal authorities from the envelope containing said notice was dated 19.10.2007 not only incomplete but it was incorrect. Hence, valid presumption of service of notice in favour of Revenue and against the assessee cannot be made.