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| DATE: | (Date of pronouncement) |
| DATE: | February 29, 2012 (Date of publication) |
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| Click here to download the judgement (VRA_143_2_notice_issue_service.pdf) |
S. 143(2): “Issue” of notice is equivalent to its “service”
In respect of AY 2009-10, the assessee filed a ROI on 29.09.2009. The last date for service of the s. 143(2) notice was 30.09.2010. A notice u/s 143 (2) was served by affixation at 11.20 pm on 30.09.2010. The assessee filed a Writ Petition claiming that u/s 282 (1), a notice or requisition had to be served either by post or as if it was a summons issued by a Court under the CPC and that service by affixture was invalid. The assessee relied on CIT vs. AVI-OIL India 323 ITR 242 (P&H) where it was held that a notice u/s 143(2) had not only to be issued, but had to be served before the expiry of 12 months (now 6M) from the end of the month in which the return was furnished. Hotel Blue Moon 321 ITR 362 (SC) was relied upon to contend that in the absence of a s. 143(2) notice, the assessment was invalid. HELD dismissing the Petition:
S. 143(2) (ii) provides that no notice shall be “served” on the assessee after the expiry of six months. The question is that what is the meaning of expression ‘served’? Is it used literally, so as to mean actual physical receipt of notice by the addressee or the expression ‘served’ is inter changeable with the word issue. We are of the opinion that the expressions ‘serve’ and ‘issue’ are interchangeable. In view of the law laid down in several judgments, the date of receipt of notice by the addressee is not relevant to determine, as to whether the notice has been issued within the prescribed period of limitation. The expression “serve” means the date of issue of notice. The date of receipt of notice cannot be left to be undetermined dependent upon the will of the addressee. Therefore, to bring certainly and to avoid attempts of the addressee to evade the process of receipt of notice, the purpose of the statute will be better served, if the date of issue of notice is considered as compliance of the requirement of proviso to s. 143(2) of the Act. In fact that is the only conclusion that can be arrived at to the expression ‘serve” in s. 143(2). In AVI-OIL India 323 ITR 242 (P&H), a literal meaning of the term “service” was taken in ignorance of the binding precedents. It does not lay down any binding principle and is per incuriam.
It appears the Hon’ble Court failed to appreciate that there are innumerable number of cases where the assessing authorities have deliberately dated the notices prior to the date of statutory period. This will scope forthe officers to issue notice even after the expiry of the statutory period predating the notices. The remedy the Hon’ble court could suggest that the notices be served in the normal course of business of the post office. If the addressee is avoiding the service then this fact should be recorded by the postal authorities instead of suspecting the bona fides of the assessees. It is unfortunate that such decision is pronounced bypassing the SC.
The Act itself makes a distinction between the words ‘issue’ and ‘serve’ at various places. the intention of the legislature is very much clear by using two different words at different places. Therefore, with due respect, the court cannot ignore the legislative intent. This distinction has been brought by the apex court in the case of R. K. Upadhyaya vs. Patel 166 ITR 163 (SC). It is not clear whether this decision was relied on or not before the court. With due respect, in my opinion, the above decision does not lay down the correct legal position.