DCIT vs. M. K. Enterprise (ITAT Kolkata)

DATE: November 30, 2016 (Date of pronouncement)
DATE: January 4, 2017 (Date of publication)
AY: 2008-09
FILE: Click here to download the file in pdf format
S. 143(2)/ 143(3): Proper service of the notice u/s 143(2) is mandatory and its failure renders the assessment order void. The fact that an unauthorized person appeared on behalf of the assessee before the AO does not mean that the notice was properly served

(i) The main issue involves questioning the validity of notice issued u/s. 143(2) of the Act was not properly served on the assessee. The submissions of the DR was to remand the issue to the AO for verification of the documents as filed before us by way of 2 sets of paper book as discussed above. We find that the AR of the assessee filed pay register for its employees from April 2008 to March 2009. On perusal of the same, we find that no such person by name Shri M.Shankar, who said to have been received said notice issued u/s. 143(2) of the Act. The pay register as in paper books shows that the assessee has more or less seven employees for the said FY’s except for the months of Nov ’07 to March, 2008 the assessee has nine employees, except such minor changes found no change in strength of employees of assesse FY’s 2007-09.

(ii) We find from the order sheet of AO, that he recorded the issuance of notice issued u/s. 143(2) on 14-09-2009 which is at page no-4 of the paper book fixing the hearing on 23-11-09 and it was served admittedly on a person by name Shri M.Sankar on 30-09-2009 who is neither an employee nor concerned person representing the Assessee as evidently proved by the evidence as provided in paper books in the form of pay registers for FY’s 2007 to 2009. The contention of the AR was that Shri M.Sankar is not a concerned person representing the assessee to receive such notice and the notice was served on improper person. We also find from the assessment order that Shri Sanjib Sarkar being one of the partners appeared on 10-12- 2010 before the AO for first time and the order sheet at page no-1 of paper book supports the same. We further find that the AO recorded the issuance of notice u/s. 142(1) on 19-7-2010 for fixing the hearing on 02-08-2010 and thereafter, according to assessment order, probably, after 26-08-2010 another notice for initiation of penalty proceedings u/s. 271(1)(b)of the Act was issued. Therefore, it goes to show that a person claiming to be representing the assessee as partner appeared before the AO for the first time on 10-12-2010 in response to notice issued u/s. 271(1)(b) of the Act and it concluded that the service of notice u/sec 143(2) on 30-09-09 and issuance of notice thereafter u/sec 142(1) of the Act was not in the knowledge of the assessee and as rightly contended by the AR notice u/sec 143(2) of the Act was not properly served on the assessee.

(iii) We also find that there is a gap of one year between issuance of notice u/s. 143(2) and appearance of partner representing Assessee before the AO. Therefore, the order sheets of assessment record as filed by the assessee by way of paper book suggests that the assessee was not appeared before the AO in response to notice issued u/s. 143(2) of the Act as it was not in the knowledge of Assessee. Therefore, we hold that the statutory notice issued u/s. 143(2) of the Act was not properly served on the assessee, which is mandatory as per section 143(2) of the Act.

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