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.

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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

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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

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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

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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)

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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

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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.

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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

in (2010) 3 SCC 259, it is submitted by the learned Senior

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.

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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

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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

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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  issue  notice  under  Section 143(2)  of the 1961 Act

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

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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

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(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.

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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]

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