In the High Court for the States of Punjab and Haryana at Chandigarh … ITA No. 522 of 2007 Date of decision: 13.2.2008 The Commissioner of Income Tax-II, Amritsar ..Appellant Versus M/s Rai Bahadur Kishore Chand & Sons .. Respondent Coram: Hon’ble Mr.Justice Satish Kumar Mittal Hon'ble Mr.Justice Rakesh Kumar Garg Present: Mr.Sanjiv Bansal, Advocate for the appellant-Revenue. Rakesh Kumar Garg,J 1. The Revenue has filed the present appeal under Section 260-A of the Income Tax Act,1961 challenging order dated 18.5.2007 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar in ITA No.462(ASR)/ 2004 by raising the following substantial questions of law:- i) Whether in the facts and circumstances of the case, the Tribunal was right in law in concluding that the assessment order had not been passed on 26.3.2004 though the revenue had stated that the said assessment order had been dispatched to the assessee on 31.3.2004 ? ii) Whether in the facts and circumstances of the case, the Tribunal has erred in law in setting aside the order of the assessment and Commissioner of Income-tax (Appeals), who based upon the office record had recorded a finding that the assessment order had been dispatched by Regd. Post on 31.3.2004 ? 2. The brief facts of the case are that the assessee filed return on 31.10.2001 declaring total income of Rs. 1,92,971/-. The same was processed under Section 143(1) on 30.3.2002 at the returned income. However, the case was selected for scrutiny and as per the stand of the Revenue, the Assessing Officer completed the assessment under Section 143(3) of the Income Tax Act, 1961 vide his order dated 26.3.2004. The taxable income of the assessee was computed by the Assessing Officer as under:- Rent received Rs.13,95,116-00 Add: Arrears of rent Rs. 25,880-00 Rs.14,20,996-00 Less: Municipal Taxes shown under the account Rs. 1,71,722-00 'House-Tax' in 'Miscellaneous Expenses' Rs. 12,49,274-00 Less: Deduction under section 24(1)(i) @ 25% Rs. 3,12,318-00 Income from house property Rs. 9,36,956-00 Add: Miscellaneous income Rs. 28,682-00 Total: Rs. 9,65,638-00 Vide this order, the Assessing Officer also ordered for initiation of penalty proceedings under Section 271(1)(c) of the Income Tax Act against the assessee for concealing the particulars of its income . The assessee filed an appeal before the Commissioner of Income Tax(Appeals) against the said order on the ground that the order dated 26.3.2004 was served on the assessee by affixture on 1.4.2004 and the same is barred by limitation as the same was never properly served upon the assessee. However, the said appeal was dismissed by him vide his order dated 3.8.2004. 3. Aggrieved against the said order, the assessee filed an appeal before the Income Tax Appellate Tribunal raising the grievance that the assessment order for the Assessment Year 2001-02 had not been passed within the time allowed. Although the assessment order passed by the Assessing Officer is dated 26.3.2004, yet it was served on the assessee by affixture only on 1.4.2004. It was also argued that no effort was made to serve the notice on the assessee through normal means before serving the notice by affixture. Thus, it was submitted that the service of the notice could be done by affixture only if service through normal means was not possible. It was also argued that in case the order was passed on 26.3.2004, why the same was not served by registered post on that date. It was also stated by the assessee that admittedly, a notice under Section 17(1) of the Wealth Act, 1957 dated 29.3.2004 for the Assessment Year 1997-98 issued by the same Assessing Officer and was served on the assessee on 31.3.2004 and the service on the said notice was accepted by the assessee and if the impugned assessment order was also ready along with demand notice and challan, the same could have been accepted by the assessee on 31.3.2004 and where was the need for the Assessing Officer to effect service of the assessment order by affixture. Thus, it was argued that the assessment order had not been passed on 31.3.2004. 4. It is also relevant to mention here that the Tribunal had asked the Revenue to produce the assessment record before the Bench vide directions dated 11.7.2006 and allowed five opportunities to the Revenue to produce this record. However, the department failed to produce any record and in fact a statement was made by the departmental representative before the Tribunal to the effect that the matter be decided in the light of the facts on record of the case. In view of these facts, the Tribunal accepted the contention of the assessee that the assessment order was not passed on 26.3.2004 and came to the conclusion that there is no evidence adduced by the Revenue that the order was indeed passed on or before 31.3.2004. It was also observed that despite repeated opportunities granted to the Revenue, no evidence was produced before the Bench to show that the assessment order was dispatched by registered post on 31.3.2004. The Tribunal also observed that it is surprising that even the service by affixture was made on 1.4.2004 in the presence of the Inspector of the department alone and not in the presence of an independent witness and thus taking into account these facts coupled with the non-production of assessment record before the Bench, the Tribunal held that the assessment order was time barred and therefore, the impugned assessment order for the year 2001-02 was quashed being passed after the statutory time limit. 5. We find no force in the contention raised by the learned counsel for the Revenue. The basic question to be decided in this case is “Whether the impugned assessment order was passed within the statutory period of limitation up to 31.3.2004 or not ? “ The Tribunal after perusing the evidence on record and taking into account the non-production of assessment record before the Bench has given a finding of fact that the impugned assessment order for the Assessment Year 2001-02 was passed after the statutory time limit. The Tribunal has noted the fact that the Revenue was given more than 5 opportunities to produce record of the Department to challenge the specific grounds of appeal taken by the assessee to the effect that assessment order dated 26.3.2004 was not served upon him within the statutory period of limitation and as such the same is liable to be quashed being passed after the statutory time limit and ultimately, the departmental representative stated before the Tribunal that the matter may be decided in the light of the facts on record of the case. While dismissing the appeal of the Revenue, the Tribunal has given a categoric finding that no evidence has been adduced by the Department to show that the impugned order dated 26.3.2004 passed by the Assessing Officer was indeed passed before the statutory time limit. 6. In view of the above, we find no irregularity/ error in the order of the Tribunal. Thus, no substantial question of law arises in the present appeal and the same is hereby dismissed. (RAKESH KUMAR GARG) JUDGE February13,2008 (SATISH KUMAR MITTAL) nk JUDGE