Non-service of notice-onus is on Revenue to demonstrate that notice was issued in accordance with law-ITAT

Non-service of notice-onus is on Revenue to demonstrate that notice was issued in accordance with law. Assessee cannot be asked to lead negative evidence-ITAT  

ABCAUS Case Law Citation:
ABCAUS 1117 (2017) (02) ITAT

Assessment Year : 2007-08

Date/Month of Pronouncement: February 2017

Brief Facts of the Case:
As per AIR information available with the tax authorities, it was noticed that the assessee had deposited an amount of Rs. 20 lakhs in cash on various dates in his Savings Bank Account in the year under consideration.

Accordingly, notice under section 148 of the Income Tax Act, 1961 was issued to the assessee after recording of reasons. In response thereto, the assessee filed its return of income. Subsequently notices u/s 143(2)/142(1) were issued alongwith questionnaire etc. and finally rejecting the explanation offered by the assessee, the assessment was concluded.

The assessee challenged the jurisdiction of the Assessing Officer (AO) to pass the order and also challenged the decision on merits.

Before the CIT(A), the assessee challenged the order on the ground that the assessment was made u/s 143(3)/148 of the Act, without service of alleged notice issued u/s 148. However, the CIT(A) dismissed this ground on the ground that the assessee had not produced any evidence in support of his contention.

Contentions of the Assessee:
The assessee approached the Tribunal and contended that his ground was dismissed requiring him to produce negative evidence.

The assessee made his limited prayer that the issue may be set-aside back to the file of the CIT(A) directing the said authority to first decide the jurisdictional issue considering the record.

Observations made by the ITAT:
It was observed by the Tribunal that the Revenue could not show as to what is the kind of evidence, an assessee can produce to show that no notice was served upon it.

The Tribunal opined that the conclusion drawn by the CIT(A) on facts could not be upheld as it suffered from patent fallacy which was against all common sense and logic.

The Tribunal stated that the factum of issuance of notice within time is to be proved on query by the authority whose jurisdiction is challenged for want of notice. The aggrieved party cannot be asked to lead negative evidence in support of its claim. When service of notice is challenged by a party then the onus to demonstrate that notice was issued in accordance with law is on the authority whose jurisdiction in the absence of notice is under challenge. The dismissal of assessee’s ground requiring the assessee to produce evidence in support of its contention was beyond the law or logic.

Held:
The order was set aside and the issue was restored back to the file of the CIT(Appeals) with a direction to first decide the jurisdictional issue on facts in accordance with law and thereafter to proceed to consider the issue on merits if so warranted on facts.