PRINCIPAL COMMISSIONER OF INCOME TAX, MUMBAIversusM/S I-VEN INTERACTIVE LIMITED, MUMBAI

                          [2019] 13 S.C.R. 509                           509


  PRINCIPAL COMMISSIONER OF INCOME TAX, MUMBAI                           A
                                  v.
        M/S I-VEN INTERACTIVE LIMITED, MUMBAI
                   (Civil Appeal No. 8132 of 2019)
                        OCTOBER 18, 2019                                 B
      [UDAY UMESH LALIT, INDIRA BANERJEE AND
                        M. R. SHAH, JJ.]
       Income Tax Act, 1961 – s.142(1), Proviso to s.143(2) –
Respondent-assessee company filed return of income for 2006-07,          C
declaring total income of Rs.3,38,71,716/-, under E-Module Scheme
– Notice u/s.143(2) issued to the assessee on 05.10.07 at the address
available as per the PAN database –Another notice issued u/s.143(2)
– Further notices u/s.142(1) issued to the assessee – Duly served –
Notices challenged on the ground that they were not served upon
                                                                         D
the assessee as it never received them and the subsequent notices
served and received were beyond the period of limitation prescribed
under proviso to s.143– Assessing Officer made disallowance of
Rs.8,91,17,643/- and computed total income at Rs.5,52,45,930/- –
Assessment order confirmed by the CIT (Appeals), Income Tax
Appellate Tribunal (ITAT) and the High Court – Held: Mere                E
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
sufficient – In absence of such specific intimation, Assessing Officer
would be justified in sending the notice at the available address
                                                                         F
mentioned in the PAN database, more particularly when the return
has been filed under E-Module scheme– Notices u/s.143(2) 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, change of address in the database
of PAN is must, in case of change in the name of the company and/        G
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 –Thereafter the assessee is required to approach
the Department with the copy of the said document and make an
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                                 509
510            SUPREME COURT REPORTS                      [2019] 13 S.C.R.


A     application for change of address in the departmental database of
      PAN, which in the present case the assessee failed to do – Assessing
      Officer cannot be said to have committed any error and was justified
      in sending the notice at the address as per the PAN database –
      Thus, the notice dtd. 05.10.07 can be said to be within the period
      prescribed in proviso to s.143(2) – Once the notice is sent within
B
      the period prescribed in the proviso to s.143(2), in that case, actual
      service of the notice upon the assessee thereafter would be
      immaterial – Judgment of the High Court, CIT (Appeals) and the
      ITAT holding the assessment order bad in law, quashed – Matter
      remanded to the CIT (Appeals) to consider the appeal on merits, in
C     accordance with law.
            Allowing the appeal, the Court
             HELD: 1.1 Notice under Section 143(2) of the Income Tax
      Act, 1961 was sent by the Assessing Officer to the assessee at
      the address as mentioned in the PAN database on 05.10.2007
D     and the same was within the time limit prescribed in proviso to
      Section 143(2) of the 1961 Act. 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
E     address. 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 Form-18 with the
      ROC cannot be said to be an intimation to the Assessing Officer
      with respect to intimation of change in address. No application
      was made by the assessee to change the address in the PAN data
F     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
G     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

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PRINCIPAL COMMISSIONER. OF INCOME TAX, MUMBAI v.                      511
        M/S I-VEN INTERACTIVE LTD., MUMBAI

prescribed as per the proviso to Section 143(2) of the Act, the       A
same can be said to be sufficient 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
                                                                      B
notice is sent within the period prescribed, the assessee may
avoid actual service of the notice till the period prescribed
expired. [Para 6.1] [516-F-H; 517-A-E]
      1.2 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              C
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,      D
more particularly when the return has been filed under E-Module
scheme. 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         E
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 (Form 18) and after
completing with the said requirement, the assessee is required
to approach the Department with the copy of the said document         F
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. 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        G
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,

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512            SUPREME COURT REPORTS                       [2019] 13 S.C.R.


A     the matter is required to be remanded to the learned C.I.T
      (Appeals) to consider the appeal on merits, in accordance with
      law. [Paras 7 & 9] [518-A-D; F-G]
            Assistant Commissioner of Income Tax v. Hotel Blue
            Moon reported in (2010) 3 SCC 259 : [2010] 2 SCR
B           282 – referred to.
                             Case Law Reference
      [2010] 2 SCR 282                referred to              Para 5.3
            CIVIL APPELLATE JURISDICTION : Civil Appeal No. 8132
C     of 2019.
            From the Judgment and Order 27.06.2018 of the High Court of
      Judicature at Bombay in Income Tax Appeal No. 94 of 2016.
             H. Raghavendra Rao, Rupesh Kumar, Mrs. Anil Katiyar, Advs.
      for the Appellant.
D
             S. K. Bagaria, Sr. Adv., K. R. Sasiprabhu, Vishnu Sharma, Advs.
      for the Respondent.
            The Judgment of the Court was delivered by
            M. R. SHAH, J. 1. Leave granted.
E           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
F     quashing and setting aside the assessment order for A.Y. 2006-07, the
      revenue has preferred the present appeal.
            3. That the respondent – assessee filed return of income for the
      Assessment Year 2006-07 on 28.11.2006 declaring total income of
      Rs.3,38,71,716/-. The said return was filed under E-Module Scheme
G     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

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 PRINCIPAL COMMISSIONER. OF INCOME TAX, MUMBAI v.                           513
  M/S I-VEN INTERACTIVE LTD., MUMBAI [M. R. SHAH, J.]

respondent-assessee on 05.10.2007. The notice was sent at the               A
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
                                                                            B
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 respondent-assessee 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 proceedings before the Assessing
Officer. However, the assessee challenged the notice under Sections         C
143(2) and 142(1) of the 1961 Act on the ground that the said notices
were not served upon the assessee as the assessee-company never
received those notices and the subsequent notices served and received
by the assessee-company were beyond the period of limitation prescribed
under proviso to Section 143 of the 1961 Act.
                                                                            D
        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/-.
                                                                            E
       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         F
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 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             G
assessee as the same were sent at the old address and in the meantime
company-assessee 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

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514            SUPREME COURT REPORTS                        [2019] 13 S.C.R.


A     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
B     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.
C            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
      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
D     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.
E            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 respondent-assessee 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
F     not in a position to produce the said communication. It is submitted
      therefore the respondent-assessee 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
G     behalf of the Revenue that, as such, the learned C.I.T (Appeals) 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

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 PRINCIPAL COMMISSIONER. OF INCOME TAX, MUMBAI v.                           515
  M/S I-VEN INTERACTIVE LTD., MUMBAI [M. R. SHAH, J.]

of the case the Assessing Officer was justified in sending the notices      A
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.
                                                                            B
       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.
                                                                            C
      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 respondent-assessee has made strenuous efforts to support the
orders passed by the learned C.I.T (Appeals) and confirmed by the           D
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    E
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.                                                                        F
      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 assessee-company was intimated to the Registrar of
Companies in Form-18. It is submitted therefore in fact the name of the
company was changed and the change in the address has been established      G
and proved.
       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
2004-05 and A.Y. 2005-06 were sent at the new address.
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516             SUPREME COURT REPORTS                           [2019] 13 S.C.R.


A            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
B
      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.
C           5.4 Making the above submissions and relying upon the aforesaid
      decision of this Court, it is prayed to dismiss the present appeal.
             6. We have heard the learned counsel for the respective parties
      at length.

D            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
E     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
F     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
G     Officer nor 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

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 PRINCIPAL COMMISSIONER. OF INCOME TAX, MUMBAI v.                              517
  M/S I-VEN INTERACTIVE LTD., MUMBAI [M. R. SHAH, J.]

communication dated 06.12.2005. The only document available is Form            A
No.18 filed with the ROC. Filing of Form-18 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
                                                                               B
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         C
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
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
                                                                               D
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          E
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
                                                                               F
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 merely by filing of      G
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

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518            SUPREME COURT REPORTS                        [2019] 13 S.C.R.


A     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
B
      sending the notice at the available address mentioned in the PAN database
      of the assessee, more particularly when the return has been filed under
      E-Module 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
C     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 (Form 18) and after completing
      with the said requirement, the assessee is required to approach the
D
      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
E     with respect to the Assessment Years 2004-05 and 2005-06,
      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.
F           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
G     (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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 PRINCIPAL COMMISSIONER. OF INCOME TAX, MUMBAI v.                           519
  M/S I-VEN INTERACTIVE LTD., MUMBAI [M. R. SHAH, J.]

       10. Accordingly, the present Appeal is Allowed. The Impugned         A
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.
                                                                            B

Divya Pandey                                              Appeal allowed.




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