Budget 2008 -Fine Prints
The Finance Bill 2008 has proposed a very important change. Suppose you did not receive any scrutiny notice u/s 143(2) and suddenly one day you get a call from income tax officer that your case is selected for scrutiny , that the notice u/s 143(2) required for selection of case for scrutiny was sent by registered post .After this you or your lawyer or C.A appeared before the A.O and submitted details . The compliance on verbal information given by the A.O is often done because the authorised representative or the assessee , do not want to earn the ire of the officer concerned and also in the hope that the cooperation may result in small addition and will save the assessee from harsh assessment . However if the the A.O passed the order with heavy additions. assessee used to appeal before CIT (Appeal) and raise the issue of non receipt of the first notice u/s 143(2) .
Now, a new section 292 BB is inserted to state as under
Where an assessee has appeared in any proceeding or cooperated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under this Act that the notice was—
(a) not served upon him; or
(b) not served upon him in time; or
(c) served upon him in an improper manner.”.
The provision is self explanatory . The need of hour therefore, both for the assessee and their A.Rs is that if you have any grievance regarding the receipt of notice, make an issue in the beginning itself and not later stage. The law will take A.O’s side!
What Govt. says?
In its memorandum to the Finance Bill 2008, the government has given following reasons for such a provision
Instances have come to the notice of the department, where notices under sub-section (2) of section 143, though issued by registered post within twelve months from the end of the month in which the return was furnished, have been held `invalid’ on the ground that the notice was actually received by the assessee after the limitation date and there was no `service’ as postulated under the section. This is notwithstanding the fact that the assessee has attended the assessment proceedings in response to the notice served on him. Instances have also come to notice where the orders of the assessing officer is being quashed on the consideration that there is no evidence of issue or service of notice, even though the assessee and his authorized representative have attended the hearing before the Assessing Officer during the assessment proceedings. Further, the design of the limitation period with reference to the end of the month leads to administrative inconvenience in as much as the last day of every month becomes a time barring date. In order to address these issues and to reduce litigation, it is proposed to insert a new section 292BB.
In my opinion this is a very welcome move by the government because this will eradicate following problems both for the assessee and the income tax department
- The A.O will have to serve the notice properly , otherwise the assessee will not appear before him.
- The absence of “a paper ” known as notice does not override all other proceedings where assessee submitted all papers and assessments were made..
- The unscrupulous persons practicing in the income tax department will lose one reason to win a case. This one step towards an environment where only professionalism will make you winner