Reopening notice even if served after limitation period is valid.

Where the AO issued a notice under section 147 of the Act and also tried to serve it on the assessee within the limitation period of six years but the assessee claimed that same was served only after the expiry of the limitation period and the question arose whether the notice was valid, HELD:

(i) S. 149, which imposes the limitation period, requires the notice to be “issued” but not “served” within the limitation period. Once a notice is issued within the period of limitation, jurisdiction becomes vested in the AO to proceed to reassess. Service is not a condition precedent to conferment of jurisdiction but it is a condition precedent to the making of the order of assessment;

(ii) S. 27 of the General Clauses Act, 1897 creates a rebuttable presumption of due service or proper service if the document sought to be served is sent by properly addressing, prepaying and posting by registered post to the addressee and such presumption is raised irrespective of whether any acknowledgment due is received from the addressee or not. This means that the addressee to whom the communication is sent must be taken to have known the contents of the document sought to be served upon him without anything more. Similar presumption is raised under illustration (f) to S. 114 of the Indian Evidence Act whereunder it is stated that the Court may presume that the common course of business has been followed in a particular case, that is to say, when a letter is sent by post by pre-paying and properly addressing it the same has been received by the addressee. These presumptions are rebuttable but in the absence of proof to the contrary the presumption of proper service or effective service on the addressee would arise;

(iii) On facts, the assessee had refused to accept the notice at three