Service of notice through affixture deemed illegal, reassessment quashed. Appeal allowed.

The Tribunal found the service of notice under Section 148 of the Income Tax Act through affixture to be illegal and void ab initio. As a result, the reassessment proceedings based on such notice were quashed. The Tribunal allowed the appeal filed by the assessee, and the order was pronounced on 04.08.2016.

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Issues Involved:
1. Validity of service of notice under Section 148 of the Income Tax Act.
2. Compliance with the procedure laid down in the Code of Civil Procedure (CPC) for service of notice.
3. Legality of reassessment proceedings based on improperly served notice.

Issue-wise Detailed Analysis:

1. Validity of Service of Notice under Section 148 of the Income Tax Act:
The primary issue raised by the assessee pertains to the validity of the service of notice under Section 148 of the Income Tax Act. The assessee contended that the notice was not served according to the prescribed procedures, specifically highlighting that the notice was affixed at the residence without following the due process. The Tribunal acknowledged that the notice was issued and affixed on the same date without any prior attempts to serve it through other means.

2. Compliance with the Procedure Laid Down in the Code of Civil Procedure (CPC) for Service of Notice:
The assessee argued that the service of notice through affixture did not comply with the CPC's requirements. The Tribunal referred to several legal precedents to support this claim. According to Order V, Rule 12 of the CPC, service must be effected on the defendant in person or on his agent when practicable. The Tribunal noted that in this case, the notice was neither tendered to the assessee nor refused by the assessee or his agent. Moreover, under Order V, Rule 17, affixation is permissible only when the assessee or his agent refuses to sign the acknowledgment or cannot be found, which was not the situation here.

3. Legality of Reassessment Proceedings Based on Improperly Served Notice:
The Tribunal found that the reassessment proceedings were invalid due to the improper service of notice. The Tribunal cited the case of Sumanglam Sewa Awam Education Samiti vs. ACIT, where it was held that reassessment under Section 148 is invalid if the notice is not properly served on the assessee or his agent. Similarly, in CIT vs. Kishan Chand, the Punjab & Haryana High Court held that notice served through affixture without attempting other modes of service is not valid. The Tribunal also referenced its own decision in the case of Sh. Suresh Kumar Sharma vs. ITO, reiterating that notice by affixture must follow due diligence and proper procedures, which were not observed in this case.

Conclusion:
The Tribunal concluded that the service of notice through affixture was illegal and void ab initio. Consequently, the reassessment proceedings based on such notice were quashed. Since the assessment order was quashed, the grounds of appeal on merits were not adjudicated as they became infructuous. The appeal filed by the assessee was allowed, and the order was pronounced in open court on 04.08.2016.

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