Invalid Notice Service & Lack of Reasons Quash Assessment Order

The Tribunal allowed the appeals by the assessee, quashing the assessment due to the invalid service of notice under Section 148 and the failure to provide reasons for the notice issuance. The Tribunal found the delay in filing the appeals reasonable, condoning it for adjudication on merits. Additionally, it determined that the lack of a valid service of notice rendered the assessment order void ab initio, following a precedent where a similar issue led to the quashing of assessment. The Tribunal also noted the lack of a fair opportunity for the assessee to be heard, further supporting the decision to quash the assessment.

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Issues Involved:
1. Condonation of Delay
2. Validity of Reopening under Section 148 of the I.T. Act, 1961
3. Validity of Service of Notice under Section 148
4. Provision of Reasons for Issuance of Notice
5. Opportunity of Being Heard

Detailed Analysis:

1. Condonation of Delay:
The Tribunal noted a delay of 202 days in filing the appeals by the assessee. The delay was attributed to the illness and subsequent death of the assessee's previous counsel, Shri M. Mani. The appellate orders were misplaced in the counsel's office and were only forwarded to the assessee's office after the counsel's demise. The Tribunal, considering the overall facts and circumstances, found the cause reasonable and sufficient and condoned the delay, admitting the appeals for adjudication on merits.

2. Validity of Reopening under Section 148 of the I.T. Act, 1961:
The assessee challenged the validity of the reopening of assessment under Section 148, arguing that the notice issued was illegal, invalid, and bad in law. The Tribunal noted that the issue of jurisdiction and the invalidity of service of notice were identical to a previous case involving another assessee from the same group, Arunkumar Anandrao Moundekar. In that case, the Tribunal had quashed the assessment due to the lack of validity of the notice. The Tribunal decided to follow the same precedent.

3. Validity of Service of Notice under Section 148:
The Tribunal examined the service of notice under Section 148, which was reportedly served by affixture. The Tribunal referred to several legal precedents and procedural requirements under the Code of Civil Procedure, 1908, and found that the notice was not served in accordance with the law. The Tribunal noted that the AO did not make reasonable attempts to serve the notice through ordinary means and resorted to affixture without proper justification. The report of the Inspector lacked necessary details and verification, and the addresses of the witnesses were far from the assessee's premises. Consequently, the Tribunal held that the service of notice by affixture was not valid, rendering the assessment order void ab initio.

4. Provision of Reasons for Issuance of Notice:
The assessee argued that the reasons recorded for the issuance of the notice under Section 148 were not provided, which is a mandatory requirement. The Tribunal noted that the AO did not provide the reasons despite repeated requests from the assessee. This failure to provide reasons further invalidated the assessment proceedings.

5. Opportunity of Being Heard:
The assessee contended that no reasonable opportunity of being heard was provided before the assessment was framed. The Tribunal found that the AO did not adequately address the assessee's objections and failed to provide a fair opportunity to present their case. This lack of opportunity further supported the Tribunal's decision to quash the assessment.

Conclusion:
The Tribunal, after considering the submissions and examining the records, found that the service of notice under Section 148 was not valid and the assessment order was void ab initio. The Tribunal quashed the assessment on the grounds of lack of proper service of notice and failure to provide reasons for issuance of the notice. Consequently, the appeals by the assessee were allowed.

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