Notice Served Incorrectly; Assessment Order Quashed Due to Invalid Service Under Income-tax Act Procedures.

The Tribunal concluded that the service of notice under section 143(2) was invalid as it was served on 'A. Singh', an unauthorized individual, contrary to the procedures outlined in section 282 of the Income-tax Act and the CPC. Consequently, the assessment order was deemed ab initio invalid and quashed. The assessee's appeal was allowed.

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Issues Involved:
1. Validity and proper service of notice u/s 143(2) within the specified time limit.

Summary:

Issue 1: Validity and Proper Service of Notice u/s 143(2)
- The primary issue was whether the notice issued by the Assessing Officer (AO) u/s 143(2) was validly and properly served on the assessee within the specified time limit.
- The assessee, a firm dealing in books and journals, filed a return declaring a loss of Rs. 10,200. The AO completed the assessment u/s 143(3)/144 assessing the total income at Rs. 20,00,000.
- The assessee challenged the validity of the assessment order on the grounds that no notice u/s 143(2) was served within the specified time limit.
- The CIT(A) examined the assessment record and found that the notice was served at the address given by the assessee and signed by 'A. Singh'. The assessee contended that the signature did not belong to any of its partners or authorized representatives and alleged that the notice was served on a fictitious person.
- The AO confirmed that the notice was served through the Process Server and acknowledged by 'A. Singh'. The AO argued that there was no fixed procedure for service of notice and that the notice was validly served at the assessee's premises.
- The Tribunal observed that the AO's claim of no fixed procedure for service of notice was incorrect. The procedure is specifically provided in section 282 of the Income-tax Act, 1961, and relevant provisions of the Civil Procedure Code (CPC).
- According to section 282, a notice may be served personally or as if it were a summons issued by a court under the CPC. Rules 12, 13, 15, 16, and 18 of Order V of CPC outline the procedures for service of summons.
- The Tribunal noted that service of notice on an employee who is not authorized to receive such notices is invalid. The notice must be served on the person named, an authorized agent, or an adult family member residing with the person named.
- In this case, the notice was served on 'A. Singh', who was neither an authorized agent nor an employee of the assessee. The serving officer did not identify 'A. Singh' nor was the delivery witnessed as required by Rule 18 of Order V of CPC.
- The Tribunal concluded that the Revenue failed to establish that the notice was served on the assessee or its authorized representative. Therefore, the service of notice was invalid.
- Consequently, the assessment completed in pursuance of the invalid notice was deemed ab initio invalid and was quashed.

Conclusion:
- The appeal of the assessee was allowed, and the assessment order was quashed due to the invalid service of notice u/s 143(2).

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