TaxTMI 
TaxTMI 
2008 (1) TMI 473
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....ed under s. 143(1)(a) on 25th Sept., 1997 determining refund payable at Rs. 56,470. The AO observed that the audit has pointed out that against receipts for work done of Rs. 50,96,608, the assessee firm had shown receipts of only Rs. 46,84,488 and there was a short computation of income to the extent of Rs. 4,12,190. Accordingly, the case was reopened and notice under s. 148 of the Act was issued on 21st Jan., 2002 and served on assessee on 24th Jan., 2002. No return was filed by the assessee in response to notice under s. 148 of the IT Act, 1961. The AO issued notice under s. 142(1) on 27th Aug., 2002 fixing the case for compliance on 4th Sept., 2002. According to AO, this notice was duly served by notice server on 3rd Sept., 2002. Another notice under s. 143(2) was issued on 20th Dec., 2002 fixing the compliance on 3rd Jan., 2003. According to AO, this notice was received by one Shri Babloo on 27th Dec., 2002. There was no compliance to this notice also. The AO also issued a notice to the assessee through IT Inspector. The report of the Inspector reads as under: "The shop has since been closed. However from the enquiry from the other persons it is gathered by me that Mr. M.S. ....
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....hat no further evidence or material has been brought on record by the AO vide his remand report to show that the recipient of the notice is an authorised person, i.e. any partner of the firm. 5. In view of the above, it was submitted by the assessee before the CIT(A) that no notice under s. 148 was received by the assessee. The assessee also prayed that there was no legal or valid service of notice under s. 148 in present case, the AO did not acquire a legal or valid jurisdiction to pass any order in the present case. 6. The learned CIT(A) accepted this contention of the assessee that neither the notice under s. 148 was served on the partners of the firm nor on the Authorised Representative of the firm, or any person authorised in this behalf by the firm. For the sake of convenience, we may reproduce the finding of CIT(A) on this issue, which reads as under: "2.8...........I have carefully considered the reply given by the appellant and perused the assessment order. A remand report was called for from the AO vide this office letter dt. 5th April, 2005 in which the assessee (sic-AO) was informed that the appellant has challenged the validity of the service of notice under s....
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.... ITI to ITO and under which context. As far as language of the report is concerned, it speaks about the memory of the Inspector. Thus, it is certain that the report has been given afterward of the service of notice i.e. 24th Jan., 2002. Since the ITI had not identified the person to whom he has served the notice, it is clear that neither the notice has been served on the partner of the firm, nor on the Authorised Representatives of the appellant firm in this regard as per provision of s. 282 of the IT Act, 1961. The Hon'ble Supreme Court in its judgment in case of R.K. Upadhyaya vs. Shanabhai P. Patel (1987) 62 CTR (BC) 17 : (1987) 166 ITR 163 (BC) have held, that service under the new Act, is not a condition precedent to confirmation of jurisdiction on the ITO. It is a condition precedent and to making of the order of assessment. The Hon'ble Allahabad High Court in case of Addl. CIT vs. Prem Kumar Rastogi have held that a person who is not an authorised agent of the assessee or an agent or manager. personally carrying on the assessee's business or an adult member of the family but who has merely accepted notices in the past on his behalf cannot be deemed or treated to be an author....
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....., 2002, proceedings under s. 148 were initiated by way of issuance of notice under s. 148 of the IT Act, 1961 on 21st Feb., 2002. This notice was served upon the assessee on 24th Jan., 2002." He further submitted that the plea of the assessee before the CIT(A) was that the notice under s. 148 was never served on the assessee as the office of the assessee was no more situated at 82, G.B. Marg, Lucknow on the date of alleged issuance of notice. In this regard, Shri Anadi Verma, senior Departmental Representative submitted that office records show that the assessee has communicated neither closure of business nor change of address of business premises which was the bounden duty of the assessee. He further submitted that notice under s. 148 was sent to M/s Bedi Enterprises, 82, G.B. Marg, Lucknow which was served on 24th Jan., 2002. He further submitted that ITI, in his report, has duly stated that notice under s. 148 in this case, for asst. yr. 1996-97 was served at the residential address 48, Purana Kila, Lucknow on 24th Jan., 2002 as the assessee was not available at G.B. Marg, address. He further stated that above notice was served on a lady who was present in the house. Shri Anad....
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....stified in relying on the report of ITI. He also relied on the following decisions: 1. R.K. Upadhyaya vs. Shanabhai P. Patel; 2. Addl. CIT vs. Prem Kumar Rastogi (1980) 124 ITR 381 (All); 3. Laxmi Narain Anand Prakash vs. CIT 1980-(ST2)-GJX-011-All; 4. Bhagwan Devi Saraogi & Ors. vs. ITO & Ors. (1979) 118 ITR 906 (Cal); 5. ITO vs. Bal Govind Singh 2004 (4) MTC 1101 (All); 6. Gorakhpur Petro Oils Ltd. vs. Addl. CIT [ITA No. 1951/All/1996 dt. 12th Oct., 2004 (sic-31st May, 2005)] [reported at (2005) 95 TTJ (All)(TM) 489-Ed.]; 7. Chandra Agencies vs. ITO (2004) 89 ITD 1 (Del); 8. Duli Chand Luxmi Narain vs. Asstt. CIT (2004) 90 TTJ (Del) 236 : (2004) 89 ITD 426-(Del); 9. Hind Book House vs. ITO (2005) 93 TTJ (Del) 224 : (2005) 92 ITD 415 (Del). 10. We have heard learned representatives of both the parties at length and have also perused the materials available on record. The decisions cited at the time of hearing of the appeal were duly considered. Sec. 148(1) of the IT Act, 1961 reads as under: "148. (1) Before making the assessment, reassessment or recomputation under s. 147, the AO shall serve on the assessee a notice requiring him to furnish within....
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....ng should also record necessary detail so as to avoid any dispute in this regard. In the instant case, it has been claimed by the assessee that no notice under s. 148 of the IT Act, 1961 was served. We also find that there was no participation in the proceedings under s. 148 of the IT Act. There was no response from the assessee to the notice issued under ss. 143(1) and 143(2) of the IT Act. Thus, the AO framed the assessment under s. 148/144 of the IT Act, 1961. It is well settled law that it is the duty of the Revenue to establish that a service of notice under s. 148 was made on the assessee himself or on somebody duly authorised by him in that behalf When the assessee took the plea that there was no proper service on him, it is for the Revenue to place the relevant material to substantiate the plea that the assessee was served with proper notice. In the case of R.K. Upadhyaya vs. Shanabhai P. Patel, the Hon'ble Supreme Court held that "the mandate of s. 148(1) is that reassessment shall not be made unless there has been service." In our considered view, valid assessment order could not be passed without proper service of notice. 11. In the case of Addl. CIT vs. Prem Kumar Ra....