TaxTMI 
TaxTMI 
2010 (10) TMI 849
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....ed. 3. Brief facts, which need to be noted in this regard are that the case pertains to the assessment year 1985-86. In this year, the normal assessment was carried out and completed under section 143(1) of the Act on 10-6-1987 on the return income filed by the assessee in the status of the registered firm. The Assessing Officer wanted to reopen the assessment and for this purpose, notice under section 148 of the Act was prepared and issued on 27-3-1995 after obtaining the approval from the Commissioner of Income Tax-VIII, New Delhi. It is the case of the Assessing Officer that the same were served through Process Server/Inspector by affixation at the following last known address of the firm on 29-3-1995:- (i) C-89, NDSE, Part-II, New Delhi. (ii) E-167-168, Jhilmil Colony, Delhi. (iii) 17, Hotel Continental, Regal Building. 4. As per the Assessing Officer, the service of notice by affixation became necessary as the assessees could not be served by normal process, inasmuch as, all efforts to trace them has failed. Thereafter, notices under section 143(2) of the Act along with questionnaire, requisite details and particulars were issu....
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....87-88, notice under section 131 of the Act was issued on 7-3-1988 at the aforesaid Pahari Dhiraj address. Pursuant to the assessment, even TDS refund was allowed which was dispatched by the Assessing Officer at the aforesaid Pahari Dhiraj address on 15-3-1988. The assessees' firm also filed the return for the assessment year 1988-89 giving same Pahari Dhiraj address. All the notices for the purpose of assessment were issued by the Income-tax Department at this address. This aspect is highlighted just to demonstrate that when the assessment proceedings in respect of assessment years 1987-88 and 1988-89 were carried out in the year 1988, the Assessing Officer, District-V, knew the then available address of the assessees at Pahari Dhiraj which was on the record of the department. By this time, the Assessing Officer had also come to know that the assessees' firm had been dissolved. As per the department, notices to the assessees were issued at the three addresses namely C-89, NDSE, Part-II, New Delhi, E-167-168, Jhilmil Colony, Delhi and 17, Hotel Continental, Regal Building. These notices were sent through registered A.D. posts which were admittedly not served to any of these assessee....
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.... attempt had been made by the revenue to issue the notices through Regd. Post A/D and make an attempt to serve the notice, through registered post as per the requirement of Rule 19A, Order-V of Civil Procedure Code, which was then a mandatory requirement in law for service of a valid notice CIT v. Hotline International (P.) Ltd. [2008] 296 ITR 3331 (Delhi) and Bhagwan Singh v. Ram Balak Singh AIR 1988 Pat. 166 and as such, the substituted service under Rule 17 of Order V of CPC could have been effected only where the serving officer after using all due and reasonable diligence did not find the addressee or his agent. It is only then the serving officer could have affixed the copy of notice or summons at the so called last known address of the respondent. It is stated that the mere fact that the serving officer did not find the addressee at his address to be served with the notice is not sufficient to establish that the addressee could not be found. It must be shown that not only the serving officer went to the place at a reasonable time when the party could be expected to be present, but also, if he was not found, that the proper and reasonable attempts were made to find him either....
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.... was informed that the firm was not existing at 167-168 Jhilmil Colony, he straightway jumped to the conclusion that as per the record, that was the last known address. He did not even care to see the files of the assessment years 1986-87 and 1987-88. Had this care been taken, all necessary information would have been revealed to him and it would have been possible to serve the assessees at their present addresses which were specifically made available to the Assessing Officer/department. Under these circumstances, the conclusion of the ITAT is correct that even when correct addresses were available, no effort was made to serve these assessees at those addresses. 10. We may record the discussion in this behalf, contained in the order of the Tribunal, which proceeds as under:- "After that the return for assessment year 1987-88 was filed in the name of the firm, M/s. Chandra Agencies at the address of 4413, Mohalla Jatav, Pahari Dhiraj, Delhi and the assessment was also completed by mentioning the same address as above. This assessment was completed on 18-1-1988. Self-assessment tax for assessment year 1987-88 in case of M/s. Chandra Agencies was also made on the ....
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....s from these premises. Once there was a report that the firm has been shifted from these addresses, then in our considered view, there was no necessity of even fixing the notices on these addresses on 28-3-1995, as the report was given by the Inspector only on 18-3-1995. Nothing is borne out from the records available on record that Assessing Officer has attempted to know the whereabouts of the firm as well as of its partners. The assessment records were available with the Assessing Officer and the last known address i.e., 4413, Jatavpura, Pahari Dhiraj, Delhi was available on the record. We surprised that why the Assessing Officer has not made service on the last known address i.e., 4413, Jatavpura, Pahari Dhiraj, Delhi." 11. The following two things emerge from the aforesaid:- (a) No proper enquiry or attempt was made to know the whereabouts of the firm and its partners by the Assessing Officer even when these details were available with the department and, therefore, dispatching notices at the aforesaid addresses where the assessees were not residing, was of no consequence. (b) The order of affixation by the Assessing Officer in these circumstances ....
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....lhi. Therefore, this document is of no consequence. Another document is the challan vide which Sh. K.L. Khanna paid the advance tax. This pertains to assessment year 1987-88 and C-89, NDSE, Part-II is shown as address. However, this again would not help the department in view of the report of the Inspector that when he went to serve notice in March, 1995 he was specifically informed that Mr. Khanna has vacated the said house and it was occupied by one Sh. Gupta who is residing there. We observe at the cost of repetition that in these circumstances, had the care been taken by the Assessing Officer to look into his own record, he would have found the changed address of Mr. Khanna. 15. We thus conclude that there was no proper/valid service of notice under section 148 of the Act upon the respondents. 16. Notwithstanding the aforesaid position, alternate argument of the learned counsel for the appellant was that since the assessee had appeared and participated in the proceedings, no prejudice was caused to him and, therefore such a plea of non-service of notice under section 148 of the Act cannot be taken. She further submits that at the time when Mr. Khanna appeare....