TaxTMI 
TaxTMI 
2015 (11) TMI 490
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....as processed u/s 143(1) of the Income Tax Act, 1961 on 26.03.2006 at the returned income. Meanwhile a survey had been conducted on the premises of the assessee on 17.02.2006 wherein during the course of survey, a loose paper (marked as Page No 89 of Annexure D-3) was found which showed that certain payments had been made by one Shri Vijay Gupta and another Shri JK Gulati to Shri Satish Kumar, Secretary of the assessee society. The amount pertaining to AY 2003-04 was Rs. 33,15,100/- which according to AO was the undisclosed income having escaped assessment u/s 147 r.w.s. 148 of the Income Tax Act, 1961. Notice u/s 148 was issued on 26.03.2007 and was served upon the assessee through affixture on 16.04.2007. Para 2 on Page 2 of the Assessment Order contains the information about service of notice through affixture. 3. The ground of appeal relating issue of service of notice through affixture was not taken before the Ld. CIT(A) and it is only in this appeal before us that this ground has been raised for the first time. The assessee has specifically challenged the issue of non service of notice under section 148 before us, albeit, for the first time. The Learned DR has strongly obje....
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....dly, no notice was tendered either to the assessee or his agent nor was the same refused either by the assessee or his agent. The Learned AR further submitted that the notice allegedly served on 16.04.2007 and that too by affixture is in complete violation of Order V Rule 17 of CPC, as the conditions precedent to said affixture of notice were never satisfied by the learned AO. The Learned AR also submitted that service of notice by affixation can be resorted to only when the department has discharged its initial onus by showing that authority concerned has reason to believe that assessee was intentionally hiding himself from authorities for purpose of avoiding service or that there were other good reasons to come to the conclusion that summons could not be served in the ordinary way. The Learned AR submitted that the said process had not been exhausted or carried out by the AO in the instant case and as such, the service of notice by affixation is bad in law. The Learned AR placed reliance on the decision of the Hon'ble Delhi High Court in CIT, Delhi - IV vs Hotline International (P) Ltd. 296 ITR 333 in support of his preposition. He also relied on the judgment rendered by the Hon'....
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....u/s 282. 6. We have considered the rival submissions and have perused the facts on record. Undisputedly, notice u/s 148 was issued on 26.03.2007 and was served upon the assessee through affixture on 16.04.2007. This fact has been recorded by the AO also on Page 2 of the Assessment Order. There is no other evidence on record to even suggest that efforts were made earlier to serve the notice on the assessee. The short question which arises for consideration in this case is as to whether notice under section 148 of the Act has been duly served upon the assessee prior to the commencement or completion of the reassessment proceedings or not. The issue at hand will necessarily have to be examined in light of the relevant provisions of Income Tax Act, 1961 as well as the Code of Civil Procedure, 1908. 7. The relevant portion of section 148(1) of the Act, reads as under: "148. Issue of notice where income has escaped assessment.- (1) Before making the assessment, reassessment or re computation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his i....
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....e house in which the defendant ordinarily resides or carries on business or personally works for gain, and shall then return the original to the Court from which it was issued, with a report endorsed thereon or annexed thereto stating that he has so affixed the copy, the circumstances under which he did so, and the name and address of the person (if any) by whom the house was identified and in whose presence the copy was affixed. " Order V, Rule 19A provides for simultaneous issue of summons for service by post in addition to personal service. It reads as under:- "Rule 19A. Simultaneous issue of summons for service by post in addition to personal service.-(l) The Court shall, in addition to, and simultaneously with, the issue of summons for service in the manner provided in rules 9 to 19 (both inclusive), also direct the summons to be served by registered post, acknowledgement due, addressed to the defendant, or his agent empowered to accept the service, at the place where the defendant, or his agent, actually and voluntarily resides or carries on business or personally works for gain: Provided that nothing in this sub-rule shall require the Court to issue a summo....
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.... notice was tendered either to the assessee or his agent nor was the same refused either by the assessee or his agent. Under Order V, Rule 17 of the Code of Civil Procedure, the affixation can be done only when the assessee or his agent refuses to sign the acknowledgement or could not be found. Here, in the present case, it is very much apparent from the records that no effort was made by the Income-tax Department to serve the notice upon the assessee and no effort was made by the AO to locate the assessee. Even otherwise, as per Order V, Rule 19A of the Code of Civil Procedure, the notice sent by registered post ought to have been sent along with acknowledgement due but admittedly it was not sent along with acknowledgement due. The Delhi Bench of the Tribunal in the case of Dr. K.C. Verma vs ACIT 84 ITD 33 (Delhi) held as follows :- "Section 282 provides the manner in which a valid service can be affected. According to this section, a notice under the Act is to be served either by post or as if it was summon under the Code of Civil Procedure, 1908. In the present case, admittedly, notice was never sent by post. So the question arises whether the service was effected in ac....