TaxTMI 
TaxTMI 
2005 (1) TMI 54
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.... the point of service of notice by the mode of substituted service as indicated by Order V, rules 17 and 20, of the Code of Civil Procedure could be entertained by the Income-tax Appellate Tribunal when that point was not raised before either the Assessing Officer or the Commissioner of Income-tax? 3. Whether, on the facts and in the circumstances of the case, non-raising of point of non-service of notice to the assessee within the prescribed time limit, the Income-tax Appellate Tribunal was having jurisdiction to set aside the judgment and orders passed by the Assessing Officer and the Commissioner of Income-tax? 4. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in setting aside the judgment and orders passed by the Assessing Officer and the Commissioner of Income-tax quashing the assessment on the point of non-service of notice and resultantly lacking of jurisdiction to initiate the proceedings for assessment of tax? 5. Whether, on the facts and in the circumstances of the case, the judgment and orders passed by the Income-tax Appellate Tribunal is bad in law?" The assessee (respondent herein) is a limited company. ....
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....essee. Having heard learned counsel for the parties and having perused the record of the case, we are of the considered opinion that the appeal deserves to be allowed in part resulting in setting aside of the finding in so far as it relates to notice issued by the Assessing Officer to the assessee is concerned. In our considered opinion, the Tribunal erred in annulling the assessment on the ground of invalidity of service of notice dated November 24, 1997, issued under section 143(2) ibid on the assessee. This finding in our humble view is not legally sustainable for various reasons as indicated infra. Firstly, the assessee not having raised any objection in relation to the legality or invalidity or illegality or irregularity of the impugned notice dated November 24, 1997, either before the Assessing Officer or even before the Commissioner of Income-tax (Appeals) the same could not have been held in favour of the assessee. Secondly, and on the other hand, the assessee having submitted to the jurisdiction of the Assessing Officer and when on appearing before him, participating in the proceedings on each date of hearing which lasted for more than one year and raising all possible ....
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....r or irregular and whether it can be held to be good or not as per law. In substance, therefore, we are of the view that the question of service of notice cannot be said to be a pure question of law as sought to be urged by the assessee but it is a mixed question of law and fact. The position would have been different, if the Assessing Officer had recorded a factual finding on this issue on an objection being raised by the assessee before him and the same was again examined by the Commissioner of Income-tax (Appeals) at the instance of the appellant in appeal and some factual finding essentially on the issue of service of notice had been recorded. In our opinion, therefore, the Tribunal should not have allowed the assessee to raise the plea of service of notice for the first time in second appeal as one of the additional grounds for challenging the order of assessment. It was much more so when there was no factual material available for recording a finding on merits. The submission of learned counsel for the assessee with vehemence was that firstly on the basis of the material on record, i.e., report of P.S., one could conclude that the service of notice dated November 24, 1997,....
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....f P.S. is incorrect. Secondly, by the very fact that the assessee appeared before the Assessing Officer thereafter pursuant to the notices issued under section 142(1), the so-called objection regarding effecting service by affixture on the assessee loses its significance. After all, one of the basic objects of service of notice on the assessee is to give him full opportunity to participate in the assessment proceeding before the final assessment order is passed. The position would have been different if the Assessing Officer had proceeded to make assessment on the strength of such service of notice without affording any opportunity to the assessee to participate in the proceeding and had passed an ex parte assessment order holding the assessee to have been validly served. Such is not the case. Learned counsel for the assessee then placed reliance on an authority reported in CIT v. Thayaballi Mulla Jeevaji Kapasi [1967] 66 ITR 147 (SC) and contended that the impugned notice can be declared illegal. We do not agree. Firstly, the facts of that case and those involved in this case are distinguishable. Secondly, in that case, the Supreme Court eventually upheld the notice. Thirdly, in ....