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2018 (5) TMI 247
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....trength of a notice alleged to have issued/served on 18.07.2011 by way of affixture, without following the procedure laid down for the substituted service. 4. The learned Commissioner of Income Tax (Appeals) erred in confirming the order u/s 144 r.w.s 147, which is made by serving a notice u/s. 148, by affixture without following the procedure in terms of provisions of Order V, Rule 17-20 of CPC r.w.s 282 of the IT Act. 5. The learned Commissioner of Income Tax (Appeals) erred in confirming an amount of Rs. 50 lakhs, which is considered as income, suppose to have admitted by the assessee, by a letter after survey u/s. 133A, in the absence of any incriminating material found during the course of survey. 6. The learned Commissioner of Income Tax (Appeals) erred in accepting the validity of the notice u/s 148, in view of the Assessing Officers submissions, ignoring the submission of assessee, during the course of assessment proceedings and also before the Commissioner. 7. The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if it is considered necessary". 2. In th....
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....returns, it did not offer the amount of Rs. 50 Lakhs disclosed for the impugned assessment year. AO has noticed that assessee has not filed any return of income in AY. 2009-10 and has issued notice u/s. 142(1) calling for return of income on 19-11-2010, which was served on assessee on 20-11-2010. Assessee did not respond to the said notice. Subsequently, proceedings u/s. 147 were initiated and a notice u/s. 148 dt. 18-07-2011 was issued which was served by affixture on 18-07-2011 itself. Thereafter, a notice u/s. 143(2) was issued on 16-01-2013 and various notices and summons were issued. Assessee denied having earned the amount of Rs. 50 Lakhs and submitted that books of account were impounded by the department and since necessary permissions have been not taken for retention of the books, it pleaded for return of the books of account. AO issued show cause notice on 22-02-2013 and proposed why an ex-parte assessment cannot be made u/s. 144 of the Act. Even though assessee responded and appeared on 14-03-2013 and asked for return of the books and verification of the file for evidence of issuance on notice u/s. 148, AO came to the conclusion that assessee has no intention to file re....
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.... demand on 07-07-2011, it was the contention that AO is very much aware about the whereabouts and address of assessee. Therefore, service by affixture does not arise. Further, Ld. Counsel submitted that the so called notice was stated to have been issued on 18-07- 2011 and without going through the procedure of service prescribed, AO resorted to service by affixture which procedure is not proper. Ld. Counsel relied on the Co-ordinate Bench decision in the cases of Arunlal Vs. Asst. CIT [1 ITR (Trib) 1]; and Co-ordinate Bench decision in the case of Sri Anthi Reddy Yamireddy Vs. The Dy.CIT in ITA No. 96/Hyd/2017, dt. 23-05- 2017. It was the submission that before resorting to service by affixture, AO should have exhausted all other methods of service and then only he can resort to the service by affixture. He referred to the copy of the Inspector report to submit that there are no witnesses also for the said service. Therefore, the entire proceedings initiated are bad in law. Thus, the consequential assessment itself becomes bad in law. 8. Coming to the merits of the addition, it was submitted that the books of account maintained by assessee were impounded by the department and a....
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.... as correct in the absence of any contradictory evidence from assessee. It was the submission that proceedings are validly initiated and the addition was properly confirmed by the Ld.CIT(A). 10. We have heard the rival contentions and perused the documents placed on record and the case law relied upon. It is true that assessee has made the disclosures consequent to the survey. It is also true that assessee had honoured the disclosures made in earlier two years. However, the AO went on to make certain other additions in other years which were contested by assessee. In this assessment year, being the year of survey, the books of account are open on the date of survey. These were impounded and it is on record that the AO has taken permission, as per the provisions of the Act, to retain the books till 31-03-2010. As can be seen from the order of the assessment, the notice u/s. 142(1) calling for the return was issued only on 19-11-2010, that too, after the period for permission taken has expired. Therefore, assessee is well within his rights to ask for the return of books of account, so that he can file the return of income. We are not in a position to appreciate the observations of....
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....eted wisely. Therefore, we are not in a position to appreciate the initiation of proceedings u/s. 147 per se. We rely on the principles laid down by the judgment of Hon'ble Delhi High Court in the case of CIT Vs. Sanjay Kumar Garg in ITA No. 92 to 96/2012, dt. 02-09-2015, wherein the Hon'ble Delhi High Court has held as under: "9. The contention of the Assessee which has been accepted by the ITAT is that when the re-assessment proceedings pursuant to the notices issued on 21September 2005 were still pending and had not been completed by 31December 2006 as was required by law, it was legally impermissible that fresh notices under Section 148 of the Act could be issued to the Assessee. The ITAT has after examining a large number of decisions of the High Court and the Supreme Court come to the conclusion that the issuing of fresh notices under Section 148 of the Act for AY s 2001-02 to 2004-05 was impermissible in law. The assessments for the said AY s were annulled as being barred by limitation. 10. The legal position appears to be fairly well settled. In S.B. Jain, Income Tax Officer, Nagpur v. Mahendra [1972] 83 ITR 104 (SC) a notice was issued a notice ha....
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....e case of in the case of KLM Royal Dutch Airlines Vs. Asst. Director of Income Tax, (supra), wherein the Hon'ble Delhi High Court has held as under: "7................. The neat question which arises before us is whether on the commencement of assessment proceedings must they first be brought to their logical conclusion by framing an assessment before embarking on the proceedings as envisaged on Sections 147/148 of the Act; or more precisely stated, can resort to Section 147 be made even whilst the normal assessment proceedings are pending conclusion............" The Hon'ble Court has further held as under: "15. Applying this line of decisions to the facts of the present case, the inescapable conclusion that would have to be reached is that while assessment proceedings remain inchoate, no 'fresh evidence or material' could possibly be unearthed. If any such material or evidence is available, there would be no restrictions or constraints on its being taken into consideration by the AO for framing the then current assessment. If the assessment is not framed before the expiry of the period of limitation for a particular AY, it would have to be assumed that ....
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....iven in Section 27 of the General Clauses Act. Requirements for valid service by post are: i. Proper addressing; ii. Prepaying iii. sending by registered post with acknowledgement due 12.1. The service of notice is affected when the letter is delivered in the ordinary course by post. The presumption is that the delivery on assessee has been affected. This is so even if a third person receives the post. The onus of proving otherwise is on assessee. If the notice comes back with a postal remark 'refused' it will still have the effect of valid service. If assessee denies such refusal on oath, the postman must be examined. But if the notice is returned with the postal remarks left, not found or not known, valid service cannot be presumed. 12.2. The Code of Civil Procedure [Chapter-V, Rule 9-30] specifies the manner of service of court summons. Rule 9 specifies that a notice can be served in the following manner: i. Personal service; ii. Registered post acknowledgment due; iii. Speed post; iv. Courier service approved by High Court; v. Other means of transmission of documents (including fax message or electronic mail service) provided by the Rules made by t....
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....tion 282, the notice is to be served on the person named therein either by post or as if it was a summons issued by Court under the Code of Civil Procedure, 1908 (V of 1908). The relevant provisions for effecting of service by different modes are contained in rules 17, 19 and 20 of Order V of CPC. Rules 17, 19 and 20 of Order V of CPC lay down the procedure for service of summons/notice and, therefore, the procedure laid down therein cannot be surpassed because the intention of the Legislature behind these provisions is that strict compliance of the procedure laid down therein has to be made. The expression after using all 'due and reasonable diligence' appearing in rule 17 has been considered in many cases and it has been held that unless a real and substantial effort has been made to find the defendant after proper enquiries, the Serving Officer cannot be deemed to have exercised 'due and reasonable diligence'. Before taking advantage of rule 17, he must make diligent search for the person to be served. He therefore, must take pain to find him and also to make mention of his efforts in the report. Another requirement of rule 17 is that the Serving Officer should s....
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....nd entry for affixation was made on 28-7-2012 without showing justification for the same. Thus, it is clear that report of the Inspector was obtained without issuing any prior direction for such process or mode. Thus, the adoption of mode of substituted service was not legally justified. It is also clear from the Inspector's report that there is no mention of name and address of the person who had identified the house of the assessee and in whose presence the notice under section 143 (2) was affixed. There is no evidence or indication in the report of Inspector that he had personal knowledge of the place of the business of the assessee and was, thus, in a position to identify the same. Therefore, neither the procedure laid down under Order V rule 17 had been followed nor that laid down under Order V rules 19 and 20 had been adhered to. Neither before taking recourse to service by affixture, the Assessing Officer or the concerned officer had recorded the findings to justify the service by this mode nor afterwards called for the affidavit or certificate of service by affixture from the Serving Officer. He had not certified that the service had been effected by adopting this cours....