TaxTMI 
TaxTMI 
2018 (6) TMI 98
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....uld have been considered?" 3. Counsel for the appellant Mr. Gargeiya has taken us to the order of the AO wherein it has been observed as under:- "3.4. On 2.12.2010, the A/R of the assessee has filed two letters. One is of challenging the service of notice. The another is challenging the validity of reasons recorded for initiating proceedings u/s 148 of the Act. i) First letter challenging the service of notice u/s 148 is dealt with as under:- For the sake of convenience and ready referrence, the assessee's letter is reproduced as under: On 22.3.2010 a notice u/s 148 appears to have been sent through Speed Post vide No. ER017540747 at the following address: M/s Shubshri Pankcer E-5, Kailas Marg, Bani Park. However, no receipt or any other evidence of service is available. The above notice was not a valid notice to the assessee and as such bad in law since incorrect address is posted on envelope. The correct address as appears in the PAN of the assessee is F-58(B) Kalidas Marg Bani Park Jaipur. A letter dated 10.11.2010 appears to have been sent on 18.11.2010 at 14.57. by speed post...at the same address as above. However, the same came back on 24.11.2010 as per noting of pos....
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....uthorities. Again, the notice u/s 142(1) dated 4.10.2010 fixing hearing on 19.10.2010 was sent on the same address. In response to which Shri N.K. Shrimal, CA/AR attended this office on 19.10.2010. It is pertinent to note that there is no Road in the name of "Kailash Marg" in Bani Park, Jaipur and the Plot No. F=58 is situated at "Kalidas Marg", Bani Park, Jaipur. From these facts, it is evident that the notice u/s 148 sent through Speed Post has duly been served on the assessee. ii) Second letter - challenging the reasons recorded for issue of notice u/s 148 is dealt with as under: In the impugned reasons, your goodself has reachyed to a reason to belief that an entry of Rs. 5,01,000 dated 18.12.2002 was received by the assessee, was a bogus entry and therefore, you had a reason to believe that there was an escapment of income of Rs. 5,01,000/- The reasons is erroneous and invalid for the following reasons: 2.1. There are no details or material extracted in the impugned reasons showing further the nature or type of the information 2.2. How your good self had a reason to belief of escapement based on such information is not known... 2.3... 2.4. There appears only suspicious ....
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.... of the Delhi High Court in case of Commissioner of Income Tax vs. Rajesh Kumar Sharma (2009) 311 ITR 0235 wherein it has been held as under:- 5. Section 282(1) of the Act provides that a notice or requisition under the Act may be served on the person therein named either by post or as if it were a summons issued by a court under the Code of Civil Procedure, 1908. The provisions of Order V of the CPC, more particularly Rules 12 to 15 are relevant in so far as the present Appeal is concerned. 6. Order V Rule 12 of the CPC provides that wherever it is practicable, service shall be made on the defendant in person, unless he has an agent empowered to accept service, in which case service on such agent shall be sufficient. Rules 13, 14 and 15 form a part of the same scheme. A joint reading of these Rules suggest that if a summon is accepted by a person who is authorised to do so, then only can it be said that the defendant (or the assessed in this case) has received the summons or that that service is good service. 7. In so far as the present Appeal is concerned there is nothing to suggest that Lalmani was in any manner authorised to receive any summons on behalf of the assessed. It ....
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....notice under Section 142(1) and 143(2) of the Act and not pursuant to a notice under Section 147/148 of the Act. In fact, as we have already noted, the assessed had written a letter to the assessed soon after receiving the notice under Section 142(1) and 143(2) of the Act and that he was unaware of any notice having been issued under Section 147/148 of the Act. Moreover, the assessed entered appearance and filed his return under protest making it abundantly clear that he had not received the notice under Section 147/148 of the Act. This argument does not, Therefore, advance the case of the Revenue. 5.1. He has relied upon the decision of Supreme Court in case of Y. Narayana Chetty and Anr. vs. The Income Tax Officer, Nellore and Ors. (1959) 35 ITR 388 (SC) wherein it has been held as under:- 4. The first point raised by Mr. Sastri is that the proceedings taken by respondent 1 under section 34 of the Act are invalid because the notice required to be issued under the said section has not been issued against the assessees contemplated therein. In the present case the Income-tax Officer has purported to act under section 34(1)(a) against the three firms. The said sub-section provides....
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.... of the Act which provide: 148(1)-Before making the assessment, reassessment or recomputation under Section 147, the Income-tax Officer shall serve on the assessee a notice containing all or any of the requirements which may be included in a notice under Sub-section (2) of Section 139; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section. (2) ... 149(1) -No notice under Section 148 shall be issued, (a) ... (b) In cases falling under Clause (b) of Section 147, at any time after the expiry of four years from the end of the relevant assessment year. (2) The provisions of Sub-section (1) as to the issue of notice shall be subject to the provisions of Section 151. The High Court relied upon the decision of this Court in the case of Banarsi Debi and Anr. v. I.T.O., District IV, Calcutta and Ors., : [1964]53ITR100(SC) where the validity of a notice under Section 34(1) of the Income-tax, Act, 1922 and the scope of Section 4 of the Income-tax (Amendment) Act of 1959 by which Sub-section (4) was introduced into Section 34 were considered. this Court indicated, keeping the provisions of Section 34 in view....
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.... limitations, the appeal is allowed and the order of the High Court is vacated. The Income-tax Officer shall now proceed to complete the assessment after complying with the requirements of law. Since there has been no appearance on behalf of the respondents, we make no orders for costs. 5.3. He has relied upon the decision in case of Harcharan Singh vs. Smt. Shivrani and Ors. AIR 1981 SC 1284 wherein it has been held as under:- "Section 27 of the General Clauses Act, 1897 deals with the topic-'Meaning of service by post' and says that where any Central Act or Regulation authorises or requires any document to be served by post, then unless a different intention appears, the service shall be deemed to be effected by properly addressing, pre-paying and posting it by registered post, a letter containing the document, and unless the contrary is proved, to have been effected at the time at which the letter would be delivered in the ordinary course of post. The section thus arises a presumption of due service or proper service if the document sought to be served is sent by properly addressing, pre-paying and posting by registered post to the addressee and such presumption is rai....
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....uld, therefore, be reasonable to hold that when service is effected by refusal of a postal communication the addressee must be imputed, with the knowledge of the contents thereof and in our view, this follows upon the presumptions that are raised under Section 27 of the General Clauses Act, 1897 and Section 114 of the Indian Evidence Act." 5.4. He has relied upon the decision in case of CIT vs. Chetan Gupta (2015) 94 CCH 13 (Del) wherein it has been held as under:- 24. The Court first would like to deal with the question whether notice under Section 148 of the Act is a jurisdictional requirement. The relevant portion of Section 148 (1) reads as under: "148. Issue of notice where income has escaped assessment - (1) Before making the assessment, reassessment or recomputation under Section 147, the Income-tax Officer shall serve on the Assessee a notice containing all or any of the requirements which may be included in a notice under sub-section (2) of Section 139; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub- section." 25. The Supreme Court in R.K. Upadhyaya (supra), explained that there was a dist....
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....ataraj v. Fifth Income-tax Officer (1965) 56 ITR 250 (Mys), the High Court of Mysore was dealing with the case where the notice under Section 148 of the Act was issued in the names of the Assessee who were minors and not in the names of their guardians. The notices were served on a clerk of the father of the Assessee who was neither an agent of the Assessee nor authorized to accept notices on their behalf. The Court, relying on the decision in N. Narayana Chetty (supra) observed: "There is no doubt that a notice prescribed under section 148 of the Act for initiating reassessment proceedings is not a mere procedural requirement ; the service of the prescribed notice on the assessee is a condition precedent to the validity of any reassessment made under section 147. If no notice is issued or if the notice issued is shown to be invalid, then the proceedings taken by the Income tax Officer without a notice or in pursuance of an invalid notice would be illegal and void." 29. In CIT v. Hotline International (P) Ltd. (supra) this Court held that affixation of notice on an address at which the security guard of the Assessee-company refuses to receive such notice cannot be construed to be....
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....e service of the notice on the Manager who had no written authority to receive the same could not be held to be a proper service on the Assessee." 33. In Sri Nath Suresh Chand Ram Naresh v. CIT (supra) it was reiterated that service of valid notice under Section 148 was "the foundation for the initiation of reassessment proceedings and a condition precedent for the validity of the notice." It was held that the Tribunal was not right in holding that the notices under Section 148 addressed as „SCR‟ and the karta „S‟ were valid notices for reassessing the income of the HUF „MM‟ or „MS‟ or its successors. Onus on Revenue to prove service of notice 34. There is sufficient judicial authority for the proposition that the burden of showing that service of noticed has been effected on the Assessee or his duly authorized representative is on the Revenue. These include Fatechand Agarwal v. Commissioner of Wealth-Tax [1974] 97 ITR 701 (Ori) and Venkat Naicken Trust v. ITO [1999] 107 Taxman 391 (Mad). In CIT v. Thayaballi Mulla Jeevaji Kapasi (1967) 66 ITR 147 (SC), the Respondent to whom the notice was directed was not in town. The only inform....
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....him collecting premium on behalf of the LIC. Further there were regulations that prohibiting the agents from collecting premium on behalf of the LIC. The Court explained the doctrine of apparent authority and observed: "the authority of the agent is apparent where it results from a manifestation made by the principal to third parties." On the facts of the case, the said doctrine was held not to bind the LIC against third parties who may have been unaware of the lack of authority of the agent to whom they handed over the premium cheques. In the present case, however, the Revenue has not been able to show that the Assessee held out Mr. Ved Prakash to be his employee or agent. 37. No attempt appears to have been made by the Revenue to serve the Assessee at the address provided by him i.e. "c/o Jagat Theatre, Sector 17, Chandigarh". All the notices were addressed to him at the address "C/o Kiran Cinema, Chandigarh" which was in Sector-22. Therefore, this is not a case where an attempt was made by the Revenue to serve the Assessee at his known address, and upon not finding him there the Revenue learnt of the address where he would be found. Merely because other notices sent to the '....
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..... In B. Johar Forest Works v. Commissioner of Incometax (1977) 107 ITR 409 (J&K) the notice issued by the ITO to the Assessee under Section 22 (2) of the 1922 Act. The notice was served on an employee of the Assessee who was not authorized to accept such notice. Subsequently, the General Manager of the Assessee applied for extension of time for filing the return, which was allowed by the ITO. However, the return was not filed within the extended time and an ex parte order was passed. Before the High Court it was contended that the employee on whom the service of the notice was found to have been made was not duly authorized to accept such notice and that the mere fact that the General Manager of the firm applied for time, would not render the service of notice on the employee a valid and a legal service. It is contended that the Assessee had not denied service of notice on such employee. The High Court however negatived the plea of the Revenue and held that in the absence of finding by the Tribunal that the employee of the Assessee was authorized to accept such service on behalf of the Assessee, notice could not be said to have been duly served upon the Assessee. It was held that....
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....assessment proceedings after coming to know of it will not constitute a waiver of the requirement of effecting proper service of notice on the Assessee under Section 148 of the Act. (vi) Reassessment proceedings finalised by an AO without effecting proper service of notice on the Assessee under Section 148 (1) of the Act are invalid and liable to be quashed. (vi) Section 292 BB is prospective. In any event the Assessee in the present case, having raised an objection regarding the failure by the Revenue to effect service of notice upon him, the main part of Section 292 BB is not attracted. 6. Counsel for the respondent contended that the Tribunal has taken into consideration all the points raised before the authority and there is no question of reconsidering the same. He has relied upon the decision of Delhi High Court in case of Commissioner of Income Tax vs. Three Dee Exim Pvt. Ltd. [2012] 20 TAXMANN.COM 146 wherein it has been held as under:- 18. In view of our discussions as above, we are of the view that service of notice, a contemplated pre-condition before assessment would be a question of fact depending upon the facts and circumstances of each case. In the present case, ....