TaxTMI 
TaxTMI 
2019 (3) TMI 1927
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....ent u/s 147 of the Act is bad in law, illegal, ultra- virus and contrary to the provision of the Act and shall be quashed. (b) The CIT(A) erred in confirming the assessment order u/s 147 of the Act passed by the AO, without valid service of notice u/s 148 of the Act. The Appellant submit that there is no valid service of notice u/s 148 of the Act on the Appellant hence the reopening of assessment is bad in law, illegal, ultra-virus and contrary to the provision of the Act and same shall be quashed. (c) The CIT(A) erred in confirming the re-opening of the assessment u/s 148 of the Act on the basis of general statement recorded of third parties, and those statements were also subsequently retracted by such parties. (d) The CIT(A) erred in confirming the action of AO in passing the assessment order u/s 147 of the Act without disposing of Appellant's objection against reopening of assessment u/s 148 of the Act. (e) The CIT(A) erred in confirming the action of AO in reopening the assessment u/s 148 of the Act, without obtaining the requisite prior approval/sanction as required u/s 151 of the Act and without providing the same to the Appellant in spite of repeated demand ....
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....ous companies to the tune of Rs. 32.85 Cr in the current financial year and issued shares at a very high premium which were bought back by the Capri Group at very low rates. Finally the assessment was framed by the AO brushing aside the contentions of the assessee that reassessment proceedings were bad in law for the want of service of notice u/s 148. 5. In the appellate proceedings the ld CIT(A) also dismissed the appeal on the legal issue of re-opening of assessment while allowing the appeal of the assessee on merits. The ld CIT(A) observed and held as under:- "(e) Notice not served to the appellant The Appellant had contended that the notice u/s 148 of the Act was not served to the appellant and therefore the entire re-assessment proceeding is invalid. On the other hand, the AO in the assessment order vide para 2 of the page 2 categorically mentioned vide letter dated 18/01/2016 rebutted all the objections raised by the appellant by passing a speaking order u/s 147 and further the reasons for reopening was also provided to the appellant company on 22/01/2016. Therefore, I am of the opinion that the objections raised by the appellant company is not found to be in order. He....
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....ued on 31.3.2015 and directed the assessee to file the same failing which the assessment would be framed ex-parte. The ld counsel contended that these foregoing facts unequivocally proved that there is no valid service of notice issued u/s 148 dated 31.3.2015 nor within a reasonable period of time thereafter and thus the proceedings are invalid , null and void and may be quashed. In defence of his arguments the ld AR relied on the following decisions: 1. Heaven Distillery (P) Ltd Vs Income Tax Officer (2017) 185 TTJ 0197 (Mumbai) 2. Sanjay Kumar Mishra Vs ACIT (2006) 100 TTJ 862(Jab) 3. Sanjany Badani Vs DCIT (2014) 35 ITR(T) 536 (Mumbai Tri) 4. Ketan Shah Vs ACIT (2010) 7 taxmann.com 88(Mum) 5. World Wide Exports (P) Ltd Vs ITO (2004) 91 ITD519 Delhi 6. CIT Vs Hotline International Pvt. Ltd. (2008) 296 ITR 333 (Delhi). 7. Per Contra, the DR submitted that the AO has followed the due procedure laid down in the Act for service of notice and therefore the contentions of the assessee that there is no proper service of notice issued u/s 148 of the Act have no legal strength. The DR submitted that the notice u/s 148 of the Act was issued 31.3.2015 after obtaining nec....
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....Vithaldas Thacekary Marg New Marine Lines. Mumbai-20.-Reg. Kindly refer to the above subject matter. As directed by you, I, Jagdish Jethanandani, Inspector of Income Tax Mumbai visited the premises addressed above today evening i.e on 31.03.2015 and found that the office was closed. I was left with no option but to serve the notice by affixture. The notice was affixed on the front door of office No. 1-B, Court Chambers, 35, Sir V.T. Marg, New Marine Lines, Mumbai-400 020. (Office address of the Assessee). This is for your kind information." 9. It is clear from the above report that when the inspector visited the office of the assessee in Marine Lines, Mumbai, the office was closed and he has no option but to affix the notice which was affixed on the front door of the assessee. Thus it is abundantly clear from the above said letter that no due efforts or diligence was made by the AO to serve the notice and straightway made affixture. Section 282(1)(b) of the Act provides for service of notice by way of post or by courier or such other mode as may be approved by the Board or in such other manner as provided in the Civil Procedure Code. The provisions of Civil Procedure Code e....
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....med either by post or as if it were a summons issued by a Court under the Code of Civil Procedure, 1908 ( 5 of 1908). Factually speaking, para-1 of the assessment order makes it clear that the notice under section 143(2) of the Act issued on 29/11/2001 has been served on 29/11/2001 by affixture. The plea raised by the assessee is that service of notice by affixture could have been resorted to only when the Assessing Officer discharges his initial onus by showing that he had reason to believe that assessee was intentionally hiding itself for the purpose of avoiding service or there were other good reasons to come to the conclusion that the notice could not be served in the ordinary way. 7.1. At the time of hearing, the Ld. Representative for the assessee had relied upon the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Hotline International Pvt. Ltd., 296 ITR 333(Del), which upholds the proposition that service of notice by affixture can be done only when assessee or his agent refuses to sign acknowledgement or could not be found. In the case before the Hon'ble Delhi High Court, the Assessing Officer issued notice under section 148 of the Act on the asse....
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....ormal procedure of service of notice. In fact, in the context of such plea of the CIT(A), the judgment of the Hon'ble Delhi High Court in the case of CIT v. Dewan Kraft System (P) Ltd., 165 Taxman 139 (Del) has been rlied upon. In this case, the' notice was served on the assessee by affixture and it was the case of the Assessing Officer that the notice under section 143(2) sent by speed post could not be served and, therefore, an Inspector was deputed, who went to the office premises of the assessee and on finding the same locked, the notice was served by affixture. The assessee contended that the notice was invalidly served and the Tribunal took note of the fact that the notice was issued at the very last minute to ensure that the case did not become time barred and no efforts were made by the Assessing Officer to find out the whereabouts of the assessee to serve the notice, but a short cut was taken by the Inspector by resorting to service by affixture. The Tribunal upheld the plea of the assessee and observed that the Revenue had failed to discharge the onus to prove that the notice was in fact served upon the assessee within the prescribed period. The Hon'ble Delhi High....
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....company, a copy of which has been placed in the paper book at page 1. It was therefore, contended that it is wrong on the part of the Revenue to contend that assessee attended before the Assessing Officer on 10/12/2001 in response to the notice issued under section 143(2) of the Act dated 29/11/2001. We find the aforesaid plea of the assessee quite potent and is in fact supported by the material on record. The Ld. Representative for the assessee had referred to a communication dated 10/12/2001 addressed to the Assessing Officer, wherein it has been communicated that the notice was received on 10/12/2001 itself, which ostensibly is the notice dated 6/12/2001 addressed to the Director of the company. Therefore, the aforesaid plea of the Revenue is misplaced and is hereby rejected. 7.5. Apart therefrom, the Ld. Representative for the assessee pointed out that the defect in the service of notice namely non-service of notice by proper means and directly by affixture is not a curable defect and he has assailed the reliance placed by the Ld. Departmental Representative on the provisions of section 292BB of the Act in this regard. In our considered opinion, section 292BB, in any case, d....
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....g Officer and according to the Hon'ble High Court such participation was to be attributed to the service of the notice on 30/12/2004 albiet upon a person not authorized to receive the same. This factsituation lead the Hon'ble High Court to conclude that the service of notice could not be invalidated. In our considered opinion, the said judgment of the Hon'ble Delhi High Court does not help the case of the Revenue herein because the factsituation in the present case stands on an entirely different footing. In the present case, it is quite clear that the appearance by the assessee on 10/12/2001 was not in compliance of the notice issued by the Assessing Officer on 29/11/2001, but it was in compliance of a notice issued by the Assessing Officer on 06/12/2001 in the name of the director of the assessee company . Therefore, to say that the assessee company had come to know about the assessment proceedings in on terms of the notice issued under section 143(2) of the Act dated 29/11/2001 is facts a misnomer Therefore, in our view, the ratio of the judgment of the Hon'ble Delhi High Court in the case of Vision Inc. (supra) is not applicable to the facts of the present case.....
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....of the notice available at p. 6 of the paper book has not been denied by the learned Departmental Representative in the open Court. 15. We have also gone through the case laws also in this regard. Hon'ble Delhi High Court in the case of R.L Narang vs. CIT (1982) 136 ITR 108 (Del), has held as under : "The above two modes of serve are alternative and it is the option of the Department to adopt either of the two. As regards the former the provisions of s. 27 of the General Clauses Act, 1897, become relevant. Sec. 27 of the General Clauses Act, provides that where any Central Act or Regulation authorities or requires any document to be served by post, then unless a different intention is drawn, the serve shall be deemed to be effected properly if a correctly addressed and stamped letter containing the document is dispatched by registered post; and unless the contrary is proved, such a letters would be deemed to have been delivered in the ordinary course of post. The IT Act is a Central Act and s. 282 provides for service by post. As such the provisions of s. 27 of the General Clauses Act, 1897 are applicable. From perusing s. 27 of the General Clauses Act, it is apparent ....
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....vice in the manner provided in rr. 9 to 19 by a bailiff. According to sub-r. (2), service of summons by registered post with AD shall be deemed to be sufficient it is delivered either to the defendant or his agent authorised to receive the notice. In case it is refused either by the addressee or by his authorised agent, it will be presumed that the notice has been duly served. According to the proviso below sub-r. (2), if the notice is properly addressed, prepaid and duly sent by registered post with AD, a declaration by the postal employee that the notice was refused shall be presumed even through the acknowledgement slip has been lost or mislaid or for any other reason has not been received by the Court within 30 days from the date of issue of the notice." 19. Hon'ble Calcutta High Court in the case of Keshab Narayan Banerjee vs. CIT (1999) 156 CTR (Cal) 109 : (1998) 101 Taxman 512 (Cal) has held that : "the minimum that was required to (be) shown for establishing proper service by registered post was an endorsement that an attempt was made to serve the assessee and that either he was not available at his residence or that there was no one willing to accept the service ....
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....IT Act. The facts in this case were that the Inspector of income-tax who had to serve notices under s. 33B of the IT Act, 1922, claimed to have served the notices by affixing them on the assessee's place of business but in his report did not mention the names and addresses of the persons who identified the place of business of the assessees. The assessees, however, claimed that they had closed their business long before the notices were issued. On writ petitions filed by the assessees, the High Court held that there was no proper service on the assessee and the orders of the CIT pursuant thereto could not be sustained. 23. In view of the aforesaid discussion, we are of the view that the notice has not been served on the assessee in this case in accordance with s. 282 of the IT Act earlier to 31st March, 1999. In the absence of service of notice, the assessment order passed on 31st March, 1999 is a nullity and cannot be sustained in the eyes of law. We, therefore, set aside the order of the CIT (A) on this issue and annul the order passed by the AO. 24. We have already held that the order passed by the AO is barred by limitation. We cannot direct the AO to make a fresh ass....