TaxTMI 
TaxTMI 
2006 (3) TMI 192
X X X X Extracts X X X X
X X X X Extracts X X X X
....s issued after recording the reasons which was served upon the assessee on 25-3-1998. Later on, vide letter dated 22-11-1998 Shri Karaj Singh S/o Shri Iqbal Singh, partner of M/s. Mukand Lal & Sons on enquiry intimated the Assessing Officer that they had purchased petrol pump on 17-12-1997 from Shri Lakhwinder Singh S/o Shri Gurdev Singh and the tax matter may be negotiated with Shri Lakhwinder Singh S/o Shri Gurdev Singh for the assessment years in question. Therefore, on 9/14-12-1998, letter No. 3384 was sent to Shri Lakhwinder Singh S/o Shri Gurdev Singh by registered post intimating therein that the notices under section 148 were issued in the name of M/s. Mukand Lal & Sons for all the assessment years under appeal which was served on 25-3-1998 and that the income-tax returns in response to these notices had not been received. He was requested to intimate if the said notices have been received by him or by the firm or its representative etc. It was also stated that failing to furnish intimation, it would be presumed that notices have been received by the firm as constituted during the period relevant to the assessment years for which notices under section 148 had been issued. I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pump was worked out at Rs. 84,485. In the remaining assessment years, the Assessing Officer estimated the undisclosed income at Rs. 1,03,657, Rs. 1,24,430 and Rs. 1,22,520 for the assessment years 1994-95, 1995-96 and 1996-97 respectively. 5. The additions were challenged before the CIT(A) and it was submitted that no notice is validly served on Shri Lakhwinder Singh and in the absence of any service of the notice under section 148 of the Income-tax Act, the reassessment proceedings are bad in law and the Assessing Officer has not assumed the jurisdiction validly in accordance with law. On merits, it was submitted that Shri Lakhwinder Singh has subsequently filed the return of income in the status of individual on 18-7-2000 declaring income below the taxable limit and that Shri Lakhwinder Singh has income from agriculture, therefore, the additions are unwarranted and the assessment order so framed under section 148 of the Income-tax Act is bad in law. The CIT(A) however dismissed the appeal of the assessee as regards taking status of AOP. The CIT(A) also upheld the issue of notice under section 148 as well as resultant proceedings. However, the addition on account of unexplained i....
X X X X Extracts X X X X
X X X X Extracts X X X X
....perly considered by the CIT(A). He has submitted that subsequently Shri Lakhwinder Singh filed belated return on 18-7-2000 showing profit margin which was below taxable limit and, therefore, the authorities below were not justified in making the additions. He has further submitted that the petrol pump was controlled by Indian Oil Corporation and the profit margin should have been verified by the Assessing Officer before making the addition in the matter. He has submitted that the profit margin as declared by Indian Oil Corporation is very meagre and as such huge addition is unwarranted in the matter and the same is excessive and unreasonable. 8. On the other hand, the learned D.R. relied upon the orders of the authorities below and submitted that the status of the assessee was correctly taken as AOP and that the notice under section 148 were validly served and that Shri Lakhwinder Singh has not shown agricultural income in the belated returns. Therefore, no further benefit can be given to the assessee. The learned D.R. was directed to file copies of the notices under section 148 of the Income-tax Act dated 9-3-1998 along with the letter of the Assessing Officer dated 14-12-1998 ad....
X X X X Extracts X X X X
X X X X Extracts X X X X
....icer or any member thereof. The combined reading of the aforesaid provisions would clearly prove that before making the reassessment under section 147, the Assessing Officer shall serve on an assessee notice requiring him to furnish within such period as may specify in the notice, return of his income assessable under the Act. Therefore, it is condition precedent that before making reassessment under section 147/148, the Assessing Officer shall have to serve the notice under section 148 of the Income-tax Act upon the assessee. In case of A.O.P. or other association such notice shall have to be served upon the principal officer or any other member thereof. In this case, nothing is specified as to who else were the Members of the A.O.P. M/s. Mukand Lal & Sons. Therefore, at the most the Assessing Officer should have served the notices under section 148 upon Shri Lakhwinder Singh. Copies of the notices under section 148 have been filed on record along with the report of the I.T.O., T.D.S., Ferozepur dated 3-2-2006 in which it is stated that the signatures on the notice under section 148 are of Notice Server Shri Palla Singh. Adjacent to his sign there is another signature but no name ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ned D.R. admitted that only one notice dated 9-3-1998 under section 148 has been issued and it is not known as to upon whom it is served. The Assessing Officer observed that on 22-3-1999 Shri Lakhwinder Singh attended the office but the learned D.R. admitted before me that there is no order sheet available for 22-3-1999 to confirm the above fact. Therefore, it is clear that Shri Lakhwinder Singh did not appear before the Assessing Officer in connection with the reassessment proceedings. No return is filed in response to notice under section 148 of the Income-tax Act. The Assessing Officer never tried to issue or serve any notice under section 148 of the Income-tax Act upon Shri Lakhwinder Singh through whom the assessment is now framed. 11. The Hon'ble Kerala High Court in the case of P.N. Sasikumar held:- ".... that the assessments were made on an association of persons, an entity distinct and different from the various persons who were members of the association of persons. There was no material to show that the notices were sent to any association of persons or to S as representing the association of persons. Therefore, the notices under section 148 were not served in accorda....