TMI Blog2021 (11) TMI 915X X X X Extracts X X X X X X X X Extracts X X X X ..... f the IT Act for A.Y.2009-10 - Decided in favour of assessee. - ITA No.62/Ind/2018 And ITA No.189/Ind/2018 - - - Dated:- 1-9-2021 - Hon ble Rajpal Yadav, Vice President And Shri Manish Borad, Accountant Member For the Revenue : Shri Rajib Jain, CIT-DR For the Respondent : Shri Ashish Goyal N.D. Patwa, ARs ORDER PER MANISH BORAD, A.M The above captioned appeal filed at the instance of the Assessee Cross Appeal by the Revenue for Assessment Year 2009-10 are directed against the orders of Ld. Commissioner of Income Tax(Appeals) (in short Ld. CIT]-I Indore dated 13.11.2017 which are arising out of the order u/s 144 r.w.s. 147 of the Income Tax Act 1961(In short the Act ) dated 23.03.2016 framed by ACIT-3(1), Indore. The Assessee has raised following grounds of appeal in ITA No.62/Ind/2018: Ground no. 1 :- On facts and circumstances of the case and in law, the learned Commissioner d in not holding that the reassessment proceedings of the Appellant were illegal as the initiated by the learned Assessing Officer without satisfying the mandatory jurisdictional condition set out in section 147 of the Income Tax Act. 1961. Ground no. 2 :- On fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and in the circumstances of the case} Ld. CIT(A) was justified in restricting the addition of ₹ 1,64,64,619/- based on credits in bank accounts to ₹ 4,05,223/- only without giving any opportunity to the assessing officer regarding nature and source of deposits in the bank accounts. 4.Whether on the facts and in the circumstances of the case} Ld. CIT(A) in justified even when principles of natural justice have not been followed While deleting addition at SL. No.1, 2 3 above. ITA No.62/Ind/2018 (Assessee s appeal) At the outset, learned Counsel for the assessee submitted that in the appeal filed by the assessee, the assessee has raised the legal ground as ground no.2 with regard to challenging the reassessment proceedings as illegal and void as the same were without issuing mandatory notice U/S 143 (2) of the Income Tax Act. 1961. Since this ground no.2 being legal in nature goes to the root of the matter, we have heard it at first. 2. Facts with regard to this legal ground are that the address of the assessee as filed in Return of Income u/s. 139 for the assessment year 2009-10 is 49-B Chandra Nagar, A.B Road Indore-452008 where his family re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nwards as under: Therefore notice u/s. 143(2) was again issued on the address mentioned on the latest return filed for A.Y. 2014-15 i.e. 49-B, Chandra Nagar, A.B. Road, Indore being last known address affixture was made by the ITI of this office (copy of affixture report of ITI is enclosed). It is mentioned in the remand report that the notice u/s. 143(2) dt. 06.07.2015 was served by affixture. It was alleged that since the door was locked, notice was affixed and two witnesses have signed. 3. Being aggrieved, the assessee challenged the legality of the reassessment proceedings before the ld. CIT(A) claiming that the notice u/s 143(2) of the I.T. Act was not served on the assessee. But, the ld. CIT(A) confirmed the action of the Assessing Officer. Being aggrieved, the assessee is before this Tribunal. 4. Before us, the ld. Counsel for the assessee submitted that the mandatory notice u/s 143(2) was not served on the assessee and hence the entire reassessment proceedings completed by the Assessing Officer are null and void. Ld. Counsel for the assessee submitted that at the note of inspector, nowhere the details of Inspector or witness, their names, address, father s n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and submitted that the Assessing Officer made all possible efforts to serve the notice on the assessee including affixure, therefore, the notice was rightly served on the assessee. 6. We have heard rival contentions of both the parties and perused material available on record. We find that the notice u/s 148 was sent at 7-B Chandra Nagar . This was the address in which assessee used to reside before 2003 for a very brief period of time. The reasons recorded by the Assessing Officer u/s 148 dated 25.03.2015 addressed to 7-B Chandra Nagar state that Mr Sanjeev Patni is residing in E1102, Matri Elegance, Bannerghatta Road, Bangalore and his principal place of employment is at Bangalore only. Thus, even though the return of income was filed from Indore address, the Assessing Officer was well aware that the assessee was residing at Bangalore. In reply to the notice u/s 148, it was stated that Income tax return already filed for A.Y. 2009-10 may be considered as the return in response to compliance u/s 148, thereby, reconfirming the address also. We find that in the assessment order, there is no mention of any notice u/s. 143(2) being issued to assessee. After referring ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , cannot find the defendant, who is absent from his residence at the time when service is sought to be effected on him at his residence and there is no likelihood of his being found at the residence within a reasonable time and there is no agent empowered to accept service of the summons on his behalf, nor any other person on whom service can be made, the serving officer shall affix a copy of the summons on the outer door or some other conspicuous part of the house in which the defendant ordinarily resides or carries on business or personally works for gain, and shall then return the original to the Court from which it was issued, with a report endorsed thereon or annexed thereto stating that he has so affixed the copy, the circumstances under which he did so, and the name and address of the person (if any) by whom the house was identified and in whose presence the copy was affixed. Further, under Rule 19 it is provided that: 19. Examination of serving officer Where a summons is returned under rule 17, the Court shall, if the return under that rule has not been verified by the affidavit of the serving officer, and may, if it has been so verified, examine the servin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he has not given affidavit, only after examination of serving officer (Inspector) on oath . Further, in any case, the Court may make such further enquiry in the matter as it thinks fit; and shall either declare that the summons has been duly served or order such service as it thinks fit. The assessee applied to the Assessing Officer for cross-examination of the Inspector and witness. But, the same was not done by the Assessing Officer. Therefore, we are of the view that the service of notice by affixture is not a valid service in the present case as service by affixture is substituted service and since it is not direct or personal service upon the defendant, to bind him by such mode of service, the mere formality of affixture is not sufficient. The Assessing Officer failed to complied with the requisite procedure as laid down in 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 considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rule 17 of Order V of CPC, which requires that before service of notice by affixture, notice server/service officer must make diligent search for person to be served and, he, therefore must take pain to find him and also to make mention of his efforts in report. The serving officer should also state in his report the circumstances under which he did so and the name and address of the person by whom house or premises were identified and in whose premises copy of summon was affixed, otherwise such service could not be accepted to be a legally valid service of notice u/s.143(2). 9. In case of CIT v. Ramendra Nath Ghosh [1971] 82 ITR 888 (SC), the Hon ble Apex Court held as under: The contention of the assessees was that at the relevant time they had no place of business. The report of the serving officer did not mention the names and addresses of the person who identified the place of business of the assessees. That officer did not mention in his report nor in the affidavit filed by him that he personally knew the place of business of the assessee. Hence, the service of notice must be held to be not in accordance with the law. The possibility of his having gone to a wrong pl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hi Bench). 10. We further find that this Tribunal vide order dated 20.5.2021 in the case of M/s. Swastik Coal Corporation P. Ltd., Indore in ITA No. for the A.Y. 477/Ind/2013 (A.Y. 2005-06) has decided the identical issue of service of notice u/s 143(2) of the I.T. Act and the ratio laid down in this decision is applicable to the facts of the present case. The relevant portion of the order of the Tribunal passed on 25.5.2021 (supra) is reproduced hereunder: However, before arguing the matter on merit, the Ld. Counsel appearing for the assessee raised preliminary objection in regard to the serving of notice u/s 143(2) of the Act dated 31.08.2009 while initiating the assessment proceedings. The assessee company filed its return of income on 30.09.2008. It is submitted by the Ld. Counsel appearing for the assessee that the impugned assessment order u/s 143(2) of the Act was claimed to have been passed after due process of the law by serving notice in due time in terms of proviso to Section 143(2) but the same has not been served in terms of the procedure laid down by the provision under section 282 of the Act. In that view of the matter, it was ultimately contended by the Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t Year 2008-09 was received only on 17.07.2010. It was contended by the assessee that the same ought to have been served u/s 143(2) of the Act before 30.09.2009. It is relevant to mention that the proviso to Clause II sub section (2) of Section 143 speaks as follows:- provided that no notice under this sub-section shall be served upon the assessee after the expiry of six months from the end of financial year in which return is furnished . Therefore, admittedly the notice issued is beyond the period as stipulated under proviso of Section 143(2) of the Act and the entire proceedings was, thus, prayed to be dropped by the appellant. It is surprised to note that the photo copy of the Speed Post envelope dispatch No.1221 was placed on record by the revenue. With our limited understanding, w failed to follow that if the said envelope containing the notice is sent to the assessee and received by them then as to how the same could reach the sender i.e. the office of the concerned Revenue Officer and this could be kept in the file. Secondly the notice which has been claimed to have been served upon the assessee through office server the acknowledgement whereof speak about the details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ic person on whom he made the delivery. It was further observed that personal service would not be a valid service of notice, if it has not been made either on the person mentioned there or an agent duly authorised to receive notice as provided under Section 282 of the Act. Finally, since there have been no entry in the order sheet regarding the issuance and service of notice u/s 143(2) of the Act, the contention of the assessee that no such service was ever issued what is to say of service of the same on the assessee or on his authorised representative has been accepted by the court. In another judgment the Hon ble Tribunal, Lucknow Benches in the case of Nripendra Mishra reported in (2009) 121 TTJ 701 (Lucknow) held in para 11 that In fact the revenue had not proved the identity of person. Thus the revenue had not proved on record that the notice under section 143(2) was served upon the agent of the assessee. In such circumstances, the assessment order passed by the Assessing Officer had to be annulled . 4. Thus, taking into consideration of the entire aspect of the matter we are of the considered view that unless there is service of notice in accordance with provisio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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