2007 (8) TMI 474 - AT - Income Tax

Summary

Issues Involved:
1. Validity of assessment u/s 143(3) without effective service of notice u/s 143(2) within the prescribed time limit.

Summary:

1. Validity of Assessment u/s 143(3) Without Effective Service of Notice u/s 143(2):

The assessee, a private limited company engaged in manufacturing oil for aviation, filed a return declaring a loss which was assessed u/s 143(3) after issuing a notice u/s 143(2). The assessee contended that the assessment was invalid due to improper service of notice u/s 143(2). The first notice dated 29-10-2002 was allegedly served by affixture on 31-10-2002, but the service did not comply with the rules prescribed under the Civil Procedure Code, 1908. The second notice dated 30-10-2002 was served by registered post on 1-11-2002, beyond the prescribed period.

The Tribunal examined the facts and found that the service by affixture was not valid as it did not meet the requirements of the Civil Procedure Code. The notice server's report lacked details such as the time of service, the identity of witnesses, and the reason for affixture. The Tribunal concluded that the service by affixture was a "make-belief story" and not a real sequence of events. Additionally, the notice served by registered post was beyond the limitation period.

The Tribunal held that the assessment framed u/s 143(3) was invalid due to the lack of valid service of notice u/s 143(2) within the prescribed time. Consequently, the assessment was annulled. The Tribunal cited several judicial precedents supporting the requirement of valid service of notice within the prescribed period for a valid assessment.

Conclusion:

The Tribunal annulled the assessment framed u/s 143(3) due to the invalid service of notice u/s 143(2) and dismissed the revenue's appeal while allowing the assessee's appeal.