2016 (1) TMI 1268 - AT - Income Tax

Validity of reopening of assessment - non service of notice - Held that - In the present case we find that admittedly no effort was made by Assessing Officer to serve the notice in ordinary way and further there is no order passed by Assessing Officer to the effect that service by the affixture was made in accordance with law. The so called service is in utter disregard of Rule 17 19 and 20 of Order V of CPC. Moreover we find that the notice was served through affixture at a wrong address at 34 P Trikuta Road where as the address as claimed by assessee was 43 P Trikuta Nagar Jammu. The Assessing Officer during the remand proceedings has admitted that service by affixture was made at 34 P Trikuta Road. Therefore on this account also the service is not legal as the service by affixture was also done at a wrong address and therefore such service cannot be said to have been made on assessee. Further we find that at the time of issuance of notice u/s 148 the Assessing Officer Ward 1(3) was not having jurisdiction on the assessee as is apparent from the copies of orders passed by Commissioner of Income Tax Jammu and Kashmir and Joint Director of Income Tax Investigation Chandigarh as placed in paper book page 16 to 20. In view of the above facts and circumstances enumerated above we find that notice was not at all served upon the assessee and therefore the assessment itself is bad in law and is therefore quashed. - Decided in favour of assessee.

Summary

Issues Involved:
1. Validity of service of notice under Section 148.
2. Service of notice by affixture at the wrong address.
3. Jurisdiction of the Assessing Officer at the time of issuing notice under Section 148.
4. Delay in filing the appeal.

Issue-wise Detailed Analysis:

1. Validity of Service of Notice under Section 148:

The appellant argued that the notice under Section 148 was never properly served, as it was done by affixture without following the due process. The learned AR pointed out that the Assessing Officer (AO) resorted to affixture on the same day the approval for reopening was received, without attempting other modes of service as required by Section 282 of the Income Tax Act and the Civil Procedure Code (CPC). The Tribunal agreed, citing precedents such as *Dr. K.C. Verma vs. ACIT* and *CIT vs. Ramendra Nath Ghosh*, which mandate that affixture can only be used after due diligence and attempts at personal service. The AO failed to meet these requirements, rendering the service invalid.

2. Service of Notice by Afixure at the Wrong Address:

The appellant contended that the notice was affixed at 34 P, Ext. Sec. 1, Trikuta Nagar, Jammu, whereas the correct address was 43 P, Ext. Sec. 1, Trikuta Nagar, Jammu. The Tribunal found this claim to be substantiated by the records, noting that the AO had the correct address available through the PAN records and the assessment information system. The affixture at the wrong address further invalidated the service of notice.

3. Jurisdiction of the Assessing Officer at the Time of Issuing Notice under Section 148:

The appellant argued that the AO who issued the notice under Section 148 did not have jurisdiction over the assessee at that time. The jurisdiction had been transferred to the DCIT, Central Circle, Jammu, as per orders dated 26.10.2007 and 8.6.2012. The Tribunal confirmed that the AO, Ward 1(3), Jammu, lacked jurisdiction when the notice was issued on 23.3.2012. This lack of jurisdiction further invalidated the proceedings initiated by the AO.

4. Delay in Filing the Appeal:

The appeal was filed 293 days late. The appellant submitted an affidavit stating that he was unaware of the CIT(A)'s order until recovery proceedings commenced. The Tribunal found insufficient evidence of the order being served on the appellant and accepted the affidavit, condoning the delay and allowing the appeal to proceed.

Conclusion:

The Tribunal concluded that the notice under Section 148 was not validly served, as it was done by affixture without due diligence and at the wrong address. Additionally, the AO lacked jurisdiction at the time of issuing the notice. Consequently, the assessment was deemed invalid and quashed. The appeal filed by the assessee was allowed.