TMI Blog2005 (12) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... s been sent to the assessee through registered post AD nor any evidence has been produced that the AO has given finding that sending of the notice through registered post is not necessary. Even no such finding has been recorded on the order sheet. From the first page of the order and from the impression of the ink/writing it appears as if the entry dt. 15th Feb., 1999 to 31st March, 1999 has been made at one go. Therefore, we find force in the submission of the learned AR that no notice has been served on the assessee prior to 31st March, 1999 and it was only notice issued on 30th March, 1999 the copy of which is available at p. 6 has been served on the assessee for the first time on 31st March, 1999 and since the assessment was getting time-barred, the AO has tried to bring the evidence on record that the notice has been served on the assessee prior to 31st March, 1999. Genuinenity of the photocopy of the notice available at p. 6 of the paper book has not been denied by the ld DR in the open Court. Thus, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 lacs was taken possession of by the Police, while he was travelling in the car. This amount was requisitioned under s. 132A on 1st March, 1997 by Dy. Director of IT, Varanasi. Notice under s. 158BC dt. 12th Feb., 1999, was issued asking the assessee to file the return for the block period ending on 1st March, 1999, within 15 days. The AO mentioned that the notice under s. 158BC was returned by the notice-server that the assessee refused to receive the notice. Later on Inspector Shri G.M. Wate was deputed to get the notice served upon the assessee. During his visit it was reported to the Inspector that the assessee is out of station. Therefore, the notice under s. 158BC was served upon the assessee on 16th Feb., 1999 by affixture. Other copy of the notice was served upon Shri P.D. Shrivastava, advocate, who represented the assessee once. The return was not filed till 26th Feb., 1999. The notice under s. 142(1) dt. 3rd March, 1999, fixing the case for 15th March, 1999 was issued. This notice was also alleged to have been served by affixture. The AO, therefore, in the absence of non-compliance of the notice under s. 158BC went on completing the assessment ex parte on the basis of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advocate, therefore, the service of notice on the advocate, Shri P.D. Shrivastava, is illegal unauthorised and unwarranted. In fact the AO has not served the notice under s. 158BC or 142(1), therefore, he cannot assume the jurisdiction and assessment was barred by limitation. The AO failed to appreciate the returns filed by the assessee for the asst. yrs. 1993-94 to 1997-98 and the return for the asst. yrs. 1996-97 and 1997-98 were filed in time. The AO only mentioned in the assessment order that the return was filed to cover the cash of Rs. 3.64 lacs but even then the addition was made not only of the cash found but also Rs. 3.84 lacs being the capital shown by the assessee on 31st March, 1997. Both the assets and liabilities cannot be added together. The registered letters sent by the AO were served on 19th Nov., 1999 prove that the assessment has been framed after 31st March, 1999, therefore, it must be annulled. It was also contended that under the provisions of CPC, service of notice should have been done by sending notice through registered post. The village address reflected in the record and shown in the notice under s. 158BC and under s. 142(1) is the permanent residence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd time to be specified that why assessment should not be made ex parte on the basis of his judgment. No such notice was also served on the assessee. This also renders the assessment framed under s. 144 as illegal. In view of the above facts, it is submitted that since the AO has framed the assessment in violation of principle of natural justice and without serving any notice and without allowing hearing to the assessee is illegal and void and should be annulled. 4. Thus, it was contended that the assessment was barred by limitation. The CIT(A) asked for the remand report of the AO which was sent and the copy of the same was given to the assessee. The CIT(A) ultimately took the view that the notice under s. 158BC issued on 12th Feb., 1999 stood served on the assessee by affixture on 16th Feb., 1999. Further the notice dt. 3rd March, 1999 issued under s. 142(1) also stood served on 5th March, 1999 and the assessment under s. 144 was finalised on 31st March, 1999, therefore, the assessment was not barred by limitation. The CIT(A) also observed that the order passed by the AO since was approved by the Jt. CIT, Range-1, Jabalpur, through his letter dt. 30th March, 1999, therefore, it c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... could not serve a notice under s. 158BC immediately on the assessee. In fact it was so done but the date was 31st March, 1999. The assessee has enclosed at page No.6 of the paper book the copy of said notice served on the assessee on 31st March, 1999. The original copy of this notice was later on retrieved by the AO from the possession of the assessee's counsel Shri P.D. Srivastava. The learned AO later, realised that it was the last day for completing the assessment and he had committed an error for serving such notice to the assessee which resulted into his action of retrieval of notice and passing ex parte order. The learned AO could not even make an assessment within the time-limit as provided in the Act that is how the noting of notice-server was fabricated for the purpose of service of assessment order also. (e) the assessee's correct address was available on the record of the learned AO in the statement recorded by Police authorities and that was as under: Shri Sanjay Kumar Mishra, Shri Kamlesh Prasad Mishra Village-Patharha, Tehsil and District-Rewa and Circuit House Road, C/o Jagjiwan Pathak, Somgarali Bazar, Singarauli No effort was made to serve the notice on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated that the assessment is barred by limitation. Similar view is taken by the Full Bench of Andhra Pradesh High Court in the case of Ushodaya Enterprises Ltd. vs. CCT 111 STC 711 (AP)(FB). In this case it is held that delay of 8 months for service remains unexplained. It must be presumed that order is barred by limitation. In the case of State of A.P. vs. M. Ramakishtaiah Co. 93 STC 406 (SC) similar view has been expressed by the Hon'ble Supreme Court that was relied by West Bengal Taxation Tribunal in the case of Mafatlal. The copies of these judgments were submitted before Your Honour in the paper book. The learned AO in his remand report has not explained the inordinate delay for the service of assessment order. Therefore, it is established beyond doubt that the assessment was framed beyond the limitation period which expired on 31st March, 1999. Hence, on this ground also assessment being barred by limitation is illegal and void. 8. Learned Departmental Representative relied on the order of the AO and submitted that notice was issued under s. 158BC on 12th Feb., 1999 by granting 15 days' time to the assessee. Since the notice-server could not be able to serve the notic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h March, 1999 was wrongly issued the AO created the evidence of issuing notice dt. 12th Feb., 1999 getting it served on the assessee through affixture on 15th Feb., 1999. We have asked the learned Departmental Representative to produce the evidence for the service of order on the assessee. The learned Departmental Representative could not be able to produce this evidence but he pointed out that the assessment order was sent to the assessee through registered post only on 24th Nov., 1999. This is a case where the sum of money was requisitioned on 1st March, 1997. Therefore, the assessment order must have been passed by 31st March, 1999. Thus, a natural inference will be that the order under s. 158BC must have been passed after 31st March, 1999 because the notice under s. 158BC was issued on 30th March, 1999 and the order could not be served by the registered post by 31st March, 1999. No doubt under s. 158BC the word 'passed' has been used. In our opinion passing of the order does not mean that the order should be drafted, signed and kept by the authority who has passed it. While passing the order, action is to be taken on the basis of the order as inbuilt therein. It is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or work against a person who does not reside within the local limits of the jurisdiction of the Court from which the summons is issued, service on any manager or agent, who, at the time of service, personally carried on such business or work for such person within such limits, shall be deemed good service. For the purpose of this rule the mater of a ship shall be deemed to be the agent of the owner or character. Rule 15. Where service may be on an adult member of defendant's family -Where in any suit the defendant is absent from his residence at the time when the service of summons 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 he has no agent empowered to accept service of the summons on his behalf service may be made on any adult member of the family, whether male or female, who is residing with him. Explanation-A servant is not a member of the family within the meaning of this rule. Rule 16. Person served to sign acknowledgement- Where the serving officer delivers or tenders a copy of the summons to the defendant personally, or to an agent or other person on his behalf, he shall r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mons for service by registered post, where, in the circumstances of the case, the Court considers it unnecessary. (2) When an acknowledgement purporting to be signed by the defendant or his agent is received by the Court or the postal article containing the summons is received back by the Court with an endorsement purporting to have been made by a postal employee the effect that the defendant or his agent had refused to take delivery of the postal article containing the summons, when tendered to him, the Court issuing the summons shall declare that the summons had been duly served on the defendant: Provided that where the summons was properly addressed, prepaid and duly sent by registered post, AD, the declaration referred to in this sub-rule shall be made notwithstanding the fact that the acknowledgement having been lost or mislaid, or for other reason, has not been received by the Court within thirty days from the date of the issue of the summons. 12. Order 5, r. 17 of CPC states that where the defendant refuses to sign the acknowledgement, or where the serving officer, after using all due and reasonable diligence, cannot find the defendant and there is no agent empowered to acce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther through notice-server or by affixture but no opportunity was given to the assessee. In our opinion this is the settled law that the affidavit of the assessee cannot be rejected without cross-examination of the person who has given the affidavit in view of the decision of the Hon'ble apex Court in the case of Mehta Parikh Co. vs. CIT (1956) 30 ITR 181 (SC). The affidavit is the best piece of evidence and CIT(A) in our opinion was not correct in law in rejecting the affidavit without bringing any evidence to the contrary. The CIT(A) was duty-bound to give opportunity to the assessee to cross-examine the Inspector and witnesses for bringing the truth as we feel it was necessary on the facts of the case to render substantial justice and to ascertain the fact whether the notice has been served on the assessee through the notice-server or by affixture. 14. We have gone through the record of the case and asked the copy of the order sheet from the learned Departmental Representative but the learned Departmental Representative did not give us the photocopy of all the order sheets and only the first page was handed over to us. We have also noted from r. 19A of the CPC, O.5 that it i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the General Clauses Act, 1897 are applicable. From perusing s. 27 of the General Clauses Act, it is apparent that in order to presume service having been effected, the document or letter should be sent by registered post. A notice sent under certificate of posting and not by registered post would not amount to proper service. 16. Delhi Bench of Tribunal in the case of Jain Marbles vs. IAC (1989) 33 ITJ (Del) 526 held as under: Rule 19A in O. 5 which lays down that the Court shall, in addition to, and simultaneously with, the issue of summons for service in the manner provided in rr. 9 to 19 also direct the summons to be served by registered post AD. The proviso to r. 19A(1); however, empowers the Court to dispense with registered post AD serve in appropriate causes. But for that, in the fitness of things a special order in writing may be necessary. Further, there is and can be no presumption in law as to the exact date of service of a notice purported to be sent under registered cover much less any presumption of valid service. 17. Hon'ble Punjab Haryana High Court in the case of Ramesh Khosla vs. ITO (1984) 41 CTR (P H) 138 : (1985) 154 ITR 556 (P H) held as under: Under s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at his residence or that there was no one willing to accept the service on his behalf. Tribunal, Jaipur Bench in the case of Prakash Chand Lunia vs. ITO (1996) 54 TTJ (Jp) 383 : (1996) 56 ITD 1 (Jp) has held that: Sec. 27 of the General Clauses Act, 1897, however lays down that if a letter has been duly posted with necessary and address of the addressee thereupon then there may arise a rebuttable presumption to the effect that letter was delivered or tendered to the addressee rebuttable presumption such presumption may come either from the endorsement of the postman himself or through the addressee. Where the postman has returned the posted letter with the endorsement 'left', such endorsement itself suggests that delivery or tender of the letter could not be made on the addressee. The very endorsement itself, thus, would rebut the presumption created under s. 27 of the General Clauses Act, 1897 in favour of the service of the posted letter on the addressee. 20. As observed by the Hon'ble Calcutta High Court in Tripura Modern Bank Ltd. vs. Basen Cross-objection AIR 1952 Cal 781, in the case of service by affixation, it is not sufficient to state in the affidavit of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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