TMI Blog2011 (5) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... 98] 229 ITR 383 (SC). On behalf of the assessee, Sri. S. K. Garg, advocate and Sri Ashish Bansal, advocate appeared and it was vehemently contended that no notice under section 143(2) of the Act was ever served either on the assessee, Dr. Y. D. Singh or on Shri Murli Dhar Vaish, chartered accountant, who had been appearing in the block assessment proceedings. In order to highlight this contention, counsel for the assessee placed before us the chronology of events which are relevant for deciding the additional ground taken by the assessee. The same are as under: Date Events 14-4-1998 Search and seizure action under section 132(1) was carried out at the residential premises of Dr. Y. D. Singh at 33 Kasia Road, Gorakhpur, in pursuance of warrant of authorisation dated April 8, 1998 issued by the Director of Income-tax (Inv.) Kanpur, and as per the panchanama prepared by the authorised officers, search was finally concluded on that date. 15-4-1998 Another warrant was issued by the Deputy Commissioner of Income-tax, Gorakhpur to carry out search at the bank locker No. 126 with the State Bank of India in the join ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12, 2000 and it was claimed that the said notice was served on Shri Murli Dhar Vaish. It was also claimed that the original of the said notice was available on the assessment record and in support of this contention, he offered to produce the block assessment records for our perusal. On the other hand, learned counsel for the assessee, Shri S. K. Garg contended that no such notice was served either on the assessee or on Shri Murli Dhar Vaish, the chartered accountant who was regularly attending the income-tax proceedings on behalf of the assessee. In support of this contention, learned counsel for the assessee, Shri S. K. Garg filed before us the affidavits dated October 6, 2010 duly sworn in by Sri Murli Dhar Vaish and Dr. Y. D. Singh. The averments made in the said affidavits read as under: I. Affidavit of Shri Murli Dhar Vaish "I, Murli Dhar Vaish, the deponent above named, solemnly affirm and state on oath as under : 2. That I am a practising chartered accountant and in terms of certificate of practice granted by the Institute of Chartered Accountants, Ihave been in the accountancy ever since 1970. 3. That Dr. Y. D. Singh, son of late I. D. Singh, resident of 33, Kas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as under : Para No. Averments made Cross reference of verification clause of the affidavit 1. I, the deponent named above do hereby solemnly affirm and state on oath as follows: True to the perso-nal knowledge of the deponent. 2. That the deponent has been authorised by the appellant in this case to swear this affidavit. Accordingly, he has gone through the relevant records and the affidavit dated -Feb-ruary 21, 2010 of Dr. Y. D. Singh. Being conversant with the facts of this case, he is making this affidavit. True to the perso-nal knowledge of the deponent. 3. That the deponent submits that the Departmental appeal being I. T. A No. 230/Allahabad/2002 was filed against order of the Commissioner of Income-tax (Appeals) deleting some additions made by the Assessing Officer made in the block assessment of the assessee Dr. Y. D. Singh. The assessee also filed appeal bearing I. T. A. No. 244/Allahabad/2002 mainly challenging the assessment order on the ground that the same was barred by limitation. Based on records 4. That the deponent submits t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a recent decision of the hon ble Allahabad High Court as per their judgment and order dated January 29, 2010 in the case of Sultanpur Kshetriya Gramin Bank v. Joint CIT [2011] 336 ITR 156 (All) in Application No. 202135 in Income-tax Appeal No. 221 of 2005 (D). A copy of the High Court judgment is being filed herewith as Annexure CA-3 for ready reference. Legal advice 10. That the deponent submits that even otherwise the -notings as per the order sheet entry March 3, 2000, March 4, 2000, etc. amount to valid notice under section 143(2) of the Act. Legal advice 11. That the deponent further submits that the assessee having participated in the assessment proceedings without raising any grievance before the Assessing Officer regarding proper service of notice cannot raise such a ground, particularly in view of the provisions contained in section 292BB of the Act. Legal advice The copies of the notice under section 143(2) dated June 12, 2000 and the order sheet entries starting from March 31, 2000 to July 28, 2000, which is the date of block assessment order, marked as annexures CA-1 and CA2 were annexed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 143(2) been issued, but the same has been served also on an agent authorised to receive the same. In the present case, the learned standing counsel for the Department has not even been able to establish that the notice under section 143(2) of the Act dated February 16, 2000 has ever been issued. In support of this contention, he referred to the order sheet entries, which is annexure CA-2 to the counter affidavit filed on behalf of the Department. Further there existed no authority in favour of Shri Murli Dhar Vaish to receive any such notice under section 282 of the Act and any such authority was not available on record. At this stage, learned counsel for the assessee, Shri S. K. Garg brought to our notice the provisions contained in section 288 of the Act under which an assessee can appear in income-tax proceedings at various stages through his authorised representatives. It also contains the description of the persons who can act as "authorised representative" and in that capacity can make submissions before the income-tax appellate authorities up to the stage of the Income-tax Appellate Tribunal. It does not give any power to such an authorised representative to receive no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e notices of demand were served on the assessee cannot help the assessee or the petitioners in this case. The failure of the respondents to make a positive assertion is not sufficient in view of the peculiar facts of the instant case, to lead to the conclusion that the assertion made by the assessee is true and worthy of reliance. It is neither a rule of prudence nor a rule of law that the statements made in an affidavit which remains uncontroverted, must invariably be accepted as true and reliable. Ordinarily, in the absence of denial, the statements may be accepted as true but if there are circumstances which suggest that the statements on affidavit should not be accepted as true, the absence of denial by the other side, would not by itself be sufficient to clothe the statements on affidavit with truthfulness and reliability. In view of the special facts and circumstances of this case, we are not inclined to accept the statement of the karta made on oath in the affidavit that the notices of demand in respect of the assessment years in question were not served on him before the commencement of recovery proceedings. As said earlier, this statement is clearly an afterthought and was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 618 (All), the same is also not applicable in the present case as the initial onus to prove the service of a valid notice under section 143(2) of the Act on the assessee or on his agent possessing the requisite authority in writing, has not been discharged by it. In fact, the said decision supports the assessee on the facts of the present case and the counter affidavit is just a "self serving statement" without any evidence to support the same. Similarly, the decision in the case of R. M. Yellatti v. Assistant Executive Engineer [2006] 108 FLR 213 ; 1 SCC 106 has also no application on the issue involved in the present case. Finally learned counsel for the assessee, Shri S. K. Garg submitted that there being no evidence brought on record by the Income-tax Department to show that Sri Murli Dhar Vaish had valid authority to receive notice under section 143(2) of the Act on behalf of the assessee and he had actually received that notice, the block assessment order dated July 26, 2000 is not valid and the same deserves to be quashed. We have heard the rival contentions and perused the facts of the case. As stated earlier, the ground of non-service of notice under section 143(2) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndicated that also. A reading of the provision would clearly indicate, in our opinion, if the Assessing Officer, if for any reason, repudiates the return filed by the assessee in response to notice under section 158BC(a), the Assessing Officer must necessarily issue notice under section 143(2) of the Act within the time prescribed in the proviso to section 143(2) of the Act. Where the Legislature intended to exclude certain provisions from the ambit of section 158BC(b) it has done so specifically. Thus, when section 158BC(b) specifically refers to applicability of the proviso thereto it cannot be excluded. We may also notice here itself that the clarification given by the Central Board of Direct Taxes in its Circular No. 717 dated August 14, 1995 ([1995] 215 ITR (St.) 70), has a binding effect on the Department, but not on the court. This circular clarifies the requirement of law in respect of service of notice under sub-section (2) of section 143 of the Act. Accordingly, we conclude that even for the purpose of Chapter XIV-B of the Act, for the determination of undisclosed income for a block period under the provisions of section 158BC, the provisions of section 142 and sub-sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a fact in issue or relevant fact, and made by a public servant in the discharge of his official duty, or by any other person in performance of a duty specially enjoined by the law of the country in which such book, register or record or an electronic record is kept, is itself a relevant fact." There being no entry in the order sheet regarding issuance and service of notice under section 143(2) of the Act, it goes to support the assessee's contention that no such notice was ever issued what to say of service of the same on the assessee or on his authorised representative. The reliance placed by the learned standing counsel for the Department on the decision in the case of Sri Krishna [1983] 142 ITR 618 (All) is also misplaced. The primary onus of proving that notice under section 143(2) of the Act had been issued and served also on the assessee or on the person authorised to receive the same on behalf of the assessee, was on the Income-tax Department. From the orders sheet entries forming part of the "counter affidavit" filed on behalf of the Department, it is seen that no such notice was even issued and no material of corroborative nature was brought on record to show that such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... After analysing the material and information brought on record, we have already come to the conclusion that the burden in this respect has not been discharged by the Income-tax Department by any evidence whatsoever. There is no statement made by the process server that he had been handed over the "notice", which was served by him in person. Thus, "satisfaction" of the Assessing Officer to the effect that service had been lawfully effected is also not on record. Now, we come to the most important part of the proceedings before us. Shri R. K. Upadhya, learned standing counsel for the Department has claimed that service of notice was through process server and not by post and it has been claimed that service of notice was on the authorised representative. There are set rules for such a mode of service, as have been dealt with at length by the hon'ble Allahabad High Court in its judgment and order dated May 22, 2008 in the case of Harsingar Gutkha P. Ltd. v. CIT [2011] 336 ITR 90 available at paper book 25 to 29. The relevant portion of the said judgment are reproduced hereunder (page 97 of 336 ITR) : "Section 282 of the Act provides as to how the notice under the Act is to be serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It reads as under : '19A. Simultaneous issue of summons for service by post in addition to personal service.-(1) The court shall, in addition to, and simultaneously with the issue of summons for service in the manner provided in rules 9 to 19 (both inclusive), also direct the summons to be served by registered post, acknowledgment due, addressed to the defendant, or his agent empowered to accept the service, at the place where the defendant, or his agent, actually and voluntarily resides or carries on business or personally works for gain : Provided that nothing in this sub-rule shall require the court to issue a summons for service by registered post, where, in the circumstances of the case, the court considers it unnecessary. (2) When an acknowledgment 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 to 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that appearance by an authorised representative is Portion in vernacular are not printed here.Ed. covered by section 288 of the Act and it is entirely different and independent from the provisions relating to service of notice as envisaged in section 282 of the Act read with the relevant provisions of the Civil Procedure Code, 1908. One may be an authorised representative to appear, but he may not have been given "authority" to receive notice. Therefore, in the absence of any material to show that Shri Murli Dhar Vaish had the authority to receive mandatory notice as per the provisions contained in section 282, being brought on record, we hold that the mandatory notice under section 143(2) of the Act has not been served at all on the assessee and such an omission is fatal to the very survival of the block assessment order dated July 28, 2000. We, therefore, quash the same as illegal being void ab initio. It is also placed on record that although in paragraph 6 of the counter affidavit it has been averred that the said notice was served on the assessee, but finally it was pleaded before us that the notice under section 143(2) of the Act was served on Sri Murli Dhar Vaish. After an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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