TMI Blog2011 (11) TMI 16X X X X Extracts X X X X X X X X Extracts X X X X ..... as not representing the appellant stands falsified and negated. Submission that no material or evidence was found in the alleged search - Held that:- The questionnaire attached to the notice refers to the material and evidence collected during the course of search. The block assessment order which was challenged before the tribunal also refers to documents, material etc. found during the search. - Decided against the assessee. - INCOME TAX APPEAL NO. 1525 OF 2010 - - - Dated:- 11-11-2011 - MR. JUSTICE SANJIV KHANNA, MR. JUSTICE R.V. EASWAR, JJ. For Appellant: Mr. C.S. Aggarwal, Sr. Advocate with Mr. Prakash Kumar, Advocate. For Respondent: Mr. Sanjeev Rajpal, Advocate. SANJIV KHANNA, J.: The appellant-Venad Properties Private Limited in this appeal under Section 260A of the Income Tax Act, 1961 (Act, for short), has challenged the order dated 18th December, 2009 passed in ITA No. 374/DEL/1997 on the following grounds: (1) No search under Section 132 of the Act was conducted on the appellant. (2) Notice under Section 158BC of the Act was not served on the appellant and, therefore, the block assessment order dated 28th November, 1997 under Section 158B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cuments were seized. The seizure of these documents is mentioned in paragraphs 9 to 20 of the assessment order. The appellant had filed a writ petition before the High Court of Kerala at Ernakulam being Original Petition No. 23000/1997. In this writ petition, the appellant had challenged the order under Section 127 of the Act transferring the jurisdiction of the appellant from Trivandrum to the Assistant Commissioner of Income Tax, Central Circle, New Delhi. In paragraph G of the said writ petition, the appellant had admitted that there was search and seizure operation at Ushus‟, Jawahar Nagar, Trivandrum, Kerala on 6th November, 1996, but it was alleged that the order Exhibit P-4 did not state that the search and seizure operation was directed against the appellant company. As noticed above, the search warrant and panchnama mention the name of the appellant. The appellant has, therefore, taken conflicting and contrary stands in different proceedings. The first contention, therefore, fails. 5. The second contention relates to service of the notice dated 17th October, 1997 under Section 158BC of the Act. The said notice was addressed to the Principal Officer of the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... If we analysis both these two sets of circumstances on human probability, then it will reveal that right from the beginning assessee was aware about the proceedings, a show-cause notice was given to it while its jurisdiction was being transferred under sec. 127 of the IT Act from Trivanantpuram to New Delhi. Thereafter, it had filed writ petition in the Hon‟ble High Court challenging the transfer of its jurisdiction. The writ petition was filed in the month of December, 1997 by that time assessment order was already passed but assessee sought to amend the writ petition in order to challenge the assessment order also. These facts do indicate that assessee was aware about the proceedings but now wants to persuade the revenue to demonstrate the service of notice under sec. 158-BC. When any explanation of a party based on number of facts supported by evidence and circumstances required consideration whether explanation is sound or not must be determined not by considering the weight to be attached to each single fact in isolation but by assessing the cumulative effect of all the facts in their setting as a whole. If we see the cumulative effect of all the evidence produced by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stionnaire would be submitted for you perusal, Thanking you, Yours faithfully, Chartered Accountants iv. The appellant had/has disputed and denied that they know any person by the name of A.K. Mishra or had appointed Thakur, Vidhyanath and Co. as Chartered Accountants. In the grounds of appeal before the tribunal in paragraphs 4 and 5, the appellant had stated as under:- 4. The Company has not authorized anyone to appear before the Assessing Officer at New Delhi for notice u/s 142(1) dt 5-11-97 stated to have been served. 5. The assessment order has been passed without granting the appellant an effective and adequate opportunity of being heard. No notices u/s 142(1) or u/s 158BC was served on the Assessee. Thus the assessment order has been passed in violation of the principles of natural justice and hence it ought to be annulled. v. Similarly, in the writ petition filed before the High Court of Kerala at Ernakulum, the stand taken by the appellant was as under:- The notice under section 158BC dated 17-10-1997 as also the notice under section 142(1) dated 24-10-1997 and 5-11-1997 have not been received or served on the petitioner. The petitioner has also not authorize ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng facts are relevant;- (a). Name and appearance of A.K. Mishra, on behalf of the appellant, was mentioned in the assessment order. In the grounds of appeal filed before the tribunal, it was not stated that the appellant or its principal officers did not know A.K. Mishra. (b). Before the tribunal, directors of the appellant company had filed affidavits dated 21st August/11th November, 2008 stating, inter-alia, that the notice under Section 158 BC dated 17th October, 1997, had not been served on the company and the notice bears un-discernible signature. It was further stated that the company had only seven employees, whose signatures did not tally with the signature on the notice dated 17th October, 1997. The said affidavits did not state that the Directors did not know any person by the name of A.K. Mishra. (c). On 7th October, 2009, the appellant company was asked to file an affidavit stating, whether they had appointed Thakur Vaidyanath and Co., Chartered Accountants. Usha Krishan Kumar, then filed an affidavit dated 8th October, 2009. In this affidavit, she has stated as under:- 5. That the deponent further states that in fact there could have been no occasion for it to hav ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... third contention must fail. However, later on a short written note was filed that Rule 19A of Order V of the Code of Civil Procedure, 1908 was not complied with and the compliance was/is mandatory in all cases, where the party/person who is to be served, does not admit service under Rules 10 to 15 of Order V of the said Code. Thus the service of notice dated 17th October, 1997 was bad or void. Reliance was placed on Commissioner of Income Tax versus Hotline International Private Limited, [2008] 296 ITR 333 (Delhi) and Commissioner of Income Tax versus Eqbal Singh Sindhana, [2008] 304 ITR 177 (Delhi). 9. Section 282 of the Act provides that notice or requisition may be served on a person either by post or as if summons were issued by a Court under the Code of Civil Procedure. Order V of the aforesaid Code prescribes for mode, procedure and manner of service of notices. Formalities and procedure prescribed is to curtail and minimize possibilities of disputes and questions about service of summons/notices. Procedural rules and stipulations are means to deliver justice and not technical contrives to stall/obstruct proceedings, even when no prejudice is caused due to non observance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there is complete extinguishment of rights, as opposed to the cases where discretion is vested in the courts to balance the equities between the parties to meet the ends of justice which would invite liberal construction. For example, under Order 41 Rule 22 of the Code, cross-objections can be filed at any subsequent time, even after expiry of statutory period of one month, as may be allowed by the court. Thus, it is evidently clear that there is no complete or indefeasible extinguishment of right to file cross-objections after the expiry of statutory period of limitation provided under the said provision. Cross-objections within the scheme of Order 41 Rule 22 of the Code are to be treated as separate appeal and must be disposed of on same principles in accordance with the provisions of Order 41 of the Code 11. In Sardar Amarjit Singh Kalra v. Pramod Gupta [2003] 3 SCC 212, a Constitution Bench of the Supreme Court has held: 26. Laws of procedure are meant to regulate effectively, assist and aid the object of doing substantial and real justice and not to foreclose even an adjudication on merits of substantial rights of citizen under personal, property and other laws. Procedure h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tober, 1997 was received by the appellant company. In case the appellant company had not received the notice, the same would have been mentioned in the reply dated 17th November, 1997. If any such contention was raised, the Assessing Officer could have served the notice a fresh. 15. In Eqbal Singh Sindhana (supra), notice for scrutiny under Section 143(2) of the Act was sent by post but was returned back with the remark of the postal authorities that the premises/house number mentioned did not exist. Subsequently, another notice under Section 143(2) was issued but this notice was beyond the prescribed period and an ex parte assessment order was framed. Question arose whether the first notice under Section 143(2) was served within the prescribed period or not. The court noticed that the postal authorities had not tried to serve the notice on the assessee at the correct address, i.e., B-226, Vivek Vihar, Delhi but had reported that property No. 226 did not exist. It was further mentioned that there was an interpolation in the address of the assessee mentioned in the notice. The facts of the present case noted above are different. 16. Reliance placed on the order of this Court d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examined and kept in mind. Procedural rules are assigned to afford a full and proper opportunity to the person concerned to defend himself. 19. There has been a gradual but a perceptible and distinct acceptance that in matters of due service of notice/summon, a practical and pragmatic approach, rather than mere compliance or non compliance of a formality(ies) is determinative and relevant. Amendment to Order XIII, Rule 9 of the Code of Civil Procedure, 1908 pursuant to the 27th report of the Law Commission in 1976 is a clear pointer and reflects an acceptable approach. Prejudice caused is relevant and apposite, but contrivance and stratagem once established should not be accepted. 20. The last and the fourth contention of the appellant is without substance and does not merit acceptance. The questionnaire attached to the notice refers to the material and evidence collected during the course of search. The block assessment order which was challenged before the tribunal also refers to documents, material etc. found during the search. The tribunal has set aside the ex-parte assessment order and has issued the following directions:- 20. The assessment order is an ex parte order. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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