TMI Blog2010 (10) TMI 849X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 20-10-2010 - A.K. Sikri, Suresh Kait, JJ. Rashmi Chopra for the Appellant C.S. Aggarwal, Prakash Kumar and O.P. Sapra for the Respondent JUDGMENT A.K. Sikri, J 1. On 25-2-2008 it was recorded by this Court that the only question raised in these appeals is whether the notice was affixed at the latest and correct address of the assessee. We treat these appeals admitted on this issue and proceed to decide. 2. All these three appeals arise out of the common judgment of the Tribunal whereby the Tribunal has quashed the reassessment done by the Assessing Officer under section 147/148 of the Income-tax Act primarily on the ground that there was no valid service of notices under section 148 of the Act upon the assessees herein. M/s. Chandra Agencies, one of the assessees was the partnership firm at the relevant time and other two assessees were its partners. That is how all these cases are inter-related. 3. Brief facts, which need to be noted in this regard are that the case pertains to the assessment year 1985-86. In this year, the normal assessment was carried out and completed under section 143(1) of the Act on 10-6-1987 on the return income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion as to whether there was no proper service or not, following admitted facts need to be recorded. 7. As pointed out above, the normal assessment for the year 1985-86 (corresponding to financial year 1984-85) was completed on 10-6-1987. The assessees' firm, however, was dissolved on 31-7-1986. The dissolution deed was executed among the partners. This was duly placed on record of the department. In this dissolution deed, address of the firm was shown as C-89, NDSE, Part-II, New Delhi. A public Notice of dissolution of firm was given on 29-9-1986 and this was also placed on record of the department. Thereafter, return of income for the assessment year 1987-88 was filed with the Assessing Officer, District-V, on 16-1-1988. Significantly, in this return, the firm had disclosed the address as 4413, Jatavpura, Pahari Dhiraj, Delhi. For completion of assessment for the assessment year 1987-88, notice under section 131 of the Act was issued on 7-3-1988 at the aforesaid Pahari Dhiraj address. Pursuant to the assessment, even TDS refund was allowed which was dispatched by the Assessing Officer at the aforesaid Pahari Dhiraj address on 15-3-1988. The assessees' firm also filed the retur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tinental, Regal Building, he found that no such firm was existing at that address. On enquiries, he learnt that partnership firm has vacated this premises long time back. Similarly, Sh. K.L. Khanna, was not found at 167-168, Jhilmil Colony which happened to be his address. Instead one S.L. Saini was residing there who informed that Sh. K.L. Khanna has sold the property to him long time back. Likewise, at C-89, NDSE, Part-II, one Mr. Gupta was found residing who also informed that Sh. K.L. Khanna had vacated that premises some years back. This report shows that on none of these addresses, the erstwhile partners were residing as on March, 1995 when the notices were sought to be served. Even when these facts came to the notice of the Assessing Officer, instead of making any efforts to locate the present addresses, he ordered the service by affixation. No attempt had been made by the revenue to issue the notices through Regd. Post A/D and make an attempt to serve the notice, through registered post as per the requirement of Rule 19A, Order-V of Civil Procedure Code, which was then a mandatory requirement in law for service of a valid notice CIT v. Hotline International (P.) Ltd. [2008] ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dressee and serve the notice, which can be termed as due and reasonable. Such a move of service by affixation was clearly not proper without making venture to find out the present addresses of these assessees at least from the records. 9. We have already noted above that this case relates to the reassessment of proceedings in respect of assessment year 1985-86. The firm had been dissolved thereafter and when the returns for the assessment years 1986-87 and 1987-88 were filed, the factum of the submission was specifically brought to the notice of the Assessing Officer. In those proceedings, the assessee firm had given its address as 4413, Jatavpura, Pahari Dhiraj, Delhi. Curiously, it is the same Assessing Officer of the same Ward who had completed these assessments by sending communication at Pahari Dhiraj address. When the Assessing Officer was informed that the firm was not existing at 167-168 Jhilmil Colony, he straightway jumped to the conclusion that as per the record, that was the last known address. He did not even care to see the files of the assessment years 1986-87 and 1987-88. Had this care been taken, all necessary information would have been revealed to him and it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 995 and they were directed by the Assessing Officer to be affixed on the addresses mentioned in the notices and accordingly the notices were affixed on three addresses, as mentioned above. Copies of these notices are placed at pages 141 to 143. We have seen these copies of the notices and found that no name of any witness is mentioned on these notices. It is clearly shows that the notices were affixed on the above three addresses in absence of any witness, which is mandatory a per Order V, Rule 17 of CPC, 1908. We further noted that a report was given by Inspector, One Sh. K. Bhatnagar of Ward 12(2) on 18-3-1995 wherein it is stated that he visited Continental Hotel, 17 Regal Building, New Delhi and C-89, NDSE, Part-II, New Delhi and was informed that M/s. Chandra Agencies had left this address, as they have closed down their business from these premises. Once there was a report that the firm has been shifted from these addresses, then in our considered view, there was no necessity of even fixing the notices on these addresses on 28-3-1995, as the report was given by the Inspector only on 18-3-1995. Nothing is borne out from the records available on record that Assessing Officer ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n addresses and in fact the addresses where the assessees had shifted were duly communicated to the department but no care was taken by the Assessing Officer to look into its records. It is only the department which is to be blamed for this serious lapse. 14. We may take note of one argument of the learned counsel for the appellant at this stage. It was submitted that certain documents are filed to show that the assessees continued on the aforesaid addresses even in the year 1989-90. The first document is a copy of the Registration of Marriage under the Hindu Marriage Act, as per which, address of Mr. Kapil Khanna is shown as C-84, Jhilmil Colony, New Delhi. However, admittedly, notice was not sent at this address but sent at another address in the same colony namely 167-168, Jhilmil Colony, Delhi. Therefore, this document is of no consequence. Another document is the challan vide which Sh. K.L. Khanna paid the advance tax. This pertains to assessment year 1987-88 and C-89, NDSE, Part-II is shown as address. However, this again would not help the department in view of the report of the Inspector that when he went to serve notice in March, 1995 he was specifically informed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen correct address could be found subsequently, with due care and attention this could have been done at the initial stage also while sending notice under section 148 of the Act). Be as it may, the fact remains that the assessees were not served with any notice under section 148 of the Act. It is the case of the assessee that when Mr. Khanna appeared before the Assessing Officer, he was not even informed at that stage that the proceedings were reopen in respect of the assessment year in question pursuant to notice under section 148 of the Act. Even a copy of that notice was not served upon him when he appeared. In these circumstances, one has to proceed on the premise that no notice under section 148 of the Act was ever served upon the assessees or even given to them when Mr. Khanna appeared before the Assessing Officer. When there is complete absence of service of notice under section 148 of the Act, the consequence in law is that the entire proceedings for reopening the assessment would be void. Therefore, merely because Mr. Khanna had appeared before the Assessing Officer when he was called upon to do so by service of notice under section 143(2) of the Act would not validate th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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