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2015 (11) TMI 490

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..... upta, CA For the Respondent : Shri Sujit Kumar, Sr. DR ORDER Per Bench ITA No. 1467/Del/2011 arises from the order of learned Commissioner of Income Tax (Appeals), Ghaziabad dated 17.01.2011 for the Assessment year 2003- 04, wherein the appeal of the appellant was partly allowed on merits. The assessee has taken as many as 14 grounds in this appeal before us but the main grievance of the assessee is contained in ground no. 4 which reads as under: That the learned CIT (Appeals) has erred in upholding the impugned assessment order passed u/s 147/148 of the Act even when the notice u/s 148 was never served on the assessee society. 2. The facts of the case, in brief, are that the return of income was filed on 3.12.2003 and the same was processed u/s 143(1) of the Income Tax Act, 1961 on 26.03.2006 at the returned income. Meanwhile a survey had been conducted on the premises of the assessee on 17.02.2006 wherein during the course of survey, a loose paper (marked as Page No 89 of Annexure D-3) was found which showed that certain payments had been made by one Shri Vijay Gupta and another Shri JK Gulati to Shri Satish Kumar, Secretary of the assessee society. .....

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..... ssee - appellant) had refused to receive the said notice. He drew our attention to Order V, Rule 12 of the Code of Civil Procedure which prescribes that the service has to be effected on defendant in person or on his agent. The Learned AR further submitted that in the present case, notice under section 148 of the Act was not served on the assessee nor the same was refused at all by the assessee. He submitted that when the officials of the Income-tax Department went to serve the notice under section 148, the servant (not of assessee, as the notice was not sent at the address of assessee - appellant) refused to accept the notice. The Learned AR submitted that the servant here, by no stretch of imagination can be said to be the agent of the assessee and thus, admittedly, no notice was tendered either to the assessee or his agent nor was the same refused either by the assessee or his agent. The Learned AR further submitted that the notice allegedly served on 16.04.2007 and that too by affixture is in complete violation of Order V Rule 17 of CPC, as the conditions precedent to said affixture of notice were never satisfied by the learned AO. The Learned AR also submitted that service of .....

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..... Both on the issues of reopening as well as on merits, he strongly opposed the contentions of the assessee. We would be dealing with the same, if necessary. Both parties agreed that the issues for the assessment year 2004-05 are identical to the issues that arise for the assessment year 2003-04 and hence the arguments would be the same. In rejoinder the Ld. Counsel for the assessee pointed out that the notice was not sent at the correct address and hence the question of the assessee avoiding the receiving of notice does not arise. He also submitted that admittedly no notice has been served to the assessee by speed post. He referred to section 282 and submitted that refusal by servant is of no consequence, as the notice is to be served on the person mentioned u/s 282. 6. We have considered the rival submissions and have perused the facts on record. Undisputedly, notice u/s 148 was issued on 26.03.2007 and was served upon the assessee through affixture on 16.04.2007. This fact has been recorded by the AO also on Page 2 of the Assessment Order. There is no other evidence on record to even suggest that efforts were made earlier to serve the notice on the assessee. The short question .....

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..... s under: Rule 17. Procedure when defendant refuses to accept service, or cannot be found.-Where the defendant or his agent or such other person as aforesaid refuses to sign the acknowledgement, or where the serving officer, after using all due and reasonable diligence, cannot find the defendant (who is absent from his residence at the time when service 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 there is no agent empowered to accept service of the summons on his behalf, nor any other person on whom service can be made, the serving officer shall affix a copy of the summons on the outer door or some other conspicuous part of the house in which the defendant ordinarily resides or carries on business or personally works for gain, and shall then return the original to the Court from which it was issued, with a report endorsed thereon or annexed thereto stating that he has so affixed the copy, the circumstances under which he did so, and the name and address of the person (if any) by whom the house was identified and in whose presence the copy was affixed. Order V, Rule 19A provide .....

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..... de or business only, where no other agent is expressly authorized to make and do such appearances, applications and acts. 8. Thus a bare reading of the provisions of the Income Tax Act, 1961 and the Code of Civil Procedure reproduced herein above it is seen that as per Order V, Rule 12 of the Code of Civil Procedure, wherever it is practicable the service has to be effected on defendant in person or on his agent. Admittedly, in the present case, notice under section 148 of the Act was not tendered to the assessee nor the same was refused at all by the assessee. It was refused by the servant of another person who by no stretch of imagination can be said to be the agent of the assessee and admittedly no notice was tendered either to the assessee or his agent nor was the same refused either by the assessee or his agent. Under Order V, Rule 17 of the Code of Civil Procedure, the affixation can be done only when the assessee or his agent refuses to sign the acknowledgement or could not be found. Here, in the present case, it is very much apparent from the records that no effort was made by the Income-tax Department to serve the notice upon the assessee and no effort was made by t .....

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..... e was identified and in whose presence the copy was affixed. Rule 19 provides that where a summon is returned under Rule 17, the Court shall, if the return under that rule has not been verified by the affidavit of the serving officer and may, if it has been so verified, examine the serving officer on oath, or cause him to be so examined by another Court, touching his proceedings and may make such further enquiry in the matter as it thinks fit; and shall either declare that the summon has been duly served or order such service as it thinks fit. At this stage, the attention is also drawn to Rule 20 which provides the circumstances under which the substituted service can be effected. For the benefit of this order, the provisions of Rule 20 are being reproduced as under: 20. Substituted service - Where the Court is satisfied that there is reason to believe that the defendant is keeping out of the way for the purpose of avoiding service, or that for any other reason the summons cannot be served in the ordinary way, the Court shall order the summons to be served by affixing a copy thereof in some conspicuous place in the Court- house and also upon some conspicuous part of the .....

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