9911796707
TMI Blog2017 (1) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... against the order of the Commissioner of Income Tax (Appeals)-I, Nagpur within a specific time limit, therefore, the deponent (assessee) has not filed any appeal against the order. When the Tax Recovery Officer approached for recovery of demand the deponent (assessee) contacted in the office of Adv. M. Mani and received the file in the last week of June, 2015. Thereafter, deponent (assessee) approached to new counsel office Adv. Manoj Moryani and after going through the record it is found that the appeal has not been filed against the Ex-party order passed by the Commissioner of Income tax (Appeals)-I, Nagpur. The deponent (assessee) has filed application before the Hon'ble Income Tax Appellate Tribunal, Nagpur Bench, Nagpur on 26/10/2015 and request that delay in filing of appeal by 555 days may kindly be condoned due o aforesaid reason." In this regard notice of the Tax Recovery Officer dated 29/07/2015 has also been submitted. 3. The learned counsel of the assessee has also placed reliance on the following case laws in support of the plea for condonation of the delay. 1. 1981 AIR 1400 Rafiq & Anr. Vs. Munshilal & Anr. 2. Judgement of Hon'ble Supreme Court of India dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. The learned counsel of the assessee has also filed additional grounds as under : "1. The notice issued u/s 148 of I.T. Act, 1961 is illegal, invalid and bad in law and consequent assessment framed u/s 144 r.w.s. 147 of I.T. Act, 1961 is liable to be cancelled. 2. The notice issued u/s 148 of I.T. Act, 1k961 in the case of assessee has not been served on assessee in accordance with law and the consequent assessment framed thereupon is illegal, invalid and bad in law and liable to be cancelled. 3. Reasons recorded for issue of notice u/s 148 of I.T. Act, 1961 having not been provided to assessee the assessment framed is liable to be cancelled. 4. The learned Assessing Officer ought to have telescoped the income and unexplained investment while determining total income at the hands of assessee. Since the additional ground sought to be raised by the assessee do not involve investigation of new facts and the same relate to interconnected grounds of appeal and have impact on the same subject matter as well as a legal issue which goes to the root of the matter therefore it is requested that kindly consider the same in the interest of Justice." 7. Upon hearing both the cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued U/s 148 of the Income Tax Act, 1961. Then on 22.7.2009, the assessee was informed that the notices UIs 148 of the Income Tax Act were duly served in your cases for the below mentioned Assessment Years on 26.03.09, by way of affixture, in the presence of two witnesses. This office has all the necessary evidence to prove that the notices u/s 148 has been properly served: The assessee vide his reply dated 29.7.2009 still maintained that the notices have not been received by the assessee. Then on 5.8.2009, a notice U/s 142(1) was again sent to the assessee mentioning all the details that: "A survey action u/s 133A was conducted in your? Case on 24.11.2008. During the course of survey proceedings/some documents pertaining to you were found and impounded. A copy of all such documents has already been given to you. Considering your reply dated 29.7.2009/your returns tiled u/s 139 and the documents found and seized during the course of survey are considered as the material available on record and it is proposed that assessment would be completed by affording you of an opportunity of being heard to state your case and to explain the documents found and impounded during the course of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was issued on 20.10.2009, fixing the case for hearing on 30, 10.2009 and also a summons U/s 131 was issued on 27.10.2009 to produce all the documents called for vide notices issued U/s 142(1). As expected, no documents, as called for. vide notices issued U/s 142(1) were filed. On 3.11.2009, the assessee attended without any of the documents called for by the Department. Still, a statement U/s 131 was recorded and the assessee was specifically asked to produce all the documents latest by 6.11.2009. The assessee assured to explain all the impounded documents on 6.11.2009 but neither the assessee nor the Counsel for the assessee attended nor any explanation/documents were filed, except for adjournment letter. 8 From the above narrated facts, it can be inferred that the assessee has scant regard for the Income Tax proceedings and has no explanation to file before the Department in respect of the querries raised/explanation sought on impounded documents by the Department, hence. it was proposed to the assessee vide this Office notice dated 6.11.2009 to complete the assessment U/s 144 of the I. T. Act. For passing order U/s 144, it was informed that the return of income filed U/s 139 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not been served by post. Further, the AR states "provision for service of summon issued by Court under the Code of Civil Procedure are provided in order V of Civil Procedure Code. The aforesaid provision provides the procedure required to be followed for valid service of summons under various rules contained in Order V. On the basis of facts and evidence on record, the procedure prescribed under Order V of Civil Procedure for service of notice by affixture has not been complied with in the case of the assessee. In view of the above, there is no valid service of notice issued u/s 148 of the I.T. Act, 1961." 5.2 The appellant has also placed reliance on the decision of ITAT, Amritsar Bench in the case of DCIT Vs. K.G. Singhania in ITA No. 281/282/ASR/2008 reported in 126 TTJ 373 and decision of ITAT, A gra Bench reported in 126 TTJ (AGR) 346.Thus, based on thee judgements the assessee has submitted that the jurisdiction assumed by the AO u/s 144 is bad in law as there was no valid service of notice u/s 148 of the I.T. Act, 1961. 6. I have carefully considered the submissions of the AR and the order of the AO. 6.1 A survey action u/s 133A of the I.T. Act, 1961 was conducted i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO vide letter dated 17.08.2009 informed the assessee that the assessment would be completed on the basis of the return of income and other material impounded during the survey action for want of any compliance on the part of the assessee, However, the assessee did not file any explanation on the impounded material and reiterated that the service of notice u/s 148 by affixture is not valid. Thereafter, adjournment was sought by the appellant on 17.08.2009 and subsequently which were allowed by the AO. The details of adjournment sought by the assessee, which were allowed by the AO, are elaborately discussed in Para 7 of the assessment order and the relevant finding in this regard is as below : 7. An adjournment was S011g1u for on 17.8,2009 and the date was fixed for 20'.8.2009. Again on 20.8"-2009, adjournment was requested and the case was adjourned for 27.8.2009. Again on 27.8.:2009. adjournment was sought for and the case was adjourned to 2.91.200J. None attended on 2.9.2009 and no submission "pas furnished. Again a notice U/s 142(1)) and notice U/s 274 r. w. s. 271 (1) (b) was issued on 20.10.2009, fixing the case for hearing on 30, 10.2009 and also a summons U/s 131 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts available on records including the relevant reports clearly demonstrates the non-cooperative attitude of the appellant. The fact that the AO for want of compliance from the appellant was constructed to pass the assessment order ex-parte u/s 144 of the Act, also shows the non-co-operative approach of the appellant towards official proceedings. It is perused from the record that ample opportunities were conferred upon the appellant to explain the contents of the impounded material found during the survey action, but the appellant chose not to avail such opportunities. The ratio of the decisions relied upon by the appellant is not applicable to the facts of the case of the appellant. The facts of the case make it abundantly clear that there was no procedural lapse in service of notice u/s 148 of the Act. The service through Notice Server is the most preferred mode of service prevalent in the department followed by the Service by Post and affixture. In the case of present appellant, the initial conduct of the appellant itself was non cooperative; therefore, the AO had rightly adhered to the mode of service by affixture. The ultimate motto of the AO was to serve upon the appella ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment years under consideration are 2003-04 to 2005-06. Survey u/s 133A was made on 24/11/2008. Notice u/s 148 are issued on 26/-03/2009. Affixture is made on 26/03/2009. Enough limitation to serve the notice u/s 148 of I.T. Act 1961 was available with A.O. of more than one years for Asstt. Year 2003-04 and for other years much more than that A.O. has hurriedly resorted to process of affixture for no valid justification. E) Reasons recorded not provided to assessee by learned A.O. and even by Hon'ble CIT(A). Request made before A.O. on 25/01/2010 A.O. Page-4, Para-8. Request made before Hon'ble CIT(A) 19/11/2010 F) Reliance on W/s before CIT(A) &n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . iii) ITAT order in ITA No. 5221/Mum/2014 in the case of Shri Sanjay Badani vide order dated 09/09/2014. iv) (2015) 43 ITR (Trib) 0635 (Delhi) Sumanglam Sewa Awam Educational Samiti vs. CIT. v) (2010) 328 ITR 0173 (P&H) CIT vs. Kishan Chand. vi) (2010) 1 ITR 0001 (Agra) Arun Lal vs. ACIT. vii) (2008) 296 ITR 0333 (Delhi) CIT vs. Hotline International (P) Ltd. viii) (1973) 89 ITR 0136 (All.) CIT vs. Satya Narain Poddar. ix) (1977) 110 ITR 0027 (All.) Jagannath Prasad & Ors. Vs. CIT & Ors. x) (1971) 82 ITR 0888 (SC) CIT & Ors. Vs. Ramendra Nath Ghosh. xi) (1973) 88 ITR 0374 (Cal.) Rameswar Sirkar vs. ITO. xii) (2000) 242 ITR 0141 (Mad.) Venkat Naicken Trust & Anr. Vs. ITO. N) Inspection of record by assessee revealed that there is no report of notice server to the effect there was any refusal to receive notice by assessee. O) Inspectors report is not verified by affidavit of service nor A.O. has examined inspector on oath as required under Rule 19 of Order V of Civil Procedure Code 1908. The A.O. having not followed the provisions of Rule 19 there is no valid service of notice u/s 148 of I.T. Act, 1961. P) Assessment record does not indicate that A.O. has d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided in Chapter IV of the Information Technology Act, 2000 (21 of 2000); or (d) by any other means of transmission of documents as provided by rules made by the Board in this behalf. (2) The Board may make rules providing for the address (including the address for electronic mail or electronic mail message) to which the communication referred to in sub-section (1) may be delivered or transmitted to the person therein named. Explanation - For the purposes of this section, the expressions "electronic mail" and "electronic mail message" shall have the meanings as assigned to them in Explanation to section 66A of the Information Technology Act, 2000 (21 of 2000). 15. Issue and service of summons as per Code of Civil Procedure "1. Summons (1) When a suit has been duly instituted a summons may be issued to the defendant to appear and answer the claim on a day to be therein specified: Provided that no such summons shall be issued when the defendant has appeared at the presentation of the plaint and admitted the plaintiff's claim: [Provided further that where a summons has been issued, the Court may direct the defendant to file the written statement of his defence, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... endant to produce documents relied on by him The summons to appeal and answer shall order the defendant to produce all documents in his possession or power upon which he intends to rely in support of his case. 8. On issue of summons for final disposal, defendant to be directed to produce his witnesses Where the summons is for the final disposal of the suit, it shall also direct the defendant to produce, on the day fixed for his appearance, all witnesses upon whose evidence he intends to relay in support of his case. Service of Summons 9. Delivery or transmission of summons for service (1) Where the defendant resides within the jurisdiction of the Court in which the suit is instituted, or has an agent resident within that jurisdiction who is empowered to accept the service of the summons, the summons shall, unless the Court otherwise directs, be delivered or sent to the proper officer to be served by him or one of his subordinates. (2) The proper officer may be an officer of a Court other than that in which the suit is instituted, and, where he is such an officer, the summons may be sent to him by post or in such other manner as the Court may direct. 10. Mode of serv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the original summons. 17. Procedure when defendant refuses to accept service, or cannot he 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, 22[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 affixe~ 18. Endorsement of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r mislaid, or for other reason, has been received by the Court within thirty days from the date of the issue of the summons]. 20. Substituted services (1) 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 house(if any) in which the defendant is known to have last resided or carried on business or personally worked for gain, or in such other manner as the Court thinks fit. 22[(1A) Where the Court acting under sub-rule(1) orders service by an advertisement in a newspaper, the newspaper shall be a daily newspaper circulating in the locality in which the defendant is last known to have actually and voluntarily resided, carried on business or personally worked for gain.] (2) Effect of substituted service-Service substituted by order of the Court shall be as effectual as if it had been made on the defendant personally. (3) Where service substituted, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l premises of the appellant as far back as August, 1976, and the income of the asst. Yr 1969-70 could be assessed by issuing a notice by 31st March, 1978. Notice under s. 148 was issued on 23rd March, 1978, and the ITO was naturally anxious to see that the notice gets served by 31st March, 1978. Though he meticulously complied with all the formalities prescribed with regard to the service of notice through the affixture yet the hurry which he had to make is quite apparent. As pointed out, search had taken place in the year August, 1976, and when no action had been taken up to 23rd March, 1978, taken recourse to service by affixture can be said only a sheer formality and not the real service as held by their Lordships in different judgments of the different High Courts, referred to above. (3) Learned counsel for the Revenue is unable to show that there was any refusal of the assessee to accept service as has been assumed in the question referred. On the other hand, the Tribunal has categorically held that no other mode was adopted and steps for service of notice were taken about a week before the time was expiring." 3) CIT vs. Hotline International (P)Ltd. 296 ITR 333. "As per o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntion of the assessee that the notice was never served on the assessee or his agent. This aspect has been repeatedly agitated by the assessee before the AO as well as the CIT(Appeals). Examination of the materials produced in this regard do not reflect any effort on the part of the AO to service the notice by post or by other ordinary means of service as required by section 282. This fact is evident from the date of issue of notice and the date of affixture being the same. The above clearly reveals that the AO has not taken reasonable steps to serve the notice in the ordinary course. Thus as in the case of CIT vs. Kishan Chand before the Hon'ble Punjab & Haryana High Court, in this case also no other mode was adopted and steps of service of notice was taken except reportedly through the affixture about few days before time was expired. Thus it is clear that the AO has not made regular attempts for service of notice in regular manners and was not justified to make substituted service of notice. There is no report of notice server to the effect that there was any refusal of notice by the assessee. In the report of Inspector, names of two witnesses are referred. The addresses of the w ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
