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TMI Blog2021 (11) TMI 915X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 147 of the Income Tax Act. 1961. Ground no. 2 :- On facts and circumstances of the case and in law, the learned Commissioner (appeals) erred in not quashing the reassessment proceedings as illegal and void as the same were without issuing mandatory notice U/S 143 (2) of the Income Tax Act. 1961. Ground no. 3 :- On facts and circumstances of the case and in law, the learned Commissioner al erred in sustaining the disallowance made by the learned Assessing Officer of Appellant's for house rent allowance U/S 10 (13A) of the Income Tax Act, 1961 of Rs. 3,40,000/- from his - salary income. Ground no. 4 :- On facts and circumstances of the case and in law, the learned Commissioner (appeals) erred in sustaining the disallowance made by the learned Assessing Officer of loss claimed by e Appellant under the head 'short term capital gains' of Rs. 53,37,250/- from sale of shares. Ground no. 5 :- On facts and circumstances of the case and in law, the learned Commissioner Appeals) erred in sustaining to the extent of Rs. 4,05,223/- the addition made by the learned Assessing Officer U/S 69 of the Income Tax Act, 1961 towards alleged unexplained cash credits in Appellant& ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn was filed on 18.09.2009. The notice u/s 148 was sent at "7-B Chandra Nagar". This was the address in which assessee used to reside before 2003 for a very brief period of time. The notice u/s 148 was actually delivered to "49-B Chandra Nagar" and signed by the father of assessee since this was within 200 meters radius and in same compound. Further, the Reasons recorded by the Assessing Officer u/s 148 dated 25.03.2015 addressed to 7-B Chandra Nagar also state that "Mr Sanjeev Patni is residing in E1102, Matri Elegance, Bannerghatta Road, Bangalore" and his principal place of employment is at Bangalore only. In reply to the notice u/s 148, it was stated that Income tax return already filed for A.Y. 2009-10 may be considered as in response to compliance u/s 148, thereby, reconfirming the address also. Copy of reason reads as under: "In continuation of proceedings, further the notice u/s. 142(1) for producing the books of account and other related documents registers, vouchers etc. in justification of income for the year under consideration i.e. A.Y. 2009-10 disclosed in the return filed in compliance of notice u/s. 148, fixing date of compliance on 29/06/2015 was issued on 25/06 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is a settled proposition of law that service by affixture is a permissible mode of service, but a detailed procedure as given under Rule 17 & 19 of the Order V of 1908 of Code of Civil Procedure is applicable which indicate that notice by affixture can be resorted only as a last resort, after exhausting all other modes of service. Notice by affixture can be resorted only if Defendant 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. Further, it is the responsibility of the serving officer to 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 also to return the original to the Court from which it was issued, with a report endorsed thereon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... easons were provided, it was stated that the notice u/s. 142(1) for producing the books of account and other related documents registers, vouchers etc. in justification of income for the year under consideration i.e. A.Y. 2009-10 disclosed in the return filed in compliance of notice u/s. 148, fixing date of compliance on 29/06/2015 was issued on 25/06/2015 by speed post which was received back on 26/06/2015 with the remarks as "not available on the given address". From the perusal of note sheet, we find that that no mention is made of any notice issued in the year 2015 particularly of notice u/s. 143(2). Further, in the Remand Report, it was stated that the notice u/s. 143(2) was issued dated 25.06.2015 and was returned unserved. But, in the Assessment Order, the Assessing Officer stated that only notice u/s. 142(1) was issued on 25.06.2015 whereas in the Remand Report, he stateed that in the same envelope, notice u/s. 143(2) was also there. Such notice u/s. 143(2) was never brought on record. Further, in the remand report only, there is mention that since the notice dt. 25.06.2015 was unserved, another notice u/s. 143(2) was issued and in this notice also, there was no dispatch no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng his proceedings, and may make such further enquiry in the matter as it thinks fit; and shall either declare that the summons has been duly served or order such service as it thinks fit." 7. From perusal of the above, it is clear that notice by affixture can be resorted only as a last resort, after exhausting all other modes of service. Notice by affixture can be resorted only if: 1.(a) Defendant refuses to sign the acknowledgement, or 2.(b) 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. 3. It is the responsibility of the serving officer to: (i) 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, (ii) return the original to the Court from which it was issued, with a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dant after proper enquiries, the Serving Officer cannot be deemed to have exercised 'due and reasonable diligence'. Before taking advantage of rule 17, he must make diligent search for the person to be served. Another requirement of rule 17 is that the Serving Officer should state that he has affixed the copy of summons as per this rule; the circumstances under which he did so; the name and address of the person by whom the house or premises were identified; in whose premises the copy of the summon was affixed and these facts should also be verified by an affidavit of the Serving Officer. This view is supported by the ratio laid down in case of World Wide Exports (P.) Ltd. [2004] 91 ITD 519 (DEL). We find that the facts related to affixture of notice cannot be true in light of the affidavit from Shri Rajiv Patni (brother of assessee) which states as under: a. They reside in 49B Chandra Nagar, A.B Road Indore since past 17 years with his family members comprising of parents, wife, son and daughter-in-law. b. Also affirmed that his brother's address was Bangalore address. His brother used this address as correspondence address for sake of convenience. c. Due to old age and medi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... heir case as required by section 33B." In the present case also, the serving officer could not state in his report the any name and address of the witnesses who have identified the house of the assessee and in whose presence the notice was affixed. Further, the affidavit in assessment records is missing thus in contravention of Rule 20 of Order V of CPC 1908. We find that in case of Jagannath Prasad [1977] 110 ITR 27 (ALL.), the Hon'ble Allahabad High Court held as under: "the report given by the process server was to the effect that he had made enquiries at a number of places but could not find out the assessee. After this report the ITO passed an order for affixture. From the mere fact that the process server could not find out the assessee it would not lead to the conclusion that the assessee was keeping out of the way for the purpose of avoiding service or that for any other reason the notice could not be served. The report did not indicate that more than one attempt was made by the process server. On the contrary, it indicated that on a single attempt he enquired at a number of places but could not find out the assessee. This could not constitute sufficient material for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act was duly discharged through speed post followed by another notice by the notice servers namely Shri Prem N. Joshi on 4.9.2009. The proof of the two services are on record before the revenue and duly submitted before the Ld. Tribunal and therefore, according to the Ld. DR it has been assumed that the notice served was entered in the scrutiny pendency register. Hence, the plea of the order being passed without due process of law is not tenable. 3. We have heard the rival submissions made by the respective parties on the ground of maintainability of the assessment proceedings. We have also perused the available records. The case of the assessee is this that the notice u/s 143(2) and 142(1) of the Act was received for the first time in 21.7.2010 by and under the notice dated 14.07.2010 fixing the date of hearing on 12.8.2010. Such fact was brought to the notice of Ld. A.O by and under a letter dated 12.8.2010 issued by the assessee as appears at page 55 of the paper book submitted before us. Such objection was also filed on 03.09.2010 owing to non availability of Ld. A.O. In fact certified true copy of the assessment proceedings was also obtained from ACIT-5(1), Indore who issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame was delivered. It was contended by the appellant that the signature of the impugned notice does not belong to any of the officer/Director or employee of the company. It is relevant to note that this fact has not been controverted by the revenue. No such evidence indicating receiving notice genuinely on behalf of the assessee is forthcoming from the revenue in order to substantiate that the service has actually been affected. The Ld. DR has not been able to satisfy us on this aspect. In that event we do not hesitate to conclude that the provision of service of notice as stipulated under Section 282 of the Act as if it is a summon issued by a court under the code of civil procedure, 1908 (5 of 1908) has not been complied with in its true spirit, in the absence of disclosure of identification of the person to whom the service was ultimately effected. The Ld. A.O failed to bring any material on record to show that the notice u/s 143(2) of the Act was served on the assessee within the stipulated period i.e. 30.09.2009 before the expiry of 6 months from the end of the financial year in which the return is furnished. Thus, it cannot be held to be a valid service of notice on the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , that service of notice under Section 143(2) of the Act effected within the stipulated time under the provisions of Section 143(2) of the Act on the assessee or on any of their employees/ relatives or any authorized representatives particularly in adherence to provision under Section 282 of the Act either by post or as if it were a summons issued by a Court under the Code of Civil Procedure, 1908 (5 of 908). In that view of the matter the service of notice under Section 143(2) of the Act, in our considered opinion is no service. Since the initiation of the proceeding is not in adherence to the prescribed rules, the entire proceeding is vitiated and hence quashed. Consequently, all action taken there under is bad. The impugned addition, made by the Revenue is, thus, hereby deleted. 5. In the result appeal of the assessee is allowed." 11. In view of the above facts in the light of the aforesaid judicial pronouncements, we are of the view that the reassessment proceedings, so initiated, are bad in law as the Assessing Officer failed to serve the notice u/s 143(2) of the I.T. Act on the assessee. Accordingly, we quash the assessment order framed u/s 144 r.w.s. 147 of the IT Act f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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