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Issues Involved:
1. Validity of service of notices u/s 148 and 139(2) of the Income-tax Act, 1961. 2. Legality of assessment orders passed u/s 147 of the Income-tax Act. 3. Jurisdiction of the Commissioner of Income-tax to invoke section 263 of the Income-tax Act. Summary: 1. Validity of Service of Notices: The appellant contended that the assessment order u/s 147 was invalid due to improper service of notices u/s 148 and 139(2). The learned single judge examined three modes of service: personal service, affixation, and registered post. The judge found that personal service was not properly effected due to lack of details in the refusal endorsement. Service by affixation was also deemed improper as it did not comply with Order 5, rule 17 of the Civil Procedure Code. However, the judge held that notices sent by registered post should be deemed served based on the Supreme Court judgment in Madan and Co. v. Wazir Jaivir Chand, even though there was no conclusive proof of the contents of the registered covers. 2. Legality of Assessment Orders: The appellant argued that the assessment orders u/s 147 were invalid as they were not preceded by proper service of notices, denying the appellant a right to a hearing. The learned single judge agreed that if the order u/s 147 was not preceded by proper notice, it was invalid, and consequently, proceedings u/s 263 were also invalid. 3. Jurisdiction of Commissioner of Income-tax: The Commissioner invoked section 263 to revise the assessment orders, claiming they were erroneous and prejudicial to the interests of the Revenue. The appellant challenged this, arguing that the original orders u/s 147 were invalid due to improper service of notices. The learned single judge directed the Commissioner to reconsider the service of notices. Appellate Court Findings: The appellate court found no endorsement on the registered cover indicating refusal or return, and no attempt by postal authorities to serve the appellant was discernible. The court held that the learned single judge erred in finding that service by registered post was deemed accomplished. The court concluded that the service of notices was not properly effected, making the orders u/s 147 invalid. Consequently, the proceedings u/s 263 were also invalid. The appeal was allowed, and the judgment of the learned single judge was set aside. Conclusion: The appellate court set aside the judgment of the learned single judge, holding that the service of notices by registered post was not properly effected, rendering the orders u/s 147 and the proceedings u/s 263 invalid. The appeal was allowed without any order as to costs.
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