2012 (6) TMI 378 - AT - Income Tax

Block Assessment - Validity of notice - notices u/s 143(2) and 115WE(2) of the I.T. Act Held that - According to the report of the Inspector/notice server, the notice was affixed on the main door of Shop No. 33. There was no evidence of any local person having been associated with in identifying the place of business of the assessee-respondent and the report was not witnessed by any person at all. It had been found to be flagrant violation of rule 17 of order V of the code which lays down a procedure to serve notice by affixture. assessment framed u/s 144 was invalid as no notice u/s 143(2) was validly served upon the assessee within the statutory time. appeal filed by the revenue is dismissed.

Summary

Issues Involved:
1. Validity of the notices issued under Section 143(2) and 115WE(2) of the Income Tax Act, 1961.
2. Validity of the assessment order passed under Section 144 of the Income Tax Act, 1961.
3. Validity of the service of notice by affixture.

Detailed Analysis:

Issue 1: Validity of the Notices Issued Under Section 143(2) and 115WE(2) of the Income Tax Act, 1961
The revenue contended that the notices issued under Sections 143(2) and 115WE(2) were validly served at the last known address of the assessee. The Assessing Officer (AO) issued a notice under Section 143(2) dated 11.10.2007 to the address at 44-Rajendra Bhawan, Rajendra Place, New Delhi, which was returned undelivered. The AO then served the notice by affixture at the same address. However, the assessee argued that the correct address was 1-GF, AGCR Enclave, Karkarduma, Delhi, which was mentioned in the return of income filed on 25.11.2006. The CIT(A) found that the address used by the AO was incorrect and that the AO had knowledge of the correct address, as evidenced by other communications sent to the correct address. Therefore, the CIT(A) treated the notices as invalid.

Issue 2: Validity of the Assessment Order Passed Under Section 144 of the Income Tax Act, 1961
The AO completed the assessment under Section 144 of the Act on the basis that the assessee did not respond to the notices. The assessee contended that the notices were not served at the correct address. The CIT(A) upheld this contention, noting that the AO had not made sufficient efforts to serve the notice at the correct address, which was known to the department. The CIT(A) concluded that the assessment framed under Section 144 was invalid due to the improper service of the notice.

Issue 3: Validity of the Service of Notice by Affixture
The AO served the notice by affixture at the address 44-Rajendra Bhawan, Rajendra Place, New Delhi, and later at 1-GF, AGCR Enclave, Karkarduma, Delhi. The CIT(A) found that the service by affixture was not in accordance with the provisions of Order V, Rule 17 of the Code of Civil Procedure, 1908, as the place was not properly identified and the report of service was not authenticated by any independent person. The Tribunal upheld the CIT(A)'s finding, noting that the service of notice by affixture was not valid and did not comply with the legal requirements.

Conclusion:
The Tribunal dismissed the appeal filed by the revenue, upholding the CIT(A)'s order that the assessment framed under Section 144 was invalid due to the improper service of the notice under Section 143(2). The Tribunal noted that the AO had not issued the notice at the correct last known address of the assessee and that the service by affixture was not valid. The appeal by the revenue was dismissed, and the decision was pronounced in the Open Court on 17.06.2011.