2015 (8) TMI 284 - HC - Income Tax

Validity of reopening of assessment - no proper service under Section 148 read with Section 282 along with Order V Rule 17 and Order V Rule 18 of the Code of Civil Procedure - Held that - Order V Rule 17 clearly indicates that when the notice cannot be served, the serving officer shall affix the copy of the summons on the outer door or at some other conspicuous part of the house in which the petitioner ordinarily resides or carries on business. In the instant case, the Inspector s report clearly indicates that the petitioner personally refused and thereafter the notice was affixed at the outer door of his clinic. The contention that the service was not made at his residence, but at his clinic is immaterial. The fact remains, that the service was made at his business place and that the petitioner himself refused to accept the notice. The Inspector s report also indicates the time and manner of service which is in compliance with the Order V Rule 18 of the C.P.C. In the light of the aforesaid, we are of the opinion, that the service of the notice under Section 148 of the Act was validly made. Once we have held that a valid notice under Section 148 of the Act had been issued, it is open to the petitioner to raise this objection before the assessing authority, as to whether the original assessment proceeding for the assessment year 2008-09 are pending or not and whether a valid notice under Section 142(1) of the Act has been issued. If such objections are filed, the assessing authority will consider the same while making the re-assessment order under Section 148 of the Act. - Decided against assessee.

Issues:
1. Validity of notice under Section 148 of the Income Tax Act for reassessment.
2. Compliance with service requirements under Section 282 of the Act and relevant rules.
3. Validity of service by refusal and affixation at business premises.
4. Completion of original assessment proceeding for the assessment year 2008-09.
5. Authority to consider objections regarding pending assessment proceedings.

Analysis:

1. Validity of Notice under Section 148:
The petitioner challenged the initiation of reassessment proceedings for the assessment year 2008-09 based on the contention that no valid notice under Section 148 of the Income Tax Act had been served upon him. The petitioner argued that the notice sent on 25.3.2015 was unserved and not received by him. However, the court found that the notice was served by refusal at the petitioner's clinic, which is a valid mode of service under Section 148 read with Section 282 of the Act and relevant civil procedure rules.

2. Compliance with Service Requirements:
The petitioner raised objections regarding the compliance with service requirements under Order V Rule 17 and 18 of the Code of Civil Procedure. The court held that the service by refusal and subsequent affixation of the notice at the business premises of the petitioner met the requirements of the law. The court emphasized that the service was valid even though it was not at the petitioner's residence but at his clinic.

3. Validity of Service by Refusal and Affixation:
The court examined the Inspector's report detailing the service of the notice under Section 148 of the Act. The report indicated that the petitioner refused to accept the notice personally, following which it was affixed at the main door of his clinic. The court concluded that the service by refusal and affixation was in compliance with the relevant legal provisions, dismissing the petitioner's argument against the validity of the service.

4. Completion of Original Assessment Proceeding:
The petitioner contended that the original assessment proceeding for the assessment year 2008-09 had not been completed before the initiation of reassessment proceedings. The court noted that the definition of "assessment" under the Act includes reassessment, and the issuance of a notice under Section 142(1) was valid. The court held that any objections regarding the pending original assessment proceedings could be raised before the assessing authority during the reassessment process.

5. Authority to Consider Objections:
The court clarified that the assessing authority had the discretion to consider objections raised by the petitioner regarding the completion of original assessment proceedings and the validity of the notice under Section 142(1) of the Act. The court directed the petitioner to address these objections through the appropriate channels during the reassessment process.

In conclusion, the court dismissed the writ petition, finding no merit in the petitioner's arguments against the validity of the notice and the initiation of reassessment proceedings. The court also directed the Income Tax Officer to provide the information requested by the petitioner within a specified timeframe, emphasizing the officer's obligation to comply with such requests.

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