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2004 (10) TMI 280 - AT - Income TaxService Of Notice - Validity and proper service of notice u/s 143(2) within the specified time limit - compliance with the statutory requirement or not - HELD THAT - A conjoint reading of section 282 of the Income-tax Act 1961 and the relevant provisions of Civil Procedure Code reproduced above shows that notices under the Income-tax Act are required to be served on the assessee in accordance with the provisions of section 282 and the same may be served personally upon the person named therein or upon his agent duly authorized. As per Rule 12 of Order V of CPC a service has to be made wherever it is practicable on the person named therein unless he has an agent empowered to accept service in which case service on such agent is sufficient. In terms of Rule 13(1) a notice against a person who does not reside within the jurisdiction of the concerned agent service on any Manager or agent who at the time of service personally carries on such business or work for such person within such limits shall be deemed to be good service. In terms of Rule 14 when service cannot be made on the person named therein the same may be made in the absence of an agent empowered to accept the service of summons on any agent of such person in charge of the property of the defendant. As per Rule 15 where the defendant is absent from his residence when the service is sought to be effected and there is no likelihood of his return within a reasonable time and there is no agent empowered to accept service of the summons on his behalf service may be made on any adult member of the family whether male or female who is residing with him. Service of notice on a person who is employed by the assessee however is not valid unless such person is authorized specifically to receive notices etc. on behalf of the assessee and the fact that such person accepted the service of notices and assessee acted on such notice in the past does not enable the Department to treat such person as an authorized agent of the assessee In the present case the notice purportedly served on the assessee firm was neither served on any of its partners or its agent duly authorized to receive the said notice. As is evident from the record the same was served on one Mr. A. Singh who was neither the agent of the assessee firm duly authorized to receive the said notice on its behalf nor even its employee. The said person to whom the notice in question was claimed to be served and who had even acknowledged receipt of the same was neither identified by the notice server nor delivering or tendering of the said notice to him was witnessed as required by Rule 18 of Order V of CPC. Before the learned CIT(A) as well as before us the plea raised on behalf of the assessee firm has been that the said notice was not received by it as claimed by the Revenue and it was therefore incumbent upon the Department to place on record the relevant material to establish that the service was made either on the assessee firm itself or any of its partners or on somebody else duly authorized by it to receive such notice. The Revenue however has failed to discharge this onus that lay on it. Thus we are of the view that there was no valid service of notice on the assessee u/s 143(2) within the time specified in the proviso to the said section and in the absence of compliance of the said statutory requirement the assessment completed in pursuance of the said notice was ab initio invalid. The same is therefore quashed allowing the appeal of the assessee. In the result the appeal of the assessee is allowed.
Issues Involved:
1. Validity and proper service of notice u/s 143(2) within the specified time limit. Summary: Issue 1: Validity and Proper Service of Notice u/s 143(2) - The primary issue was whether the notice issued by the Assessing Officer (AO) u/s 143(2) was validly and properly served on the assessee within the specified time limit. - The assessee, a firm dealing in books and journals, filed a return declaring a loss of Rs. 10,200. The AO completed the assessment u/s 143(3)/144 assessing the total income at Rs. 20,00,000. - The assessee challenged the validity of the assessment order on the grounds that no notice u/s 143(2) was served within the specified time limit. - The CIT(A) examined the assessment record and found that the notice was served at the address given by the assessee and signed by 'A. Singh'. The assessee contended that the signature did not belong to any of its partners or authorized representatives and alleged that the notice was served on a fictitious person. - The AO confirmed that the notice was served through the Process Server and acknowledged by 'A. Singh'. The AO argued that there was no fixed procedure for service of notice and that the notice was validly served at the assessee's premises. - The Tribunal observed that the AO's claim of no fixed procedure for service of notice was incorrect. The procedure is specifically provided in section 282 of the Income-tax Act, 1961, and relevant provisions of the Civil Procedure Code (CPC). - According to section 282, a notice may be served personally or as if it were a summons issued by a court under the CPC. Rules 12, 13, 15, 16, and 18 of Order V of CPC outline the procedures for service of summons. - The Tribunal noted that service of notice on an employee who is not authorized to receive such notices is invalid. The notice must be served on the person named, an authorized agent, or an adult family member residing with the person named. - In this case, the notice was served on 'A. Singh', who was neither an authorized agent nor an employee of the assessee. The serving officer did not identify 'A. Singh' nor was the delivery witnessed as required by Rule 18 of Order V of CPC. - The Tribunal concluded that the Revenue failed to establish that the notice was served on the assessee or its authorized representative. Therefore, the service of notice was invalid. - Consequently, the assessment completed in pursuance of the invalid notice was deemed ab initio invalid and was quashed. Conclusion: - The appeal of the assessee was allowed, and the assessment order was quashed due to the invalid service of notice u/s 143(2).
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