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Issues:
- Validity of notice served under section 139(2) for assessment under section 144. - Jurisdiction to challenge assessment validity based on notice service in different appeal sections. - Competency of the person receiving the notice on behalf of the assessee. - Interpretation of sections 146 and 246(c) regarding challenging notice service validity. Analysis: 1. Validity of Notice under Section 139(2) for Assessment under Section 144: The case involved an appeal by the revenue against an assessment order under section 144 for the assessment year 1977-78. The Commissioner (Appeals) held that the notice under section 139(2) was not properly served on the assessee, leading to the cancellation of the assessment order. The revenue contended that the assessee could not challenge the assessment validity based on notice service in the appeal under section 144. However, the Tribunal upheld the Commissioner's decision, emphasizing that proper service of the notice under section 139(2) is a condition precedent to the validity of the assessment. The Tribunal cited relevant case law, including Y. Narayana Chetty v. ITO, to support its conclusion. 2. Jurisdiction to Challenge Assessment Validity Based on Notice Service: The Tribunal addressed the issue of jurisdiction to challenge the validity of the assessment based on notice service in different appeal sections. It clarified that if the assessee disputes the receipt of notice under section 139(2), the assessment's invalidity on this ground can only be challenged in the appeal filed against the order passed under section 144. The Tribunal relied on the decision in Jayanthi Talkies Distributors v. CIT to support this interpretation. It highlighted that the notice service is not a mere procedural requirement but a jurisdictional prerequisite for assessment validity. 3. Competency of the Person Receiving the Notice: Another aspect considered was the competency of the person receiving the notice on behalf of the assessee. The Tribunal analyzed whether the individual who accepted notices in the past could be deemed an authorized agent of the assessee. Referring to Addl. CIT v. Prem Kumar Rastogi, the Tribunal concluded that merely accepting notices in the past does not establish authorization to receive notices on behalf of the assessee. Therefore, the Tribunal held that the person who received the notice was not competent to accept it on behalf of the assessee. 4. Interpretation of Sections 146 and 246(c) Regarding Notice Service Validity: Regarding the interpretation of sections 146 and 246(c) in challenging notice service validity, the Tribunal clarified that the assessee can challenge the non-receipt of notice under section 139(2) in the appeal against the order passed under section 144. It distinguished between mitigating circumstances of defaults under section 146 and the challenge to notice service validity, emphasizing that the latter can be raised in the appeal under section 144. The Tribunal dismissed the revenue's appeals based on this interpretation and previous case law, including Jayanthi Talkies Distributors' case. 5. Conclusion: In conclusion, the Tribunal upheld the Commissioner's decision to cancel the assessment order due to improper service of the notice under section 139(2). Consequently, all the appeals by the revenue against the orders under sections 144, 271(1)(a), and 273 were dismissed based on the findings related to notice service validity and jurisdiction to challenge assessment validity in different appeal sections.
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