2009 (11) TMI 535 - HC - Income Tax

Proper service - assessee refused to accept the service of the notice - search and seizure operation was conducted on his premises of assessee - Held that - Revenue is unable to show that there was any refusal of the assessee to accept service as has been assumed in the question referred - Tribunal has categorically held that no other mode was adopted and steps for service of notice were taken about a week before the time was expiring - question has to be answered against the Revenue and in favour of the assessee

Summary

Issues:
1. Question of law referred by Income-tax Appellate Tribunal regarding service of notice to the assessee.

Analysis:
The judgment pertains to a question of law referred by the Income-tax Appellate Tribunal regarding the service of a notice to the assessee for the assessment year 1969-70. The assessee, an individual, had undergone a search and seizure operation, following which he filed a revised return. The Assessing Officer framed the assessment under section 144 of the Act based on best judgment. The Commissioner of Income-tax (Appeals) allowed the appeal on the grounds that the assessee had not been properly served with the notice. The evidence of service by affixture was rejected as it was considered premature without exhausting other modes of service. The Tribunal upheld this finding, emphasizing the importance of following due process in serving notices. The Tribunal noted the urgency displayed by the Income-tax Officer in serving the notice but concluded that resorting to service by affixture without exploring other options was merely a formality and not a valid service according to precedents from various High Courts.

In the judgment, it was highlighted that the Revenue failed to demonstrate any refusal by the assessee to accept the service of the notice. The Tribunal explicitly stated that no other method of service was attempted, and the steps for serving the notice were initiated only about a week before the deadline. The Tribunal's finding, which was not deemed unreasonable, led to the conclusion that the question referred should be resolved in favor of the assessee and against the Revenue. Consequently, the judgment disposed of the reference in accordance with the above determination.