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2013 (10) TMI 1186 - HC - Income TaxReassessment u/s 147 - improper service of notice u/s 148 - validity of the service of notice under section 148 Held that - From the record, it appears that Sri O. P. Nehru has received the notice on 25.02.2004 at the assessee s premises and he was the legal officer of the assessee company and on earlier occasions, he has received the notices from the department. Similarly, Sri Dinesh Singh, who is the Chartered Accountant of the company has represented the assessee on many occasions. A notice was served at the registered office of the assessee company. The server of the department has served the notice in good faith and now by raising the technical ground, the assessment order cannot be set aside specially when the assessee has already voluntarily participated in the appellate proceedings. Inspiration may be drawn from the Section 292 BB, though the same is not applicable during the assessment year under consideration but the fact remains that the assessee has participated voluntarily in the appellate proceedings - In the instant case, the assessee is a company whose employees/consultant are the Members of the family. Thus, service of notice is sufficient as per the ratio laid down in the case of CIT vs. Smt. Kanti Devi Gupta; 2004 (9) TMI 41 - MADHYA PRADESH High Court Decided in favor of Revenue.
Issues:
1. Validity of notice under section 148 for assessment year 1999-2000. 2. Implications of notice service on Sri O. P. Nehru. 3. Interpretation of Order 29 Rule 2 of CPC for notice service. 4. Jurisdiction of A.O. in absence of valid notice service. 5. Validity of assessment order under section 143(3)/147. Issue 1: Validity of notice under section 148 for assessment year 1999-2000: The High Court considered whether the notice issued under section 148 on 25.02.2004 was validly served on the assessee. The Tribunal observed that the notice was not validly served, leading to the A.O. lacking jurisdiction to make the assessment. The department contended that the notice was served at the registered office of the assessee company, which was acknowledged by Sri O. P. Nehru, and thus, the service was valid under Order 29 Rule 2 of CPC. Issue 2: Implications of notice service on Sri O. P. Nehru: The department argued that Sri O. P. Nehru, as a legal officer of the assessee company, had implied authority to receive the notice, supported by his past compliance with notices. The assessee's counsel countered that Sri Nehru was not authorized to receive the notice and that the notice was not served through post, raising questions about the validity of service. Issue 3: Interpretation of Order 29 Rule 2 of CPC for notice service: The department relied on Order 29 Rule 2 of CPC, stating that service at the registered office of the assessee was sufficient, even if Sri Nehru was not authorized to receive the notice. The High Court analyzed the provisions of Order 29 Rule 2 and considered whether the service was valid based on the prescribed modes of service. Issue 4: Jurisdiction of A.O. in absence of valid notice service: The Tribunal's decision to set aside the assessment order due to lack of valid notice service raised questions about the A.O.'s jurisdiction. The department argued that the technical ground should not invalidate the assessment order, especially when the assessee voluntarily participated in the proceedings. Issue 5: Validity of assessment order under section 143(3)/147: The High Court examined the validity of the assessment order passed under section 143(3)/147 in light of the notice service issue. It considered precedents and legal principles related to notice service, participation in proceedings, and the rectification of procedural irregularities. In conclusion, the High Court set aside the Tribunal's order and remanded the matter back to the A.O. for a decision on merit within a specified timeframe. The Court ruled in favor of the revenue, allowing the department's appeal based on the analysis of notice service, participation in proceedings, and procedural irregularities.
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