9911796707
TMI Blog2003 (12) TMI 285X X X X Extracts X X X X X X X X Extracts X X X X ..... dity of service u/s 148 which have been reproduced above. Thus, the findings and direction of learned CIT(A) cannot be justified in law. We, therefore, set aside the same and hold that the assessment order made by the Assessing Officer without making valid service of notice cannot survive. The same has to be quashed. Thus, ground No.1 is allowed in favour of the assessee and against the Department. In the result, all the three appeals preferred by the assessee stand allowed. - Member(s) : P. N. PARASHAR., KESHAV PRASAD. ORDER Per P.N. Parashar, J.M.-- These appeals have been filed by the assessee against the common order of learned CIT(A) dated2-1-1998 for assessment years 1981-82, 1983-84 and 1987-88. Since common issues are involved for adjudication in these appeals, the same were heard together and are being disposed of by a common order for the sake of convenience. 2. Shri K.L. Guglani, Advocate, appeared on behalf of the assessee whereas Smt. Vandna Verma, Sr. D.R. represented the Department. 3. We are treating ITA No. 1532/Del/98 as leading appeal and propose to adjudicate the grounds taken by the assessee in this appeal first. Since the grounds are identical in other two a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e under section 148 of the Act has been settled by the Supreme Court in the decision reported at 166 ITR page 163 R.K Upadhyaya v. Shanabhai P. Patel The Act categorically prescribes that no notice under section 148 shall be issued after the period of limitation and that is the condition precedent to making the orders of assessment. Once a notice is issued within the period of limitation, the jurisdiction becomes vested in the Assessing Officer to proceed to reassess. However, the mandate of section 148(1) of the Act is that reassessment shall not be made until there has been service. Service under the Act is not a condition precedent to conferment of jurisdiction on the Assessing Officer to deal with the matter but it is a condition precedent to the making of the order of assessment. This legal position shall be kept in view while reframing the assessments." 4.5 Thereafter the learned CIT(A) has set aside the assessment by observing as under: "In the result, the assessments impugned in these four appeal are set aside with the above directions." 4.6 The assessee has challenged this direction. According to learned counsel of the assessee Shri Guglani, since the assessment framed wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompliance to the notice and therefore the irregularity, if any, in the service of notice stood cured. She also made reference to Rule 15 of the CPC and submitted that service on adult member of the family of the assessee is to be deemed as sufficient service. She supported the order of learned CIT(A) and also placed reliance on the order of Assessing Officer. 4.10 We have carefully considered the entire matter. The provisions contained under section 283 of the I.T. Act deal with the procedure for effecting service on the dissolved firm. Sub-clause (2) of section 283 runs as under: "Where a firm or other association of persons is dissolved, notices under this Act in respect of the income of the firm or association may be served on any person who was a partner (not being a minor) or member of the association, as the case may be, immediately before its dissolution." 4.11 In view of the above provision, it is clear that notice of service is to be effected upon any person who was a partner before the dissolution of the firm. This provision does not postulate service on the son or any family member of the partner. It is a settled rule of construction that while interpreting particular pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d invalid and assessment was quashed in that case also. 4.14 In the case of Thangam Textiles the Hon'ble Madras High Court held that notice under section 283(2) had to be issued only to such of those persons who were partners immediately before the dissolution of the firm. The Hon'ble Court observed that the phrase 'immediately before' in section 283(2) means 'preceding the date of dissolution' and has no reference to the year of assessment and therefore, where the notice under section 148 was served on an erstwhile partner who had retired long ago and was not a partner immediately before the dissolution of the firm, the reassessment proceeding would be invalid. 4.15 The issue regarding service of notices came for the consideration in the case of CIT v. Baxiram Rodmal [1934] 2 ITR 438 (Nag.) and thereafter in the case of CIT v. Dey Bros. [1935] 3 ITR 213 (Rangoon). The Hon'ble Mysore High Court in the case of C.N. Nataraj, following the two decisions mentioned above, held that the service of notice should be in accordance with the provisions of the Act and unless the provision relating to mode of service are strictly complied with the reassessment proceedings would be without juris ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsonance with the provisions contained in section 283(2) of the Act and therefore the assumption of jurisdiction by the Assessing Officer cannot be treated to be a proper assumption justified in law. 4.20 In Baradakanta Mishra v. High Court of Orissa AIR 1976 SC 1899 the Hon'ble Supreme Court has held that if the order of the initial authority is void, an order of the appellate authority cannot make it valid. 4.22 In view of this position, the service of the notice under section 148 is not a legal service and consequently the assessment order cannot have legal legs to stand. The same is to be quashed. In our view the learned CIT(A) was not justified in setting aside the matter again and again in not adjudicating the issue properly particularly when he has himself made observations regarding the validity of service under section 148 which have been reproduced above. Thus, the findings and direction of learned CIT(A) cannot be justified in law. We, therefore, set aside the same and hold that the assessment order made by the Assessing Officer without making valid service of notice cannot survive. The same has to be quashed. In view of above, ground No.1 is allowed in favour of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
