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TMI Blog2006 (3) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... ost. Thus, in view of the amended provision of the CPC, firstly, the mode of sending notice through speed/registered post is recognized mode and secondly, a presumption can be drawn regarding service by speed post within 3-4 days in the present case, where the assessee was living in the city of Delhi. On this basis also we have to uphold the finding of the learned CIT (Appeals). Thus, it is held that the learned CIT (Appeals) was justified in recording the finding that notice had been validly served. We, therefore, do not find any scope to interfere in the finding of learned CIT(A) on the issue in question. Ground Nos. 1 1.1 taken by the assessee are, therefore, rejected. Disallowance of expenditure - carry forward the same to be set off in the succeeding assessment year - In the assessment order, the Assessing Officer has not examined the nature of expenses nor the aspect that the assessee was carrying on business activity in earlier and subsequent assessment years and expenditure claimed by it was allowed by the Department in earlier and subsequent years. The learned CIT(A) has also not examined these aspects. The order of the Tribunal for assessment year 1997-98, a copy of which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (2) was issued by him fixing the case for 27-8-2003 and fourth notice was issued on 17-11-2003. Shri Navin, C.A. appeared and objected to the validity of the notice. The Assessing Officer rejected this plea after observing that the assessee was shown all the record including the first notice and after that AR attended the case from time to time and submitted details. 4.1 The finding of the Assessing Officer was challenged before the learned CIT (Appeals). It was submitted that the notice was not served upon the assessee within the statutory period. The learned CIT (Appeals) rejected the pleas of the assessee by observing as under: Perusal of the record shows that the first notice under section 143(2)(i) of the Act was issued by the Assessing Officer on 16-10-2002 and the same was served upon the appellant by sending it through speed post on 20-10-2002 i.e., well before the expiry of the last date of 30-10-2002. The notice was issued in respect of the issue of inadmissibility of the appellant's claim for expenses/loss of Rs. 4,66,160 and the same was clearly specified by the Assessing Officer in the above notice. The postal receipt for speed post is found to have been duly affix ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ); and CIT v. Lunar Diamonds Ltd. [2005] 146 Taxman 691 (Delhi). 6. The learned DR on the other hand, submitted that as observed by the Assessing Officer, the AR of the assessee was shown the entire record including the service of first notice and thereafter the assessee did not raise any further objection regarding service of notices which shows that the assessee was fully convinced that the first notice was properly served within time. According to learned DR the assessee did not take any specific plea to deny the service of notice nor filed any affidavit before any of the authorities in this regard. 7. We have carefully considered the facts and circumstances relating to this matter and the rival submissions. Certain facts remained undisputed in this case: (1) The assessee filed return of income on 30-10-2001. (2) The first notice was issued to the assessee on 16-10-2002. (3) The Assessing Officer issued four notices on the same address i.e., on the address on which first notice was sent. Fourth notice was received by the assessee and in compliance of this notice objection was raised. (4) The observation of the Assessing Officer that the assessee was shown all the records includi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... resident within that jurisdiction who is empowered to accept the service of the summons, the summons shall, unless the Court otherwise directs, be delivered or sent either to the proper officer to be served by him or one of his subordinates or to such courier services as are approved by the court. (2) (3) The services of summons may be made by delivering or transmitting a copy thereof by registered post acknowledgement due, addressed to the defendant or his agent empowered to accept the service or by speed post or by such courier services as are approved by the High Court or by the Court referred to in sub-rule (1) of by any other means of transmission of documents (including fax message or electronic mail service) provided by the rules made by the High Court. 7.4-1 Thus, in view of sub-rule (3) of rule 9 of Order V of the CPC, the summons may be sent through speed post or so, in view of the amendment introduced. In fact the mode of speed post is only a faster mode of registered mail and just another mode of dispatch through registered post. 7.5 Sub-rule (5) of rule 9 of Order V of the CPC runs as under: (5) When an acknowledgement or any other receipt purporting to be signed by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee on 20-10-2002. The assessee is a local resident of Delhi and therefore, it is quite reasonable to observe and infer that the notice sent through speed post must have been served upon the addressee (assessee) at least within 3-4 days. Otherwise also, the findings recorded by the learned CIT (Appeals) have not been rebutted or controverted by the assessee by making any positive statement regarding the notice sent on 16-10-2002 through speed post. Thus, in view of the amended provision of the CPC, firstly, the mode of sending notice through speed/registered post is recognized mode and secondly, a presumption can be drawn regarding service by speed post within 3-4 days in the present case, where the assessee was living in the city of Delhi. On this basis also we have to uphold the finding of the learned CIT (Appeals). 7.8 The assessee has placed reliance on certain cases and on going through the same it is found that the decisions referred to by the learned counsel for the assessee are not applicable to the facts of the present case and are not applicable being distinguishable on facts. 7.8-1 In the case of Lunar Diamonds Ltd., the Hon'ble Delhi High Court examined the issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under section 143(2) was served at the address given by the assessee in its return and the same was also signed by the recipient as 'A. Singh'. It was further submitted on behalf of the assessee-firm that the said signature appearing on the office copy of notice under section 143(2) did not belong either to any of its partners or authorized representative. It was also submitted that there was no person employed with the assessee-firm who could have signed as Mr. A. Singh in this regard. An affidavit of the partner of the firm in support of this contention was filed. A copy of this affidavit was forwarded by the learned CIT (Appeals) to the Assessing Officer. The Assessing Officer, in reply submitted that the notice was served through process server who was stated to have obtained the acknowledgement. The learned CIT (Appeals) on these submissions of the Assessing Officer held that the notice was properly served within the time-limit specified under section 143(2). The Tribunal after examining the provisions of section 282 held that the notice was neither served on any partner of the firm or any agent duly authorized to receive the same. This case is distinguishable from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... production of acknowledgement, in his report submitted before the learned CIT(A). Therefore, the matter is restored to the file of the learned CIT(A) who is directed to ask the Assessing Officer to produce the copy of the acknowledgement from his assessment records or make the enquiry from the postal authorities. In the absence of which it should be presumed that notice has not been served upon the assessee and assessment will be deemed to be null and void and without jurisdiction of the Assessing Officer. Thus, the matter is restored to the file of the learned CIT(A) with the specific directions given above. 7.10-2 Thus, firstly the above case is not applicable to the facts of this case because in that case affidavit was filed by the assessee whereas in the present case no affidavit was filed to deny the service of the first notice; and secondly, in that case the finding of the learned CIT (Appeals) was not accepted and the matter was remanded back to the Assessing Officer for deciding the issue after collecting or examining other evidence. 7.11 The next case on which reliance has been placed by the learned DR is the decision of ITAT in the case of Basant Lal Khushwahaw. ITO date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee on account of various expenses incurred during the year for purposes of its business which were fully allowable as deduction. It was submitted that the Assessing Officer was not justified in disallowing the claim of the assessee with regard to these expenses. The learned CIT (Appeals) upheld the finding of the Assessing Officer by observing as under: The allowability of the alleged business expenses has to be examined with reference to computation of income chargeable under the head 'Profits and gains of business or profession' under section 28 of the Act. In order to compute the profits or loss assessable under the head 'Profits and gains of business or profession' under section 28 of the Act, it is essential that the business of the appellant must have been carried on at any time during the previous year relevant to the assessment year under consideration. The onus to prove that the business was carried on during the year under consideration lies on the appellant. However, the appellant has not furnished any cogent and reliable evidence to prove that the business of trading in shares was carried on at any time during the year under consideration or that such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hen the assessee succeeds in justifying the same. According to him, if the Assessing Officer has not passed a speaking order then the matter should be restored to the file of Assessing Officer for passing a speaking order. 12. In rejoinder, the learned counsel for the assessee submitted that the nature of expenditure remained the same in this year as was in the earlier year. He further submitted that matter should not be restored because a party which is guilty of conduct, should not be given remissness. 13. We have carefully considered the facts and circumstances relating to these matters. In the assessment order, the Assessing Officer has not examined the nature of expenses nor the aspect that the assessee was carrying on business activity in earlier and subsequent assessment years and expenditure claimed by it was allowed by the Department in earlier and subsequent years. The learned CIT(A) has also not examined these aspects. The order of the Tribunal for assessment year 1997-98, a copy of which has been placed on record was also not considered by the departmental authorities as no mention of this of order has been made. It appears that this order was not available at the time ..... X X X X Extracts X X X X X X X X Extracts X X X X
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