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TMI Blog2009 (2) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of sundry debit balances written off. Thus, the AO noted that a total sum of Rs. 1,84,290.83 had escaped assessment. He issued a notice under s. 148(1) on 2nd Nov., 2005. The assessee challenged the issue of this notice before the learned CIT(A), who after considering the material on record, held that notice has not been served on the assessee personally and therefore, proceedings under s. 148(1) are invalid. He accordingly quashed the assessment. He had not discussed anything on merits. 3. The reasons given by the learned CIT(A) for cancelling the assessment are that the notice is not legally served on the assessee as there is no evidence in the assessment record of such service. He called a remand report from the AO on 24th April, 2007 wherein also it was not pointed out as to how notice under s. 148(1) was actually served on the assessee. The AO, however, raised the issue that question of non-service of notice should have been agitated under s. 124(3) before the AO. But the assessee brought this fact to the knowledge of the learned CIT(A) only vide his letter, a copy of which was placed before the learned CIT(A). The assessee pointed out to the AO that it has not re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t already discussed hereinabove, have also held that if the notice under s. 148 is not served on the assessee, the ITO will have no jurisdiction to make an assessment under s. 147 and the assessment would be illegal and without jurisdiction. The argument of the AO that the plea of the assessee with regard to non-service of notice under s. 148 is destitute of merit in terms of s. 124(3) of the Act does not hold any weight since the issue at hand is with regard to the validity of the reassessment made when no notice under s. 148 has been served on the assessee making the proceedings taken by the AO to be illegal and void. As already discussed above, it is a settled law that service of notice is the foundation for validity of any further proceedings based upon such notice and that the notice prescribed in s. 148 of the Act for the purpose of initiating reassessment proceedings is not a mere procedural requirement but is a condition precedent to the validity of any reassessment made. If no notice is issued or if the notice is shown to be invalid, the proceedings taken by the AO would be illegal and void as the AO is statutorily required before making reassessment under s. 147 to serve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acknowledgement due. Therefore, if notice is not sent through registered post but service through courier is preferred, then a proper acknowledgement of service with identification that it is being served on the person named in the notice should be on record. The courier is neither a notice server of the Department nor a person holding any other post in the Department. He has to be properly authorized by the Department to serve the notice and acknowledgement in token of service should be returned along with a certificate that notice has been served on the person named in the notice. When service of notice is challenged by the assessee, then evidence in the form of acknowledgement/certificate from the courier and proper authorization to the courier should be shown to the assessee so that no link in between is apparently missed. In addition to the acknowledgement, there must be something on record to show that the person on whom notice was served was, in fact, the person named in the notice, when service through courier is preferred. In fact, courier is not any recognized mode of service under s. 282. Therefore, extra caution is required to be taken when this mode of service is prefe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view was affirmed by the Hon'ble Supreme Court in CIT vs. Thayaballi Mulla Jeevaji Kapasi (Decd) (1967) 66 ITR 147 (SC). 6.4 In CIT vs. Kurban Hussain Ibrahimji Mithiborwala 1973 CTR (SC) 454 : (1971) 82 ITR 821 (SC), the Hon'ble Supreme Court held that if no notice is issued in respect of an assessment year, then the proceeding for that year cannot be reopened. 6.5 In CIT vs. Naraindas Dwarkadas (1976) 102 ITR 767 (Bom) Hon'ble Bombay High Court held that if notice under s. 34 is not issued to the firm, then assessment so framed will be invalid. 6.6 In Rama Devi Agarwalla vs. CIT (1979) 117 ITR 256 (Cal), it is held that if notice issued under s. 148 is invalid, then entire proceedings are forfeited for want of jurisdiction. 6.7 In CIT vs. Ishwar Singh Sons (1981) 131 ITR 480 (All), it was held by the Hon'ble Allahabad High Court that issue of valid notice under s. 148 is a condition precedent for validity of an assessment under s. 147. If no notice is issued or if notice issued is invalid or is not served in accordance with law, the assessment would be bad because it is a jurisdictional issue. Unless the notice is properly issued and served, the AO does not get jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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