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TMI Blog2008 (9) TMI 461X X X X Extracts X X X X X X X X Extracts X X X X ..... ssly erred in confirming that notice under s. 148 served on the appellant. (b) Notice under s. 148 was served on 10th Nov., 1999 not on the assessee but his wife Smt. Satwant Kaur, which is illegal and non-maintainable. Service of the notice being invalid and bad in law, the entire proceedings as well as assessment are void and liable to be cancelled ab initio. (c) Notice has not been served on the assessee as per provisions of s. 282 of the IT Act. 2. That on facts and circumstances of the case learned CIT(A) has grossly erred in confirming that ex parte assessment framed under s. 144 of the Act is not bad in law. All the three notices under s. 142(1) of the IT Act were not properly and legally served on the appellant and hence ex parte assessment framed under s. 144 of the Act is illegal and bad in law. 3. That learned CIT(A) has grossly erred in confirming addition of Rs. 21,500 on account of deposit in SB a/c No. 457 with Punjab and Sind Bank, Achharwal." 4. ITA No. 90/Asr/2003 raises, inter alia., a preliminary issue regarding service of notice. Accordingly, it is being taken up first. 5. The assessment order states that notice under s. 148 of the Act was issued an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be made on any male member of the family of the person named in the notice and/or by substituted means in terms of order V, r. 20 of the CPC; that a notice served on a person who was not the duly authorised agent of the assessee is not valid; that since the notice under s. 148 was not served on the assessee, such service was illegal; and that the other notices were also illegal, since they were never served on the assessee, as per the reports of the postal authority, the Inspector and the notice server of the Department, when the assessee was abroad. 8. The learned CIT(A), however, did not agree with the stand taken by the assessee. It was observed, inter alia, that since the sons of the assessee were residing abroad and there was no other male member in the family, service of the notice under s. 148 of the Act on the wife of the assessee was good service of the said notice on the assessee; that since there was no compliance, notices under s. 142(1) were issued; that one of such notices under s. 142(1) was served by affixture on 24th Jan., 2002; that the assessee returns to India on 26th Feb., 2002 and though it was claimed that the assessee did not visit his native place directl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT (1965) 55 ITR 406 (Cal); (3) CIT vs. Habibullah (1985) 49 CTR (All) 98, (4) CIT vs. Thayaballi Mulla Jeevaji Kapasi (1963) 47 ITR 184 (Ker). (5) Jayanthi Talkies Distributors vs. CIT; (6) B. Johar Forest Works vs. CIT (1977) 107 ITR 409 (J K); (7) Y. Narayana Chetty Anr. vs. ITO Ors. (1959) 35 ITR 388 (SC). 10. The learned Departmental Representative, on the other hand, has placed strong reliance on the impugned order in this regard. It has been submitted that the service of the notice was duly effected on the assessee; that the assessee is trying to resort to mere technicalities in an attempt to somehow get out of the well versed order of the learned CIT(A); that this is not permissible in law; and that as such, the assessee's appeal is liable to be dismissed. The learned Departmental Representative had requested that the assessee's appeal, carrying no force, be ordered to be dismissed. 11. We have heard both the parties and have perused the material on record. The question is as to whether the service of notice dt. 10th Nov., 1999 under s. 148 of the IT Act on the wife of the assessee is in accordance with law or not. Sec. 282(1) of the Act reads as follows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce is entirely in accordance with the law as laid down in order V, r. 15, CPC and s. 282(1), IT Act. 17. The assessee has all through maintained that order V, r. 15, CPC runs as follows: "15. Where in any suit the defendant is absent and has no agent empowered to accept service of the summons on his behalf, service may be made on any adult male member of the family of the defendant who is residing with him." 18. It has been and hitherto remains the assessee's case that since his wife is not a male member of his family, service of the notice on her is invalid in view of the express provisions of order V, r. 15, CPC. 19. However, the stand taken by the assessee is found to be grossly incorrect. Rule 15, order V of the CPC as quoted by the assessee is as it was in force prior to its substitution by the extant r. 15, as reproduced hereinabove, by the CPC (Amendment) Act, 1976, s. 55, w.e.f. 1st Feb., 1977. Clause 58, sub-cls. (ii) and (iii) of S.O.R. (Gazette of India, 8th April, 1974, Part II, s. 2, Ext. p. 312) in this regard is as under: "Clause 58, sub-cls. (ii) and (iii)-Rule 15 provides that where in a suit the defendant cannot be found and has no agent to accept servi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ground raised by the assessee concerning this issue is, hence, rejected. 25. Apropos the merits of the case, the assessee has contended that the learned CIT(A) has erred in confirming the addition of Rs. 21,500 on account of deposits in savings bank account No. 457 with Punjab and Sind Bank, Achharwal. The Department, on the other hand, has contended that the learned CIT(A) has erred in deleting the addition of Rs. 17 lacs made by the AO on account of unexplained investment in the purchase of FDRs. 26. Regarding the addition of Rs. 21,500, the AO made this addition on account of credit in the bank account of the assessee treating it to be unexplained investment. The assessee's stand before the learned CIT(A) was that that he was an agriculturist and that the amount of Rs. 21,500 was out of withdrawal of Rs. 21,000 from the same account prior to the deposit of the amount of Rs. 21,500. The learned CIT(A), rejecting the assessee's claim, held that the assessee had failed to prove that the amount withdrawn was recycled as deposit in the bank account and was not used for any other purpose. 27. Concerning the addition of Rs. 17, lacs, the assessee purchased fixed deposit/receipts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urn credited in the name of Shri Samuel in the books of account of M/s Continental Liquor of Shri Ghuman and assessed with ITO, Ward II(3), Jalandhar and credit of Rs. 17 lacs had been accepted as explained cash credit in the asst. yr. 1997-98 in the said case; that the affidavit of Shri Samuel was being filed confirming that he had deposited Rs. 17 lacs in the savings fund account of the assessee and it was on his instruction that the FDRs were purchased and were prematurely en cashed and the amount was deposited in the savings fund account of the assessee after drawings were made by Shri Samuel from his savings fund account No. 164 in the same branch and were invested in the FDRs in the name of the assessee and after encashment, were credited in the savings bank account of the assessee; that along with the facts (statement) from Shri Samuel, certifying that the FDRs of Rs. 17 lacs in the name of the assessee were purchased by him from his personal fund was also being filed; that the financial position of the assessee was very poor and he could not be expected to earn Rs. 17 lacs during the whole of his life; that the regular bank account with Punjab and Sind Bank showed his finan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... only the name of the appellant was used when the affairs were controlled by the person named Shri R.K. Samuel in view of his own transactions with son in law of the appellant. The said conclusion as per submissions of the appellant gets further supplemented as the FDR purchased for Rs. 9 lakhs on 28th Dec., 1996 is directly co-relatable to the withdrawal of Rs. 9 lakhs effected from account of Shri Samuel. This fact gets further confirmed by the affidavit of Shri Samuel. The amounts received by premature encashment of FDRs were introduced by Shri Samuel as cash credits in the books of M/s Continental Liquor, proprietary concern of one Shri R.S. Ghuman and not only amount of Rs. 17 lakhs was treated as his income but perusal of the case records of Shri Samuel revealed that the outstanding demand in his case is being recovered by attaching his account in the books of M/s Continental Liquors against the amount of Rs. 17 lakhs so deposited by Shri Samuel in the books of M/s Continental Liquor. Not only the said sum of Rs. 17 lakhs has been taxed as the income of Shri Samuel in asst. yr. 1997-98 as part of the overall addition of Rs. 39 lakhs but also a sum of Rs. 10 lakhs was taxed in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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