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TMI Blog2021 (10) TMI 1148X X X X Extracts X X X X X X X X Extracts X X X X ..... to sign the acknowledgement or the assessing officer even after reasonable attempt has failed to find the assessee at the given address or the assessee has consciously avoided service of notice issued under section 148 of the Act. Thus, in our view, the notice issued under section 148 of the Act was not validly served on the assessee. Therefore, the fundamental requirement for initiation of proceedings under section 147 of the Act stands unsatisfied / unfulfilled. This being a jurisdictional error, the consequence which follows would result in invalidation of the assessment order. Therefore, we hold that the assessment order passed under section 143(3) r.w.s. 147 of the Act without valid service of notice under section 148 of the Act is void ab initio. Eligibility of reasons to believe - As reading of the reasons recorded clearly reveals that being of the view that the assessee has not filed any return of income for the impugned assessment year resulting in escapement of income, the assessing officer has reopened the assessment under section 147 of the Act. However, the facts on record reveal that the assessee, in fact, had filed his return of income for the impugned assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e view that income aggregating to ₹ 44,83,689/- has escaped assessment, the assessing officer reopened the assessment u/s 147 of the Act by issuing notice under section 148 of the Act. Ultimately, the assessing officer completed the assessment under section 143(3) r.w.s. 147 of the Act vide order dated 27-03-2015 making the following additions:- 1. Unexplained cash credit u/s 68 of the Act ₹ 10,06,503/- 2. Investment from undisclosed source u/s 69B ₹ 37,00,000/- 3. Interest on FDR ₹ 10,211/- 4. Interest on bank deposit ₹ 9,037/- Total ₹ 47,25,751/- 4. Against the assessment order so passed, assessee preferred appeal before learned Commissioner (Appeals), inter alia, challenging the validity of the assessment order. However, learned Commissioner (Appeals) did not find merit in the grounds raised by the assessee either on the issue of validity of service of notice under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us, he submitted, the very basis for reopening the assessment is erroneous. Therefore, the assessment order passed in pursuance to such wrong initiation of proceeding would be invalid. In support of such contention, he relied upon the following decisions:- 1. Sagar Enterprises vs ACIT (2002) 257 ITR 335 (Guj) 2. Mumtaz Haji Mohmad Memon vs ITO (2018) 408 ITR 268 (Guj) 3. Baba Kartar Singh Dukki Educational Trust vs ITO (2016) 158 ITD 965 (Chandigarh Trib.) 7. Strongly relying upon the observations of the assessing officer and learned Commissioner (Appeals) the learned departmental representative submitted, the issues regarding valid service of notice issued under section 148 of the Act and validity of reopening of assessment were not raised either before the assessing officer or before learned Commissioner (Appeals). He submitted, in any case of the matter, learned Commissioner (Appeals) has addressed all the issues raised by the assessee. He submitted, the fact that the notice issued under section 148 of the Act was served by affixture is established. Therefore, the assessee cannot have any grievance. 8. As regards the validity of reopening of assessment under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the address of the assessee and since the assessee was not present at the said address, he served the notice by way of affixture on the door of the said premise. At this stage, it is necessary to refer to section 282 of the Act which lays down the mode and manner of service of notice, which is as under:- [Service of notice generally. 282. (1) The service of a notice or summon or requisition or order or any other communication under this Act (heiinafter in this section referred to as communication ) may be made by delivering or transmitting a copy thereof, to the person therein named,- (a) by post or by such courier services as may be approved by the Board; or (b) in such manner as provided under the Code of Civil Procedure , 1908 (5 of 1908) for the purposes of service of summons; (c) in the form of any electronic record as provided in Chapter IV of the Information Technology Act, 2000 (21 of 2000); or (d) by any other means of transmission of documents as provided by rules made by the Board in this behalf. (2) The Board may make rules providing for the addresses (including the address for electronic mail or electronic mail message) to which the communicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er V, CPC also provides for substituted service in a situation when Court is satisfied that there is reason to believe that the defendant is keeping out of the way for the purpose of avoiding service and that for any other reason, the summons cannot be served in the ordinary way, then such summons / notice can be served by way of affixture in the last known address. 13. Thus, a conjoint reading of section 282 of the Act and Order V Rules 17 and 20 of CPC would make it clear that the mode of service by affixation can be resorted to only if none of the other modes are practicable and cannot be resorted to at the first instance. If attempt to serve notice / summons by registered post was found to be ineffective, the serving officer is justified in ordering service by affixation. However, the conditions of Rules 17 and 20 of Order V, CPC have to be satisfied. The expression, after using of due and reasonable diligence as used in rule 17 of Oder V, CPC makes it incumbent upon the serving officer to serve by way of affixture, only if, after service of notice / summons either on the defendant or agent, refuses to sign the acknowledgement or serving officer cannot find the defendant o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder:- Date:- 10/03/2014 A.Y. 2010-11 ShrL Sanjecv C. Deo REASON FOR REOPENING The undersigned is in 'possession of information wherein it is informed that the assessee has purchased an immovable property for ₹ 37,00,000/- incurred credit card expenses of ₹ 7,75827/- has received interest on bank deposits to the extent of ₹ 1 7,862/- during the previous year ending 31/03/2010 relevant to the A-Y 2010-11. Since the assessee has not filed any Return of Income for the relevant A.Y. 2010-11, I have reason to believe that income to the extent of ₹ 44,83,689/- has escaped assessment within the meaning of section 147 of the Income Tax Act, 196 1,for the A.Y. 201 0- 11 . Sd/- (Manoj Tripathj) Income Tax Oficer, 23(3)(3), Mumbai Note : Issue notice u/s 148 of the IT Act, immediately. 17. A careful reading of the reasons recorded clearly reveals that being of the view that the assessee has not filed any return of income for the impugned assessment year resulting in escapement of income, the assessing officer has reopened the assessment under section 147 of the Act. However, the facts on record reveal that the assessee, in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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