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TMI Blog2019 (3) TMI 1927X X X X Extracts X X X X X X X X Extracts X X X X ..... dress of the person by whom the house/place of business was identified and in whose presence the copy of the notice was affixed. As is clear from the above that the inspector income tax stated in his report that only upon finding the door closed he has no option but to make affixture of the notice on the out door of the assessee. There is no doubt that the AO has not made any due effort or diligence to serve the notice and affixed the same on the date of issuance of the said notice. There is nothing on records that the assessee was hiding or avoiding the service of notice and there is also no evidence on records that the service could not be made through ordinary ways/means. In this the case the ordinary means of service of notice were not used or exhausted and the service was made directly through affixture at the last minutes on 31.3.2015 to avoid limitation expiring on 31.3.2015. Thus there is merit and force in the arguments of the ld AR that there is no valid service of notice and the proceedings are null and void as the notice issued u/s 148 was not served upon the assessee. In the Hon ble Delhi High Court in the case of CIT Vs Hotline International (P) Ltd [ 2007 (4) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of third parties, and those statements were also subsequently retracted by such parties. (d) The CIT(A) erred in confirming the action of AO in passing the assessment order u/s 147 of the Act without disposing of Appellant's objection against reopening of assessment u/s 148 of the Act. (e) The CIT(A) erred in confirming the action of AO in reopening the assessment u/s 148 of the Act, without obtaining the requisite prior approval/sanction as required u/s 151 of the Act and without providing the same to the Appellant in spite of repeated demand by the Appellant during the reassessment proceedings. (f) The CIT(A) erred in confirming the action of AO in issuing the notice u/s 148 of the Act after expiry of four years from the end of relevant assessment year. The Appellant submits that in its case assessment proceeding has been completed u/s 143(1) of the Act after considering full details/disclosure filed by the Appellant; hence, the same cannot be reopened after expiry of four years from the end of relevant assessment year. 3. The sole issue raised by the assessee is against the order of CIT(A) upholding the order of AO on re-opening of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant The Appellant had contended that the notice u/s 148 of the Act was not served to the appellant and therefore the entire re-assessment proceeding is invalid. On the other hand, the AO in the assessment order vide para 2 of the page 2 categorically mentioned vide letter dated 18/01/2016 rebutted all the objections raised by the appellant by passing a speaking order u/s 147 and further the reasons for reopening was also provided to the appellant company on 22/01/2016. Therefore, I am of the opinion that the objections raised by the appellant company is not found to be in order. Hence, the contention of the appellant is rejected. In view of the above, the ground No.1 is dismissed. 6. The ld AR vehemently argued before us that re-assessment proceedings are bad in law and void ab-initio as there was no valid service of notice issued u/s 148 of the Act. The ld AR submitted that the AO issued the notice u/s 148 on 31.3.2015 and served the notice through affixture on the same day as stated in the letters of the assessee dated 18.1.2016 and 22.1.2016. The ld AR took us through the report of the inspector who was deputed to serve the notice in which the insp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 00 TTJ 862(Jab) 3. Sanjany Badani Vs DCIT (2014) 35 ITR(T) 536 (Mumbai Tri) 4. Ketan Shah Vs ACIT (2010) 7 taxmann.com 88(Mum) 5. World Wide Exports (P) Ltd Vs ITO (2004) 91 ITD519 Delhi 6. CIT Vs Hotline International Pvt. Ltd. (2008) 296 ITR 333 (Delhi). 7. Per Contra, the DR submitted that the AO has followed the due procedure laid down in the Act for service of notice and therefore the contentions of the assessee that there is no proper service of notice issued u/s 148 of the Act have no legal strength. The DR submitted that the notice u/s 148 of the Act was issued 31.3.2015 after obtaining necessary approval of the Addl. CIT granted on 30.3.2015. Thereafter the inspector Income tax Shri Jagdish Jethanandani was assigned the duty to serve the notice on the assessee. Mr Jagdish Jethannandani visited the office of the assessee. Upon finding the office closed, the inspector served the notice by way of affixture on the front door of the office No. 1-B, Court Chambers, 35, V.T. Marg, New Marine Lines, Mumbai as per the report of the inspector dated 31.3.2015. The ld DR defended the service of notice by affixture on the ground that that was the last of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... your kind information. 9. It is clear from the above report that when the inspector visited the office of the assessee in Marine Lines, Mumbai, the office was closed and he has no option but to affix the notice which was affixed on the front door of the assessee. Thus it is abundantly clear from the above said letter that no due efforts or diligence was made by the AO to serve the notice and straightway made affixture. Section 282(1)(b) of the Act provides for service of notice by way of post or by courier or such other mode as may be approved by the Board or in such other manner as provided in the Civil Procedure Code. The provisions of Civil Procedure Code envisages the circumstances when the service can be affected by affixture. The order V of CPC Rule 12 of CPC provides that that the service, wherever practicable shall be made on the defendant in person or on an agent empowered to accept service. The order V of CPC Rule 17 provides service of notice by way of affixture on the defendant on his residence or place of business on the outer door if defendant refuses to accept the service or can not be found. The serving officer can affix the notice on the out door of the hou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tentionally hiding itself for the purpose of avoiding service or there were other good reasons to come to the conclusion that the notice could not be served in the ordinary way. 7.1. At the time of hearing, the Ld. Representative for the assessee had relied upon the judgment of the Hon'ble Delhi High Court in the case of CIT vs. Hotline International Pvt. Ltd., 296 ITR 333(Del), which upholds the proposition that service of notice by affixture can be done only when assessee or his agent refuses to sign acknowledgement or could not be found. In the case before the Hon'ble Delhi High Court, the Assessing Officer issued notice under section 148 of the Act on the assessee company through the Inspector, who found that the factory was closed due to Holi festival holidays. As security guard refused to receive notice, it was served by affixture and notice was also sent by registered post which remain uncomplied with. The assessment so completed was sought to be challenged on the ground as being bad in law as no proper service of notice under section 148 was effected by the Assessing Officer on the assessee. In this background, the Hon'ble High Court examined the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d on finding the same locked, the notice was served by affixture. The assessee contended that the notice was invalidly served and the Tribunal took note of the fact that the notice was issued at the very last minute to ensure that the case did not become time barred and no efforts were made by the Assessing Officer to find out the whereabouts of the assessee to serve the notice, but a short cut was taken by the Inspector by resorting to service by affixture. The Tribunal upheld the plea of the assessee and observed that the Revenue had failed to discharge the onus to prove that the notice was in fact served upon the assessee within the prescribed period. The Hon'ble Delhi High Court upheld the decision of the Tribunal by making the following discussion. 11. We have examined the copies of the notices issued by the Assessing Officer and find that the notices was issued at the last minute. Since the office of the assessee was closed, no efforts were made by the Assessing Officer to find out the whereabouts of the assessee to serve it but a short cut was taken by the Inspector who resorted to affixation, which was carried out in the absence of any independent witness. It app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ressed to the Assessing Officer, wherein it has been communicated that the notice was received on 10/12/2001 itself, which ostensibly is the notice dated 6/12/2001 addressed to the Director of the company. Therefore, the aforesaid plea of the Revenue is misplaced and is hereby rejected. 7.5. Apart therefrom, the Ld. Representative for the assessee pointed out that the defect in the service of notice namely non-service of notice by proper means and directly by affixture is not a curable defect and he has assailed the reliance placed by the Ld. Departmental Representative on the provisions of section 292BB of the Act in this regard. In our considered opinion, section 292BB, in any case, does not come to the rescue of the Revenue in the present case because it has been introduced by Finance Act, 2008 w.e.f. 01/04/2008 and it would not apply in the instant case. The Hon'ble Bombay High Court in the case of CIT v. Salman Khan, Income Tax Appeal (L) No.2362 of 2009 dated 1st December, 2009 has held that section 292 BB of the Act introduced w.e.f. 01/04/2008 is prospective in nature and would not apply to the assessment years earlier than assessment year 2008-09. Therefore, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntirely different footing. In the present case, it is quite clear that the appearance by the assessee on 10/12/2001 was not in compliance of the notice issued by the Assessing Officer on 29/11/2001, but it was in compliance of a notice issued by the Assessing Officer on 06/12/2001 in the name of the director of the assessee company . Therefore, to say that the assessee company had come to know about the assessment proceedings in on terms of the notice issued under section 143(2) of the Act dated 29/11/2001 is facts a misnomer Therefore, in our view, the ratio of the judgment of the Hon'ble Delhi High Court in the case of Vision Inc. (supra) is not applicable to the facts of the present case. 7.7. In conclusion, it has to be held that the notice under section 143(2) of the Act has not been served within the time and the mode prescribed under the Act and as a consequence, the impugned assessment framed under section 143(3) of the Act is void ab-initio. Accordingly, the assessment order dated 10.11.2003 is liable to be quashed. We hold so. 7.8. In the result, the plea of the assessee is allowed and since assessment order has been quashed, all other Grounds raised by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the General Clauses Act, 1897, become relevant. Sec. 27 of the General Clauses Act, provides that where any Central Act or Regulation authorities or requires any document to be served by post, then unless a different intention is drawn, the serve shall be deemed to be effected properly if a correctly addressed and stamped letter containing the document is dispatched by registered post; and unless the contrary is proved, such a letters would be deemed to have been delivered in the ordinary course of post. The IT Act is a Central Act and s. 282 provides for service by post. As such the provisions of s. 27 of the General Clauses Act, 1897 are applicable. From perusing s. 27 of the General Clauses Act, it is apparent that in order to presume service having been effected, the document or letter should be sent by registered post. A notice sent under certificate of posting and not by registered post would not amount to proper service. 16. Delhi Bench of Tribunal in the case of Jain Marbles vs. IAC (1989) 33 777 (Del) 526 held as under: Rule 19A in 0. 5 which lays down that the Court shall, in addition to, and simultaneously with, the issue of summons for service in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essed, prepaid and duly sent by registered post with AD, a declaration by the postal employee that the notice was refused shall be presumed even through the acknowledgement slip has been lost or mislaid or for any other reason has not been received by the Court within 30 days from the date of issue of the notice. 19. Hon'ble Calcutta High Court in the case of Keshab Narayan Banerjee vs. CIT (1999) 156 CTR (Cal) 109 : (1998) 101 Taxman 512 (Cal) has held that : the minimum that was required to (be) shown for establishing proper service by registered post was an endorsement that an attempt was made to serve the assessee and that either he was not available at his residence or that there was no one willing to accept the service on his behalf. Tribunal, Jaipur Bench in the case of Prakash Chand Lunia vs. ITO (1996) 54 TTJ (Jp) 383 : (1996) 56 ITD 1 (Jp) has held that : Sec. 27 of the General Clauses Act, 1897, however lays down that if a letter has been duly posted with necessary and address of the addressee thereupon then there may arise a rebuttable presumption to the effect that letter was delivered or tendered to the addressee rebuttable presumption s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he notices were issued. On writ petitions filed by the assessees, the High Court held that there was no proper service on the assessee and the orders of the CIT pursuant thereto could not be sustained. 23. In view of the aforesaid discussion, we are of the view that the notice has not been served on the assessee in this case in accordance with s. 282 of the IT Act earlier to 31st March, 1999. In the absence of service of notice, the assessment order passed on 31st March, 1999 is a nullity and cannot be sustained in the eyes of law. We, therefore, set aside the order of the CIT (A) on this issue and annul the order passed by the AO. 24. We have already held that the order passed by the AO is barred by limitation. We cannot direct the AO to make a fresh assessment because that would tantamount to extending the limitation for which we are not competent. Our aforesaid view is duly supported by the decision of the Hon'ble Supreme Court in the case of Hope Textiles Ltd. vs. Union of India (1994) 117 CTR (SC) 314 : (1994) 205 ITR 508 (SC). 25. In the result, the appeal filed by the assessee on this issue is allowed. Sanjay Badani and Another Vs DCIT(Supra ) th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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