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TMI Blog2022 (8) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... mated that the assessee is in jail, the Pr. CIT was aware that the assessee is in judicial custody as on 20.3.2019. He had adequate time for serving the notice on the assessee in Jail through Superintendent of the Jail. Instead of this, the Pr. CIT proceeded to issue order u/s.263. He failed to serve notice on the assessee even though he was informed of the judicial custody of the assessee. One must also keep in mind that when the assessee is in judicial custody, his address during the period of judicial custody does not change and it cannot be said that the assessee is absconding. The second condition that the assessee should be given an opportunity of being heard also stood violated insofar as the assessee has not been heard. In the circumstances, order passed u/s.263 got vitiated and is liable to be annulled and we do so. Thus non-service of notice on the assessee, who is in judicial custody and on account of non-granting the assessee an opportunity of being heard, the additional ground filed by the assessee stands allowed and orders passed u/s.263 stand quashed. Decided in favour of assessee. - ITA Nos.170 to 175/CTK/2019 - - - Dated:- 15-6-2022 - S/SHRI GEORGE MATHAN, J ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , one Mr Uttam Kumar claiming to be the staff of the assessee vide letter dated 18.3.2019 intimated the Pr. CIT that his employer being the assessee is in judicial custody and he was unable to attend the notice immediately and sought reasonable time of one month to organize the submission of data. It was the submission that the Pr. CIT on the ground that Shri Uttam Kumar did not have the Power of Attorney to represent the assessee, proceeded to revise the order u/s.143(3) r.w.s 153C of the Act and held the said assessment orders as erroneous and prejudicial to the interest of the revenue. Pr. CIT also observed that as there is no reply of the assessee to the show cause notice, he presumed that the assessee does not have any explanation to offer and directed the AO to consider the issue as mentioned in the show cause notice and to pass the assessment order as per law after giving opportunity to the assessee. The order u/.s.263 of the Act was passed on 25.3.2019. It was the submission by ld CIT DR that notice u/s.263 of the Act was sent by Speed Post at the address as mentioned in PAN and consequently, it was a valid service of notice. For this proposition, he placed reliance on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings could not be invalidated for want of proper service of notice. Reliance was placed on the decision of Hon ble Supreme Court in the case of ITO vs Dharam Narain (2018) 90 taxmann.com 325 (SC) to support the proposition that the non-availability of the assessee to receive the scrutiny notice sent by registered post on multiple occasions and the service of notice on authorized representative of the assessee who the assessee now disown, is sufficient to draw an inference of deemed service of notice on the assessee. Ld CIT DR also relied upon the decision of Hon ble Supreme Court in the case of CIT vs Thayaballi Mulla Jeevaji Kapasi (1967) 66 ITR 147 (SC) to submit that when attempts were made to serve notice of reassessment upon assessee at his place of business and he was not in town at that time and no definite information could be secured inspite of inquiries as to whereabouts of assessee and only then notice was served by affixation on conspicuous part of business premises and the process server has also made a requisite endorsement on notice in presence of two witnesses, was held to be valid service. He further relied on the decision of Hon ble Delhi High C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a) has categorically held that the notices are to be served on the assessee and the notice communicated to the lawyer of the assessee, especially when there was no endorsement in the Voklatanama that the lawyer was authorised to accept the notice on behalf of the assessee, therefore, it was not a valid service. It was the submission that the notice having not been validly served, the notice issued u/s.263 and consequential order u/s.263 was liable to be annulled. 7. We have considered the rival submissions. At this point, it would be worthwhile to peruse the provisions of section 263 of the Act. The provisions of section 263 of the Act require that if the Pr. CIT consider any order to be erroneous and prejudicial to the interest of the revenue, he may after giving the assessee an opportunity of being heard revise the same . It must be clearly explained here that the service of notice on the assessee is not a pre-condition much less the condition but the assessee must be granted the opportunity of being heard. Admittedly, it is for the purpose of granting the assessee an opportunity of being heard that the notice is served on the assessee. In the present case, the assessee is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee is in judicial custody, his address during the period of judicial custody does not change and it cannot be said that the assessee is absconding. The second condition that the assessee should be given an opportunity of being heard also stood violated insofar as the assessee has not been heard. In the circumstances, order passed u/s.263 got vitiated and is liable to be annulled and we do so. 8. A perusal of the decisions relied upon by ld CIT DR in the case of P.A,.Chacko Muthalaly (supra) is in regard to the service of notice by post. The assessee has not challenged the address or that the notice is not served on the addressee. The challenge is in regard to service of notice on the assessee. Same is the position in regard to the decision of Hon ble Jharkhand High Court in the case of Milan Poddar (supra), the decision of Hon ble Delhi High Court in the case of Madhsy Films Pvt Ltd (supra) and the decision of Hon ble Allahabad High Court in the case of Privilage Investment Pvt Ltd (supra). Coming to the decision of Hon ble Supreme Court in the case of Sudev Industries Ltd (supra), in that case, the assessee therein had co-operated in the assessment proceedings under the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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