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TMI Blog2024 (8) TMI 1241X X X X Extracts X X X X X X X X Extracts X X X X ..... It was only when the bank account of the assessee was attached by the Tax Recovery Officer that the assessee decided to file appeal before the CIT(A) and that also after a gap of over seven years. As per the provisions of Section 282 of Income Tax Act,1961, the service of notice of summon or requisition or order under the I.T. Act may be made by delivering a copy thereof, by post or by such courier services as may be approved by the Central Board of Direct Taxes. Sub-Rule (1) of the Rule 127 of the Income Tax Rules, 1962 provides that for the purposes of sub-Section (1) of Section 282, the addresses (including the address for electronic mail or electronic mail message) to which a notice or summons or requisition or order or any other communication under the may be delivered or transmitted shall be as per sub-Rule (2). AO can also serve the assessment order by affixture. Service by affixture is resorted to in two circumstances: First, when the assessee or his agent refuses to sign the acknowledgement for service or when the serving official, after using all due and reasonable diligence, cannot find the assessee in his residential or business premises within a reasonable time and se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the years under consideration, both the appeals filed by the assessee are being taken up together. We shall take up assessee s appeal in ITA No. 1033/Ahd/2019 (Quantum Proceedings) 2. The assessee has taken the following grounds of appeal: ITA No. 1033/Ahd/2019 1. The Appellant submit that the learned CIT(A) has grossly erred in law and on facts to confirmed the addition made by the Ld A.O. amounting to Rs. Rs. 62,37,123/- regarding the Secured Loans and Unsecured loan taken from various Banks and Financial Institutions in earlier years also and the same have been verified / examined and accepted by the Ld A.O. in A.Y 2006-07 and passed the order u/s 143(3). Hence the addition of unexplained cash credit to be deleted fully. 2. The Appellant submit that the learned CIT(A) has grossly erred in law and on facts to confirmed the addition made by the Ld A.O. amounting to Rs. 2,08,67,654/- on account of estimation of Net Profit @ 8% on Gross Sales which is unreasonable without appreciating the facts that the Accounts was Audited u/s 44AB and the report and Audited Balance sheet is available on record and also the previous year i.e. A.Y.2006-07 assessment was made u/s 143(3) and the det ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ams, flour etc. During the year under consideration, the assessee filed return of income declaring total income of Rs. 9,12,500/-. The case of the assessee was selected for scrutiny and notice under Section 143(2) of the Act was issued on 24.09.2008 which was duly served upon the assessee on 30.09.2008. In response to the said notice, none appeared on behalf of the assessee. Thereafter, the Assessing Officer issued various notices dated 24.09.2008, 02.02.2009 and 23.07.2009. However, all the notices issued by the Assessing Officer remained uncomplied with. Thereafter, the Assessing Officer issued final notice dated 08.12.2009, giving a final opportunity to the assessee to cause appearance, however, again none appeared on behalf of the assessee and no details were filed. Accordingly, the Assessing Officer proceeded to finalize the assessment order on the basis of material available on record. 4. On verification of return filed by the assessee, and data available on record, the Assessing Officer observed that the assessee had shown unsecured loan of Rs. 62,37,123/-. The Assessing Officer was of the view that since the assessee did not furnish any details, the unsecured loans and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal. Accordingly, Ld. CIT(A) refused to condone the delay in filing of appeal by the assessee and dismissed the appeal of the assessee with the following observations: 4.5 In view of the above judicial pronouncements, the basic principle emerges that the delay should be bonafide and there should not be any negligence on the part of the appellant. However in the appeal under consideration, the appellant has taken the vague and unsupported plea for the delay and which is not verifiabile from the records. It is noted from the assessment order that notice u/s 143(2) dated 24.09.2008 was properly served upon the assessee on 30.09.2008. It is also fact that during appellant proceeding, appellant did not object the service of the above notice. It is also noted that during the year under consideration the appellant was doing business in the name of 4 proprietorship concerns which shows that he was a prudent person therefore it was expected from the him to know that the assessment order will be passed in compliance of notice u/s 143(2) of the IT Act. However his conduct during the assessment proceeding, clearly shows his deliberate non compliance before the AO. Thus it appears that the app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice of assessment of by affixture at a place which was not functional and closed is not a valid service of assessment order. The Counsel for the assessee placed reliance on the case of CIT vs. Ramendranath Ghosh 82 ITR 888 (SC) and on the case of CIT vs. Shersingh 37 taxmann.com 418 in support of the above contention. 7. In response, the Ld. D.R. submitted that even the assessee has not denied service of notice dated 24.09.2008 under Section 143(2) of the Act, which was duly served upon the assessee on 30.09.2008. Therefore, even despite valid service of notice on the assessee during the course of assessment proceedings, the assessee deliberately refused to participate in assessment proceedings and any absence of in compliance on part of the assessee, the Assessing Officer had no option but to pass best judgment assessment order under Section 143(3) of the Act r.w.s. 144 of the Act, on the basis of material available on record. Secondly, the Ld. D.R. placed before us the relevant assessment records and from the same, it was observed that the Assessing Officer had tried to serve the assessment order on the assessee by speed post and the assessment order could not be served on the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent and it was only when the bank account of the assessee, held by the assessee at IDBI Bank, Ashram Road Branch, Ahmedabad was attached by the Tax Recovery Officer in proceeding under Section 222 to 225 of the Acct that the assessee finally decided to file appeal before CIT(A), and that too after a gap of over seven years. Accordingly, the Ld. CIT(A) has not erred in facts and in law in refusing to condone the delay in filing of the present appeal. 8. We have heard the rival contentions and perused the material on record. 9. On going through the facts of the instant case, it is evident that the assessee has been deliberately avoiding receipt of notices issued by the Income Tax Department and had also deliberately not participated in assessment proceedings. The assessee had changed his address and such change in address was also intimated to the Income Tax Department and neither was the PAN data base was updated by the assessee to keep the Income Tax Department informed about the whereabouts of the assessee. It was only when the bank account of the assessee was attached by the Tax Recovery Officer that the assessee decided to file appeal before the Ld. CIT(A) and that also after a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing Officer can also serve the assessment order by affixture. Service by affixture is resorted to in two circumstances: First, when the assessee or his agent refuses to sign the acknowledgement for service or when the serving official, after using all due and reasonable diligence, cannot find the assessee in his residential or business premises within a reasonable time and second, when there is nobody else authorized to receive the notice. In the above circumstances, the Income Tax Inspector can effect the service by affixture on his own initiative without waiting for an order from the AO. A report is to be drawn up by the Income Tax Inspector, on the facts and circumstances of the service by affixture, specifying the date and time of service and the name of the identifier if any. 12. Therefore, for the purpose of deciding the question of condonation of delay, it needs to be assessed whether the Assessing Officer had followed the due process laid down for service of notice by affixture in the instant facts. While, from the facts placed on record before us, the Assessing Officer had initially tried to serve the assessment order by way of speed post which could not be done since th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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