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TMI Blog2023 (1) TMI 1441X X X X Extracts X X X X X X X X Extracts X X X X ..... sending the notice through Speed Post in the month of March, 2018 no efforts have been made to serve notice u/s 148 of the Act on the assessee through other modes. Since the notice returned un-served the AO could have sent notice through notice server for service of notice on the assessee which process was not followed and at the fag end of the due date for completion of assessment i.e. in December, 2018 the AO chose to serve the notice by way of affixture on 4.12.2018 and complete the assessment immediately on 06th December, 2018 not even giving time for the assessee to file return of income in response to the said notice even though the said notice specifies filing of return within 30 days of time from the date of service of notice. Decided in favour of assessee. - Shri Challa Nagendra Prasad, Judicial Member, S.M.C. For the Assessee : Shri Rajiv Jain, C. A. For the Revenue : Shri Om Parkash, Sr. D. R. ORDER PER C. N. PRASAD, J. M. : 1. This appeal is filed by the assessee against the order of the ld. Commissioner of Income Tax (Appeals)-16 [hereafter referred to CIT (Appeals)] New Delhi, dated 10.07.2019 for assessment year 2011-12 2. The assessee has raised the following grou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , who taxed the entire amount of Rs. 14,28,900/ -deposited by the assessee in his bank during F.Y. 2010-11 without providing any benefit/relief for the cash withdrawn from the bank during F.Y 2010-11 and the opening capital balance of life savings of the assessee. 3. The ld. Counsel for the assessee submits that ground Nos. 1, 2, 3 and 6 are in respect of service of notice under section 148 of the Income Tax Act, 1961 (the Act) and consequent completion of assessment as bad in law. The ld. Counsel for the assessee, at the outset, submits that notice u/s 148 of the Act dated 31st March, 2018 was claimed to have been served on the assessee by the Assessing Officer by way of affixture on 4.12.2018 without allowing the period of 30 days as mentioned in the notice u/s 148 of the Act to file return of income, thus the assessment of jurisdiction is vitiated. The ld. Counsel for the assessee submits that notice u/s 148 dated 31.03.2018 which was claimed to have been served on the assessee on 4.12.2018 by way of affixture and the affixture report did not contain the name of any local witness who made the above affixture and, therefore, the service by affixture on 4.12.2018 is bad in law and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 31.03.2018 along with show cause notice dated 3.12.2018 by way of affixture. After service of notice u/s 148 dated 31.12.2018 and show cause notice dated 3.12.2018 by way of affixture on 4.12.2018 the Assessing Officer completed the best judgement assessment on 6.12.2018 bringing to tax the cash deposit of Rs. 14,28,900/- made by the assessee in his bank account for the assessment year under consideration. On perusal of the assessment order it is noticed that the Assessing Officer even though issued notice as early as in March, 2018 (31.03.2018) the said notice came to be un-served and thereafter the Assessing Officer did not make any efforts to serve this notice on the assessee till 4.12.2018 as the assessment was time barring in the month of December, 2018. The Assessing Officer served notice u/s 148 dated 31.03.2018 by way of affixture on 4.12.2018 and immediately thereafter completed the best judgement assessment on 6.12.2018, even though the Assessing Officer required the assessee to file return within 30 days from the service of notice u/s 148 of the Act. This is completely in violation of principles of natural justice. Further the service report of notice by affixture is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble, statutes authorize substituted service and such service attributes constructive knowledge of the assessee. To attribute such constructive knowledge, the substituted service must be in accordance with the prescribed procedure, that is, by Section 64 of the Agricultural Income-tax Act, 1950, in this case, which provides that a notice can be served as if it were a summons issued by a court, that is, as provided in Order V Rules 17, 18 and 19 of the Code of Civil Procedure, 1908. In the absence of proof of service as required, in the said Rule 17, such service could not be treated as valid service. A mere statement that service was effected by affixture would not be enough. 13. It is clear from above that constructive knowledge of notice can be attributed to the assessee if service, has been effected as provided by the Statute. All the requirements of substituted service must be shown to be fully satisfied, In the case of Ramendra Nath Ghosh (supra), their Lordships also noted provisions of rule 17 Order V of the Civil Procedure Code and reproduced the same at pages 890/891 of the report. It is seen that the provision requires that names and address of the persons, if any, by whom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that local persons of the area are to be associated in the process of service of notice by affixture. This process of law has not been followed in serving the notice by way of affixture and the decision squarely applied to the assessee s case. 9. The Hon ble Punjab Haryana High Court in the case of CIT Vs. Kishan Chand (supra) affirmed the decision of the Tribunal in holding that resort to affixture could not be straight away taken without taking other modes of service. The Hon ble High Court while holding so, observed as under:- 2. The assessee is individual and as a sequel to the search and seizure operation was conducted on his premises, he filed revised return. The Assessing Officer framed assessment under section 144 of the Act on the basis of best judgement. The Commissioner of Income Tax (Appeals) accepted the appeal mainly on the ground that the assessee had not been served. Evidence with regard to service by affixture was rejected on the ground that resort to affixture could not be straightaway taken without first taking other modes of service. The Tribunal affirmed the said finding. It was observed: From the facts of the case, I find that the search and seizure operations ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er it is practicable, service has to be effected on the defendant in person or on his agent. Order V, rule 17 of CPC further provides that the affixture can be done only when the assessee or his agent refuses to sign the acknowledgement or cannot be found. Thus, for resorting to I.T.A. No. 1605/Del/2012 Assessment year 2008-09 9 affixture, efforts have to be made to serve the notice upon the assessee and only after reaching a finding that the notice cannot be served upon the assessee, the mode of affixture can be resorted to. Further rule 17 of order V of CPC mandates that an independent local person be the witness of service through affixture and for the purpose of having been associated with the identification of the place. However a perusal of the affixture report shows that there was no independent local person as a witness and there is no evidence that anyone identified the place as belonging to the assessee before such affixture. It is seen that the Income Tax Inspector has signed as the local independent person but such witness cannot be considered to be a local independent person for the purposes of rule 17 of order V of CPC. The Hon ble Punjab and Haryana High Court in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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