Cit-Ii vs. Shri B.K. Agarwal

I.T.A.NO.226/2009

21/04//2014 Shri Sanjay Lal, learned counsel for the revenue. This is a revenues appeal under Section 260-A of the Income Tax Act, calling in question the concurrent orders passed by the Commissioner (Appeals) and the Income Tax Appellate Tribunal in the matter of holding that the notice to the assessee by substituted service under section143(2) has not been effected in accordance to law and interfered with the order of assessment on such consideration. For the assessment years 2004-05, return of income was filed on 28-10-2004 declaring total income of Rs.1,51,022/-. The case was taken up for scrutiny and the Assessing Officer issued a notice under section 143(2) of the Act. It is said that this notice was served by affixture in the presence of two witnesses. The legal requirement was fulfilled. The assessee during the course of assessment proceedings objected to the legality of the service of notice under section 143(2) of the Act and the Appellate Authority referred the matter to the Joint Commissioner. The Joint Commissioner, refused to issue any instructions or directions under section 144-A of the Act. The assessment was challenged in appeal before the Commissioner (Appeals) and the Tribunal and the concurrent findings have been recorded by both the authorities to say that under the Income Tax Act and the rules framed therein, a statutory provision has been laid down for service of notice by affixture and as this statutory procedure has been violated, service of notice is deemed to have not been affected , therefore, the appellate authorities have interfered into the matter. Learned counsel for the revenue argued that in this case the notice under section 143(2) was served by affixture, therefore, he is deemed to have been served, his counsel did appear and placing reliance on a judgment rendered by a Division Bench of this court in the case of Dr.H.R.Rai Vs. Commissioner of Income Tax, (1982) 31 CTR (MP) 284, it is argued that in the facts and circumstances of the case service is deemed to have been affected and therefore, the orders passed are unsustainable. We have heard the learned counsel for the parties and perused the record. It is a fact that service of notice under section 143(2) was effected by affixture at the residence of the assessee wife and both the Commissioner(Appeals) and the Tribunal have found that the statutory procedure laid down for service of notice by affixture has not been complied with.. This is a pure finding on fact and we find that service of notice in accordance with law has not been effected, accordingly, it has to be held that without service of notice, proceeding in the matter is a illegality and in interference with such assessment order, no error has been committed by the Appellate Tribunal. If the proceedings before the Assessing Officer are perused, it would be seen that the counsel, who appeared for the assessee raised objections with regard to issuance of notice and wanted documents to say that the notice under section 143(2) has not been properly served. Whatever objections have been raised are with regard to issuance of notice and there is no hearing of the assessee or his counsel on the merit of the order of assessment . The lawyer only objected to the fact that notice under section 143(2) has not been properly issued or service effected and wanted to argue on this ground. He was not heard and on merit ex-parte decision was taken. That being the position, the principles laid down in the case of Dr.H.R..Rai(supra) will not apply because in the said case the assessee appeared and participated in the process of assessment . On the contrary in this case the assessment has been conducted ex- parte without hearing the assessee on merit and therefore the Commissioner(Appeals) and the Tribunal have not committed any error in interfering with such an exparte assessment order. The order passed is in accordance with law, we see no reason to interfere into the matter and no substantial questions of law arise. Accordingly, the appeal stands dismissed.

(RAJENDRA MENON) (A.K.SHARMA ) JUDGE JUDGE hsp