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Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. SANJAY ARORA & SH. N.K.CHOUDHRY
IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER AND SH. N.K.CHOUDHRY, JUDICIAL MEMBER ITA No.500(Asr)/2017 Asst. Year:2009-10
Om Prakash Sharma Vs. Income Tax Officer, 61, Keshav Nagar, Ward-III(3), Jalandhar Mithapur Road, Jalandhar PAN:AJOPS 6014R (Appellant) (Respondent) Appellant by: Sh. Sudarshan Kapoor (Ld. Adv.) Respondent by: Sh. Charan Dass (Ld. DR) Date of hearing: 10.09.2018 Date of pronouncement: 09.10.2018 ORDER PER N.K.CHOUDHRY, JM: The instant appeal has been preferred by the Assessee/Appellant, on feeling aggrieved against the order dated 15.05.2017 passed by the Ld. CIT(A)-2, Jalandhar u/s. 250(6) of the I.T. Act, 1961 (hereinafter called as ‘the Act’).
In the instant case, the notice u/s 143(2) dated 20.09.2010 was sent to the assessee at the address i.e. 2-D.C. Nagar, Cannt Road, Mithapur, Jalandhar through speed post, however, the same was returned un-served in the office of the Revenue Department with remarks of the postal authorities “baar baar jaan the prapatkarta is patay te nahi mileya, is lyee RC bina takseem vapis keeti jandi hai … dated 29.09.2010”. However, from the record, it appears that on dated 28.09.2010, the Assessing Officer passed the affixture order with remarks that:
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“Where as I am satisfied that service of Notice ii/s 143(2) of the Income-tax Act, 1961 for the Asstt. Year 2009-10 is not possible by ordinary means on Sh. Om Parkash Sharma, 2, DC Nagar, Cantt Road, Mithapur, Jalandhar.
I hereby direct Sh. Satish Kumar, Notice Server of this office to effect the service of the said notice dated 30.09.2010 i.e. Notice u/s 143(2) of the Income-tax Act, 1961 are not served by ordinary means on the last known address of the assessee at a conspicuous place in the presence of Inspector of Income Tax Sh. H.S. Sajjan.”
Although the ld. AR Sh. Sudharshan Kapoor, Advocate of the assessee raised many issued qua legality of the notice of its service and affixture order and its affixing as well as with regard to the service of notice on the previous address of the assessee, however, emphasized that it is wondering facts that once the notice on 23.09.2010 returned only on 29.09.2010 then how the Assessing Officer has passed order for affixture on 28.09.2010.
On the contrary, except relying upon the orders passed by the authorities below, the ld. DR failed to controvert the submissions of the assessee.
Having heard the parties at length and perused the material available on record, it emerged that the notice dated 20.09.2010 was sent through speed post No.EP08920181IN on dated 23.09.2010 and the postal authorities made several attempts to service the notice to the assessee on 23.09.2010, 24.09.2010, 25.09.2010, 26.09.2010, 27.09.2010 and finally on 29.09.2010, however did not any yield any result and thereafter on 29th Sep. 2010 returned the speed post with remarks “baar baar jaan the prapatkarta is patay te nahi mileya,
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is lyee RC bina takseem vapis keeti jandi hai … dated 29.09.2010.”
However, the Assessing Officer on satisfying about the non - possibility of service of notice through ordinary means, decided to serve through affixture at the last known address of the assessee. It is really surprising that the notice sent through speed post remained undelivered upto 29th Sep., 2010 and thereafter the same must have been received by the Assessing Officer after 2 and 3 days, may be on 1st October, however, the A.O. passed the affixture order on 28.09.2010. We have failed to understand as to how the A.O. has perceived on 28.09.2010 about the non-service of the notice on the assessee that apparently seems to be mere formality without any basis ,which creates many doubts and shrouds in the genuineness of the assessment proceeding, hence, we do not any hesitation to hold that the notice dated 20.09.2010 as well as 28.09.2010 by way of affixture never been served upon the assessee and in the absence of statutory notices, the Assessment order can not be held valid and therefore on the aforesaid reasons is liable to be set aside and pursuant thereto the appellant order which is impugned herein also liable to be set aside.
Even otherwise, in the affixture order it is mentioned that the notice u/s 143(2) of the Income Tax Act, 1961 are not served by ordinary means on the last known address of the assessee, however, from the IT Returns for AY.2003-04, 2004-05, 2005-06, 2006-07, 2007-08 and 2008-9 and 2009-10, it clearly appears that the assessee is showing address as Keshav Nagar, Mithapur Road, Jalandhar which according to our mind liable to be treated as last known address of the assessee, however from the notices, it reflects that the Assessing Officer tried to serve the notice at 2-D.C. Nagar, Cannt Road,
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Mithapur, Jalandhar which otherwise, is not last known address of the assessee, hence, on this aspect also, we are inclined to hold that the Assessing Officer failed to serve the notice to the assessee at his last known address and therefore not in confirmatory with the provisions of the Order-5, Rule -17 & Rule-20 of the C.P.C .
The co-ordinate Bench at Amritsar dealt with the identical issue in the case of Sh. Shridhar Bedi through Legal Heir Smt. Sonil Bedi Versus Income Tax Officer Ward -3, Phagwara (ITA No.02(Asr)/2017) . Relevant part of the order is reproduced herin below:
7.2 Rule-1 of Order V of CPC, enumerates the procedure for issuing the summons and according to the rule-10 of Order-V of CPC, service of summon(s) shall be made by delivering or tendering a copy thereof signed by the judge or such officer as he appoints in this behalf, and seal of the Court.
7.3 Rule 17 of order V further enumerates the procedure when defendant refuses to accept the service, or cannot be found. Rule 17 further mandates that where the defendant or his agent or such other person as aforesaid refuses to sign the acknowledgement, or where the serving Officer, after using all due and reasonable diligence, cannot find the aforesaid person, who is absent from his residence at the time when service is sought to be effected on him at his residence and there is no likelihood of his being found at the residence within a reasonable time and there is no agent empowered to accept the service of the summons on his behalf, nor any other persons on whom service can be made, the serving officer shall affix a copy of the summons on the outer door or some other conspicuous part of the house in which the defendant ordinarily resides or carries on business or personally works for gain. 7.4 Further Rule 20 of order-V speaks about the substituted services, according to this rule, when the Court is satisfied that there is a reason to believe that the defendant is keeping out of the way for the purpose of avoiding service, or that for any other reason the summons cannot be served in the ordinary way, the Court shall order the summons to be served
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by affixing a copy thereof in some conspicuous place in the Court and also upon some conspicuous part of the house (if any) in which the defendant is known to have last resided or carried on business or personally worked for gain, or in such other manner as the Court thinks fit. 7.5 The mandate of Rule-1, 17 & 20 of the Order -V is that attempt should be made by the Assessing Officer for serving the notice in the ordinary way and if the notice cannot be served in the ordinary way on the reason that the Assessee cannot be found, after using all due and reasonable diligence and there is no likelihood of his being found at the residence within a reasonable time and there is no agent empowered to accept service of the summons on his behalf, nor any other person on whom service can be made, and the Assessing Officer is satisfied that there is a reason to believe that the Assessee is keeping out of the way for the purpose of avoiding service, or that for any other reason the summons cannot be served in the ordinary way, then only the Assessing Officer can order for service of summons by way of affixing a copy thereof in some conspicuous place as defined under Rule 20 of order-5 of the CPC but not otherwise . 7.6 From the assessment order, it does not reflect that the Assessing Officer had ever tried to issue and serve the alleged notice(s) in ordinary way and after exhausting ordinary attempt, while recording the reasons, adopted the substituted service by way of affixture upon the deceased assessee. As it is clearly reflects from the chronological dates and events that notice u/s 148 was issued in the name of the deceased assessee on 29th March, 2012 which claimed as has been served through affixture on 31st March, 2012 and thereafter notice u/s 142(1) of the Act claimed as has been served on dated 29th May, 2012 through affixture on the deceased assessee, creates many doubts with regard to the genuineness of the service of the notice on the deceased assessee because if the notice has been served through affixture on 31st March, 2012 then certainly the notice server would have used his due and reasonable diligence for not finding the deceased assessee and would have come to the knowledge about the death of deceased assessee and must have communicated the said information to the assessing officer and thereafter the Assessing Officer would had no option except to substitute the assessment proceedings in the name of the legal heir only, however, it is admitted fact that notice 29.05.2012 u/s 142(1) was also served to the deceased assessee by way of affixture and thereafter, getting the knowledge about the death of the assessee, the Assessing
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Officer initiated the assessment proceeding against the sole legal heir. The notice dated 18.02.2013 u/s 142(1) has also been claimed as served upon the legal heir, through affixture only. While serving the notice through substituted service to the sole legal heir of the assessee, the Assessing Officer never tried to serve the legal heir in the ordinary way, however made an attempt only through substituted service which also create lots of doubts about service and validity of the notices which according to our mind is not mere procedural requirement but mandatory. 7.7 The judgments relied upon by the Ld. AR, in support of assessee's case speaks about one thing only that proper notice u/s 148 of the Act for initiating reassessment proceeding is not a mere procedural requirement but the service of the prescribed notice on the assessee is a condition precedent to the validity of any of the reassessment made u/s 147. It is settled law that if no notice is issued or if the notice issued is shown to be invalid then proceedings initiated and carried by the Income Tax Officer without a notice or in pursuance of invalid notice would be illegal and void and shall vitiate the entire proceedings.
In the aforesaid analyzation, we do not have any hesitation to hold that in the instant case, no notice has ever been properly served either u/s 148 or 142(1) of the Act upon the deceased assessee or his sole legal heir. Therefore, the Assessment Order under challenge cannot be sustained and impugned order under challenge liable to be set aside under the limb of non-service/invalid notice itself and hence, the order passed by the Ld. CIT(A) is set aside and the addition confirmed by the Ld. CIT(A) stands deleted.
Respectfully fowling the dictum of co-ordinate bench and even otherwise as we observed in aforesaid paras independently, we do not have hesitation to held that the service of the prescribed notice on the assessee is a condition precedent to the validity of the assessment proceedings. It is settled law that if no notice is issued or if the notice issued is shown to be invalid then proceedings initiated and carried by the Income Tax Officer without a notice or in pursuance of invalid notice would be illegal and void and shall vitiate the entire proceedings. As in the instant case, while passing the affixture order,
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no material qua non-service of the notice through ordinary means was available with A.O. as on 28-09-2010 because the notice sent through speed was received by the A.O. only after 29-09-2010 but not before to that . Even otherwise the notices appears to not sent to last known address of the Asseeee hence we are of the considered opinion that no notice has ever been served upon the assessee neither properly nor at the last known address, therefore the assessment order as well as appellate order which is impugned herein are liable to be set aside, hence the same are set aside.
In the result, appeal filed by the assessee stands allowed. Order pronounced in the open Court on 09.10.2018.
Sd/- Sd/- (SANJAY ARORA) (N.K.CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated:09.10.2018 /PK/ Ps. Copy of the order forwarded to: (1) Om Prakash Sharma 61, Keshav Nagar, Mithapur Road, Jalandhar (2) Income Tax Officer, Ward-III(3), Jalandhar (3) The CIT(A)-2, Jammu (4) The CIT concerned (5) The SR DR, I.T.A.T., Amritsar True copy By order