Smt. Neha Bedi, Ludhiana V. DCIT, CC-I, Ludhiana

ITA 1062/CHANDI/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6700 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 22-06-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: PANKAJ BHALLA
• Keywords: Bonafide belief; Period of limitation; Reasonable cause; Time period of passing order; Condonation of delay; Reason to believe
• Section: 153A; 144; 154

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES B, CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER & MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NOS. 1065 TO 1067/CHD/2017 ASSESSMENT YEARS: 2008-09 TO 2010-11 M/S PUNEET FASHION PVT. LTD., VS. THE DCIT, CENTRA L CIRCLE-1, C/O M/S V.V.BHALLA & CO., LUDHIANA LUDHIANA PAN NO.AAECP1579L ITA NOS. 1050 TO 1055/CHD/2017 ASSESSMENT YEARS: 2005-06 TO 2010-11 MR. PUNEET BEDI, VS. THE DCIT, CENTRAL CIRCLE-1, PROP. M/S V.V. BHALLA & CO., LUDHIANA LUDHIANA PAN NO.AGAPB9766C ITA NOS. 1056 TO 1061/CHD/2017 ASSESSMENT YEARS: 2005-06 TO 2010-11 SH. TILAK RAJ BEDI, VS. THE DCIT, CENTRAL CIRCLE -1, C/O M/S V.V. BHALLA & CO., LUDHIANA LUDHIANA PAN NO.ADBPB3623N ITA NOS. 1062 TO 1064/CHD/2017 ASSESSMENT YEARS: 2008-09 TO 2010-11 MRS. NEHA BEDI, VS. THE DCIT, CENTRAL CIRCLE-1, C/O M/S V.V. BHALLA & CO., LUDHIANA LUDHIANA PAN NO.AOFPB1778M 2 ITA NOS. 1068 TO 1969/CHD/2017 ASSESSMENT YEARS: 2010-11 TO 2011-12 M/S NIKHIL EXIM PVT. LTD., VS. THE DCIT, CENTRAL C IRCLE-1, C/O M/S V.V. BHALLA & CO., LUDHIANA LUDHIANA PAN NO.AADCN0553D ITA NOS. 1070/CHD/2017 ASSESSMENT YEAR: 2010-11 M/S RAJAN TRADING PRIVATE LTD., VS. THE DCIT, C ENTRAL CIRCLE-1, C/O M/S V.V. BHALLA & CO., LUDHIANA LUDHIANA PAN NO.AAECR1188B & ITA NOS. 1071/CHD/2017 ASSESSMENT YEAR: 2009-10 M/S S.K. TEXTILES, VS. THE DCIT, CENTRAL CIRCLE- 1, C/O M/S V.V. BHALLA & CO., LUDHIANA LUDHIANA PAN NO.AAQFS0455C (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI PANKAJ BHALLA, CA RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 09.10.2017 DATE OF PRONOUNCEMENT : 31.10.2017 ORDER PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE CAPTIONED APPEALS HAVE BEEN PREFERRED BY THE DIFFERENT BUT RELATED ASSESSEES FOR DIFFERENT ASSESSMENT YEARS AG ITATING THE ADDITIONS 3 MADE IN RELATION TO ASSESSMENTS MADE U/S 144 R.W.S 153A OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). THE APPEALS ARE B ARRED BY THE LIMITATION PERIOD OF 821 DAYS. SEPARATE APPLICATIONS FOR CONDO NATION OF DELAY HAVE BEEN FILED. 2. THE FACTS FOR ADJUDICATION ON THE APPLICATION FO R CONDONATION OF DELAY AND AS WELL AS THE APPEALS ON MERITS, FOR THE SAKE OF CONVENIENCE, ARE TAKEN FROM ITA NO. 1065/CHD/2017 . 3. IN THE APPLICATION FOR CONDONATION OF DELAY, IT HAS BEEN PLEADED THAT THE ASSESSMENT U/S 144 R.W.S. SECTION 153A OF THE I NCOME-TAX ACT, 1961 (IN SHORT 'THE ACT') WAS COMPLETED BY THE ASSESSING OFF ICER VIDE ORDER DATED 8.11.2013 AGAINST WHICH THE ASSESSEE PREFERRED APPE AL BEFORE THE CIT(A) WHICH WAS DELAYED BY 159 DAYS FROM THE DATE OF EXPI RY OF THE PERIOD OF LIMITATION. THE ASSESSEE ALSO MOVED AN APPLICATION FOR CONDONATION OF DELAY. THE LD. CIT(A), HOWEVER, DISMISSED THE APPLI CATION FOR CONDONATION OF DELAY AND THEREBY THE APPEAL OF THE ASSESSEE, BE ING BARRED BY LIMITATION. BEING AGGRIEVED, THE ASSESSEE MOVED AN APPLICATION U/S 154 OF THE ACT BEFORE THE CIT(A) STATING THEREIN THAT IN FACT THER E WAS NO DELAY IN FILING OF THE APPEAL. THAT EVEN AS PER MEMORANDUM OF APPEAL, THERE WAS NO MENTION THAT THERE WAS ANY DELAY IN FILING OF THE APPEAL. I T HAS BEEN CONTENDED IN THE SAID APPLICATION THAT THERE WAS NO VALID SERVIC E OF ORDER DATED 18.11.2013 ON THE ASSESSEE AS PER THE RELEVANT PROV ISIONS OF THE STATUTE. HOWEVER, NOW EVEN AFTER LAPSE OF MORE THAN 2 YEARS AND AFTER MAKING VARIOUS EFFORTS FOR DISPOSAL OF THE RECTIFICATION P ETITION, THE LD. CIT(A) HAS FAILED TO DECIDE THE SAID APPLICATION MOVED BY THE ASSESSEE U/S 154 OF THE ACT. THAT THE APPELLANT AS PER ADVISE OF HIS COUNSE L WAS OF THE BONA FIDE 4 BELIEF THAT THE APPLICATION OF THE ASSESSEE FOR REC TIFICATION OF THE ORDER MOVED U/S 154 OF THE ACT HAS MERIT AND THAT THE ASS ESSEE WOULD GET THE REQUISITE RELIEF. SINCE THE LD. CIT(A) HAS FAILED TO DECIDE THE APPLICATION OF THE ASSESSEE MOVED U/S 154 OF THE ACT, THE ASSES SEE HAS FILED THE PRESENT APPEAL BEFORE THIS TRIBUNAL AND HAS SOUGHT CONDONATION OF DELAY FOR THE PERIOD CONSUMED IN PURSUING HIS APPLICATION U/S 154 OF THE ACT BEFORE THE LD. CIT(A) AS AN ALTERNATIVE REMEDY. IT HAS BEEN CONTENDED THAT THE DELAY IN FILING THE PRESENT APPEAL IS BECAUSE O F THE GENUINE BELIEF THAT THE ASSESSEE WAS ENTITLED TO PERUSE THE ALTERNATIVE LEGAL REMEDY AS PER LEGAL CONSULTATION OBTAINED BY HIM FROM HIS COUNSEL, WHIC H CONSTITUTES A SUFFICIENT CAUSE FOR THE PURPOSE OF CONDONATION OF DELAY IN FILING OF THE APPEAL. THE ASSESSEE IN THIS RESPECT HAS RELIED UPO N THE FOLLOWING CASE LAWS:- I) HIMACHAL PRADESH CRICKET ASSOCIATION, UNA VS. THE CIT(A), SHIMLA REPORTED IN ITA NO. 110 & 111/CHD/20 04. II) AUTOSER (P) LTD VS. ACIT REPORTED DIN [1998] 1 01 TAXMAN 70 (COCH.)(MAG.) III) RAJA & CO. VS. DCIT REPORTED IN [2013] 37 TAX MANN.COM 268 IV) COLLECTOR, LAND ACQUISITION, ANANTNAG V MST KA TIJI AND OTHERS 1987 AIR 1353 4. IT HAS BEEN FURTHER PLEADED THAT THE ASSESSEE CO MPANY AS WELL ITS DIRECTORS WERE FACING EXTREME FINANCIAL CRUNCH AND DIFFICULTIES OF LIFE. THE BANKS HAD TAKEN POSSESSION OF THE PROPERTIES OF THE ASSESSEE INCLUDING ITS FACTORIES, RESIDENTIAL PREMISES OF THE DIRECTORS AN D THEY WERE RENDERED HOMELESS. EVEN THE LITIGATION WITH THE BANK WAS ST ILL GOING ON. APART FORM THAT, THE ASSESSEE WAS ALSO FACING LITIGATION WITH CUSTOMS & D.R.I. IT HAD BECOME VERY DIFFICULT FOR THE ASSESSEE TO FACE ALL THE LITIGATIONS AT THE SAME 5 TIME WHEN IT WAS FACING FINANCIAL CRUNCH AND PROPER TIES WERE SEIZED. THE DIRECTORS WERE NOT HAVING ANY ALTERNATIVE BUSINESS / EMPLOYMENT OR SOURCE OF INCOME. APART FROM THAT THE DIRECTORS OF ASSESSE E WERE ALSO FACING VARIOUS FAMILY PROBLEMS INCLUDING THE DIVORCE OF FA MILY MEMBER SMT. PRIYA BEDI (DAUGHTER OF IST DIRECTOR AND SISTER OF SECOND DIRECTOR) AND DEATH OF ELDER MEMBER OF THE FAMILY (GRANDMOTHER OF SHRI PUNEET BEDI AND MOTHER OF SHRI TILAK RAJ BEDI, DIRECTORS OF THE ASS ESSEE COMPANY). BECAUSE OF THESE FACTS, THE ASSESSEE COULD NOT PROP ERLY ATTEND AND PROVIDE THE NECESSARY DETAILS DURING THE ASSESSMENT PROCEED INGS. THE DIRECTORS OF THE ASSESSEE COMPANY WERE UNDER EXTREME PRESSURE AN D DEPRESSION AND THEY WERE UNDER BONAFIDE BELIEF THAT THEIR COUNSEL WOULD LOOK INTO THE INCOME TAX MATTERS. IT HAS BEEN FURTHER PLEADED THAT THE ASSESSEE HAD SPECIFICALLY WRITTEN TO THE SPECIAL AUDITOR AND THE INCOME TAX A UTHORITIES THAT ALL HIS BOOKS OF ACCOUNT WERE SEIZED BY THE DRI, HENCE, THE REQUISITE INFORMATION CALLED FOR WAS NOT AVAILABLE WITH HIM. THE ASSESSM ENT ORDER WAS SERVED BY WAY OF AFFIXTURE IN THE HOUSE WHERE THE ASSESSEE WA S NO MORE RESIDING AND THAT THE ASSESSEE WAS NOT AWARE OF THE PASSING OF T HE ASSESSMENT ORDER. THERE WAS EVEN NO COMMUNICATION BETWEEN THE ASSESSE E AND HIS CHARTERED ACCOUNTANT DURING THE PERIOD. IN VIEW OF THIS, IT H AS BEEN PLEADED THAT THERE WAS SERIOUS DEFECT IN THE SERVICE OF THE ASSE SSMENT ORDER ON THE ASSESSEE AND THE SAME DOES NOT CONSTITUTE THE VALID SERVICE. THAT IN VIEW OF THIS, THERE WAS NO DELAY IN FILING THE APPEAL BE FORE THE CIT(A). SO FAR AS THE DELAY IN FILING THE APPEAL BEFORE THE TRIBUNAL IS CONCERNED, THE ASSESSEE, AS EXPLAINED ABOVE, HAS SUBMITTED THAT TH E ASSESSEE UNDER BONA FIDE BELIEF AND AS PER THE LEGAL ADVICE AVAILABLE TO HIM, WAS PURSUING THE ALTERNATIVE REMEDY U/S 154 OF THE ACT BUT THE LD. C IT(A) HAS FAILED TO PASS 6 ANY ORDER ON SUCH APPLICATION DESPITE REPEATED REQU ESTS MADE BY THE ASSESSEE. SINCE NO ORDER WAS FORTHCOMING FROM CIT( A), THE ASSESSEE INSTEAD OF WAITING FURTHER, HAS FILED THE PRESENT A PPEAL BEFORE THIS TRIBUNAL. 5. THE LD. COUNSEL FOR THE ASSESSEE, THEREFORE, HAS SUBMITTED THAT THERE IS A SUFFICIENT AND REASONABLE CAUSE FOR THE ASSESS EE FOR THE DELAY IN FILING THE PRESENT APPEAL BEFORE THIS TRIBUNAL. 6. ON THE OTHER HAND, LD. DR HAS SUBMITTED THAT FRO M THE VERY BEGINNING THE CONDUCT OF THE ASSESSEE WAS NON-COOPE RATIVE AND THAT THE ASSESSEE DOES NOT DESERVE ANY LENIENCY AT THIS STAG E. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. SO FA R AS THE CONDONATION OF DELAY IN FILING THE PRESENT APPEAL IS CONCERNED, THE COUNSEL FOR THE ASSESSEE HAS EXPLAINED THAT THE ASSESSEE, UNDER BON AFIDE BELIEF, WAS PERUSING THE ALTERNATE REMEDY BY WAY OF MOVING THE RECTIFICATION APPLICATION U/S 154 OF THE ACT BEFORE THE LD. CIT(A ). IN THE SAID RECTIFICATION APPLICATION, THE ASSESSEE HAD RAISED THE VITAL LEGAL ISSUE THAT A MISTAKE APPARENT ON RECORD HAD CREPT IN THE IMPUGNE D ORDER OF CIT(A) WHILE DISMISSING THE APPEAL OF THE ASSESSEE BEING B ARRED BY LIMITATION; WHEREAS, IN FACT THERE COULD NOT BE SAID TO HAVE OC CURRED ANY DELAY IN FILING THE APPEAL AS NO PROPER SERVICE OF THE IMPUG NED ORDER OF THE ASSESSING OFFICER HAD BEEN MADE UPON THE ASSESSEE. ADMITTEDLY, TILL DATE THE SAID RECTIFICATION APPLIC ATION HAS NOT BEEN DECIDED BY THE CIT(A). THE SAID RECTIFICATION APPLI CATION WAS FILED BY THE ASSESSEE ON THE ADVICE OF ITS COUNSEL AND UNDER THE BONAFIDE BELIEF THAT THE ASSESSEE WAS LEGALLY ENTITLED TO PURSUE THE SAID RE MEDY BEFORE THE CIT(A). EVEN AFTER GOING THROUGH THE FACT OF THE CASE AND T HE LEGAL PROPOSITION AS 7 LAID DOWN BY THE VARIOUS HIGH COURTS AND BY THE HON BLE APEX COURT, WHICH WE WILL DISCUSS IN THE LATER PART OF THE ORDE R, WE ARE OF THE VIEW THAT THE ASSESSEE OTHERWISE HAD A GOOD CASE ON MERITS FO R RECALLING OF THE IMPUGNED ORDER OF CIT(A). UNDER THE CIRCUMSTANCES T HERE IS A MERIT IN THE APPLICATION OF THE ASSESSEE FOR CONDONATION OF DELA Y. WE ARE GUIDED IN THIS RESPECT BY THE FOLLOWING DECISIONS: I. VIJAY VISHIN MEGHANI VS DCIT [2017] 86 TAXMANN.COM 98 (BOMBAY). II. SH. HARISH KUMAR CHABBRA VS CIT (P&H) ITA NO. 38 OF 2012 VIDE ORDER DATED 28/08/2012. III. HIMACHAL PRADESH CRICKET ASSOCIATION, UNA VS CIT IT A NOS. 110 & 111/CHD/2004 (CHANDIGARH BENCH). 8. IN THE CASE OF VIJAY VISHIN MEGHANI (SUPRA), T HE DELAY OF 2984 DAYS WAS CONDONED BY THE HONBLE BOMBAY HIGH COURT RESTI NG ITS DECISION ON THE PROPOSITION THAT IF THE LITIGANT HAS ACTED UNDE R THE LEGAL ADVICE BONAFIDE, AND THAT IS MISTAKEN, ORDINARY HE SHOULD NOT BE PENALIZED. THE HONBLE BOMBAY HIGH COURT HAS FURTHER RELIED ON THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF M/S CONCORD OF INDIA INSURANCE CO. LTD VS SMT. NIRMALA DEVI & OTHERS REPORTED IN AIR 1979 SC 1666. 9. WE FIND THAT THE FACTS OF THE CASE OF THE ASSESS EE ARE ON BETTER FOOTING. IN THIS CASE, THE REVENUE COULD NOT ESTABL ISH THAT THE RECTIFICATION APPLICATION MOVED BY THE ASSESSEE WAS NOT MAINTAINA BLE OR THAT THE SAME WAS UNDER MISTAKEN BELIEF. EVEN THE SAID APPLICATIO N HAS NOT BEEN REJECTED BY THE CIT(A). EVEN OTHERWISE, THE LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE IMPUGNED ASSESSMENT OR DER AND HAS SUBMITTED THAT THE SAME IS AN EX-PARTE ORDER MAKING HIGH PITC HED ASSESSMENT. UNDER 8 THE CIRCUMSTANCES, IN OUR VIEW, THE INTEREST OF JUS TICE DEMANDS THAT THE ASSESSEE BE GIVEN PROPER OPPORTUNITY TO CONTEST THE VOLUMINOUS AND HEFTY ADDITIONS MADE INTO THE INCOME OF THE ASSESSEE. IN VIEW OF THE ABOVE WE FIND MERIT IN THE APPLICATION FOR CONDONATION OF DE LAY AND THE SAME IS ACCORDINGLY ALLOWED. THE DELAY, IF ANY, OCCURRED IN FILING OF THE PRESENT APPEAL IS HEREBY CONDONED. SINCE THE FACTS AND CIRCUMSTANCES IN ALL THE CAPTIO NED APPEALS AND IN THE ACCOMPANIED APPLICATIONS FOR CONDONATION OF DEL AY ARE IDENTICAL, HENCE THE DELAY IN FILING ALL THE CAPTIONED APPEALS IS CO NDONED. 10. NOW COMING TO THE MERITS OF THE APPEAL, THE APP EAL OF THE ASSESSEE HAS BEEN DISMISSED BY THE LD. CIT(A) BEING BARRED B Y LIMITATION. THE ASSESSEE IN THE APPLICATION OF CONDONATION OF DELAY MOVED BEFORE THE CIT(A) HAD EXPLAINED ABOUT THE CIRCUMSTANCES BECAUS E OF WHICH HE COULD NOT FILE THE APPEAL WITHIN THE LIMITATION PERIOD. T HE ASSESSEE ALSO EXPLAINED THAT NONE OF THE SHOW CAUSE NOTICES ISSUED BY THE A O HAD BEEN SERVED IN THE ORDINARY COURSE UPON THE ASSESSEE AS THE HOUSE IN WHICH THE DIRECTORS OF THE ASSESSEE COMPANY WERE RESIDING WAS TAKEN POS SESSION OF BY THE ALLAHABAD BANK AND THAT THE DIRECTORS HAD BEEN REND ERED HOMELESS AND HAVE SHIFTED TO A RENTED ACCOMMODATION. FURTHER, TH AT DUE TO EXTREME FINANCIAL CRUNCH AND OTHER DIFFICULTIES OF LIFE, TA KING OVER OF ALL THE ASSETS BY THE BANK, LITIGATION WITH CUSTOMS & DRI, PENDING PROCEEDING AGAINST THE ASSESSEE UNDER SECURITY AND RECONSTRUCTION OF F INANCIAL ASSET AND ENFORCEMENT OF SECURITY INTEREST (SARFAESI) ACT, TH E FAMILY PROBLEMS SUCH AS DIVORCE AFTER FEW DAYS OF HER MARRIAGE OF T HE DAUGHTER OF SH. TILAK RAJ BEDI AND SISTER OF SH. PUNEET BEDI (BOTH DIRECT ORS OF THE COMPANY), THE DIRECTORS WERE UNDER EXTREME PRESSURE AND DEPRESSIO N AND COULD NOT 9 ESTABLISH CONTACT WITH THEIR CHARTERED ACCOUNTANT. THE DIRECTORS WERE UNDER BONAFIDE BELIEF THAT THEIR COUNSEL WOULD LOOK AFTER INCOME TAX PROCEEDINGS. IT WAS FURTHER POINTED OUT THAT THE AS SESSMENT ORDER WAS NEVER SERVED UPON THE ASSESSEE. THE SERVICE WAS EFFECTED THROUGH AFFIXATION ON THE HOUSE IN WHICH THE DIRECTORS WERE NOT RESIDING AS THE SAME WAS TAKEN POSSESSION OF BY THE BANK. IN OUR VIEW, THE ABOVE C IRCUMSTANCES CONSTITUTE SUFFICIENT CAUSE FOR CONDONATION OF DELAY IN FILING OF THE APPEAL BEFORE THE CIT(A). 11. FURTHER, BEFORE US, THE LD. COUNSEL FOR THE ASS ESSEE HAS TAKEN A PLEA THAT THE SERVICE OF THE ORDER EFFECTED BY WAY OF SU BSTITUTED MODE OF SERVICE THROUGH AFFIXTURE ON THE HOUSE IN WHICH THE DIRECTO RS OF THE ASSESSEE HAD CEASED TO RESIDE WAS DEFECTIVE AS THE ASSESSING OFF ICER WAS WELL AWARE OF THE FACT THAT THE DIRECTORS WERE NOT RESIDING IN TH E SAID HOUSE. 12. AS PER THE PROVISION OF SECTION 282 OF THE ACT, SERVICE OF NOTICE OR SUMMON OR REQUISITION OR ORDER OR ANY OTHER COMMUNI CATION UNDER THE INCOME TAX ACT CAN BE MADE BY DELIVERING OR TRANSMI TTING A COPY THEREOF, TO THE PERSON THEREIN NAMED, (A) BY POST OR BY SUCH COURIER SERVICES AS MAY BE APPROVED BY THE BOARD; OR (B) IN SUCH MANNER AS PROVIDED UNDER THE CODE OF C IVIL PROCEDURE, 1908 (5 OF 1908) FOR THE PURPOSES OF SER VICE OF SUMMONS; OR (C) IN THE FORM OF ANY ELECTRONIC RECORD AS PROVID ED IN CHAPTER IV OF THE INFORMATION TECHNOLOGY ACT, 2000 (21 OF 2000); (D) BY ANY OTHER MEANS OF TRANSMISSION OF DOCUMENT S AS PROVIDED BY RULES MADE BY THE BOARD IN THIS BEHALF. 10 13. ADMITTEDLY THE ASSESSING OFFICER HAD ADOPTED TH E METHOD OF SERVICE BY AFFIXTURE AS APPLICABLE FOR SUBSTITUTED SERVICE UNDER ORDER V RULE 17 AND RULE 20 OF THE CPC. BUT AS NOTED ABOVE THE PRESCRIB ED PROCEDURE UNDER ORDER V RULE 17 AND RULE 20 OF THE CPC HAS NOT BEEN ADOPTED. RULE 17 & 20 ORDER V CPC READ AS UNDER: 17. PROCEDURE WHEN DEFENDANT REFUSES TO ACCEPT SERVICE, OR CANNOT BE FOUND .- WHERE THE DEFENDANT OR HIS AGENT OR SUCH OTHER PERSON AS AFORESAID REFUSES TO SIGN THE ACKNOWLEDGMENT, OR WHERE THE SERVING OFFICER, A FTER USING ALL DUE AND REASONABLE DILIGENCE, CANNOT FIND THE DEFENDANT, 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 F OUND 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, 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, AND SHALL THEN RETURN THE ORIGINAL TO THE COU RT FROM WHICH IT WAS ISSUED, WITH A REPORT ENDORSED THEREON OR ANNEXED THERETO STATING THAT HE HAS SO AFFIXED THE COPY, THE CIRCUMSTANCES UNDER WHICH HE DID SO, AND THE NA ME AND ADDRESS OF THE PERSON (IF ANY) BY WHOM THE HOUS E WAS IDENTIFIED AND WHOSE PRESENCE THE COPY WAS AFFIXED . 20. SUBSTITUTED SERVICE.- (1) WHERE THE COURT IS SATISFIED THAT THERE IS 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 C ANNOT BE SERVED IN THE ORDINARY WAY, THE COURT SHALL ORDE R THE SUMMONS TO BE SERVED BY AFFIXING A COPY THEREOF IN SOME 11 CONSPICUOUS PLACE IN THE COURT HOUSE, 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. (1A) WHERE THE COURT ACTING UNDER SUB-RULE (1) ORDE RS SERVICE BY AN ADVERTISEMENT IN A NEWSPAPER, THE NEWSPAPER SHALL BE A DAILY NEWSPAPER CIRCULATING IN THE LOCALITY IN WHICH THE DEFENDANT IS LAST KNOWN TO HA VE ACTUALLY AND VOLUNTARILY RESIDED, CARRIED ON BUSINE SS OR PERSONALLY WORKED FOR GAIN. (2) EFFECT OF SUBSTITUTED SERVICESERVICE SUBSTITUT ED BY ORDER OF THE COURT SHALL BE AS EFFECTUAL AS IF IT H AD BEEN MADE ON THE DEFENDANT PERSONALLY. (3) WHERE SERVICE SUBSTITUTED, TIME FOR APPEARANCE TO BE FIXEDWHERE SERVICE IS SUBSTITUTED BY ORDER OF THE COURT, THE COURT SHALL FIX SUCH TIME FOR THE APPEARANCE OF THE DEFENDANT AS THE CASE MAY REQUIRE. 14. THERE IS NO EVIDENCE ON RECORD THAT THE AO HAD MADE ANY EFFORT TO TRACE THE ASSESSEE/DIRECTORS. THE AFFIXTURE WAS NOT DONE IN THE PRESENCE OF ANY WITNESS. FURTHER, THERE WAS NO SATISFACTION REC ORDED BY THE AO/SERVING OFFICER THAT AFTER USING ALL DUE AND REASONABLE DIL IGENCE THE ASSESSEE COULD NOT BE FOUND AND THAT THERE WAS NO LIKELIHOOD OF HI S BEING FOUND AT THE RESIDENCE WITHIN A REASONABLE TIME. EVEN NO AFFIDAV IT OF THE SERVING OFFICER WAS FILED ALONG WITH THE RETURN REPORT OF THE ORDER /NOTICE VERIFYING THE ABOVE FACTS AND JUSTIFYING SUBSTITUTED SERVICE THR OUGH AFFIXTURE ON THE ALREADY LEFT OVER HOUSE OF THE ASSESSEE. THE NOTICE S, SENT BY THE AO THROUGH REGISTERED POST, HAD BEEN RECEIVED BACK WIT H THE REMARKS 12 ADDRESSEE LEFT. UNDER THE CIRCUMSTANCES, WHEN THE ASSESSING OFFICER WAS WELL AWARE OF THE FACT THAT THE ASSESSEE/DIRECTORS WERE NOT RESIDING IN THE HOUSE AT WHICH THE AFFIXTURE WAS DONE, THE SERVICE THROUGH AFFIXTURE WAS MEANINGLESS. NO OTHER MODE OF SUBSTITUTED SERVICE W AS ADOPTED BY THE AO. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS RA VINDRA NATH GHOSH [1971] 82 ITR 888 (SC) WHILE EXAMINING THE V ALIDITY OF THE SERVICE AS PER THE PROVISION OF RULE 17 ORDER V OF THE CPC HAS OBSERVED AS UNDER: 10. AS SEEN EARLIER THE CONTENTION OF THE ASSESSEE S WAS THAT AT THE RELEVANT TIME THEY HAD NO PLACE OF BUSI NESS. THE REPORT OF THE SERVING OFFICER DOES NOT MENTION THE NAMES AND ADDRESSES OF THE PERSON WHO IDENTIFIED TH E PLACE OF BUSINESS OF THE ASSESSEES. THAT OFFICER DO ES NOT MENTION IN HIS REPORT NOR IN THE AFFIDAVIT FILED BY HIM THAT HE PERSONALLY KNEW THE PLACE OF BUSINESS OF THE ASS ESSEES. HENCE, THE SERVICE OF NOTICE MUST BE HELD TO BE NOT IN ACCORDANCE WITH THE LAW. THE POSSIBILITY OF HIS HAV ING GONE TO A WRONG PLACE CANNOT BE RULED OUT. THE HIGH COURT AFTER GOING INTO THE FACTS OF THE CASE VERY ELABORATELY, AFTER EXAMINING SEVERAL WITNESSES, HAS COME TO THE CONCLUSION THAT THE SERVICE MADE WAS NOT A P ROPER SERVICE. HENCE, IT IS NOT POSSIBLE TO HOLD THAT THE ASSESSEES HAD BEEN GIVEN A PROPER OPPORTUNITY TO PU T FORWARD THEIR CASE AS REQUIRED BY SECTION 33B . 15. FURTHER, THE HONBLE PUNJAB & HARYANA HIGH COUR T IN THE CASE OF CIT VS SHER SINGH [2013] 37 TAXMANN.COM 418 (P&H) HAS OBSERVED THAT WHERE ASSESSING OFFICER CAME TO KNOW THAT ASSESSEE IS NOT RESIDING AT HIS LAST KNOWN ADDRESS, HE SHOULD FOLLOW PROCEDURE OF S UBSTITUTED SERVICE OF NOTICE UNDER CPC; SERVICE BY AFFIXATION AT SAID LAS T KNOWN ADDRESS WOULD BE INVALID. THE RELEVANT PART OF THE ORDER OF THE H ONBLE HIGH COURT IS REPRODUCED AS UNDER:- 6. THE REPORT LEAVES NO AMBIGUITY THAT THE ASSESSING OFFICER WAS AWARE THAT THE RESPONDENT IS NOT RESIDI NG AT 13 HIS LAST KNOWN ADDRESS BUT SURPRISINGLY PERSISTED I N ORDERING SERVICE BY AFFIXATION, AT THIS ADDRESS. AT THIS STAGE IT WOULD BE APPROPRIATE TO CLARIFY THAT IF TH E REVENUE IS AWARE THAT AN ASSESSEE IS NOT RESIDING AT HIS LA ST KNOWN ADDRESS, AN ASSESSING OFFICER, WOULD BE REQUIRED TO SEARCH FOR THE ASSESSEE'S NEW ADDRESS AND IF STILL NOT AVAILABLE, SERVE THE ASSESSEE IN ACCORDANCE WITH PROCEDURE FOR SUBSTITUTED SERVICE AND PUBLICATION E TC. PRESCRIBED BY THE CODE OF CIVIL PROCEDURE. IN THE A BSENCE OF ANY ERROR OF JURISDICTION OF LAW IN THE IMPUGNED ORDERS, WE EXPRESS OUR INABILITY TO ENTERTAIN THE APPEAL ON THE QUESTIONS OF LAW AS SET OUT IN THE MEMORANDUM OF AP PEAL BUT PROCEED TO CONSIDER WHETHER QUESTIONS OF LAW FR AMED BY COUNSEL FOR THE REVENUE IN COURT SHOULD BE ANSWE RED. THE QUESTIONS ARE AS UNDER:- (1) 'WHETHER DEFECT IN SERVICE WOULD ENTAIL SETTING ASIDE OF THE SHOW CAUSE NOTICE ALONG WITH ASSESSMENT ORDER; AND (2) WHETHER IN SUCH A SITUATION THE CIT(A) OR THE I.T.A.T SHOULD HAVE DIRECTED THE ASSESSING OFFICER TO PROCEED FROM THE STAGE OF SERVICE?' 7. A DUE CONSIDERATION OF THE ARGUMENTS ADDRESSED FOR AND AGAINST THESE QUESTIONS REVEALS THAT THEY RAISE SUBSTANTIAL QUESTIONS OF LAW AS SETTING ASIDE OF AN ASSESSMENT ORDER WOULD NOT ENTAIL SETTING ASIDE OF THE SHOW CAUSE NOTICE. THE ORDER PASSED BY THE ASSESSIN G OFFICER WAS HELD TO BE ILLEGAL FOR WANT OF VALID SE RVICE. THE SHOW CAUSE NOTICE, HOWEVER, HAS NOT BEEN HELD T O BE INVALID AND, THEREFORE, SUBSISTS. THE C.I.T(A) OF T HE TRIBUNAL, WERE, THEREFORE, REQUIRED WHILE SETTING A SIDE ORDER PASSED BY ASSESSING OFFICER FOR WANT OF VALID SERVICE TO RESTORE THE MATTER TO THE OFFICE OF THE ASSESSING OFFICER FOR PROCEEDING AFRESH FROM THE STAGE OF SER VICE OF SHOW CAUSE NOTICE, INSTEAD OF ALLOWING THE ASSESSEE TO GO SCOT FREE. FAILURE TO ADOPT SUCH A COURSE HAS LED T HE APPELLATE AUTHORITY AND THE I.T.A.T TO COMMIT AN ER ROR OF JURISDICTION. 8. THE QUESTIONS OF LAW ARE, THEREFORE, ANSWERED B Y HOLDING THAT IF SERVICE UPON AN ASSESSEE IS HELD TO BE ILLEGAL THE CIT(A) OR THE ITAT WOULD BE REQUIRED TO RESTORE THE SHOW CAUSE NOTICE TO THE ASSESSING OFFI CER 14 FROM THE STAGE OF SERVICE, FOR ADJUDICATION AFRESH AND IN ACCORDANCE WITH LAW, SUBJECT, HOWEVER TO ANY LEGAL OBJECTIONS THAT MAY BE AVAILABLE TO THE ASSESSEE TO BE RAISED AT THE APPROPRIATE STAGE BEFORE THE ASSESSIN G OFFICER. 9. IN THIS VIEW OF THE MATTER, WHILE AFFIRMING ORDERS PASSED BY THE CIT(A) OR THE I.T.A.T, WITH RESPECT T O ILLEGALITY OF THE ASSESSMENT ORDER FOR WANT OF VALI D SERVICE, THE MATTER IS REMITTED TO THE ASSESSING OF FICER TO ADJUDICATE THE SHOW CAUSE NOTICE AFRESH FROM THE ST AGE PRIOR TO INITIATION OF EX-PARTE PROCEEDINGS, AND WH ILE DOING SO CONSIDER RELEVANT PROVISIONS OF LAW AS WEL L AS OBJECTIONS AND JUDGMENTS, REFERRED TO BY THE RESPON DENT. THE APPEAL STANDS DISPOSED OF ACCORDINGLY. 16. FURTHER, AS OBSERVED ABOVE, THE COUNSEL HAS EXP LAINED THAT THE ASSESSMENT FRAMED IN THIS CASE IS HIGHLY AGGRAVATED AND HIGH PITCHED ASSESSMENT AND THE ASSESSEE HAD NOT GOT REASONABLE OPPORTUNITY OF DEFENDING ITS CASE AS THE ASSESSMENTS HAVE BEEN FRA MED EX-PARTE OF THE ASSESSEE U/S 144 OF THE I.T. ACT. THE ASSESSEE HAS ALSO EXPL AINED THE CIRCUMSTANCES BEYOND THE CONTROL OF ITS DIRECTORS, WHICH CONSTITUTE SUFFICIENT CAUSE FOR THEIR NON-PRESENCE BEFORE THE AO. IN VIEW OF THE ABOVE, THE IMPUGNED ORDER OF THE CIT(A) IS LIABLE T O BE SET ASIDE. FURTHER AT THIS STAGE, REQUIRING THE CIT(A) TO DECIDE THE R ECTIFICATION APPLICATION PENDING BEFORE HIM WILL NOT SOLVE ANY USEFUL PURPOS E AS WE HAVE ALREADY ADJUDICATED UPON THE RELEVANT ISSUES. FURTHER, IT W ILL RESULT INTO MULTIPLICITY OF LITIGATION. IN VIEW OF THIS, THE I MPUGNED ORDER OF THE CIT(A) IS HEREBY SET ASIDE AND THE MATTER IS REST ORED TO THE FILE OF AO FOR DENOVO ASSESSMENT. NEEDLESS TO SAY THAT ASSESSING OFFICER WILL GIVE TO PROPER OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS C ASE AND AT THE SAME TIME IT IS DIRECTED THAT THE ASSESSEE WOULD NOT DELIBERA TELY CONTRIBUTE IN DELAYING THE CONCLUSION OF THE PROCEEDINGS. 15 17 SINCE THE FACTS AND CIRCUMSTANCES INVOLVED IN AL L THE CAPTIONED APPEALS ARE IDENTICAL, HENCE, IN VIEW OF OUR OBSERV ATIONS MADE ABOVE, ALL THE CAPTIONED APPEALS ARE RESTORED TO THE FILE OF T HE AO IN SIMILAR TERMS FOR DENOVO ASSESSMENT. 18. IN THE RESULT ALL THE APPEALS ARE TREATED AS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 31.10.20 17 SD/- SD/- ( ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 31 ST OCT, 2017 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR