Shri Prem Kumar Bhagat, Distt. Jalandhar V. The D.D.I.T. ( International Taxation), Chandigarh

ITA 182/ASR/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 0523 (ITAT-AMRITSAR)
• Duration Of Justice: 2 year(s) 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-07-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 18-05-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 20-03-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: UMESH TAKKYAR
• Assessee Lawyers: SSH J S BHASIN
• Keywords: Capital asset converted into stock in trade; Invalid notice; Additional evidence; Block assessment; Reason to believe; Reassessment proceedings
• Section: 45(2); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. A.D. JAIN, JUDICIAL MEMBER AND SH. T.S. KAPOOR, ACCOUNTANT MEMBER ITA NO.182(ASR)/2014 ASSESSMENT YEAR:2005-06 PAN: ANWPB0092L SH. PREM KUMAR BHAGAT, VS. DIRECTOR OF INCOME TAX VPO BARA PIND, TEHSIL GORAYA (INTERNATIONAL TAXAT ION) DISTT. JALANDHAR. CHANDIGARH. (APPELLANT) (RESPONDENT) APPELLANT BY: S/SH. J. S. BHASIN & ANIL MIGLANI, AD V RESPONDENT BY: SH. UMESH TAKKYAR, DR DATE OF HEARING: 18/05/2016 DATE OF PRONOUNCEMENT: 18/07/2016 ORDER PER A.D. JAIN, JM: THIS IS THE ASSESSEES APPEAL FOR THE ASSESSMENT Y EAR 2005-06, AGAINST THE ORDER DATED 23.01.2014, PASSED BY THE LD. CIT(A), JALANDHAR. THE ASSESSEE HAS RAISED THE FOLLOWING GR OUNDS OF APPEAL: 1. THAT THE ID. CIT(A), IN THE GIVEN FACTS OF THE CASE AND ON LAW, HAS GROSSLY ERRED IN UPHOLDING THAT - A) THE ITO PHAGWARA , WAS COMPETENT TO ASSUME JURISDICTION AND ISSUE NOTICE UNDER SECTION 148; B) THE SERVICE OF NOTICE U/S 148 BY ITO PHAGWARA, ON O NE SMT. TEENA SHARMA WAS LAWFUL; C) THE NOTICE U/S 148 WAS SERVED WITHIN SPECIFIED T IME; ITA NO.182(ASR)/2014 A.Y. 2005-06 2 D) THE SUBSEQUENT TRANSFER OF CASE TO DDIT (INTERNA TIONAL TAXATION), CHANDIGARH, AND PASSING OF IMPUGNED ORDE R BY HIM WAS PROPER; E) THE ADDITIONAL EVIDENCE, FILED BY ASSESSEE. THOU GH ADMITTED, DID NOT REQUIRE ANY COGNIZANCE; 2. THAT THE ID.CIT(A) FURTHER FELL INTO GRAVE ERROR , ON A MISREADING OF THE RELEVANT DOCUMENTS, TO HOLD THAT ASSESSEE PURCHASED THE DEMISED PROPERTY FOR RS. 4 CRORES, AG AINST THE APPARENT CONSIDERATION OF RS. 2.30 CRORES EVIDENCED BY 'REGISTERED SALE DEED'. 3. THAT IN THE SAME CONTEXT, THE ID.CIT(A) ALSO ERR ED IN HOLDING THAT ASSESSEE PAID ADVANCE OF RS. 2,50,41,909/- AS PER AGREEMENT DATED 8.5.2004 (INCLUDING CASH OF RS. 1,70,00,000/-) AND IN FINALLY, SUSTAINING ADDITION OF RS. 1,71,41,909/- AS UNDISCLOSED INVESTMENT. 4. THAT THE ID.CIT(A), WHILE DELETING THE ADDITION OF RS. 1,49,58,091/- AS IT PERTAINED TO NEXT YEAR, WAS NOT JUSTIFIED EITHER ON FACTS OR IN LAW, IN IMPLIEDLY ASKING THE AO TO TAKE ACTION AGAINST THE ASSESSEE FOR AY 2006-07. 2. AS PER GROUND NO. 1(B), SERVICE OF NOTICE UNDER SECTION 148 OF THE ACT ON ONE SMT. TEENA SHARMA IS NOT LAWFUL. 3. THE AO FOUND THAT NOTICE U/S 148 OF THE ACT WAS ISSUED TO THE ASSESSEE ON 29.03.2012, AFTER RECORDING THE REASONS , BY THE ITO, WARD- 3, PHAWARA. THE NOTICE WAS SERVED ON ONE SMT. TEENA SHARMA, ONE OF THE FAMILY MEMBERS OF THE ASSESSEE, ON 31.03.2012. SINC E NO RETURN WAS FILED IN RESPONSE TO THE NOTICE U/S 148 , A LETTER DATED 30.05.2012 WAS ISSUED TO THE ASSESSEE BY THE AO, ASKING HIM TO FIL E THE RETURN. THE ASSESSEE FILED A RETURN IN RESPONSE, ON 05.10.2012, ALONGWITH THE REMARKS THAT IN RESPONSE TO NOTICE U/S 148 OF THE ACT, RETURN F ILED UNDER ITA NO.182(ASR)/2014 A.Y. 2005-06 3 PROTEST AS THE NOTICE UNDER SECTION 147 IS TIME BAR RED, NOT SERVED ON ME OR MY REPRESENTATIVE WITHIN SPECIFIED TIME AND WITHOUT JURISDICTION . 4. THE AO, HOWEVER, WENT AHEAD AND FRAMED THE ASSES SMENT ORDER UNDER SECTION 144 OF THE ACT, VIDE ORDER DATED 28.0 3.2013. APROPOS THE ISSUE OF SERVICE OF NOTICE U/S 148, THE AO OBSERVED AS FOLLOWS: INFORMATION WAS ALSO RECEIVED FROM THE BANKS AND TH E STATEMENTS OF VARIOUS ACCOUNTS AND THE ACCOUNT OPENING FORM WE RE ALSO FURNISHED BY THE BANKS. AS PER THE ACCOUNT OPENING FORM AS PROVIDED BY THE STATE BANK OF PATIAL, BARAPIND BRA NCH ACCOUNT NO.55059774207 WAS IN THE NAME OF SH. PREM KUMAR BH AGAT, SMT. TINA SHARMA W/O SANJIV KUMAR AND SMT. SHILPA W/O SA NDEEP KUMAR AND THE ADDRESS OF THE ACCOUNT HOLDERS MENTIO NED IN THE FORM IS VPO BARAPIND. THE ADDRESS IN THE BANK ACCOU NT FORM VERY WELL PROVES THAT SHE WAS RESIDENT OF SAME HOUSE AS THAT OF THE ASSESSEE. THUS, THE CLAIM OF THE ASSESSEE THAT SMT. TEENA SHARMA DID NOT STAY AT HIS RESIDENCE HAS BEEN PROVED TO B INCORRECT. SINCE IT IS VERY WELL ESTABLISHED THAT SHE WAS RESIDENT OF S AME HOUSE AS THAT OF THE ASSESSEE AND THE FACT THAT SHE WAS AN ADULT THE SERVICE OF NOTICE U/S 148 IS CORRECT AND VALID. 5. THUS, THE AO CONCLUDED THAT THE SERVICE OF NOTIC E U/S 148 OF THE ACT ON SMT. TEENA SHARMA WAS A CORRECT AND VALID S ERVICE, SINCE SMT. TEENA SHARMA WAS A RESIDENT OF THE SAME HOUSE AS T HAT OF THE ASSESSEE AND SHE WAS AN ADULT. 6. THE LD. CIT(A) CALLED FOR A REMAND REPORT ON THI S ISSUE. THE RELEVANT OBSERVATIONS HEREOF STAND REPRODUCED BY THE LD. CIT (A) IN THE IMPUGNED ORDER IN PARA 5.4 AND THE SAME ARE AS FOLLOWS: 1. ON SERVICE OF NOTICE U/S. 148 WHILE BANKING UPON A NUMBER OF OPPORTUNITIES GRANTE D TO ASSESSEE, THE ID. AO IS STRIVING HARD TO JUSTIFY SERVICE OF N OTICE U/S. 148 ON SMT TEENA SHARMA, AS A VALID. HE IS ALSO SEEKING TO REL Y UPON A JOINT ITA NO.182(ASR)/2014 A.Y. 2005-06 4 BANK ACCOUNT AS ALSO HER RELATIONSHIP WITH ASSESSEE , TO MAKE A POINT THAT SINCE SMT TEENA SHARMA WAS NOT A STRANGE R, THE SERVICE ON HER WAS GOOD IN LAW. BY FURTHER COMMENTING IT TO BE NOT SENSIBLE NOW TO FILE ADDITIONAL EVIDENCE SHOWING HER LIVING IN A SEPARATE HOUSE, THE ID.AO IS FURTHER REITERATING THAT SHE BE ING RESIDENT OF SAME VILLAGE AND HAVING SAME ADDRESS IN BANK ACCOUN T OPENING FORM, SERVICE OF NOTICE IN TIME CANNOT BE DENIED BY ASSESSEE ON ACCOUNT OF HER SEPARATE RESIDENCE. HE IS ALSO SEEKI NG TO TAKE ADVANTAGE OF THE APPEARANCE MADE BY ASSESSEE AS ALS O HIS COUNSEL BEFORE HIM ON COUPLE OF OCCASIONS, WHEN SERVICE OF NOTICE WAS NOT OBJECTED TO, WHICH TO HIS MIND, IS NOW AN AFTERTHOU GHT AND SO, DESERVES REJECTION ON THIS PREMISE. BE THAT AS IT MAY, THE ID.AO, WHILE COMMENTING AS A BOVE, HAS CONVENIENTLY CHOSEN TO MAINTAIN STARK SILENCE ON TH E PRELIMINARY ISSUE RAISED BY ASSESSEE AS TO HOW, EVEN WHEN HE IS NOW HIMSELF JUSTIFYING SERVICE OJ NOTICE ON SMT TEENA SHARMA, B Y RELYING UPON THE NRO BANK ACCOUNT OF ASSESSEE, WHICH FACT SHOWS BEYOND DOUBT THAT THE AO WAS AWARE OF THE NR1 STATUS OF THE ASSE SSEE BEFORE SERVICE OF NOTICE, HOW THE IMPUGNED NOTICE, STILL C AME TO BE ISSUED BY THE 1TO PHAGWARA, WHEN THE JURISDICTION OVER THIS C ASE, UNDISPUTEDLY VESTED WITH THE INTERNATIONAL TAXATION WING AT CHANDIGARH. THE ASSESSEE'S CLAIM THAT SUCH A SERVIC E BV 1TO PHAGWARA, WAS INTENDED ONLY TO SAVE TIME LIMITATION , ALSO GETS IMPLIEDLY APPROVED WITH THE AOS ACT OF REMAINING S ILENT TO REBUT THE SAME. NOW ALL THE POINTS TAKEN TO HIS STRIDE TO JUSTIFY S ERVICE OF NOTICE ON SMT TEENA SHARMA, WOULD NOT CARRY ANY WEIGHT, WHEN THE ASSESSEES SUPPORTING CONTENTIONS ON LAW AND FACTS TOUCHING THE ISSUE, AS DETAILED IN PARAS 2.1 TO 2.7 HAVE NOT INV ITED ANY COMMENT FROM THE ID. AO'S DESK. HOW THE ABOVE MANNER OF SER VICE FITTED INTO ANY OF THE PROVISIONS OF CPC, WHICH WERE SPECIFICAL LY QUOTED TO SHOW THE VIOLATION THEREOF HAS NOT BEEN SPELLED OUT EVEN REMOTELY. HOW SERVICE ON A RELATIVE LIVING IN SAME VILLAGE, BUT N OT IN SAME HOUSE, WOULD BE SERVICE ON A NON-RESIDENT ASSESSEE ? HOW, THE APPEARANCE BEFORE ITO PHAGWARA ON 18.6.12 AND 14.08.12, WHO WA S NOT EVEN VESTED WITH COMPETENT JURISDICTION, WOULD LEGALISE THE INVALID SERVICE MADE ON AN EARLIER POINT OF TIME ON 31.3.2012. RATH ER A LOOK AT THE ORDER SHEET, NOW SUVVLIED BY ID.AO AS ANNEX-6, WOUL D SHOW THAT ON 10.10.2012, WHEN HE RECEIVED THE CASE ON TRANSFER, HE URN' NOT EVEN POSSESSED OF THE BASIS ON WHICH NOTICE U/S. 148 WAS ISSUED. IT IS INDEED HIGHLY INTRIGUING HOW THE ID.AO IS NOW DEFEN DING HIS ACTION, WHEN THE FOUNDATIONAL DEFECTS HAVE REMAINED UNCURED . THE VITAL ASPECT OF APPOINTING AN AGENT U/S.163(1), WHEN THE ASSESSEE WAS NOT IN INDIA, AS TAKEN IN PARA 2.5 OF THE WRITTEN S UBMISSIONS, WAS ITA NO.182(ASR)/2014 A.Y. 2005-06 5 THE LEAST, THE AO SHOULD HAVE RESPONDED TO. NONE OF THE CASE LAWS CITED BY THE ID.AO TO SUPPORT HIS VERSION OF SERVIC E OF NOTICE, HAS FACTS IDENTICAL TO ONE OF THIS CASE. THE ASSESSEE H AS DISCHARGED HIS ONUS THAT NOTICE WAS NOT SERVED ON HIM BY LEADING T ANGIBLE EVIDENCE THAT SMT TEENA SHARMA WAS NEITHER HER AGENT, NOR HE R FAMILY MEMBER NOR LIVED IN THE SAME HOUSE. THUS ON SIMPLE AVERMENT OF A FEW DISPUTED FACTS, THE COMMENTS OF THE ID.AO ON TH E ISSUE, HAVE NO FORCE TO RECKON WITH 7. THE LD. CIT(A) DECIDED THE ISSUE AGAINST THE ASS ESSEE, HOLDING AS FOLLOWS: 5.5 I HAVE CONSIDERED THE OBSERVATIONS OF THE ASSES SING OFFICER AS MADE IN THE ASSESSMENT ORDER AS WELL AS REMAND REPORT ON THE ISSUE UNDER REFERENCE. I HAVE ALSO CONSIDERE D THE WRITTEN SUBMISSIONS OF THE ASSESSEE AS WELL AS HIS COUNTER COMMENTS ON THE REMAND REPORT OF THE ASSESSING OFFICER. I HAVE FURT HER CONSIDERED THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY THE ASSESSEE AND THE ASSESSING OFFICER. I HAVE AGAIN CONSIDERED THE OTHE R MATERIAL BROUGHT ON RECORD. ON CAREFUL CONSIDERATION OF THE REASONS MENTIONED IN THE APPLICATION OF THE ASSESSEE FOR AD MISSION OF ADDITIONAL EVIDENCE, REMAND REPORT OF THE ASSESSING OFFICER AND COUNTER COMMENTS OF THE ASSESSEE, 1 AM OF THE OPINI ON THAT THE REASONS CITED BY THE ASSESSEE FOR NOT PRODUCING THE ADDITIONAL EVIDENCE DURING THE COURSE OF ASSESSMENT PROCEEDING S ARE JUST AN AFTERTHOUGHT. IN MY OPINION, THE ASSESSEE AND HIS C OUNSEL ATTENDED THE ASSESSMENT PROCEEDINGS ON SOME DATES AND THE EV IDENCES WHICH HAVE NOW BEEN PRODUCED AS ADDITIONAL EVIDENCE COULD HAVE BEEN PRODUCED AT THAT TIME. MOREOVER, THERE IS NOTHING N EW IN THE ADDITIONAL EVIDENCES NOW BEING PRODUCED. THE ASSESS EE HAS ALSO NOT BROUGHT ANYTHING ON RECORD TO CORROBORATE THE F ACT THAT HE WAS ADVISED BY SOME COUNSEL WHO ADVISED HIM THAT THE PR OCEEDINGS IN HIS CASE ARE ILLEGAL AND LIKELY TO BE DROPPED. HENC E BONA-FIDE BELIEF OF THE ASSESSEE HAS NO BASIS. THE AFFIDAVIT FILED B Y THE ASSESSEE IS ALSO A SELF SERVING DOCUMENT AS IT HAS NOT BEEN SUP PORTED BY ANY THIRD PARTY EVIDENCE. THE CERTIFICATE FROM THE VILL AGE SARPANCH WILL ALSO NOT HELP THE ASSESSEE IN ANY WAY AS SMT. TEENA SHARMA WHO IS THE WIFE OF ASSESSEES NEPHEW IS CLOSELY RELATED TO THE ASSESSEE AND HAVING SEPARATE RESIDENCES WILL NOT MAKE ANY DI FFERENCE. IT HAS ALSO BEEN NOTICED THAT THE ASSESSEE ALONG WITH HIS TWO NEPHEWS NAMELY SH. SANJEEV KUMAR (HUSBAND OF SMT. TEENA SHA RMA) AND SH. SANDEEP KUMAR JOINTLY ENTERED INTO AN AGREEMEN T DATED 08.05.2004 WITH THE OWNERS OF THE CITY PLAZA COMPL EX TO PURCHASE THAT PROPERTY FOR RS.4 CRORES. THIS FACT ITSELF PRO VE THAT SMT. TEENA ITA NO.182(ASR)/2014 A.Y. 2005-06 6 SHARMA WAS NOT A STRANGER TO THE ASSESSEE AS HER HU SBAND JOINTLY WITH THE ASSESSEE ENTERED INTO AN AGREEMENT TO PURC HASE THE PROPERTY IN QUESTION. NOT ONLY THIS, THE ASSESSEE I S ALSO HAVING A JOINT ACCOUNT IN STATE BANK OF PATIALA, BARA PIND W ITH THAT OF SMT. TEENA SHARMA W/O LATE SH. SANJIV KUMAR AND SMT. SHI LPA W/O SH. SANDEEP KUMAR, THE WIVES OF OTHER TWO CO-EXECUTANTS OF THE AGREEMENT. THESE FACTS AGAIN PROVE THAT SMT. TEEN A SHARMA IS VERY CLOSELY RELATED TO THE ASSESSEE AND THE SERVIC E OF NOTICE U/S 148 OF THE ACT ON SMT. TEENA SHARMA IS A VALID SERV ICE. IN MY OPINION, THE OBJECTIONS RAISED BY THE ASSESSEE TO T HE SERVICE OF NOTICE IS JUST AN AFTERTHOUGHT. THE ASSESSING OFFICER HAS ALSO OBJECTED TO THE ADMISSION OF THE ADDITIONAL EVIDENCE ON THE GRO UND THAT THERE IS NOTHING NEW IN THE ADDITIONAL EVIDENCES AND THESE A RE NOT GOING TO HELP IN ANY WAY TO THE ASSESSEE. ON CAREFUL CONSIDE RATION ON THE FACTS ON RECORD, AND IN VIEW OF THE ABOVE DISCUSSIO N, 1 AM ALSO OF THE OPINION THAT THE ADMISSION OR NON ADMISSION OF ADDITIONAL EVIDENCES IS NOT GOING TO HELP THE ASSESSEE IN ANY WAY. HOWEVER, TO MEET THE END OF JUSTICE I, ADMIT THE ADDITIONAL EVI DENCE PRODUCED AT THE APPELLATE STAGE BUT NONE OF THE EVIDENCE PRODUC ED NOW WILL HELP THE ASSESSEE IN ANY WAY AND NO COGNIZANCE OF THESE EVIDENCES CAN BE TAKEN. IN MY OPINION, THE ASSESSING OFFICER HAS CLEARLY ESTABLISHED THAT SMT. TEENA SHARMA IS VERY CLOSELY RELATED TO THE ASSESSEE AND SERVICE OF NOTICE U/S 148 OF THE AC T ON HER ON 31.03.2012 IS A VALID SERVICE . I WOULD ALSO LIKE T O MAKE IT CLEAR THAT THERE IS NOTHING WRONG IN ISSUING THE NOTICE U/S 14 8 OF THE ACT BY 1TO, WARD-ILL, PHAGWARA AS PRIOR TO FILING OF RETUR N BY THE ASSESSEE IT WAS NOT IN HIS KNOWLEDGE THAT THE ASSESSEE IS A N NRL IN MY FURTHER OPINION THERE IS ALSO NOTHING WRONG IN | CO NTINUING THE SAME PROCEEDINGS BY THE ASSESSING OFFICER WHO FRAMED ASS ESSMENT. THE MOMENT, THE INCOME TAX OFFICER AT PHAGWARA CAME TO KNOW THAT THE JURISDICTION OVER THE CASE OF THE ASSESSEE LIES WIT H DEPUTY DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION), CHANDIGARH, HE IMMEDIATELY TRANSFERRED THE CASE RECORDS TO THE ASSESSING OFFIC ER AT CHANDIGARH. PRIOR TO THE FILING OF RETURN BY THE ASSESSEE NOBOD Y KNOWS THAT THE JURISDICTION OVER THE CASE OF THE ASSESSEE LIES WIT H INTERNATIONAL TAXATION, THE ASSESSEE BEING NRI. 5.6 IN THESE FACTS AND IN THE CIRCUMSTANCES OF THE CASE OF THE ASSESSEE, I AM OF THE CONSIDERED OPINION THAT THERE IS NOTHING WRONG IN THE SERVICE OF NOTICE U/S 148 OF THE ACT AS IT WAS VALIDLY SERVED ON SMT. TEENA SHARMA WHO IS CLOSELY RELATED TO THE ASSESSEE AND THE SERVICE OF NOTICE ON HER SHOULD BE TREATED AS SERVICE ON THE ASSESSEE. I AM ALSO OF THE OPINION THAT HAVING DIFF ERENT RESIDENCES IN THE SAME VILLAGE WILL NOT MAKE ANY DIFFERENCE AS S MT. TEENA SHARMA IS A CLOSE RELATIVE OF THE ASSESSEE. I ALSO HOLD THAT THE ASSESSMENT HAS ALSO BEEN FRAMED WITHIN PRESCRIBED T IME AS THE ITA NO.182(ASR)/2014 A.Y. 2005-06 7 NOTICE HAS BEEN FOUND TO BE SERVED WITHIN SPECIFIED TIME. IN THE RESULT, GROUNDS OF APPEAL NO. 1 & 2 TAKEN BY THE AS SESSEE ARE DISMISSED. 8. CHALLENGING THE ABOVE FINDINGS OF THE LD. CIT(A) ON THIS ISSUE, ON BEHALF OF THE ASSESSEE, IT HAS BEEN CONTENDED AS UN DER: 2.BY WAY OF SECOND GROUND, WITHOUT PREJUCIE TO THE OUTCOME OF FIRST GROUND OF APPEAL, SERVICE OF NOTICE U/S 148 H AS BEEN BROUGHT INTO DISPUTE. FIRSTLY, DURING THE RELEVANT PERIOD, ASSESSEE WAS NOT IN INDIA, AS EVIDENT FROM THE COPY OF HIS PASSPORT APP ENDED AT PG.19- 23. SO, IN HIS ABSENCE, AS DISCERNIBLE FROM THE IMP UGNED ORDER ITSELF, THE NOTICE U/S. 148 WAS SERVED ON ONE MRS TEENA SHA RMA, WHO NEITHER COMMUNICATED, NOR WAS SHE OBLIGED TO INTIMA TE SERVICE OF ANY WHO NEITHER COMMUNICATED, NOR WAS SHE OBLIGED T O INTIMATE SERVICE OF ANY NOTICE TO THE APPELLANT. IN THE COUR SE OF PROCEEDINGS BELOW, SERVICE OF NOTICE ON MRS TEENA SHARMA WAS DE NIED AND CHALLENGED, VIDE LETTER. DATED 22.01.2013, SHE NOT BEING AUTHORISED BY APPELLANT TO RECEIVE ANY NOTICE ON HIS BEHALF. A N ENDEAVOUR HAS BEEN MADE BY THE AO IN PARA 4 ON PAGE 3 OF THE ORD ER TO JUSTIFY THIS SERVICE AS VALID BY RELYING UPON A BANK A/C OPENING FORM, COLLECTED FROM STATE BANK OF PATAIAL, BARAPIND, TO THE EFFECT THAT ADDRESS OF THE ASSESSEE AS ALSO OF MRS TEENA SHARMA, AS GIVEN IN THE BANK ACCOUNT OPENING FORM, WAS OF VPO BARA PIND . IT IS NOT DISPUTED THAT THE ASSESSEE AS ALSO MRS TEENA SHARMA, WERE RESIDEN TS OF VILLAGE BARA PIND. BUT THE FACT IS THAT MRS TEENA SHARMA NE VER RESIDED IN THE HOUSE OF ASSESSEE IN VILLAGE BARA PIND. SHE BEI NG DAUGHTER-IN- LAW OF ASSESSEES'S BROTHER, RESIDED IN A SEPARATE H OUSE. THUS SHE WAS NEVER A MEMBER OF APPELLANT'S FAMILY SO THAT SE RVICE OF NOTICE ON HER COULD BE JUSTIFIED AS SERVICE ON ASSESSEE. A CERTIFICATE FROM THE VILLAGE SARPANCH IS APPENDED HEREWITH AT PG.24 AS ADDITIONAL EVIDENCE CERTIFYING THAT SMT TEERNA SHARMA, AND THE APPELLANT, RESIDED SEPARATELY IN THEIR RESPECTIVE HOUSES IN VI LLAGE BARA PIND. THIS CERTIFICATE IS PRAYED TO ADMITTED UNDER RULE 4 6A(1), AS ITS NECESSITY AROSE ONLY AFTER THE EARLIER REQUEST MADE IN ASSESSMENT THAT MRS TEENA SHARMA DID NOT RESIDE IN APPELLANT'S HOUSE, STOOD REJECTED BY THE AO. 2.1 HON'BLE SUPREME COURT IN CALCUTTA DISCOUNT CO. LTD., V. ITO (1961) 41 ITR 191 (SC) HELD THAT A NOTICE PRESCRIBE D UNDER SECTION 148 OF THE ACT F OR INITIATING REASSESSMENT PROCEEDINGS IS NOT A MER E PROCEDURAL REQUIREMENT; THE SERVICE OF THE PRESCRIB ED NOTICE ON THE ASSESSEE IS A CONDITION PRECEDENT TO THE VALIDITY O F ANY REASSESSMENT MADE UNDER SECTION 147. IF NO NOTICE I S ISSUED OR IF THE ITA NO.182(ASR)/2014 A.Y. 2005-06 8 NOTICE ISSUED IS SHOWN TO BE INVALID THEN THE PROCE EDINGS TAKEN BY THE INCOME-TAX OFFICER WITHOUT A NOTICE OR IN PURSU ANCE OF CM INVALID NOTICE WOULD BE ILLEGAL AND VOID.-SEE ALSO THE DECI SION OF THE SUPREME COURT IN NARAYAN CHETTV V. INCOME-TAX OFFIC ER, NELLORE, (1959) 35 I T R 383: (A I R 1959 S C 213). 2.2. SIGNIFICANTLY, SERVICE OF STATUTORY NOTICES, W HICH PROVIDE JURISDICTION TO ANY AUTHORITY, TO SADDLE THE ASSESS EE WITH CIVIL CONSEQUENCES, HAS TO BE STRICTLY ENSURED IN THE MAN NER PRESCRIBED U/S.282(1) OF I.T ACT, 1961, WHICH MANDATES SERVICE OF NOTICE ON THE PERSON THEREIN NAMED EITHER BY POST O R AS IF IT WERE A SUMMONS ISSUED BY A COURT UNDER THE CODE OF CIVIL PROCEDURE , 1908(5 OF 1908). THE RELEVANT PROVISIONS OF THE CPC THEREFORE , AS APPLICABLE TO THE FACTS OF THIS CASE, CALL FOR A CLOSE LOOK: -ORDER V, OF THE CODE OF CIVIL PROCEDURE, 1908 RULE 12 - SERVICE TO BE ON DEFENDANT IN PERSON WHEN PRACTICABLE, OR ON HIS AGENT 'WHEREVER IT IS PRACTICABLE., SERVICE SHELL BE MADE ON THE DEFENDANT, UNLESS HE HAS AN AGENT EMPOWERED TO ACCE PT SERVICE, IN WHICH CASE SERVICE ON SUCH AGENT SHALL BE SUFFICIEN T'. RULE 16 - PERSON SERVED TO SIGN ACKNOWLEDGEMENT - W HERE THE SERVING OFFICE DELIVERS OR TENDERS A COPY OF THE SU MMONS TO THE DEFENDANT PERSONALLY, OR TO AN AGENT OR OTHER PERSO N ON HIS BEHALF, HE SHALL REQUIRE THE SIGNATURE OF THE PERSON TO WHO M THE COPY IS SO DELIVERED OR TENDERED TO AN ACKNOWLEDGMENT OF SERVI CE ENDORSED ON THE ORIGINAL SUMMONS. RULE 17 - PROCEDURE WHEN DEFENDANT REFUSES TO ACCEP T SERVICE, OR CANNOT BE FOUND - WHERE THE DEFENDANT OR HIS AGENT OR SUCH OTHER PERSON AS AFORESAID REFUSES TO SIGN THE ACKNOLWEDGM ENT, OR WHERE THE SERVING OFFICER, AFTER USING ALL DUE AND REASON ABLE DILIGENCE CANNOT FIND THE DEFENDANT, WHO IS ABSENT FROM HIS RESIDENCE AT THE TIME WHEN SERVICE IS SOUGHT TO BE EFFECTED ON HIM A T HIS RESIDENCE AND THERE IS NO LIKELIHOOD O F 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 RNADE. THE SERVING OFFICER SHALL AFF IX 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 TH EN RETURN THE ORIGINAL TO THE COURT FROM WHICH IT WAS ISSUED, WIT H A REPORT ENDORSED THEREON OR ANNEXED THERETO STATING THAT HE HAS SO AFFIXED THE COPY, THE CIRCUMSTANCES UNDER WHICH HE DID SO, AND THE NAME AND ADDRESS OF THE PERSON, IF ANY, BY WHOM THE HOUS E WAS IDENTIFIED AND IN WHOSE PRESENCE THE COPY WAS AFFIX ED. ITA NO.182(ASR)/2014 A.Y. 2005-06 9 RULE 18 - ENDORSEMENT CF TIME AND MANNER OF SERVICE - THE SERVING OFFICER SHALL IN ALL CASES IN WHICH THE SUM MONS HAS BEEN SERVED UNDER RULE 16, ENDORSE OR ANNEX, OR CAUSE TO BE ENDORSED OR ANNEXED, ON OR TO THE ORIGINAL SUMMONS, A RETURN ST ATING THE TIME WHEN AND THE MANNER IN WHICH THE SUMMONS WAS SERVED AND THE NAME AND ADDRESS OF THE PERSON, IF ANY, IDENTIFYING THE PERSON SERVED AND WITNESSING THE DELIVERY OR TENDER OF THE SUMMONS. RULE 19 - EXAMINATION OF SERVING OFFICER - N.A. RULE 20 - SUBSTITUTED SERVICE - (1) WHERE THE COURT IS SATISFIED THAT THERE IS REASON TO BELIEVE THAT THE DEFENDANT IS KE EPING OUT OF THE WAY FOR THE PURPOSE OF AVOIDING SERVICE, OR THAT FO R ANY OTHER REASON, THE SUMMONS CANNOT BE SERVED IN THE ORDINARY WAY, T HE COURT SHALL ORDER THE SUMMONS TO BE SERVED BY AFFIXING A COPY T HEREOF IN SOME 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 O R PERSONALLY WORKED FOR GAIN, OR IN SUCH OTHER MANNER AS THE COU RT THINKS FIT. (1A) - WHERE THE COURT ACTING UNDER SUB- RULE (1) O RDERS SERVICE BY AN ADVERTISEMENT IN A NEWSPAPER, THE NEWSPAPER SHALL B E A DAILY NEWSPAPER, CIRCULATING IN THE LOCALITY IN WHICH THE DEFENDANT IS LAST KNOWN TO HAVE ACTUALLY AND VOLUNTARILY RESIDED CARR IED ON BUSINESS OR PERSONALLY WORKED FOR GAIN. (2) EFFECT OF SUBSTITUTED SERVICE - SERVICE SUBSTIT UTED BY ORDER OF THE COURT SHALL BE AS EFFECTUAL AS IF IT HAS BEEN M ADE ON THE DEFENDANT PERSONALLY. NOW IF THE FACTS OF THE PRESE NT CASE ARE TESTED ON THE TOUCHSTONE OF ABOVE MENTIONED RULES O ORDER V OF THE CPC, IT IS THE SECOND LIMB OF RULE 17, DEALING WITH THE DEF ENDANT WHO CANNOT BE FOUND, WHICH DIRECTLY COMES INTO PLAY. THE LANGU AGE IS EXPLICIT ENOUGH NOT TO BE QUOTED AGAIN. IT MANDATES SERVICE BY AFFIXTURE ON THE OUTER DOOR OR SOME OTHER CONSPICUOUS PART OF TH E HOUSE IN WHICH THE DEFENDANT ORDINARILY RESIDES AND THE ORIGINAL T O BE RETURNED TO COURT WITH THE REPORT ENDORSED THEREON STATING THE CIRCUMSTANCES UNDER WHICH AFFIXTURE MADE AND NAME/ADDRESS OF THE PERSON IF ANY BY WHOM THE HOUSE WAS IDENTIFIED AND WHO WITNESSED THE AFFIXTURE OF NOTICE. IMPORTANTLY, THE SECOND LIMB OF RULE 17, ALSO MANDATES AS A PRECONDITION BEFORE IT IS GIVEN RECOURSE TO - THA T THE FAILURE OF SERVING OFFICER TO FIND THE DEFENDANT - SHOULD BE S UBSEQUENT TO HIS USING ALL DUE AND REASONABLE DILIGENCE. 2.4 A CURSORY LOOK AT THE ORDER IMPUGNED, AS ALSO T HE OTHER MATERIAL ON RECORD, SHOWS THAT NONE OF THE ESSENTIAL INGREDI ENTS OF RULE 12 OR RULE 17 WERE EVEN REMOTELY TAKEN CARE OF TO ENSURE PROPER SERVICE OF THE STATUTORY NOTICE U/S.148 DATED 29.03.2012. AS P ER RULE 12, ITA NO.182(ASR)/2014 A.Y. 2005-06 10 SERVICE OF NOTICE HAS TO BE EFFECTED ON DEFENDANT O R HIS AGENT. IT HAS NOT BEEN UNFOLDED IN THE ORDER, AS TO UNDER WHAT CI RCUMSTANCES AND AT WHOSE INSTANCE, THE NOTICE WAS SERVED ON MRS TEE NA SHARMA HOW SHE WAS FOUND TO BE AN AUTHORISED PERSON OR AGE NT OF THE APPELLANT, WHEN THE APPELLANT WAS NOT FOUND AT HIS RESIDENCE. THE MOMENT THE ITO PHAGWARA LEARNT THAT APPELLANT WAS N OT IN INDIA, IT WAS ENOUGH A TRIGGER TO PUT HIM ON ALERT TO EXERCIS E DUE AND REASONABLE DILIGENCE IN THE MATTER AS ENVISAGED UND ER RULE 17 SUPRA, TO SERVE THE NOTICE BY AFFIXTURE AT HIS RESI DENCE RATHER THAN ALLOWING THE NOTICE TO BE SERVED ON ANY OTHER UNAUT HORISED PERSON IN THE VILLAGE. WHEN THE ASSESSEE WAS NOT FOUND AT HIS RESIDENCE, THE LEAST EXPECTED OF THE ITO WAS TO PUT IN MORE EFFORT S FIRST TO SATISY THAT THE APPELLANT COULD NOT BE FOUND AND WAS LIKEL Y NOT TO BE FOUND AT THE GIVEN ADDRESS WITHIN A REASONABLE TIME, AND THERE BEING NO AGENT EMPOWERED TO ACCEPT SERVICE OF NOTICE, THEN T O EFFECT SERVICE BY AFFIXTURE, AFTER MEETING FURTHER REQUIREMENTS THERE FORE AS ENSHRINED IN LAW. BUT, IN THIS CASE, OBLIVIOUS OF ALL THE ABO VE LEGAL MANDATES, THE NOTICE WAS ALLOWED TO BE SERVED ON A THIRD PERS ON, OUT OF THE ANXIETY OF THE ITO PHAGWARA TO ENSURE SERVICE ON OR BEFORE 31.3.2013, THAT BEING THE LAST DATE, AS IF IT WAS A NECESSARY FORMALITY. THIS MANNER OF SERVICE ON LAST DATE, TO SAVE LIMITATION, WAS NOT APPROVED BY HOIVBLE P&H HIGH COURT IN THE C ASE OF CIT V KISHAN CHAND 328 ITR 173 (P&H), WHERE ALSO, THE NOT ICE SERVED BY AFFIXTURE, WITHOUT MEETING THE LEGAL FORMALITIES , ON THE LAST DATE, WAS HELD TO BE BAD IN LAW. IN THE CASE OF CIT V MAM KAKAR (2009) 18 DTR (DEL)145, WHERE NOTICE U/S 148 WAS FOUND NOT SERVED, NOT ONLY THE ASSESSMENT WAS QUASHED, BUT EVEN THE BENEF IT OF SECTION 292BB, AS SOUGHT FOR BY THE REVENUE WAS NOT ALLOWED , HOLDING THAT IT WAS APPLICABLE FROM 1.4.2008 WHEREAS THE YEAR UN DER CONSIDERATION WAS AY 2001-- 02. HON'BLE DELHI HIGH COURT IN CIT VS. HOTLINE INTERNATIONAL (2008) 296 ITR 333 (DELHI) HE LD THAT WHERE THE NOTICE U/S. 148 WAS NOT SERVED ON ASSESSEE OR HIS A GENT, NOR THE SAME WAS REFUSED BY EITHER OF THEM THE REASSESSMEN T PROCEEDING* WERE BAD IN LEW. IN THE FLF HATEL BLUE MOON 321 ITR 302(SC), WHERE THE NOTICE U/S.143(2) WAS NOT SERVED ON ASSESSEE, T HE BLOCK ASSESSMENT WAS HELD TO BE BAD. USEFUL SUPPORT CAN A LSO BE DRAWN FROM 173 ITR LO(ORISSA); 194 ITR 748(AII); & CIT V MINTU KALITA (2002) 253 ITR 334(GAU) AL ! SUPPORTING THE APPELLANT'S ABOVE CONTENTION. IN A VERY RECENT DECISION DT 21.06.2013 , THE ITAT DELHI 'B' BENCH, IN THE CASE OF SHRI CHETAN GUPTA V ACIT CC-5, DELHI, HA NO.1891,1892 & 1893/DEL/2012, FOLLOWING THE DECISIO N O DELHI HIGH COURT IN HOTLINE INTERNATIONAL AND HOTEL BLUE MOON (SC) SUPRA, HELC THAT NOTICE U/S. 148 SERVED ON ONE MR VED PARK ASH, WHO WAS NEITHER AN EMPLOYEE NOR AN AUTHORISED AGENT OF ASSE SSEE, WAS INVALID AND HENCE THE REASSESSMENT WAS QUASHED. ITA NO.182(ASR)/2014 A.Y. 2005-06 11 2.5 FURTHERMORE, THIS BEING A CASE OF NON-RESIDENT, WHICH FACT WAS ALREADY ON RECORD WITH THE AUTHORITIES BELOW, PROCE DURE AS LAID DOWN IN SECTION 163(1), OUGHT TO HAVE BEEN GIVEN RECOURSE TO, BY APPOINTING SOMEONE, MAY BE MRS TEENA SHARMA, IF THE ITO WAS SATISIFED THAT SHE COULD BE SO APPOINTED AS AGENT OF THE NON RESIDENT, AFTER DUE NOTICE TO SUCH PERSON. BUT, HER E ALSO THE LOWER AUTHORITIES HAVE FAILED ON ALL COUNTS. THEREFORE, B Y ANY RECKONING SERVICE OF NOTICE ON A THIRD PERSON, NOT AUTHORISED BY APPELLANT, IS BAD I N LAW, AND SUCH A SERVICE COULD NOT IPSO FACTO, VES T JURISDICTION IN ME ITO PHAGWARA TO PURSUE THE MATTER ANY MORE . 2.6 IT MAY WELL BE SIGNIFICANT TO MENTION AT THIS V ERY JUNCTURE THAT EVEN THE PROVISIONS OF SECTION 292BB WOULD ALSO NOT COME TO THE RESCUE OF REVENUE, INASMUCH AS IT IS A CASE, WHERE ON RECEIPT OF A SUBSEQUENT NOTICE, THE OBJECTION AS TO NON SERVICE OF NOTICE U/S.148 ON ASSESSEE, WAS DULY RAISED BEFORE THE ITO/DIT, WE LL BEFORE THE PASSING OF IMPUGNED ORDER. HENCE, EVEN ON THIS COUN T, THE APPELLANT'S CASE STAND TO BE FULLY ENDORSED. 2.7 TO SUM UP, THE FACTS NARRATED HEREINABOVE, THE RELEVANT PROVISIONS OF CPC AND THE AUTHORITIES RELIED UPON, CONCLUSIVELY ESTABLISH OF A SERIOUS INFIRMITY HAVING OCCURRED IN THE SERVICE OF STATUTORY NOTICE. AS A RESULT THEREOF, THE IMPUGNED ORDER DESERVES TO BE HELD AS VOID, HAVING BEEN PASSED BY THE AO WITHO UT ASSUMING PROPER JURISDICTION. 9. RELIANCE HAS BEEN PLACED ON THE FOLLOWING DECISI ONS: I) M/S. ASHOKA INDUSTRIAL CORPORATION VS. INCOME T AX OFFICER, ITAT, AMRITSAR (SMC) BENCH, ITA NO.694(ASR)/2014 FO R THE A.Y. 2004-05, DATED 18.11.2015 (COPY PLACED ON RECO RD). II) DCIT VS. USHA STUD & AGRICULTRUAL FARMS (P) LT D, DELHI BENCH OF THE TRIBUNAL, (AUTHORED BY THE JM VIDE ORD ER DATED 25.10.2013) IN ITA NO.910 TO 912/DEL/2010 (COPY PLA CED ON RECORD. III) GURCHARAN SINGH OF S. DALIP SINGH VS. I.T.O, WARD 2(II), AMRITSAR BENCH OF THE TRIBUNAL VIDE ORDER DATED 19. 02.2015, PASSED IN ITA NO.331/ASR/2014 FOR THE A.Y. 2006-07 (AUTHORED BY THE JM) (COPY PLACED ON RECORD). ITA NO.182(ASR)/2014 A.Y. 2005-06 12 IV) HIND BOOK HOUSE VS. I.T.O., 92 ITD 415 (DEL. TRIB .) V) CIT VS. RAJESH KUMAR SHARMA, 311 ITR 235 (DEL.) VI) DINA NATH VS. CIT, 204 ITR 667 VII) BHAGIRATH RAJPUT VS. CIT, 36 DTR 372 VIII) CIT VS. HOTLINE INTERNATIONAL (P) LTD., 296 ITR 3 33 (DEL.) 10. ON THE OTHER AND, THE LD. DR RELIED ON THE IMPU GNED ORDER ON THIS ISSUE. 11. THE FACTS ARE NOT DISPUTED. THE NOTICE U/S 148 WAS SERVED NOT ON THE ASSESSEE, BUT ON SMT. TEENA SHARMA WHO IS A CLO SE RELATIVE OF THE ASSESSEE, STAYING IN THE SAME HOUSE AS THAT OF THE ASSESSEE. THE QUESTION IS TO WHETHER THIS SERVICE IS IN ACCORDANC E WITH LAW. IN THE CASE OF DCIT VS. USHA STUD & AGRICULTURAL FARMS (P) LTD ., ITAT, DELHI BENCH, IN ITA NOS. 910 TO 912/DEL/2010, VIDE ORDER DATED 2 5.10.2013, HAS DISCUSSED THE ISSUE, AS FOLLOWS: 6.4 NOW, REFERENCE IS TO BE MADE TO THE RELEVANT S TATUTORY PROVISIONS IN THIS REGARD. FIRSTLY, I REFER TO SUB-SECTION (1) OF SECTION 148 WHICH READS AS UNDER: '148(1) BEFORE MAKING THE ASSESSMENT, REASSESSMENT OR RECOMPUTATION UNDER SECTION 147 THE ASSESSING OFFICER SHALL SERVE ON THE ASSESSEE A NOTICE REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE A RETURN OF HIS INCOME OR HE INCOME OF A NY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DU RING THE PREVIOUS YEAR CORRESPONDING TO THE RELEVANT ASSESSMENT YEAR, IN T HE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING F ORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED, AND THE PROVISION S OF THIS ACT SHALL, SO FAR AS MAY BE APPLY ACCORDINGLY AS IF SUCH RETURN W ERE A RETURN REQUIRED TO BE FURNISHED SECTION 139.' THUS, THE MANDATE OF SECTION 148 IS THAT NOTICE SHO ULD BE SERVED ON THE ASSESSEE. 6.5 IN REGARD TO SERVICE OF NOTICE, REFERENCE IS MA DE TO SECTION ITA NO.182(ASR)/2014 A.Y. 2005-06 13 282. SECTION 282 PRESCRIBES SPECIFIC MODE OF SERVIC E OF NOTICE. THIS SECTION READS AS UNDER: '282(1) A NOTICE OR REQUISITION UNDER THIS ACT MAY BE SERVED ON THE PERSON THEREIN NAMED EITHER BY POST OR AS IF IT WERE A SUMMONS ISSUED BY A COURT UNDER THE CODE OF CIVIL PROCEDURE , 1908 (5 OF L908).' A BARE READING OF THIS SECTION CLEARLY INDICATES TH AT THE NOTICE UNDER THE ACT CAN BE SERVED ON THE PERSON EITHER BY POST OR I F NOT BY POST THEN IN THE SAME MANNER IN WHICH SUMMONS ISSUED BY THE COUR T UNDER OR THE CODE OF CIVIL PROCEDURE, 1908 ARE TO BE SERVED. AS THE SERVICE OF S THROUGH NOTICE SERVER OF THE DEPARTMENT AND NOT BY POST, THE PROCEDURE CONTEMPLATED BY THE CODE OF CIVIL PROCEDURE UNDER O RDER V FOR SERVICE OF BEEN FOLLOWED. ORDER V AND III OF CODE OF CIVIL PRO CEDURE ARE RELEVANT IN THIS REGARD AND WE REPRODUCE RELEVANT RULES FROM TH E SAID ORDER IN ORDER TO DECIDE BEEN EFFECTED IN ACCORDANCE WITH LAW OR N OT. RULE 6 OF ORDER III IS RELEVANT TO FIND OUT AS TO W HO MAY BE APPOINTED AS AGENTS TO ACCEPT SERVICE OF PROCESSES AND HOW. THAT PROVISION IS AS FOLLOWS: '(1) BESIDES THE RECOGNIZED AGENTS DESCRIBED IN RUL E 2 ANY PERSON RESIDING WITHIN THE JURISDICTION OF THE COURT MAY BE APPOINT ED AN AGENT TO ACCEPT SERVICE OF PROCESS. (2) SUCH APPOINTMENT MAY BE SPECIAL OR GENERAL AND SHALL BE MADE BY AN INSTRUMENT IN WRITING SIGNED BY THE PRINCIPAL, AND HUTCH INSTRUMENT, OR, IF THE APPOINTMENT IS GENERAL, A CERTIFIED COPY THE RE P1[SHALL BE FILED IN COURT'. RULE 9(1) OF ORDER V 'WHERE THE DEFENDANT RESIDES W ITHIN THE JURISDICTION OF THE COURT IN WHICH THE SUIT IS INSTITUTED, OR HA S AN AGENT RESIDENT WITHIN THAT JURISDICTION WHO IS EMPOWERED TO ACCEPT THE SERVICE OF THE SUMMONS, THE SUMMONS SHALL, UNLESS THE COURT OTHERW ISE DIRECTS, BE DELIVERED OR SENT TO THE PROPER OFFICE TO BE SERVED BY HIM OR ONE OF HIS SUBORDINATES,' RULES 12,13,15,16 & 18 OF ORDER V 12. SERVICE TO B E ON DEFENDANT IN PERSON WHEN PRACTICABLE; OR ON HIS AGENT - WHEREVER IT IS PRACTICABLE, SERVICE MALL BE MADE ON THE DEFENDANT IN PERSON, UN LESS HE HAS AN AGENT EMPOWERED TO ACCEPT SERVICE, IN WHICH CASE SERVICE ON SUCH AGENT SHALL BE SUFFICIENT. 13. SERVICE ON AGENT BY WHOM DEFENDANT CARRIES ON B USINESS - (1) IN A SUIT RELATING TO ANY BUSINESS OR WORK AGAINST A PER SON WHO DOES NOT RESIDE WITHIN THE LOCAL LIMITS OF THE JURISDICTION OF THE COURT FROM WHICH THE SUMMONS IS ISSUED, SERVICE ON ANY MANAGER OR E OF SERVICE, PERSONALLY CARRIES ON SUCH BUSINESS OR WORK FOR SUC H ITS, SHALL BE DEEMED GOOD SERVICE. ITA NO.182(ASR)/2014 A.Y. 2005-06 14 15. WHERE SERVICE MAY BE ON AN ADULT MEMBER OF DEFE NDANTS FAMILY WHERE IN ANY SUIT THE DEFENDANT IS ABSENT FROM HIS RESIDENCE AT THE TIME WHEN THE SERVICE OF SUMMONS IS SOUGHT TO HIS RESIDE NCE AND THERE IS NO LIKELIHOOD OF HIS BEING FOUND AT THE REASONABLE TIM E AND HE HAS NO AGENT EMPOWERED TO ACCEPT SERVICE OF THE IF SERVICE MAY B E MADE ON ANY ADULT MEMBER OF THE FAMILY, WHETHER RESIDING WITH HIM. 16. PERSON SERVED TO SIGN THE ACKNOWLEDGEMENT WHE RE THE SERVICE OFFICER SERVES OR TENDERS A COPY OF THE SUMMON TO T HE DEFENDANT PERSONALLY, OR TO AN AGENT OR TO OTHER PERSON ON HI S BEHALF HE SHALL REQUIRE THE SIGNATURE OF THE PERSON TO WHOM THE COP Y IS SO DELIVERED OR TENDERED TO AN ACKNOWLEDGEMENT OF SERVICE ENDORSED ON THE ORIGINAL SUMMONS. 18. ENDORSEMENT OF TIME AND MANNER OF SERVICE THE SERVING OFFICER SHALL, IN ALL CASES IN WHICH THE SUMMONS HAS BEEN S ERVED UNDER RULE 16, ENDORSE OR ANNEX, OR CAUSE TO BE ENDORSED OR ANNEXE D, ON OR TO THE ORIGINAL SUMMONS, A RETURN STATING THE TIME WHEN AN D THE MANNER IN WHICH THE SUMMONS WAS SERVED AND THE NAME AND ADDRE SS OF THE PERSON (IF ANY) IDENTIFYING THE PERSON SERVED AND WITNESSI NG THE DELIVERY OR TENDER OF THE SUMMONS.' 6.6 FROM RULE 6 OF ORDER III REPRODUCED ABOVE, IT I S EVIDENT THAT WRITTEN, AUTHORITY TO RECEIVE NOTICE IS NECESSARY EITHER BY WAY OF SPECIAL OR GENERAL POWER GIVEN IN THIS REGARD. THE PERSON SHOULD HAVE BEEN SPECIFICALLY EMPOWERED TO RECEIVE NOTICE, FROM THE ANALYSIS OF T HE RULES REPRODUCED ABOVE IT IS EVIDENT THAT THE MANDATE OF LEGISLATURE IS THAT AS FAR AS POSSIBLE THE SERVICE OF SUMMONS SHOULD BE EFFECTED ON THE PERSON NAMED IN THE NOTICE AND, IF IT IS NOT POSSIBLE, THEN SAME SHOULD BE EFFECTED ON THE PERSON WHO IS DULY VESTED WITH THE AUTHORITY TO RECEIVE SUCH NOTICE BY THE PERSON NAMED IN THE SUMMON. THE LEGISLATURE HAS FURTHER PROVIDED THAT IN ORDER TO ENSURE PROPER SERVICE OF NOTICE ACKNOWLEDGEMENT OF THE PERSON SERVED SHOULD BE OBTA INED AND PERSON SERVING SHOULD ALSO RECORD NECESSARY DETAILS SO AS TO AVOID ANY DISPUTE IN THIS REGARD. 6.7 IT IS SETTLED LAW THAT IT IS THE DUTY OF THE RE VENUE TO ESTABLISH THAT THE SERVICE OF AN ORDER OR A NOTICE WAS MADE ON THE ASS ESSEE HIMSELF OR ON SOMEBODY DULY AUTHORIZED BY HIM IN THAT BEHALF. WHE N THE ASSESSEE PLEADS THAT HE HAS NOT BEEN PROPERLY SERVED WITH AN Y NOTICE, IT IS FOR THE DEPARTMENT TO PLACE THE RELEVANT MATERIAL TO SUBSTA NTIATE THE PLEA THAT THE ASSESSEE WAS SERVED WITH PRIOR NOTICE. IN THE P RESENT CASE, NO MATERIAL IS ON RECORD TO SHOW THAT THE PERSON TO WH OM THE NOTICE IS ALLEGED TO HAVE BEEN SERVED WAS SPECIFICALLY AUTHOR IZED TO RECEIVE NOTICE, RATHER THAT PERSON IS NOT IDENTIFIABLE. TILL DATE D ESPITE REPEATED REQUESTS MADE ON BEHALF OF THE APPELLANT AND EVEN AFTER INST RUCTIONS BY THE UNDERSIGNED, THE A,O, HAS NOT BEEN ABLE TO NAME THE PERSON TO WHOM THE NOTICE WAS SERVED. THE MOST FUNDAMENTAL REQUIREMENT ON SERVICE HAS NOT BEEN ESTABLISHED. IF NOTICE IN SOME WAY OR THE OTHE R REACHED THE ASSESSEE ITA NO.182(ASR)/2014 A.Y. 2005-06 15 THEN IT CANNOT BE TREATED AS PROPER SERVICE OF NOTI CE SINCE STATUTE PRESCRIBES SPECIFIC MODE OF SERVICE TO BE FOLLOWED. WHEN THE STATUTE PROVIDES THAT A NOTICE SHOULD BE SERVED IN A PARTIC ULAR MODE, IT IS NOT POSSIBLE TO HOLD THAT THERE HAS BEEN A PROPER SERVI CE OF NOTICE MERELY FROM THE FACT THAT THE PERSON TO WHOM THE NOTICE HA D BEEN ADDRESSED HAD RECEIVED THE NOTICE THROUGH SOME OTHER SOURCE O R THAT HE HAS BECOME AWARE OF THE CONTENTS OF THE NOTICE. IN PAPA RRUNA RAO V. REVENUE DIVISIONAL OFFICER AIR 1918 MAD. 589, A DIVISION BE NCH OF MADRAS HIGH COURT WHILE DEALING WITH THE MANNER OF SERVICE CONT EMPLATED BY SECTION 45(2) OF THE LAND ACQUISITION ACT, WHICH ALSO ATTRA CTS THE PROVISIONS OF THE CODE OF CIVIL PROCEDURE, IN 1-HP, MATTER OF SER VICE OF NOTICES, EXPRESSED THE VIEW THAT UNLESS A PERSON IS APPOINTE D AS AGENT O ACCEPT SERVICE OF PROCESSES BY AN INSTRUMENT IN WRITING SI GNED BY THE PRINCIPAL, THE SERVICE ON HIM CANNOT BE SAID TO BE VALID. THE VIEW TAKEN IN THAT CASE WAS THAT AN ORAL AUTHORITY IS NOT SUFFICIENT BUT TH ERE SHOULD BE A WRITTEN AUTHORITY. SIMILAR VIEW HAS BEEN TAKEN IN CIT V. BA XIRARN RODMAL [1934] 2 ITR 438 (NAG.), CIT V. DEY BROTHERS [1935] 3 ITR 213 (RANG.) AND C.N. NATARAJ V. FIFTH ITO [1965] 56 ITR 250 (MYS.). IN C IT V. BAXIRAM RODMAL [194] 2 ITR 438 (NAG.) IT HAS BEEN HELD THAT THE ME RE FACT THAT A PERSON HAD ACCEPTED NOTICES ON BEHALF OF THE ASSESSEE ON P REVIOUS OCCASIONS AND APPEARED FOR THE ASSESSEE WOULD NOT CONSTITUTE HIM AN AGENT ON WHOM A NOTICE OR REQUISITION UNDER THE ACT WOULD BE VALIDL Y SERVED NOR WOULD ANY STATEMENT MADE BY HIM BIND THE ASSESSEE. IN C.N. NA TARAJ V. FIFTH ITO ([1965] 56 ITR250, THE MYSORE HIGH COURT TOOK THE V IEW THAT THE SERVICE OF NOTICE UNDER SECTION 148 ON A CLERK OF THE ASSES SEE'S FATHER WHO WAS NEITHER AN AGENT OF THE ASSESSE NOR AUTHORIZED BY H IM TO ACCEPT NOTICES ON HIS BEHALF WAS NOT VALID AND, THEREFORE, THE ASS ESSEE WOULD NOT BE ASSESSED UNDER SECTION 147 IN PURSUANCE OF SUCH SER VICE OF NOTICE 6.8 THUS, IN ORDER THAT THERE SHOULD BE A VALID SERVICE , THE PERSON ON WHOM SERVICE IS EFFECTED MUST HAVE VALID AUTHORIZATION G IVEN TO HIM IN WRITING TO RECEIVE SUCH NOTICE AND MERE IMPLIED AUTHORITY W ILL NOT BE ENOUGH. ALTERNATIVELY, IF FOR ARGUMENT SAKE, IT IS TO BE HE LD THAT IMPLIED AUTHORITY IS SUFFICIENT FOR SERVICE OF NOTICE, THEN THAT TOO IS NOT PRESENT IN THE PRESENT CASE. IT IS ALSO NOT THE CASE WHERE THE ASS ESSEE HAS AVOIDED THE SERVICE OF NOTICE ON HER. EVEN IN THE SITUATION WHE RE THE ASSESSEE WOULD HAVE AVOIDED THE SERVICE OF NOTICE, AS PER ORDER V, RULE 20 OF CODE OF CIVIL PROCEDURE, IT IS THE DUTY OF THE DEPARTMENT TO DISC HARGE ITS ONUS SHOWING THAT THE AUTHORITY CONCERNED HAS REASON TO BELIEVE THAT THE ASSESSEE WAS KEEPING OUT OF THE FOR THE PURPOSE OF AVOIDING SERV ICE OR THAT OTHERWISE THERE WERE OTHER GOOD REASONS TO COME TO THE CONCLU SION THAT THE NOTICE COULD NOT BE SERVED IN THE ORDINARY WAY. 6.9 THE RATIO OF THE DECISIONS CITED ABOVE HAD ALSO BEEN CONSISTENT THAT ACQUIESCENCE IS NOT GOING TO CONFER JURISDICTION WH ICH OTHERWISE IS LACKING FROM THE VERY BEGINNING. AS OBSERVED EARLIE R, THE ASSESSING OFFICER CAN PROCEED TO COMPLETE THE RE- ASSESSMENT ONLY WHEN HE ISSUED NOTICE AND SERVED THE SAME ON THE ASSESSEE. IN VIEW OF THESE FINDINGS, THE ASSESSING OFFICER CANNOT ASSUME JURISDICTION TO COM PLETE ASSESSMENT FOR WANT OF NOTICE EVEN THOUGH ASSESSEE HAD APPEARED BE FORE HIM AND FILED RETURN AND ALSO PARTICIPATED IN THE REASSESSMENT PR OCEEDINGS. THE ITA NO.182(ASR)/2014 A.Y. 2005-06 16 PROCEDURAL IRREGULARITIES CAN BE WAIVED, OFF BY THE ASSESSEE, BUT AT THE SAME TIME THE CONDUCT THE ASSESSEE IN PARTICIPATING IN ASSESSMENT PROCEEDINGS WILL NOT BE SUFFICIENT TO CONFER THE JU RISDICTION ON THE ASSESSING OFFICER WITHOUT SERVICE OF NOTICE ON THE ASSESSEE. IT WAS FUNDAMENTAL REQUIREMENT TO GET THE NOTICE SERVED ON THE ASSESSEE BEFORE PROCEEDING TO COMPLETE THE REASSESSMENT AND AS IT I S LACKING, THIS JURISDICTIONAL DEFECT CANNOT BE CURED BY CONDUCT OF PERSONS ON BEHALF OF THE ASSESSEE AND THUS ASSESSMENT IS LIABLE TO BE QU ASHED ON THIS POINT. 12. THIS POSITION HAS BEEN DULY TAKEN INTO CONSIDER ATION IN DCIT VS. USHA STUD & AGRICULTURAL FARMS (P) LTD. (SUPRA). 13. THE OTHER DECISIONS RELIED ON BY THE ASSESSEE A RE TO THE SAME EFFECT. 14. HEREIN, THERE IS NOTHING ON RECORD TO SUGGEST T HAT SMT. TEENA SHARMA WAS IN ANY MANNER AUTHORIZED TO RECEIVE SUM MONS/NOTICE ON BEHALF OF THE ASSESSEE. IT HAS NEVER BEEN THE CASE OF THE DEPARTMENT THAT SHE WAS AUTHORIZED TO ACCEPT ANY NOTICE ON BEHALF O F THE ASSESSEE, OR THAT SHE WAS AN AGENT OF THE ASSESSEE, ENTITLED TO RECEI VE NOTICE U/S 148 OF THE ACT. AS SUCH, IT CANNOT BE HELD THAT THE RECEIPT OF THE NOTICE BY SMT. TEENA SHARMA AMOUNTED TO SERVICE OF NOTICE ON THE A SSESSEE. 15. NO DECISION CONTRARY TO THOSE CITED BY THE ASSE SSEE HAS BEEN PRESSED BY THE DEPARTMENT BEFORE THIS BENCH. 16. FOR THE ABOVE DISCUSSION, THE ASSESSEES CONTEN TION BY WAY OF GROUND NO.1(B) IS FOUND TO BE JUSTIFIED AND IS ACCE PTED AS SUCH. ACCORDINGLY, IT IS HELD THAT NO NOTICE U/S 148 STAN DS PROVED AS SERVED ON THE ASSESSEE. AS SUCH, THE REOPENING PROCEEDINGS AR E BAD IN LAW. ITA NO.182(ASR)/2014 A.Y. 2005-06 17 CONSEQUENTLY, THE IMPUGNED ORDER PASSED IN PURSUANC E OF SUCH PROCEEDINGS IS ALSO INVALID. ACCORDINGLY, THE SAME IS CANCELLED. NOTHING ELSE SURVIVES FOR ADJUDICATION. HENCE, THE REMAININ G GROUNDS ARE NOT REQUIRED TO BE GONE INTO. 17. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/07/ 2016. SD/- SD/- (T.S. KAPOOR) (A.D. JAIN) ACCOUNTANT MEMBER JUDICIAL MEMBER /SKR/ DATED: 18/07/2016 COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:SH. PREM KUMAR BHAGAR 2. THE DY. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXAT ION, CHANDIGARH. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.