ITO, UDAIPUR V. M/s. Maheshwari Machinery Pvt. Ltd., UDAIPUR

ITA 223/JODH/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82943 (ITAT-JODHPUR)
• Duration Of Justice: 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 04-09-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 10-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Invalid notice; Business income; Income from undisclosed sources
• Section: 143(3); 144

Judgement Text

IN THE INCOME TAX APPELALTE TRIBUNAL : JODHPUR BENCH : JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K. SAINI, ACCOUNTANT MEMBER. ITA NO. 223 /JODH/2014 (A.Y. 200 9 - 1 0 ) ITO, WARD - 1(1) , UDAIPUR. VS. M/S. MAHESHWARI MACHINERY PVT. LTD. , BUS STAND, BYPASS CORNER, COLLEGE ROAD, UDAIPUR. (APPELLANT) PAN NO. AABCM 0545 J (RESPONDENT) ASSESSEE BY : NONE. DEPARTMENT BY : SHRI MAHESH KUMAR - D.R. DATE OF HEARING : 04 / 0 9 /201 4 . DATE OF PRONOUNCEMENT : 09 /0 9 /201 4 . O R D E R PER N.K. SAINI, A.M TH IS IS AN APPEAL BY THE DEPARTMENT AGAINST THE ORDER DATED 0 2/0 1/2014 OF L D . CIT(A), UDAIPUR . 2 DURING THE COURSE OF HEARING, NOBODY WAS PRESENT ON BEHALF OF THE ASSESSEE NEITHER ANY ADJOURNMENT WAS SOUGHT, THEREFORE, WE PROCEEDED 2 EXPARTE QUA THE ASSESSEE AND THE APPEAL HAS BEEN DECIDED ON MERIT AFTER HEARING LEARNED D.R. THE ONLY GROUND RAISED IN THIS APPEAL READS AS UNDER: - ON THE FACTS AND IN THE PRESENT CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN QUASHING THE ASSESSMENT PASSED U/S. 143(3) OF THE ACT BY HOLDING THAT NOTICE U/S. 143(2) OF THE I.T. ACT WAS NOT ISSUED AND SERVED WITHIN T HE TIME DESPITE THE FACT THAT NOTICE U/S. 143(2) OF THE ACT WAS DULY SERVED UPON BY WAY OF PERSONAL SERVICE AND WITHIN THE PRESCRIBED TIME AND MOREOVER THE CASE WAS ALSO SQUARELY COVERED UNDER PROVISIONS OF SECTION 292BB OF THE I.T. ACT. THAT THE APPELLANT CRAVES TO ADD, AMEND, ALTER, DELETE OR MODIFY ANY OR ALL THE ABOVE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. FACTS RELATING TO THIS CASE, IN BRIEF, ARE THAT A SURVEY WAS CONDUCTED ON THE BUSINESS PREMISES OF THE ASSESSEE ON 11/08/ 2008 AND THE CASE WAS SELECTED FOR SCRUTINY. THE ASSESSING OFFICER FRAMED THE ASSESSMENT U/S. 144 OF THE I.T. ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT IN SHORT) BY OBSERVING THAT NOBODY ATTENDED IN SPITE OF VARIOUS NOTICES ISSUED U/S. 143(2) OF THE ACT AND SERVED UPON THE ASSESSEE. THE ASSESSING OFFICER ALSO MENTIONED THAT THE ASSESSEE IN ITS RETURN OF INCOME HAS SHOWN A LOSS OF RS. 95,839/ - . THE ASSESSING OFFICER MADE THE ASSESSMENT AT AN INCOME OF RS. 21,04,161/ - . 3 4. THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) AND CHALLENGED THE VALIDITY OF THE ASSESSMENT ON THE BASIS THAT THE NOTICE U/S. 143(2) OF THE ACT WAS NOT ISSUED AND SERVED WITHIN THE TIME ALLOWED. THE ASSESSEE CHALLENGED THE VALIDITY OF THE NOTICE U/S. 143(2) OF THE ACT BY RAISING AN ADDITIONAL GROUND BEFORE THE LD. CIT(A), THEREFORE, THE LD. CIT(A) ASKED COMMENTS OF THE ASSESSING OFFICER ON ADMISSIBILITY OF THE ADDITIONAL GROUND. IN RESPONSE, THE ASSESSING OFFICER VIDE HIS LETTER DATED 18/12/2013 STATED AS UNDER: - KINDLY REFER TO YOUR LETTER NO.998 DATED 04.12.2013 ON THE ABOVE SUBJECT. THE REPORT ON THE SUBMISSION OF THE ASSESSEE IS AS UNDER: A SURVEY WAS CONDUCTED ON THE BUSINESS PREMISES OF THE ASSESSEE ON 11.08.2008 BY ITO, WARD - 1 (2), UDAIPUR. AT THIS BUSINESS PREMISES AT JINNDUTT SURI MARKET, MEWAR MOTORS GALI, O/S SURAJPOLE, TWO CONCERNS WERE RUN, FIRST WAS M/S BHUVNESH MAHESHWARI & CO. A ND SECOND, MAHESHWARI MACHINERY PVT. LTD. SH. BHUVNESH MAHESHWARI IS THE PROPRIETOR OF FIRST CONCERN AND ONE OF THE DIRECTOR IN THE OTHER CONCERN. SINCE, THE SECOND CONCERN I.E. MAHESHWARI MACHINERY PVT.LTD. WAS BEING ASSESSED IN THIS WARD, THE CASE WAS TR ANSFERRED TO THIS OFFICE ON 24.06.2011 BY ITO, WARD - 1(2), UDAIPUR VIDE THEIR LETTER NO. 320. THE CASE WAS SELECTED UNDER SCRUTINY BY ITO, WARD - 1 (2), UDAIPUR AND FIRST NOTICE U/S 143(2) WAS ISSUED AND SERVED ON THE ASSESSEE ON 24.09.2010. DUE TO CHANGE IN INCUMBENT, A FRESH NOTICE U/S 143(2) WAS ISSUED ON 16.08.2011 AND SERVED AT THE BUSINESS PREMISES OF THE ASSESSEE FIXING THE DATE OF HEARING ON 05.09.2011. NONE ATTENDED ON THIS DATE. ANOTHER NOTICE U/S 143(2) WAS ISSUED ON 26.09.2011 AND SERVED AT THE BUS INESS PREMISES OF THE ASSESSEE FIXING THE DATE OF HEARING ON 12.10.2011. NONE ATTENDED ON THIS DATE ALSO. ANOTHER NOTICE U/S 143(2) WAS ISSUED ON 28.10.2011 AND SERVED AT THE BUSINESS PREMISES OF THE ASSESSEE FIXING THE DATE OF HEARING ON 14.11.2011. NO NE ATTENDED ON THIS DATE ALSO THEREAFTER, ON 25.11.2011 A SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE AND SERVED AT THE BUSINESS PREMISES OF THE ASSESSEE FIXING THE DATE OF HEARING ON 12.12.2011. NONE 4 ATTENDED ON THIS DATE ALSO. FINALLY, THE CASE TIME BAR RED ONE, A FINAL OPPORTUNITY TO REPRESENT HIS CASE BY ISSUING A LETTER ON FIXING THE HEARING ON 23.12.2011. NONE ATTENDED ON THIS DATE ALSO. IN VIEW OF ABOVE CIRCUMSTANCES, IT IS AMPLY CLEAR THAT THE ASSESSEE HAS NOTHING TO SAY ABOUT THE ASSESSMENT OF INCO ME AND THEREFORE, THE ORDER OF ASSESSMENT IS BEING PASSED U/S 144 OF IT ACT, CONSIDERING THE PHOTOCOPIES OF DOCUMENTS/ MATERIAL FOUND DURING THE COURSE OF SURVEY PROCEEDINGS AND OTHER DOCUMENTS AVAILABLE ON RECORD. DURING THE COURSE OF SURVEY, STATEMENTS OF SH. BHUVNESH MAHESHWARI WERE RECORDED ON OATH WHO SURRENDERED RS. 35 LACS IN TO AS INCOME FROM UNDISCLOSED SOURCES. OUT OF THESE RS 35 LACS, RS. 17 LACS WERE SURRENDERED IN THE HANDS OF THE ASSESSEE AND REMAINING RS. 18 LACS IN THE HANDS OF HIS PROPRIET Y CONCERN M/S B. MAHESHWARI & CO. THE ASSESSMENT OF M/S B. MAHESHWARI & CO. WAS COMPLETED BY ITO, WARD - 1 (2), UDAIPUR, ON 06.12.2011. ITO, WARD - 1 (2), UDAIPUR IN HIS ASSESSMENT ORDER ADDED WHOLE OF RS. 35 LACS IN THE INDIVIDUAL HANDS OF SH. BHUVNESH MAHESH WARI AFTER EXAMINING THE PHOTOCOPIES OF DOCUMENTS FOUND DURING THE COURSE OF SURVEY. THE ASSESSMENT OF M/S MAHESHWARI MACHINARY PVT. LTD. WAS COMPLE TE D U/S 144 ON 26.12.2011 IN THIS OFFICE. AGGRIEVED BY THIS ASSESSMENT THE ASSESSEE PREFERRED AN APPEAL BEFO RE YOUR GOOD SELF. IN HIS SUBMISSION BEFORE YOUR GOOD SELF FOLLOWING MAIN GROUND WAS RAISED. 1. VALIDITY OF SERVICE OF NOTICES IN THIS SUBMISSION BEFORE YOUR GOOD SELF THE AR OF THE ASSESSEE MAINLY EMPHASIZED ON THE ISSUE THAT THE FIRST NOTICE U/S 143(2) HAS NOT BEEN SERVED UPON THE ASSESSEE AND THEREFORE THE ASSESSMENT ORDER IS LIABLE TO BE QUASHED. THE AR STATED THAT 'THE NOTICE ISSUED BY ITO WARD - 1 (2) ON 07.10.2011 IS CONCLUSIVE EVIDENCE THAT THE CASE WAS IN HIS CHARGE TILL 11.10.2011 AND THE CHANGE IN INCUMBENT WAS IN FACT EFFECTED ONLY AFTER 11.10.2011.' THE BELIEF OF THE AR IS NOT TRUE. THE THEN A.O. ACCEPTED THAT THE NOTIC E U/S 143(2) DATE 07.10.2011 WAS ISSUED AND SERVED WRONGLY BY HIM. THE CASE WAS TRANSFERRED TO THIS OFFICE VIDE LETTER NO. 320 DATE 24.06.2011 AND COPY OF THIS LETTER IS PLACED ON RECORD. THE THEN ITO WARD - 1 (2) MIGHT HAVE ISSUED THE NOTICE U/S 143(2) WHIC H IS A MISTAKE COVERE D U/S 292 B B OF I.T. ACT. FURTHER MORE, THE A.R. OF THE ASSESSEE HIMSELF CONFESSED THAT HE ATTENDED THE HEARING BEFORE THE THEN ITO WARD - 1(2), WHO ADVISED HIM TO ITO WARD - 1 (1) TO 5 WHOM THE CASE WAS ALREADY TRANSFERRED, THEN THE PROVISIO NS OF SECTION 292BB ARE APPLICABLE HERE. FURTHERMORE, IT IS CLEAR FROM THE RECORD THAT THE AR OF THE ASSESSEE HAS NOT RAISED ANY OBJECTION BEFORE THE COMPLETION OF ASSESSMENT REGARDING SERVICE OF NOTICES. THE ONLY OBJECTION RAISED REGARDING SERVICE OF NOTI CE IS BEFORE YOUR GOOD SELF. THE UNDERSIGNED RELY ON THE PROVISO BELOW TO SECTION 292BB ON THE FOLLOWING FACTS: (I) THE A.R. OF THE ASSESSEE ATTENDED THE OFFICE AFTER RECEIVING THE NOTICE U/S 143(2) DATE 07.10.2011. (II) HE WAS WELL AWARE OF THE ASSESSMENT PROCEEDINGS MUCH BEFORE ITS COMPLETION. (III) H E HAS NO OBJECTION TO THE PROCEEDINGS / SERVICE OF NOTICES BEFORE COMPLETION OF ASSESSMENT PROCEEDINGS. RELIANCE IS ALSO PLACED ON THE DECISIONS OF FOLLOWING HON'BLE COURTS. (I) IT O V/S GURINDER KAUR (ITAT DEL) 102ITD 189 (II) CIT V/S C. PALANIAPPAN (MAD) 55 DTR 81 WHEREIN IT WAS HELD THAT ASSESSMENT PROCEEDINGS CANNOT BE STRUCK DOWN ON THE BASIS OF ASSESSEES CLAIM THAT HE DID NOT RECEIVE NOTICE WHEN HE WAS AWARE OF ASSESSMENT PROCEEDINGS. RELIANCE IS PLACE ON THE DECISION IN THE CASE OF CIT V/S P.P. KHADAR HAJI (KER) 234ITR 461 WHEREIN IT WAS HELD THAT TRIBUNAL SHOULD NOT CANCELLED ASSESSMENT OF BEST JUDGMENT ASSESSMENT WHERE THERE IS NO COMPLIANCE TO NOTICE U/S 142(1). THE AR ALSO PLEAD THAT THE PERSON WHO RECEIVED THE NOTICES U/S 143(2) I.E. SH. BHERU LA L GAYARI WHO WAS ASSESSEE'S EMPLOYEE 12.11.2008 AND LEFT SERVICE AFTER THAT. AN AFFIDAVIT OF SH. BHERU LA L GAYARI WAS ALSO FILED. IT IS TO MENTION HERE THAT THE NOTICES WERE GO T SERVED THROUGH REGULAR NOTICE SERVER OF THIS DEPARTMENT WHO DULY SERVED THESE NOTICES AT THE BUSINESS PREMISES OF THE ASSESSEE. THE CERTIFICATE WAS GIVEN BY THE NOTICE SERVER BY DULY SIGNING THE NOTICES AFTER THE NOTICES WERE SERVED. IN VRA COTTON MILLS PVT. LTD V/S UOI & OTHERS 2010 TIOL - 176 - HC - P&H - IT IT WAS HELD THAT' TO BRING CERTAINLY AND TO AVOID ATTEMPTS OF THE ASSESSEE TO EVADE THE PROCESS OF RECEIPT OF NOTICE, THE PURPOSE OF STATUTE WILL BE BETTER SERVED IF THE DATE OF ISSUE OF NOTICE IS CONSIDERE D AS COMPLIANCE TO THE REQUIREMENT OF PROVISO TO SECTION 143(2)'. 6 IN AKM GOVINDASWAMY CHATTIER & OTHERS V/S ITO (MAD) 244 ITR 559 IT WAS HELD THAT NOTICE SERVED ON A PERSON WHO NORMALLY RECEIVED THE NOTICES ON BEHALF OF THE ASSESSEE THOUGH NOT SPECIFICALLY AUTHORIZED IS A VALID SERVICE. IN THIS CASE ALL THE NOTICES WERE SERVED ON THE EMPLOYEES OF THE ASSESSEE AND ARE THEREFORE VALIDITY SERVED. MORE PARTICULARLY, THE AR PLACED RELIANCE ON THE DECISION OF R.L. NARANG V/S CIT (DEL) 136 ITR 108 QUOTING THAT WH ERE A NOTICE IS SERVED THROUGH A PROCESS SERVER AND THERE IS NEITHER A SERVICE REPORT NO EVIDENCE TO POINT OUT THE IDENTITY OF PERSON ON WHOM THE SERVICE IS EFFECTED, IT CANNOT BE A PROPER SERVICE. BUT IN THE PRESENT CASE THE NOTICES WERE SERVED THROUGH DEPARTMENTAL NOTICE SERVER AND DULY CERTIFIED BY HIM BY PUTTING HIS SIGNATURES ON NOTICES. THE PERSON WHO RECEIVED THE NOTICES ARE ALSO IDENTIFIED, BEING EMPLOYEES OF THE ASSESSEE. THEREFORE ALL THE NOTICES WERE LEGALLY SERVED IN VIEW OF ABOVE JUDGMENTS. T HE GROUND TAKEN BY AR THAT THE NOTICE WERE NOT VALIDLY SERVED HOLDS NO WATER AND LIABLE TO BE REJECTED.. 2. TRADINQ ADDITION OF RS. 5,00,000/ - A LUMPSUM TRADING ADDITION OF RS. 5 LACS WAS MADE BY THE A.O. ON THE BASIS OF STATEMENT OF SH. BHUVNESH MAHESHWARI, THE DIRECTOR AND CONSIDERING THE CERTIFIED PHOTOCOPIES OF IMPOUNDED MATERIAL. THE ADDITION WAS MADE ON LUMPSUM BASIS AS THE ASSESSEE DID NOT PRODUCE BOOKS OF A/CS FROM WHERE THE ENTRIES FOUND IN IMPOUNDED MATERIAL COULD BE EXAMINED OR VERIFIED. WHEN THE AS SESSEE IS WELL AWARE OF THE ASSESSMENT PROCEEDINGS (AS ACCEPTED BY AR) AND QUERY LETTER, HE SHOULD HAVE COME UP WITH PROPER VERIFICATION OF ENTRIES EVEN HE HAS AN OBJECTION ON VALIDITY OF SERVICE OF NOTICES. IN ABSENCE OF PROPER VERIFICATION OF A.O. IS JUS TIFIED IN ESTIMATING THE BUSINESS INCOME OF THE ASSESSEE. 3. ADDITION ON A/C OF UNDISCLOSED SALES (RS. 5 LACS) AND BOGUS ADVANCES FROM CUSTOMERS . (RS. 12 LACS) THESE ADDITIONS WERE MADE ON PROTECTIVE BASIS AS THESE ADDITIONS HAVE ALREADY BEEN MADE BY THE I.T.O. WARD - 1 (2), UDAIPUR IN THE CASE OF SH. BHUVNESH MAHESHWARI PROP. MAHESHWARI AND CO. PRIOR TO MAKING THE ASSESSMENT OF THE ASSESSEE AS SH. BHUVNESH MAHESHWARI SURRENDERED THESE 7 AMOUNTS IN THE HANDS OF THE ASSESSEE BEING ONE OF THE DIRECTOR OF ASSESSE E COMPANY. CONSIDERING THE OVERALL FACTS AND LEGAL POSITION OF THE CASE THE ADDITIONS MADE AS MENTIONED SUPRA ARE LIABLE TO BE SUSTAINED . ' 5. THE ABOVE REPORT OF THE ASSESSING OFFICER WAS PROVIDED TO THE ASSESSEE FOR THE COMMENT . THE ASSESSEE SUBMITTED AS UNDER: - THE ID. A.O. HAS STATED IN THE ASSESSMENT ORDER THAT THE I.T.O. WARD 1(2) SELECTED THE ASSESSMENT UNDER SCRUTINY AND THE FIRST NOTICE U/S 143(2) WAS ISSUED AND SERVED ON THE ASSESSEE ON 24.09.2010. DUE TO CHANGE IN INCUMBENT, FRESH NOTICE U/S 143(2) WAS ISSUED BY THE ID. A.O. ( I.T.O WARD 1(1), UDAIPUR) ON 16.08.2011 AND FURTHER NOTICES ISSUED ON SEVERAL DATES AS UNDER: - ISSUE DATE ISSUED U/S SERVICE DATE HEARING DATE SERVED ON STATUS 16.08.2011 143(2) NOT GIVEN 05.09.2011 BUSINESS PREMISES NONE ATTENDED 26.09.2011 143(2) NOT GIVEN 12.10.2011 BUSINESS PREMISES NONE ATTENDED 28.10.2011 143(2) NOT GIVEN 14.11.2011 BUSINESS PREMISES NONE ATTENDED 25.11.2011 SHOW CAUSE NOT GIVEN 12.12.2011 BUSINESS PREMISES NONE ATTENDED 15.12.2011 LETTER NOT GIVEN 23.12 - 2011 BUSINESS PREMISES NONE ATTENDED AFTER SERVICE OF NOTICES FOR HEARING AS ABOVE THE LD. A.O . FOUND IT AMPLY CLEAR THAT THE ASSESSEE HAD NOTHING TO SAY RELATED TO HIS ASSESSMENT OF 8 INCOME AND PASSED THE ORDER U/S 144 OF IT ACT, CONSIDERING PHOTOCOPIES OF DOCUMENTS/MATERIAL FOUND DURING THE COURSE OF SURVEY PROCEEDINGS AND OTHER DOCUMENTS AVAILABLE ON RECORD. UNDER INSTRUCTIONS FROM OUR CLIENTS, WE PRAY YOUR HONOR TO CONSIDER OUR SUBMISSION AS UNDER: THE ID. A.O. STATED IN THE ORDER THAT THE FIRST NOTICE U/S 143(2) WAS ISSUED BY I.T.O. WARD 1(2), UDAIPUR WHICH WAS SERVED ON THE ASSESSEE ON 24.09.2010. HE FURTHER STATED THAT DUE TO CHANGE IN INCUMBENT A FRESH NOTICE WAS ISSUED BY HIM ON AND ALL SUBSEQUENT NOTICES ALSO BY HIM AS D ETAILED ABOVE. KINDLY CONSIDER THE FACT THAT AS PER ID. A.O. THE CHANGE IN INCUMBENT WAS EFFECTED BY TRANSFER OF CASE ON 24.06.2011, IMPLIEDLY, BEFORE 16.08.2011, THE DATE OF ISSUE OF NOTICE AFTER CHANGE IN INCUMBENT BUT THE FACT APPEARS TO BE DIFFERENT. W E MAY KINDLY BE ALLOWED TO PLACE BEFORE YOUR HONOR A COPY OF NOTICE U/S 143(2) DT.07.10.2011 ISSUED BY THE I.T.O. WARD 1(2), UDAIPUR AND SERVED ON THE ASSESSEE ON 11.10.2011 FIXING THE DATE FOR 18.09..2011. THE UNDERSIGNED PERSONALLY APPEARED BEFORE THE I. T.O. WARD 1(2), UDAIPUR AFTER RECEIPT OF THE NOTICE WHO IN TURN ADVISED TO CONTACT THE I. T.O. WARD 1(1), UDAIPUR WHO WAS IN FACT THEN ENJOYING JURISDICTION AND STATED THAT THE NOTICE WAS WRONGLY ISSUED BY HIM AND THE CASE WILL BE TRANSFERRED TO CONCERNED A . O THE I.T.O. WARD 1(1), UDAIPUR. THE NOTICE ISSUED BY I.T.O WARD 1(2) ON 07/10/2011 IS CONCLUSIVE EVIDENCE THAT THE CASE WAS IN HIS CHARGE TILL 11.10.2011 AND THAT THE CHANGE IN INCUMBENT WAS IN FACT EFFECTED ONLY AFTER 11.10.2011. AS SUCH THE FACT STATED BY THE ID. A.O ABOUT ISSUE OF FRESH NOTICE ON 16.08.2011 AND SUBSEQUENT NOTICES BY HIM IS NOT TRUE & CORRECT AND APPEARS TO BE AFTER THOUGHT ONLY. ANX - 1 FURTHER, WE MAY KINDLY BE ALLOWED TO PLACE BEFORE YOUR HONOR COPY OF ORDER SHEET ISSUED BY THE LD. A.O. IN SUPPORT OF THE EVIDENCE THAT NO ORDER SHEET BEFORE THE DATE OF TRANSFER OF JURISDICTION WAS RECORDED BY THE THEN A.O. ENJOYING JURISDICTION. THE ORDER SHEET DATED 27.02.2010 ONWARD HAS BEEN RECORDED BY THE A.O. WARD 1(1) WHO WAS TRANSFERRED JURISDICTION AND CASE AFTER 11.10.2011. IT IS AS SUCH THE NOTICES STATED TO HAVE BEEN ISSUED ON SEVERAL DATES WERE ALSO IN - CONTRAVENTION TO THE PROVISIONS OF THE I.T. ACT. COPY OF ORDER SHEET IS ENCLOSED FOR KIND PERUSAL. ANX - 2 THE VERIFICATION OF COPY OF NOTICES RECEIVED REVEAL THE FACT THAT ALL THE NOTICES WERE SERVED BY NOTICE SERVER OF WARD 1 (2), UDAIPUR AND NOT BY THE 9 NOTICE SERVER OF WARD 1(1), UDAIPUR. IT IS ALSO AN EVIDENCE THAT THE ISSUE AND SERVICE OF ALL NOTICES BY WA RD 1(1) IS AFTER THOUGHT AND NO VALID NOTICE WAS ISSUED BY LD. A.O. THE ITO WARD 1(1) UDAIPUR. COPIES OF NOTICES ISSUED BY THE LD. A.O. ARE ENCLOSED FOR KIND PERUSAL. ANX - 3(I - IV) THE ID. A.O. HAS STATED THAT THE FIRST NOTICE U/S 143(2) WAS ISSUED BY I.T.O. WARD 1(2) AND SERVED ON THE ASSESSEE ON 24.09.2010. IT IS ALSO NOT CORRECT. WE ARE PLACING BEFORE YOUR HONOR COPY OF THE NOTICE DATED 23.09.2010 SERVED ON ONE BHERULAL AND NOT TO THE ASSESSEE. THIS NOTICE HAS BEEN CONSIDERED GOOD FOR ASSESSMENT PURPOSE BUT IT WAS NOT A VALID SERVICE IN COMPLIANCE OF PROVISO TO SECTION 143(2) AND SECTION 282 OF THE I.T. ACT. ANX - 4 IT IS SUBMITTED FOR KIND CONSIDERATION THAT AT THE TIME OF SURVEY ONE BH ERU LAL GAYARI WAS IN EMPLOYMENT WITH THE DIRECTOR SHRI BHUVNESH MAHESHWARY IN HIS PROPRIETORY FIRM M/S B. MAHESHWARY & CO.. THE SURVEY WAS CONDUCTED OF THE PRO P RIETORY FIRM AS WELL AS THE APPELLANT COMPANY WHEN BHERU LAL GAYARI WAS IN EMPLOYMENT BUT HE LE FT THE SERVICE ON 12.11.2008. INCIDENTALLY BUT HOW NOTICES U/S 143(2) WERE SERVED IN CASE OF PROPRIETORY FIRM AS WELL THE APPELLANT COMPANY ON THE SAME DATE I.E. BY THE SAME NOTICE SERVER ON THE SAME BHERULAL ISSUED ONLY ON 23/09/2010 IS BEST KNOWN TO THE ID. A.O. WHEN JURISDICTION ON BOTH THE CASES WERE ENJOYED BY DIFFERENT ASSESSING OFFICERS. A CERTIFIED COPY OF AFFIDAVIT FROM SHRI BHERULAL GAYARI IS ENCLOSED HEREWITH FOR KIND CONSIDERATION. IN THE AFFIDAVIT SHRI BHERULAL GAYARI HAS STATED ON OATH THAT HE WAS IN SERVICE WITH SHRI BHUVNESH MAHESHWARY IN HIS PROPRIRTORY FIRM TILL 12.11.2008 AND THEREAFTER JOINED SERVICE ELSEWHERE. HE FURTHER STATED ON OATH THAT SINCE 12.11.2008 HE HAS NOT BEEN IN TOUCH WITH THE APPELLANT AND NEVER HAD BEEN TO HIS BUSINESS PLACE AND THAT AFTER LEAVING SERVICES HE DID NOT RECEIVE ANY NOTICE FROM ANY GOVT. DEPARTMENT IN THE NAME OF THE FIRM OR IN THE NAME OF THE APPELLANT COMPANY ANX - 5 IN CASE OF PROPRIET O RY FIRM AN APPEAL WAS PREFERRED WHICH HAS ALREADY BEEN DECIDED BY YOUR HONOR VIDE APPEAL ORDER NO. 303/IT/UDR/2011 - 12 DATED 05.03.2013 CONSIDERING THE ABOVE SAID AFFIDAVIT FILED BY BHERULAL STATING ON OATH ABOUT NON RECEIPT OF NOTICE/S 143(2) . A COPY OF THE APPEAL ORDER IS ENCLOSED FOR KIND CONSIDERATION. ANX - 6 10 SINCE B HERU LAL GAYARI HAS DENIED HAVING RECEIVED ANY NOTICE ON BEHALF OF THE APPELLANT FROM ANY GOVT. DEPARTMENT ANY TIME THE SERVICE OF NOTICE STATED BY THE LD. A.O. FOR ASSESSMENT PURPOSE IS BEYOND ANY TRUTH AND LIABLE TO BE HELD INVALID SERVICE IN COMPLIANCE OF SECTION 143(2). FURTHER, THE APPELLANT HAS NOT AUTHORIZED ANY OF HIS EMPLOYEES OR ANY PERSON EXCEPT A/ R TO RECEIVE ANY NOTICE ON HIS BEHALF. THE SERVICE OF NOTICE TO SHRI BHERULAL IS THEREFORE LIABLE TO BE HELD INVALID IN COMPLIANCE OF PROVISO TO SECTIO N 2 82 OF THE ACT ALSO. AN AFFIDAVIT FROM THE APPELLANT IS ENCLOSED FOR KIND CONSIDERATION. IN THE AFFIDAVIT SHRI BHUVNESH MAHESHWARY DIRECTOR OF THE APPELLANT COMPANY HAS AFFIRMED ON OATH THAT THE FIRST NOTICE U/S 143(2) DATED 07.10.2011 WAS RECEIVED BY HI M ON 11.10.2011 FIXING THE DATE OF HEARING FOR 18.09.2011. ALL OTHER NOTICES STATED TO HAVE BEEN ISSUED U/S 143(2) /144 WERE NOT RECEIVED BY HIM OR LEGAL REPRESENTATIVE OF THE APPELLANT COMPANY. AS SUCH NO NOTICE WAS RECEIVED BY THE APPELLANT. ANX - 7 IN CASE OF DENIAL FOR PROPER SERVICE OF NOTICE FOR HEARING THE ONUS IS ON THE REVENUE TO ESTABLISH THAT THE SERVICE WAS MADE EITHER ON THE ASSESSEE HIMSELF OR ON SOMEBODY DULY AUTHORIZED BY HIM TO RECEIVE SUCH NOTICE. FURTHER, WHERE A NOTICE IS SERVED THROUGH A PROCESS SERVER THEN THERE SHOULD BE EITHER THE SERVICE REPORT OR EVIDENCE TO POINT OUT THE IDENTITY OF THE PERSON ON WHOM THE SERVICE IS EFFECTED. AS SUCH IN THE ABSENCE THEREOF THE ORDER PASSED IS LIABLE TO BE HELD INVALID. IN THE ENCLOSED AFFIDAVIT BY SHRI BHUVNESH MAHESHWARY THE APPELLANT HAS AFFIRMED ON OATH THAT NO NOTICE WAS RECEIVED STATED TO HAVE BEEN ISSUED AND SERVED BY THE ID. A.O. FIXING DATE OF HEARING. AS SUCH NO NOTICE IN COMPLIANCE OF SECTION 143(2) WAS RECEIVED WITHI N THE STATUTORY TIME LIMIT OF SECTION 143(2) OF THE ACT. AS PER PROVISO TO SECTION 143(2) THE NOTICE SHOULD HAVE BEEN ISSUED AND SERVED UPON THE ASSESSEE BEFORE 30.09.2010 WHEREAS ASSESSEE RECEIVED FIRST NOTICE DATED 07.10.2011 AFTER 30.09.2010 AND THAT AL SO ISSUED BY THE I.T.O. WARD 1(2) HAVING NO JURISDICTION. THE ASSESSMENT ORDER PASSED IS THEREFORE WITHOUT JURISDICTION AND LIABLE TO BE QUASHED. IN THE CASE OF HIND BOOK HOUSE VS. ITO 93 TTJ 0224, THE HONBLE ITAT DELHI HAS HELD THAT IN ABSENCE OF VALID SERVICE OF NOTICE ON THE ASSESSEE U/S 143(2) WITH IN THE TIME SPECIFIED IN THE PROVISO TO THE SAID SECTION AND IN THE ABSENCE OF COMPLIANCE OF THE SAID STATUTORY REQUIREMENT, THE ASSESSMENT COMPLETED IN PURSUANCE OF THE SAID NOTICE WAS AB INITIO INVALID AN D QUASHED THE ORDER. IN THE JUDGMENT THE HONBLE ITAT ALSO MADE REFERENCE TO THE 11 FOLLOWING: - THE HONBLE SUPREME COURT HAS HELD THAT THE ONUS IS ON THE REVENUE TO ESTABLISH THAT THE SERVICE WAS MADE EITHER ON THE ASSESSEE HIMSELF OR ON SOMEBODY DULY AUTHOR IZED BY HIM TO RECEIVE SUCH NOTICE. CIT VS. THAYABALI MULLA JEEVAJI KAPASI [1967] 66 ITR 147. THE HONBLE DELHI HIGH COURT HAS HELD THAT WHERE A NOTICE IS SERVED THROUGH A PROCESS SERVER AND THERE IS NEITHER THE SERVICE REPORT NOR EVIDENCE TO POINT OUT THE IDENTITY OF THE PERSON ON WHOM THE SERVICE IS EFFECTED, IT CAN NOT BE SAID THAT THERE IS A PROPER SERVICE OF NOTICE. R.L. NARANG V. CIT 136 ITR108. IN THE CASE OF SPRINGER VERLAG GMBH VS. DY. DIRECTOR OF INCOME TAX 97 TTJ 0269 THE ITAT DELHI QUASHED THE A SSESSMENT ORDER AND HELD TO BE INVALID SINCE THE FIRST NOTICE U/S 143(2) WAS SERVED ON THE ASSESSEE BEYOND THE TIME LIMIT SPECIFIED IN THE PROVISO TO SECTION 143(2) OF THE ACT. UNDER THE FACTS AS SUBMITTED ABOVE IT IS CLEAR THAT THERE WAS NO SERVICE OF NOT ICE ON THE ASSESSEE U/S 143(2) WITHIN THE TIME SPECIFIED IN THE PROVISO TO SECTION 143(2) AND IN COMPLIANCE OF REQUIREMENT OF SECTION 282 OF THE ACT SINCE SERVICE OF NOTICES TO THE APPELLANT HIMSELF OR PERSON AUTHORIZED BY HIM ARE NOT SUPPORTED BY ANY EVID ENCE. WE AS SUCH PRAY YOUR HONOR THAT THE ASSESSMENT ORDER PASSED MAY KINDLY BE QUASHED AND HELD INVALID.' 6 . THE LEARNED CIT(A), AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE REMAND REPORT OF THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 27/02/2010 AS SUCH THE ASSESSING OFFICER SHOULD HAVE SERVED STATUTORY NOTICE U/S. 143(2) OF THE ACT ON OR BEFORE 30/09/2010 ON THE PERSON AS SPECIFIED IN THE PROVISIONS OF SECTION 282(1) OF THE ACT I.E. THE ASSESSEE OR ANY OTHER PERSON AUTHORIZED BY HIM. 12 THE LD. CIT(A) OBSERVED THAT THE FIRST NOTICE HAD BEEN SERVED ON ONE SHRI BHERULAL , WHO WAS STATED TO BE IN THE BUSINESS PREMISES OF THE ASSESSEE, BUT HE WAS NOT THE EMPLOYEE OF THE ASSESSEE COMPANY AND HAD FILED AN AFFIDAVIT WHEREIN IT HAD BEEN MENTIONED THAT HE WAS AN EMPLOYEE OF THE ASSESSEE COMPANY UPTO THE MONTH OF NOVEMBER, 2008 AND THEREAFTER, HE LEFT SERVICE AND HAD NOT VISITED THE BUSINESS PREM ISES OF THE ASSESSEE AND TH AT HE HAD NOT RECEIVED ANY KIND OF NOTICE FOR THE ASSESSEE . THE LD. CIT(A) CATEGORICALLY STATED THAT THE ASSESSING OFFICER HAD NOT CONTROVERTED THE AFFIDAVIT OF SHRI BHERULAL WHICH WAS SENT FOR HIS COMMENTS. HE, THEREFORE, HELD THAT THERE WAS NO COMPLIANCE IN RESPONSE TO THE NOTICE CLAIMED TO HAVE BEEN RECEIVED BY SHRI BHERULAL AS MENTIONED IN THE ASSESSMENT ORDER WHEREAS THE ASSESSEE HAD COMPLIED WITH THE NOTICE U/S. 143(2) OF THE ACT ISSUED ON 07/10/2011 WHICH WAS SERVED O N THE ASSESSEE ON 11/10/2011 FIXING THE DATE OF HEARING ON 18/09/2011. ACCORDING TO THE LD. CIT(A) , THIS NOTICE WAS WRONG BECAUSE THE DATE FIXED WAS MUCH BEFORE THE DATE OF ISSUE AND SERVICE OF NOTICE AND SERVED ALONG WITH QUESTIONNAIRE ON THE ASSESSEE ON 18/11/2011 WHICH CLEARLY INDICATED THAT THE NOTICE WAS SERV ED AFTER EXPIR Y OF THE TIME LIMIT PRESCRIBED BY THE PROVIS I ONS OF SECTION 143(2) OF THE ACT. HE ALSO MENTIONED THAT EVEN DURING THE REMAND PROCEEDINGS, THE ASSESSING 13 OFFICER COULD NOT BRING ANY MATERIAL ON RECORD TO ESTABLISH THAT THE FIRST NOTICE ISSUED U/S. 143(2) OF THE ACT WAS SERVED ON THE ASSESSEE WITHIN THE TIME ALLOWED UNDER THE ACT I.E. WITHIN 6 MONTHS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ASSESSEE HAS FILED THE RETURN. NOW TH E DEPARTMENT IS IN APPEAL. 7 . LEARNED D.R. SUPPORTED THE ORDER OF THE ASSESSING OFFICER AND REITERATED THE OBSERVATIONS MADE IN THE ASSESSMENT ORDER DATED 26/12/2011. HE FURTHER SUBMITTED THAT THE ASSESSEE PARTICIPATED IN THE ASSESSMENT PROCEEDINGS , THE REFORE, CASE WAS COVERED UNDER THE PROVISIONS OF SECTION 292BB OF THE ACT AND THE LD. CIT(A) WAS NOT JUSTIFIED IN QUASHING THE ASSESSMENT ORDER. 8 . WE HAVE CONSIDERED THE SUBMISSIONS OF LEARNED D.R. AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IN OUR OPINION, SERVICE OF NOTICE U/S. 143(2) OF THE ACT IS MANDATORY TO FRAME THE ASSESSMENT U/S. 143( 3 ) OF THE ACT AND THE TIME LIMIT PRESCRI BED FOR SERVICE OF NOTICE U/S. 143(2) OF THE ACT IS SIX MONTHS FROM THE END OF THE FINANCIAL YEAR , IN WHICH THE ASSESSEE HAD FILED THE RETURN. IN THE PRESENT CASE, THE ASSESSEE FILED THE RETURN OF INCOME ON 27/02/2010 AND THE FINANCIAL YEAR ENDED ON 31/03/2010, THEREFORE, THE NOTICE U/S. 143(2) OF THE ACT SHOULD 14 HAVE BEEN SERVED ON OR BEFORE 30/09/2010. HOWEVER, IN THE PRESENT CASE, NOTICE WAS SERVED ON THE ASSESSEE ON 18/11/2011 AND ALL OTHER NOTICES CLAIMED TO HAVE BEEN SERVED ON SHRI BHERULAL W ERE NOT VALID, PARTICULARLY WHEN THE ASSESSEE HAD NOT GIVEN ANY AUTHORITY TO SHRI BHERULAL, WHO LEFT THE EMPLOYMENT IN THE MONTH OF NOVEMBER 2008 AND HAD FILED AN AFFIDAVIT STATING THEREIN THAT HE HAD NOTHING TO DO WITH THE ASSESSEE AND HAD NOT VISITED THE BUSINESS PREMISES OF THE ASSESSEE AFTER LEAVING THE SERVICE I.E IN THE MONTH OF NOVEMBER 2008. THEREFORE, I N THE PRESENT CASE, THERE WAS NO VALID SERVICE OF NOTICE U/S. 143(2) OF THE ACT WITHIN THE STATUTORY TIME PRESCRIBED IN THE SAID SECTION, AS SUCH THE ASSESSMENT COMPLETED ON THE BASIS OF INVALID NOTICE U/S. 143(2) OF THE ACT WAS RIGHTLY QUASHED BY THE LD. CIT(A). WE DO NOT SEE ANY INFIRMITY IN THE IMPUGNED ORDER AND ACCORDINGLY WE DO NOT SEE ANY MERIT IN THIS APPEAL OF THE DEPARTMENT . 9 . I N THE RE SULT, APPEAL OF THE DEPARTMENT IS DISMISSED . ( ORDER PRONOUNCED IN THE COURT ON 09 TH SEPTEMBER , 201 4) . S D/ - SD/ - ( HARI OM MARATHA ) (N.K.SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 09 TH SEPTEMBER , 201 4 . 15 VR/ - COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE LD. CIT 4. THE CIT(A) 5. THE D.R SR. PRIVATE SECRETARY , ITAT, JODHPUR .