Shri. OM PARKASH SHARMA, JALANDHAR V. INCOME TAX OFFICER, WARD - III(3), JALANDHAR

ITA 500/ASR/2017

• Counselvise Citation: [2018] 122 COUNSELVISE.COM (IT) 5387 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 10-09-2018
• Assessment Year: 2009-2010
• Appeal Filed On: 27-07-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SUDARSHAN KAPOOR LD
• Keywords: Invalid notice; Reason to believe
• Section: 142(1); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRI BUNAL 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 61, KESHAV NAGAR, MITHAPUR ROAD, JALANDHAR PAN:AJOPS 6014R VS. INCOME TAX OFFICER, WARD-III(3), JALANDHAR (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 OR DER 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). 2. 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, C ANNT ROAD, MITHAPUR, JALANDHAR THROUGH SPEED POST, HOWEVER, THE SAME WAS RETURNED UN-SERVED IN THE OFFICE OF THE REVENUE DEPAR TMENT WITH REMARKS OF THE POSTAL AUTHORITIES BAAR BAAR JAAN THE PRAPATKARTA IS PATAY TE NAHI MILEYA, IS LYEE RC BINA TAKSEEM VAPIS K EETI JANDI HAI DATED 29.09.2010. HOWEVER, FROM THE RECORD, IT APPEARS THAT ON DATED 28.09.2010, THE ASSESSING OFFICER PASSED THE AFFIXTU RE ORDER WITH REMARKS THAT: ITA NO.500/ASR/2017 OM PRAKASH SHAR MA, JALANDHAR V. CIT 2 WHERE AS I AM SATISFIED THAT SERVICE OF NOTICE II/ S 143(2) OF THE INCOME-TAX ACT, 1961 FOR THE ASSTT. YEAR 2009-1 0 IS NOT POSSIBLE BY ORDINARY MEANS ON SH. OM PARKASH SHARMA, 2, DC N AGAR, CANTT ROAD, MITHAPUR, JALANDHAR. I HEREBY DIRECT SH. SATISH KUMAR, NOTICE SERVER OF THIS OFFICE TO EFFECT THE SERVICE OF THE SAID NOTICE DATED 30.09.2 010 I.E. NOTICE U/S 143(2) OF THE INCOME-TAX ACT, 1961 ARE NOT SERVED B Y ORDINARY MEANS ON THE LAST KNOWN ADDRESS OF THE ASSESSEE AT A CONS PICUOUS PLACE IN THE PRESENCE OF INSPECTOR OF INCOME TAX SH. H.S. SA JJAN. 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 R EGARD TO THE SERVICE OF NOTICE ON THE PREVIOUS ADDRESS OF THE ASSESSEE, HOWEVER , EMPHASIZED THAT IT IS WONDERING FACTS THAT ONCE THE NOTI CE ON 23.09.2010 RETURNED ONLY ON 29.09.2010 THEN HOW THE ASSESSING OFFICER HAS PASSED ORDER FOR AFFIXTURE ON 28.09.2010. 3. ON THE CONTRARY, EXCEPT RELYING UPON THE ORDERS PASSED BY THE AUTHORITIES BELOW, THE LD. DR FAILED TO CONTROVERT TH E SUBMISSIONS OF THE ASSESSEE. 4. HAVING HEARD THE PARTIES AT LENGTH AND PERUSED THE M ATERIAL 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 T HE 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 N OT ANY YIELD ANY RESULT AND THEREAFTER ON 29 TH SEP. 2010 RETURNED THE SPEED POST WITH REMARKS BAAR BAAR JAAN THE PRAPATKARTA IS PATAY TE NAHI MIL EYA, ITA NO.500/ASR/2017 OM PRAKASH SHAR MA, JALANDHAR V. CIT 3 IS LYEE RC BINA TAKSEEM VAPIS KEETI JANDI HAI DA TED 29.09.2010. 5. 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 TH E ASSESSEE. IT IS REALLY SURPRISING THAT THE NOTICE SENT THROUGH SPEED PO ST REMAINED UNDELIVERED UPTO 29 TH SEP., 2010 AND THEREAFTER THE SAME MUST HAVE BEEN RECEIVED BY THE ASSESSING OFFICER AFTER 2 AND 3 DAYS, MAY BE ON 1 ST OCTOBER, HOWEVER, THE A.O. PASSED THE AFFIXTURE ORDER ON 28.09.2010. WE HAVE FAILED TO UNDERSTAND AS TO HOW TH E A.O. HAS PERCEIVED ON 28.09.2010 ABOUT THE NON-SERVICE OF THE N OTICE ON THE ASSESSEE THAT APPARENTLY SEEMS TO BE MERE FORMALITY WITHO UT 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 W AY OF AFFIXTURE NEVER BEEN SERVED UPON THE ASSESSEE AND IN THE ABSENCE OF STATUTORY NOTICES, THE ASSESSMENT ORDER CAN NOT BE HELD VALID AND T HEREFORE ON THE AFORESAID REASONS IS LIABLE TO BE SET ASIDE AND PUR SUANT THERETO THE APPELLANT ORDER WHICH IS IMPUGNED HEREIN ALSO LIABLE T O BE SET ASIDE. 6. EVEN OTHERWISE, IN THE AFFIXTURE ORDER IT IS MENTION ED THAT THE NOTICE U/S 143(2) OF THE INCOME TAX ACT, 1961 ARE NOT SE RVED BY ORDINARY MEANS ON THE LAST KNOWN ADDRESS OF THE ASSESSEE, H OWEVER, 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 TH AT THE ASSESSEE IS SHOWING ADDRESS AS KESHAV NAGAR, MITHAPUR ROAD, JALAND HAR WHICH ACCORDING TO OUR MIND LIABLE TO BE TREATED AS LAST KNOW N ADDRESS OF THE ASSESSEE, HOWEVER FROM THE NOTICES, IT REFLECTS THAT THE ASSE SSING OFFICER TRIED TO SERVE THE NOTICE AT 2-D.C. NAGAR, CA NNT ROAD, ITA NO.500/ASR/2017 OM PRAKASH SHAR MA, JALANDHAR V. CIT 4 MITHAPUR, JALANDHAR WHICH OTHERWISE, IS NOT LAST KNOWN ADDRESS OF THE ASSESSEE, HENCE, ON THIS ASPECT ALSO, WE ARE INCLINED TO HOL D THAT THE ASSESSING OFFICER FAILED TO SERVE THE NOTICE TO THE ASSESSEE A T HIS LAST KNOWN ADDRESS AND THEREFORE NOT IN CONFIRMATORY WITH T HE PROVISIONS OF THE ORDER-5, RULE -17 & RULE-20 OF THE C.P.C . 7. THE CO-ORDINATE BENCH AT AMRITSAR DEALT WITH THE IDEN TICAL ISSUE IN THE CASE OF SH. SHRIDHAR BEDI THROUGH LEGAL HEIR S MT. SONIL BEDI VERSUS INCOME TAX OFFICER WARD -3, PHAGWARA (ITA NO.02(ASR)/2017) . RELEVANT PART OF THE ORDER IS RE PRODUCED HERIN BELOW: 7.2 RULE-1 OF ORDER V OF CPC, ENUMERATES THE PROCED URE FOR ISSUING THE SUMMONS AND ACCORDING TO THE RULE-10 OF ORDER-V OF CPC, SERVICE OF SUMMON(S) SHALL BE MADE BY DELIV ERING OR TENDERING A COPY THEREOF SIGNED BY THE JUDGE OR SUC H OFFICER AS HE APPOINTS IN THIS BEHALF, AND SEAL OF THE COURT. 7.3 RULE 17 OF ORDER V FURTHER ENUMERATES THE PROCE DURE WHEN DEFENDANT REFUSES TO ACCEPT THE SERVICE, OR CA NNOT BE FOUND. RULE 17 FURTHER MANDATES THAT WHERE THE DEFE NDANT OR HIS AGENT OR SUCH OTHER PERSON AS AFORESAID REFUSES TO SIGN THE ACKNOWLEDGEMENT, OR WHERE THE SERVING OFFICER, AFTE R USING ALL DUE AND REASONABLE DILIGENCE, CANNOT FIND THE AFORE SAID PERSON, WHO IS ABSENT FROM HIS RESIDENCE AT THE TIM E WHEN SERVICE IS SOUGHT TO BE EFFECTED ON HIM AT HIS RESI DENCE AND THERE IS NO LIKELIHOOD OF HIS BEING FOUND AT THE RE SIDENCE WITHIN A REASONABLE TIME AND THERE IS NO AGENT EMPO WERED TO ACCEPT THE SERVICE OF THE SUMMONS ON HIS BEHALF, NO R ANY OTHER PERSONS ON WHOM SERVICE CAN BE MADE, THE SERVING OF FICER SHALL AFFIX A COPY OF THE SUMMONS ON THE OUTER DOOR OR SOME OTHER CONSPICUOUS PART OF THE HOUSE IN WHICH THE DE FENDANT ORDINARILY RESIDES OR CARRIES ON BUSINESS OR PERSON ALLY WORKS FOR GAIN. 7.4 FURTHER RULE 20 OF ORDER-V SPEAKS ABOUT THE SUB STITUTED SERVICES, ACCORDING TO THIS RULE, WHEN THE COURT IS SATISFIED THAT THERE IS A REASON TO BELIEVE THAT THE DEFENDAN T IS KEEPING OUT OF THE WAY FOR THE PURPOSE OF AVOIDING SERVICE, OR THAT FOR ANY OTHER REASON THE SUMMONS CANNOT BE SERVED IN TH E ORDINARY WAY, THE COURT SHALL ORDER THE SUMMONS TO BE SERVED ITA NO.500/ASR/2017 OM PRAKASH SHAR MA, JALANDHAR V. CIT 5 BY AFFIXING A COPY THEREOF IN SOME CONSPICUOUS PLAC E IN THE COURT AND ALSO UPON SOME CONSPICUOUS PART OF THE HO USE (IF ANY) IN WHICH THE DEFENDANT IS KNOWN TO HAVE LAST R ESIDED 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 CA NNOT BE SERVED IN THE ORDINARY WAY ON THE REASON THAT THE A SSESSEE CANNOT BE FOUND, AFTER USING ALL DUE AND REASONABLE DILIGENCE AND THERE IS NO LIKELIHOOD OF HIS BEING FOUND AT TH E RESIDENCE WITHIN A REASONABLE TIME AND THERE IS NO AGENT EMPO WERED TO ACCEPT SERVICE OF THE SUMMONS ON HIS BEHALF, NOR AN Y OTHER PERSON ON WHOM SERVICE CAN BE MADE, AND THE ASSESSI NG OFFICER IS SATISFIED THAT THERE IS A REASON TO BEL IEVE 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 U NDER 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 ORDI NARY ATTEMPT, WHILE RECORDING THE REASONS, ADOPTED THE S UBSTITUTED SERVICE BY WAY OF AFFIXTURE UPON THE DECEASED ASSES SEE. AS IT IS CLEARLY REFLECTS FROM THE CHRONOLOGICAL DATES AN D EVENTS THAT NOTICE U/S 148 WAS ISSUED IN THE NAME OF THE DECEAS ED ASSESSEE ON 29 TH MARCH, 2012 WHICH CLAIMED AS HAS BEEN SERVED THROUGH AFFIXTURE ON 31 ST MARCH, 2012 AND THEREAFTER NOTICE U/S 142(1) OF THE ACT CLAIMED AS HAS BEEN SE RVED ON DATED 29 TH MAY, 2012 THROUGH AFFIXTURE ON THE DECEASED ASSESSEE, CREATES MANY DOUBTS WITH REGARD TO THE GENUINENESS OF THE SERVICE OF THE NOTICE ON THE DEC EASED ASSESSEE BECAUSE IF THE NOTICE HAS BEEN SERVED THRO UGH AFFIXTURE ON 31 ST MARCH, 2012 THEN CERTAINLY THE NOTICE SERVER WOULD HAVE USED HIS DUE AND REASONABLE DILIGENCE FO R NOT FINDING THE DECEASED ASSESSEE AND WOULD HAVE COME T O THE KNOWLEDGE ABOUT THE DEATH OF DECEASED ASSESSEE AND MUST HAVE COMMUNICATED THE SAID INFORMATION TO THE ASSES SING OFFICER AND THEREAFTER THE ASSESSING OFFICER WOULD HAD NO OPTION EXCEPT TO SUBSTITUTE THE ASSESSMENT PROCEEDI NGS IN THE NAME OF THE LEGAL HEIR ONLY, HOWEVER, IT IS ADMITTE D FACT THAT NOTICE 29.05.2012 U/S 142(1) WAS ALSO SERVED TO THE DECEASED ASSESSEE BY WAY OF AFFIXTURE AND THEREAFTER, GETTIN G THE KNOWLEDGE ABOUT THE DEATH OF THE ASSESSEE, THE ASSE SSING ITA NO.500/ASR/2017 OM PRAKASH SHAR MA, JALANDHAR V. CIT 6 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 WH ICH 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 SUP PORT OF ASSESSEE'S CASE SPEAKS ABOUT ONE THING ONLY THAT PR OPER NOTICE U/S 148 OF THE ACT FOR INITIATING REASSESSME NT 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 REASSESSMEN T 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 INIT IATED AND CARRIED BY THE INCOME TAX OFFICER WITHOUT A NOTICE OR IN PURSUANCE OF INVALID NOTICE WOULD BE ILLEGAL AND VO ID AND SHALL VITIATE THE ENTIRE PROCEEDINGS. IN THE AFORESAID ANALYZATION, WE DO NOT HAVE ANY HESITATION TO HOLD THAT IN THE INSTANT CASE, NO NOT ICE HAS EVER BEEN PROPERLY SERVED EITHER U/S 148 OR 142(1) OF TH E ACT UPON THE DECEASED ASSESSEE OR HIS SOLE LEGAL HEIR. THEREFORE, THE ASSESSMENT ORDER UNDER CHALLENGE CANNOT BE SUSTAINE D AND IMPUGNED ORDER UNDER CHALLENGE LIABLE TO BE SET ASI DE UNDER THE LIMB OF NON-SERVICE/INVALID NOTICE ITSELF AND H ENCE, THE ORDER PASSED BY THE LD. CIT(A) IS SET ASIDE AND THE ADDITION CONFIRMED BY THE LD. CIT(A) STANDS DELETED. 8. RESPECTFULLY FOWLING THE DICTUM OF CO-ORDINATE BENCH AND EVEN OTHERWISE AS WE OBSERVED IN AFORESAID PARAS INDEPENDENTL Y, WE DO NOT HAVE HESITATION TO HELD THAT THE SERVICE OF THE PRESCRIB ED NOTICE ON THE ASSESSEE IS A CONDITION PRECEDENT TO THE VALIDITY OF THE A SSESSMENT 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 TH E ENTIRE PROCEEDINGS. AS IN THE INSTANT CASE, WHILE PASSING THE AFF IXTURE ORDER, ITA NO.500/ASR/2017 OM PRAKASH SHAR MA, JALANDHAR V. CIT 7 NO MATERIAL QUA NON-SERVICE OF THE NOTICE THROUGH ORDI NARY 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 B UT 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 OPI NION THAT NO NOTICE HAS EVER BEEN SERVED UPON THE ASSESSEE NEITHER PROP ERLY NOR AT THE LAST KNOWN ADDRESS, THEREFORE THE ASSESSMENT ORDER AS W ELL AS APPELLATE ORDER WHICH IS IMPUGNED HEREIN ARE LIABLE T O BE SET ASIDE, HENCE THE SAME ARE SET ASIDE. 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE STANDS ALLO WED. 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