VIDYAVIHAR CONTAINERS LTD, MUMBAI V. DCIT CIR 10(2), MUMBAI

ITA 7469/MUM/2010

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1434 (ITAT-MUMBAI)
• Duration Of Justice: 6 year(s) 1 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 06-09-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 01-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S PADMAJA
• Assessee Lawyers: J D MISTRI
• Keywords: Invalid notice; Period of limitation; Assessment record; Block assessment; Reason to believe; Revenue expenditure; Reassessment proceedings
• Section: 143(3); 92B; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'F' BENCH, MUMBAI BEFORE SHRI JASON P. BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN , JUDICIAL MEMBER ITA NO. 7469/MUM/2010 (ASSESSMENT YEAR: 2005-06) M/S. VIDYAVIHAR CONTAINERS LTD. VS. DCIT, CIRCLE - 10(2) BAJAJ BHAWN, 3 RD FLOOR, JUMNALAL BAJAR MARG, 226, NARIMAN POINT MUMBAI 400021 AAYAKAR BHAVAN, M.K. ROAD MUMBAI 400020 PAN AAACN0291R APPELLANT RESPONDENT APPELLANT BY: SHRI J.D. MISTRI RESPONDENT BY: SHRI MS. S. PADMAJA DATE OF HEARING: 16.11.2016 DATE OF PRONOUNCEMENT: 23.12.2016 O R D E R PER JASON P. BOAZ, A.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A)- 22, MUMBAI DATED 16.07.2010 FOR A.Y. 2005-06. 2. THE FACTS OF THE CASE, BRIEFLY, ARE AS UNDER: - 2.1 THE ASSESSEE, ENGAGED IN THE BUSINESS OF MANUFA CTURE OF CONTAINERS AND SALE OF FACTORY LAND, FILED ITS RETURN OF INCOM E FOR A.Y. 2005-06 ON 24.10.2005 DECLARING LOSS OF ` 11,38,17,975/-. THE RETURN WAS PROCESS UNDER SECTION 143(1) OF THE INCOME TAX ACT, 1961 (I N SHORT 'THE ACT'). THE CASE WAS SUBSEQUENTLY TAKEN UP FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) OF THE ACT VIDE ORDE R DATED 29.11.2007; WHEREIN THE LOSS WAS ASSESSED AT ` 16,07,100/- IN VIEW OF THE FOLLOWING DISALLOWANCES: - (I) INTEREST ` 11,07,57,156/- (II) LEGAL EXPENDITURE ` 1,86,998/- (III) FACTORY TAXES ` 4,48,929/- ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 2 2.2 AGGRIEVED BY THE ORDER OF ASSESSMENT DATED 29.1 1.2007 FOR A.Y. 2005- 06, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (A)-22, MUMBAI CHALLENGING THE AFORESAID THREE DISALLOWANCES (SUPR A), NON ALLOWANCE OF CARRY FORWARD OF BUSINESS LOSS OF EARLIER YEARS AND THE EXISTENCE OF/AND THE VALIDITY OF THE NOTICE ISSUED UNDER SECTION 143(2) OF THE ACT FOR A.Y. 2005- 06. THE LEARNED CIT(A) DISPOSED OFF THE ASSESSEES APPEAL ALLOWING THE ASSESSEE PARTIAL RELIEF. 3. AGGRIEVED BY THE ORDER OF THE CIT(A)-22, MUMBAI DAT ED 17.07.2010 FOR A.Y. 2005-06, THE ASSESSEE HAS PREFERRED THIS APPEA L AND RAISED THE FOLLOWING GROUNDS: - I. VALIDITY OF THE NOTICE UNDER SECTION 143(2) OF THE ACT AND THE ASSESSMENT THEREUNDER: 1.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) [CIT ( A)] ERRED IN UPHOLDING THE ASSESSMENT FOR THE ABOVE YEAR FRAMED BY THE LEARNED ASSESSING OFFICER WITHOUT COMPLYING WITH TH E RELEVANT PROVISIONS OF THE LAW. 1.2 IT IS RESPECTFULLY SUBMITTED THAT NO NOTICE UN DER SECTION 143(2) OF THE ACT WAS SERVED ON THE APPELLANT WITHIN THE TIME LIMITS PRESCRIBED UNDER SECTION 143(2) OF THE ACT. ACCORDI NGLY, THE LEARNED ASSESSING OFFICER HAD NO JURISDICTION TO PR OCEED WITH SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT . THUS THE ASSESSMENT IS BAD IN LAW AND DESERVES TO BE QUASHED AND STRUCK DOWN AS NULL AND VOID. IN VIEW OF THE ABOVE, THE APPELLANT PRAYS THAT TH E ASSESSMENT BE SET ASIDE AS BAD IN LAW AND STRUCK DOWN AS NULL AND VOID. II. DISALLOWANCE OF INTEREST PAYABLE TO MUKAND LIMI TED RS. 11,07,57,156: 2.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT (A) ERRED IN CONFIRMING THE DISALLOWANC E OF THE CLAIM OF THE APPELLANT FOR INTEREST OF RS.11,07,57,156 PAYAB LE BY THE APPELLANT TO ITS HOLDING COMPANY, NAMELY MUKAND LIM ITED. 2.2 THE LEARNED CIT (A) AND THE ASSESSING OFFICER FAILED TO APPRECIATE THE EXPLANATIONS GIVEN BY THE APPELLANT. THE LEARNE D CIT (A) AND THE ASSESSING OFFICER FAILED TO APPRECIATE THAT THE APPELLANT HAS NOT CLOSED DOWN ITS BUSINESS COMPLETELY AND WAS EXP LORING THE POSSIBILITY OF DEVELOPING ITS LAND. 2.3 THE APPELLANT PRAYS THAT ALL THE CONDITIONS PR ESCRIBED FOR CLAIMING THE DEDUCTION OF INTEREST PAYABLE TO MUKAND LIMITED HAVE BEEN COMPLIED WITH AND HENCE THE LEARNED ASSESSING OFFIC ER BE DIRECTED TO ALLOW DEDUCTION IN RESPECT OF SUCH INTEREST IN T ERMS OF PROVISIONS OF SECTION 36(1)(III) OF THE ACT. ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 3 IN VIEW OF THE ABOVE THE APPELLANT PRAYS THAT THE DISALLOWANCE MADE BY THE LEARNED ASSESSING OFFICER BE DELETED AN D THE LOSS FOR THE YEAR BE INCREASED ACCORDINGLY. III. DISALLOWANCE OF RATES AND TAXES RS. 29,06,197: 3.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT (A) ERRED IN CONFIRMING DISALLOWANCE OF A SUM OF RS.29,06,197 IN RESPECT OF RATES AND TAXES INCURRED BY THE APPELLANT ON THE GROUND THAT THE SAME ARE NOT FOR T HE PURPOSES OF THE BUSINESS OF THE APPELLANT. 3.2 THE LEARNED CIT (A) AND THE LEARNED ASSESSING OFFICER FAILED TO APPRECIATE THE EXPLANATIONS GIVEN AND DETAILS PLACE D ON RECORD IN RESPECT OF RATES AND TAXES INCURRED BY THE APPELLAN T. IT IS SUBMITTED THAT SUCH EXPENSES WERE WHOLLY AND EXCLUS IVELY FOR THE BUSINESS OF THE APPELLANT AND BE ALLOWED AS REVENUE EXPENDITURE. IN VIEW OF THE ABOVE, THE APPELLANT PRAYS THAT TH E LEARNED ASSESSING OFFICER BE DIRECTED TO ALLOW DEDUCTION FO R RATES AND TAXES INCURRED BY THE APPELLANT AND INCREASE THE LOSS ACC ORDINGLY. IV. CARRY FORWARD OF BUSINESS LOSS OF EARLIER YEARS: 4.1 ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LEARNED CIT (A) ERRED IN HOLDING THAT LOSSES OF THE EARLIER YEARS CANNOT BE ALLOWED TO BE CARRIED FORWARD AS THERE AR E NO BUSINESS ACTIVITIES AND THE LOSSES ARE NOT FROM BUSINESS. 4.2 THE LEARNED CIT(A) AND THE ASSESSING OFFICER F AILED TO APPRECIATE THAT THE ISSUE OF ALLOWING CARRY FORWARD OF BUSINES S LOSS HAD ALREADY BEEN SETTLED IN EARLIER YEARS AND HAVING CO MPLIED WITH THE RELEVANT PROVISIONS OF THE LAW, THE APPELLANT IS EL IGIBLE TO CARRY FORWARD AND SET OFF OF SUCH LOSSES. 4.3 IT IS SUBMITTED THAT THE LEARNED CIT(A) AND THE ASSESSING OFFICER EXCEEDED HIS JURISDICTION WHILE DWELLING UPON THE I SSUE. 4. GROUND NO, I (1.1 TO 1.2) VALIDITY OF NOTICE UNDE R SECTION 143(2) OF THE ACT AND THE ASSESSMENT THEREUNDER 4.1.1 IN THIS GROUND, THE ASSESSEE ASSAILS THE IMPU GNED ORDER OF THE LEARNED CIT(A) IN UPHOLDING THE VALIDITY OF THE ASS ESSMENT FOR A.Y. 2005-06 FRAMED BY THE ASSESSING OFFICER (AO) IN VIOLATION O F THE RELEVANT PROVISIONS OF LAW. IT IS FURTHER CONTENDED THEREIN THAT NO NOT ICE UNDER SECTION 143(2) OF THE ACT WAS SERVED ON THE ASSESSEE WITHIN THE TI ME LIMIT PRESCRIBED UNDER SECTION 143(2) OF THE ACT. THEREFORE, SINCE T HE AO HAD NO VALID JURISDICTION TO PROCEED WITH THE SCRUTINY ASSESSMEN T UNDER SECTION 143(3) OF THE ACT, THE RESULTANT ORDER OF ASSESSMENT FOR A .Y. 2005-06 IS BAD IN LAW AND REQUIRES TO BE STRUCK DOWN AS NULL AND VOID. ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 4 4.1.2 ACCORDING TO THE SR. COUNSEL FOR THE ASSESSEE , THE FACTS OF THE MATTER ARE THAT ADMITTEDLY AS PER THE ORDER OF ASSESSMENT THE ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2005-06 ON 24.10.2005 AND THEREFORE IN ORDER TO TAKE UP THE ASSESSEES CASE FOR SCRUTINY, NOTICE UN DER SECTION 143(2) IS REQUIRED TO BE SERVED ON THE ASSESSEE WITHIN 12 MON THS FROM THE END OF THE MONTH IN WHICH THE RETURN OF INCOME WAS FURNISH ED I.E. ON OR BEFORE 31.01.2006. IT IS SUBMITTED THAT SINCE THE FIRST NO TICE UNDER SECTION 143(2) RECEIVED BY THE ASSESSEE WAS ON 05.09.2007, THE ASS ESSEE VIDE LETTER DATED 07.09.2007, DULY FILED IN THE OFFICE OF THE AO ON T HE SAME DATE AS PER ACKNOWLEDGEMENT THEREON; OBJECTED THAT THE SAID NOT ICE WAS ILLEGAL AND BAD IN LAW AS IT WAS SERVED BEYOND THE TIME LIMIT P RESCRIBED UNDER SECTION 143(2) OF THE ACT. THE SR. COUNSEL INVITED THE ATTE NTION OF THE BENCH TO THE ORDER OF ASSESSMENT WHICH SHOWS THAT THE AO SIMPLY IGNORED THIS OBJECTION RAISED BY THE ASSESSEE AND PROCEEDED TO COMPLETE TH E ASSESSMENT STATING THAT NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISS UED ON 23.10.206 AND DULY SERVED ON THE ASSESSEE. 4.1.3 ON APPEAL, BEFORE THE LEARNED CIT(A), IT IS S UBMITTED THAT THE ASSESSEE CONTENDED THAT THOUGH IT HAD DENIED SERVICE OF ANY NOTICE DATED 23.10.2006, THE AO NEITHER FURNISHED ANY PROOF OF SERVICE OF TH IS NOTICE NOR ADDRESSED THE OBJECTIONS RAISED IN ASSESSEES LETTER DATED 07 .09.2007. IN THIS REGARD, AN AFFIDAVIT WAS EXECUTED BY DIRECTOR OF THE ASSESS EE COMPANY (COPY PLACED AT PG. 23 & 24 OF PAPER BOOK) DENYING SERVICE OF NO TICE UNDER SECTION 143(2) OF THE ACT DATED 23.06.2006 ON THE ASSESSEE. IT WAS POINTED OUT THAT THE ASSESSEE HAD INTIMATED THE AO OF SHIFT OF BOTH ITS REGISTERED OFFICE AS WELL AS ADMINISTRATIVE OFFICE VIDE LETTER DATED 19.06.20 06 SERVED ON THE DEPARTMENT ON THE SAME DAY (COPY PLACED AT PG. 19 & 20 OF THE PAPER BOOK). IN THE LIGHT OF THE ABOVE CONTENTIONS, THE LEARNED CIT(A) CALLED FOR A REMAND REPORT FROM THE AO IN THE MATTER. IN THE REMAND REP ORT DATED 15.06.2010 (COPY PLACED AT PG. 15 TO 18 OF PAPER BOOK), IT IS CLAIMED THAT THE AO HAD ISSUED NOTICE UNDER SECTION 143(2) OF THE ACT ON 23 .10.2006 AND THAT THE SAME WAS ALLEGEDLY SERVED BY AFFIXTURE BY THE INSPE CTOR OF INCOME TAX ON 31.10.2006 AT NATHANI ROAD, VIDYAVIHAR (W), MUMBAI 400086, AS GIVEN IN THE RETURN OF INCOME FOR A.Y. 2005-06. IT IS SUBMIT TED THAT THIS PLACE IS THE ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 5 ASSESSEES OLD REGISTERED OFFICE, THE SHIFTING OF W HICH WAS INTIMATED TO THE AO VIDE LETTER DATED 19.06.2006. IN THIS REGARD, IT WAS POINTED OUT THAT THE ORDER OF ASSESSMENT FOR A.Y. 2004-05 DATED 24.10.20 06 WAS SERVED ON THE ASSESSEE ON 06.12.2006 AT THE NEW ADDRESS OF ITS RE GISTERED OFFICER AT BAJAJ BHAWAN, NARIMAN POINT, MUMBAI; INDICATING THAT THE INTIMATION FOR CHARGE OF ADDRESS WAS AVAILABLE ON THE RECORDS OF THE DEPA RTMENT. 4.1.4 ADVERTING TO THE AOS REMAND REPORT, IT WAS C ONTENDED THAT IT APPEARS THAT THE INSPECTOR WHO FURNISHED THE REPORT OF SERVICE OF NOTICE BY AFFIXTURE TO THE AO, HAD VISITED THE OLD OFFICE OF THE ASSESSEE AT VIDYAVIHAR FROM WHICH IT HAS SHIFTED EARLIER FOR THIS PURPOSE. AS SUBMITTED EARLIER, THE ASSESSEE HAD DISCONTINUED ITS MANUFACTURING BUSINES S LONG BACK AND COMMENCED REAL ESTATE BUSINESS YEARS AGO AND IN CON SEQUENCE OF A DEVELOPMENT AGREEMENT ENTERED INTO WITH GAMON NEELK ANTH REALTY CORPORATION, THE SAID OLD OFFICE LAND AT VIDYAVIHAR WAS A CONSTRUCTION SITE. IT IS CONTENDED THAT IT IS EVIDENTLY CLEAR FROM THE FACTS ON RECORD THAT THE NOTICE DATED 23.10.2006 WAS SOUGHT TO BE SERVED ON THE PREVIOUS ADDRESS OF THE ASSESSEE, IGNORING THE DETAILS OF CHANGE OF ADDRESS TO THE NEW PREMISES, INTIMATED BY THE ASSESSEE VIDE LETTER DAT ED 19.06.2006 ON THE RECORDS OF THE DEPARTMENT. THE REPORT OF THE INSPEC TOR DOES NOT SPECIFY THE ENQUIRIES MADE TO ASCERTAIN THE CORRECT ADDRESS ON WHICH THE SAID NOTICE WAS TO BE SERVED. NO ATTEMPT WAS MADE BY REVENUE TO ASCERTAIN FACTS AND WHEREABOUTS OF THE ASSESSEE BY MAKING CONTACT WITH THE ASSESSEE ON THE TELEPHONE NUMBER 25148936 GIVEN IN THE RETURN OF IN COME OR WITH THE CHARTERED ACCOUNTANT WHOSE NUMBER WAS GIVEN IN THE COVERING LETTER ATTACHED TO THE RETURN OF INCOME FOR A.Y. 2005-06. 4.1.7 ACCORDING TO THE SR. COUNSEL, SERVICE OF NOTI CE BY AFFIXTURE CANNOT BE RESORTED TO IN A ROUTINE MANNER WITHOUT RECORDS EVI DENCING ANY EFFORTS BEING MADE BY REVENUE TO SERVE THE NOTICE ON THE AS SESSEE AS REQUIRED. AFFIXTURE IS USUALLY USED AS A MEASURE OF LAST RESO RT. SUCH A PROCEDURE REQUIRES WITNESSING OF THE INCIDENT BY TWO INDEPEND ENT WITNESSES FROM THE LOCALITY. IN THE CASE ON HAND THE INSPECTORS REPOR T OF SERVICE OF NOTICE BY AFFIXTURE, AS EXTRACTED IN THE REMAND REPORT, DOES NOT CONTAIN SIGNATURES OF ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 6 ANY SUCH INDEPENDENT WITNESSES. RATHER, IT IS CLEAR THAT THE SAID INSPECTOR SIGNED THE REPORT ON HIS OWN ALONG WITH ANOTHER INS PECTOR. IT IS FURTHER SUBMITTED THAT THE AOS STATEMENT IN THE REMAND REP ORT DATED 15.06.2010 THAT THE COPY OF THE ASSESSEES LETTER DATED 07.09. 2007 TO THE AO, OBJECTING TO THE NON-RECEIPT OF NOTICE UNDER SECTION 143(2) O F THE ACT WITHIN THE TIME STIPULATED UNDER THE ACT (I.E. ON OR BEFORE 431.10. 2006) WAS RECEIVED BY HIM ONLY ALONGWITH SUBMISSION DATED 22.01.2010 IN R EMAND PROCEEDINGS WAS FACTUALLY ERRONEOUS. THAT THE SAID LETTER DATED 07.09.2007 ITSELF, ON RECEIPT OF THE FIRST NOTICE UNDER SECTION 143(2) OF THE ACT, WAS RECEIVED BY DEPARTMENT IS EVIDENCED BY THE ACKNOWLEDGEMENT STAM P OF THE DEPARTMENT THEREON ON 07.09.2007 ITSELF (COPY AT PG . 14 OF THE PAPER BOOK). THE AO HAS BRUSHED ASIDE AND IGNORED THIS VI TAL LEGAL CONTENTION PUT FORTH BY THE ASSESSEE BOTH AT THE TIME OF PASSI NG OF THE ORDER OF ASSESSMENT FOR A.Y. 2005-06, AS ALSO IN THE REMAND REPORT DATED 15.06.2010 (COPY PLACED AT PG. 15 TO 18 OF THE PAPE R BOOK). 4.1.8 IT IS CONTENDED THAT THE ALLEGED NOTICE UNDER SECTION 143(2) OF THE ACT DATED 23.10.2006 HAS BEEN ALLEGEDLY SERVED AT THE P REVIOUS REGISTERED OFFICE OF THE ASSESSEE INSTEAD OF THE NEW REGISTERE D OFFICE, THE ADDRESS OF WHICH WAS INTIMATED AND RECEIVED BY THE REVENUE OFF ICE ON 19.07.2006 (COPY AT PG. 19 & 20 OF THE PAPER BOOK). FURTHER, T HE SAID NOTICE WAS ALLEGEDLY SERVED BY AFFIXTURE; APPARENTLY WITHOUT MAKING ANY EFFORTS TO TRACE THE ASSESSEE AT THE NEW PREMISES, THE DETAILS OF WHICH WERE PART OF REVENUES RECORDS, AND WITHOUT THE SIGNATURES OF TW O INDEPENDENT WITNESSES OF THE LOCALITY, AS IS REQUIRED IN SUCH C ASES. IT IS ALSO EVIDENT FROM THE REPORT THAT THE ALLEGED SERVICE OF THE NOT ICE UNDER SECTION 143(2) BY AFFIXTURE HAS ONLY BEEN WITNESSED BY A COLLEAGUE OF THE INSPECTOR MAKING THE AFFIXTURE. ACCORDING TO THE LEARNED SR. COUNSEL, THE ALLEGED SERVICE OF THE NOTICE UNDER SECTION 143(2) OF THE A CT BY AFFIXTURE IN THE ABOVE MANNER WAS HIGHLY IRREGULAR, UNWARRANTED, UNJ USTIFIED AND IS INVALID/BAD IN LAW. IN SUPPORT OF THE PROPOSITION T HAT THE SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT BY AFFIXTURE IN THE MANNER CARRIED OUT AS ABOVE BEING BAD IN LAW, IN THE FACTUAL MATRIX OF TH E CASE, THE SR. COUNSEL PLACED RELIANCE ON THE FOLLOWING JUDICIAL PRONOUNCE MENTS: - ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 7 (I) CIT VS. RAMENDRA NATH GHOSH (1971) 82 ITR 888 ( SC) (II) CIT VS. GODAVARI ELECTRICAL CONDUCTORS (2015) 120 DTR (AP) 84 (III) ARUN LAL VS. ACIT (2010) 124 ITD 85 (AGRA) (T M) (IV) CIT VS. MASCOMPTEL INDIA LTD. (2013) 345 ITR 5 8 (DELHI) 4.1.9 IT IS SUBMITTED THAT AS PER THE LAW LAID DOW N IN THIS REGARD, SERVICE OF NOTICE BY AFFIXTURE MUST BE PRECEDED BY ADEQUATE EFFORTS BY THE REVENUE TO SERVE THE NOTICE ON THE ASSESSEE TO BE H ELD AS VALID SERVICE OF NOTICE IN TERMS OF SECTION 282(I) OF THE ACT. THE A SSESSEE ARGUES THAT THIS IS ABSOLUTELY LACKING IN THE CASE ON HAND, AS THE F ACTS SHOW THAT THE NOTICE ALLEGEDLY SERVED ON 23.10.2006 WAS SOUGHT TO BE SERVED ONLY ON 31.10.2006. THE SAID NOTICE WAS SERVED BY AFFIXTURE ON 31.01.2006 ITSELF, WITHOUT BRINGING ON RECORD TO SHOW AS TO WHAT EFFOR TS WERE MADE BY THE INSPECTOR TO ASCERTAIN THE WHEREABOUTS OF THE ASSES SEE OR FROM ITS OWN RECORDS, BEFORE SERVICE OF THE NOTICE BY AFFIXTURE. IT IS CONTENDED THAT NOTICE BY AFFIXTURE CAN BE RESORTED TO ONLY IN VERY EXCEPTIONAL CIRCUMSTANCES AND CANNOT BE RESORTED TO IN A ROUTIN E MANNER AS HAS BEEN DONE IN THE CASE ON HAND. REVENUE HAS FAILED T O ESTABLISH THAT ANY REASONABLE EFFORTS WHATSOEVER HAVE MADE BY IT TO SE RVE THE SAID NOTICE ON THE ASSESSEE OR THAT THE ASSESSEE EVADED SERVICE OF THE NOTICE AND THEREFORE SERVICE BY AFFIXTURE WOULD BE ONLY AVAILA BLE OPTION LEFT. 4.1.10 THE SR. COUNSEL SUBMITS THAT THE PROVISIONS OF SECTION 292BB OF THE ACT ARE NOT ATTRACTED TO THE CASE ON HAND. THE ASSESSEE IS SQUARELY COVERED BY THE PROVISO TO SECTION 292BB OF THE ACT, IN AS MUCH AS, THE ASSESSEE HAS RAISED THE OBJECTION AT THE FIRST INST ANCE IMMEDIATELY ON RECEIPT OF THE NOTICE UNDER SECTION 143(2) OF THE A CT DATED 20.08.2007, VIDE LETTER DATED 07.09.2007 (COPY PLACED AT PG. 14 OF THE PAPER BOOK), WHICH IS WELL BEFORE THE COMPLETION OF THE ASSESSME NT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 29.11.20 07. EVEN OTHERWISE, IT IS NOW SETTLED LEGAL POSITION THAT THE PROVISIONS O F SECTION 292BB OF THE ACT WOULD OPERATE PROSPECTIVELY FROM A.Y. 2008-09 A ND ONWARDS. 4.1.11 IT IS SUBMITTED THAT THE LIMITATION PRESCRIB ED IN THE PROVISIONS OF SECTION 143(2) OF THE ACT ARE MANDATORY. IT IS TRIT E LAW THAT IF THE ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 8 REQUIREMENTS OF A STATUTE WHICH PRESCRIBES THE MANN ER IN WHICH SOMETHING IS TO BE DONE ARE EXPRESSED IN NEGATIVE L ANGUAGE; I.E. IF THE STATUTE ENACTS THAT IT SHALL BE DONE IN SUCH MANNER AND NOT IN ANY OTHER WAY, THEN SUCH REQUIREMENTS IN ALL CASES ARE ABSOLU TE AND INFRACTION OF THE SAME WILL INVALIDATE THE WHOLE PROCEEDINGS. SIN CE THE ALLEGED SERVICE OF THE NOTICE UNDER SECTION 143(2) OF THE ACT BY AF FIXTURE IN THE CASE ON HAND IS NOT IN ACCORDANCE WITH THE LAW PRESCRIBED, IT IS BAD IN LAW. THEREFORE THE AO HAS NO JURISDICTION TO TAKE UP SCR UTINY ASSESSMENT OF THE ASSESSEE FOR A.Y. 2005-06 AND CONSEQUENTLY, THE ORDER OF ASSESSMENT FRAMED ON THE BASIS OF SUCH INVALID NOTICE IS BAD I N LAW AND LIABLE TO BE QUASHED AS NULL AND VOID AS INITIO. IN SUPPORT OF T HIS PROPOSITION, RELIANCE WAS PLACED ON THE FOLLOWING JUDICIAL PRONO UNCEMENTS: - (I) CIT VS. BLUE MOON (2010) 321 ITR 362 (SC) (II) CWT VS. HUF OF LATE SHRI J.M. SCINDIA (2008) 3 00 ITR 193 (III) ARUNLAL VS. ACIT (2010) 124 ITD 85 (AGRA) (TM ) (IV) ABACUS DISTRIBUTION SYSTEMS (I) P. LTD. VS. DC IT (2014) 29 ITR (TRIB) 1 (MUMBAI) 4.2 PER CONTRA, THE LEARNED D.R. FOR REVENUE SUPPOR TED THE FINDING OF THE LEARNED CIT(A) IN THE IMPUGNED ORDER ON THIS IS SUE. THE LEARNED D.R. PLACED RELIANCE ON THE FOLLOWING DECISIONS IN SUPPO RT OF REVENUES CASE: - (I) V.R.A. COTTON MILLS (P) LTD. VS. UNION OF INDI A AND ORS. (2011) 359 ITR 495 (P & H) (II) CIT VS. VISION INC. (2012) 208 TAXMAN 153 (DE L) 4.3.1 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED AND CAREFULLY CONSIDERED THE MATERIAL ON RECORD, INCLUDING THE JU DICIAL PRONOUNCEMENTS CITED BY BOTH THE SIDES. THE ISSUE FOR CONSIDERATIO N IS WHETHER THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS SERVED ON THE A SSESSEE IN THE CASE ON HAND WITHIN THE TIME PRESCRIBED UNDER THE PROVISION S OF SECTION OF SECTION 143(2) OF THE ACT AND AS PER THE REQUIREMENTS LAID DOWN BY LAW AND PROCEDURE. THE CONTENTION OF THE ASSESSEE IS THAT S INCE NO NOTICE UNDER SECTION 143(2) OF THE ACT WAS SERVED ON THE ASSESSE E WITHIN THE TIME PRESCRIBED AND IN ACCORDANCE WITH THE LEGAL PROCEDU RE LAID DOWN, THE AO HAD NO JURISDICTION TO PROCEED WITH THE SCRUTINY AS SESSMENT AND ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 9 CONSEQUENTLY THE RESULTANT ORDER OF ASSESSMENT FOR A.Y. 2005-06 IS BAD IN LAW AND REQUIRED TO BE STRUCK DOWN AS NULL AND VOID . 4.3.2 IN THE CASE ON HAND, THE ASSESSEE ADMITTEDLY FILED ITS RETURN OF INCOME FOR A.Y. 2005-06 ON 24.10.2005 AND THEREFORE THE INITIAL NOTICE UNDER SECTION 143(2) OF THE ACT OUGHT TO HAVE BEEN SERVED ON THE ASSESSEE WITHIN 12 MONTHS FROM THE END OF THE MONTH IN WHICH THE RETURN OF INCOME WAS FILED, I.E. ON OR BEFORE 31.10.2006. ACCORDING TO THE ASSESSEE THE FIRST NOTICE UNDER SECTION 143(2) OF THE ACT WAS SERVED O N IT ON 05.09.2007 AND IN THIS REGARD IT HAD FILED LETTER DATED 07.09.2007 ON THE SAME DATE IN THE OFFICE OF THE AO AS PER ACKNOWLEDGEMENT THEREON (CO PY OF LETTER DATED 07.09.2007 WITH ACKNOWLEDGEMENT PLACED AT PG. 14 OF PAPER BOOK); PLACING ITS OBJECTION THAT THE SAID NOTICE WAS BELATED, ILL EGAL AND BAD IN LAW AS IT WAS BEYOND THE TIME LIMIT PRESCRIBED UNDER SECTION 143(2) OF THE ACT. WE FIND FROM A PERUSAL OF THE ORDER OF ASSESSMENT THAT THESE OBJECTIONS OF THE ASSESSEE HAVE NOT BEEN ADDRESSED BY THE AO AS THERE IS NOT A WHISPER OF THIS LETTER CONTAINING THE ASSESSEES OBJECTION AND FIND THAT THE AO HAS MERELY MENTIONED THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED ON 23.10.206 AND SERVED ON THE ASSESSEE. 4.3.3 BEFORE THE LEARNED CIT(A), THE ASSESSEE SUBMI TTED THAT IT HAD DENIED RECEIPT OF ANY NOTICE DATED 23.10.2006 UNDER SECTIO N 143(2) OF THE ACT BY WAY OF ITS LETTER DATED 07.09.2007. THIS WAS SUPPOR TED BY AFFIDAVIT OF DIRECTOR OF THE ASSESSEE COMPANY (COPY PLACED AT PG . 23 & 24 OF THE PAPER BOOK) CONTENDING THAT THE AO HAD NEITHER FURNISHED ANY PROOF OF SERVICE OF NOTICE DATED 23.10.2006 NOR ADDRESSED ITS OBJECTION S RAISED IN LETTER DATED 07.09.2007 THAT, SINCE THE SAID NOTICE WAS NEVER SE RVED ON THE ASSESSEE IN THE TIME PRESCRIBED UNDER SECTION 143(2) OF THE ACT , THE AO HAD NO AUTHORITY TO ASSUME JURISDICTION FOR TAKING UP SCRU TINY ASSESSMENT IN THE CASE ON HAND, FOR A.Y. 2005-06. 4.3.4 IT IS SEEN FROM THE REMAND REPORT DATED 15.06 .2010 (COPY PLACED ON PG. 15 TO 18 OF PAPER BOOK), CALLED FOR BY THE LEAR NED CIT(A) THAT IT WAS REPORTED THAT THE AO HAD ISSUED NOTICE UNDER SECTIO N 143(2) OF THE ACT DATED 23.10.2006 WHICH WAS ALLEGEDLY SERVED BY AFFI XTURE BY THE INSPECTOR ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 10 OF INCOME TAX (ITI) ON 31.10.2006 AT NATHARI ROAD , VIDYAVIHAR (W), MUMBAI 400086 AS PER THE ADDRESS GIVEN BY THE ASSES SEE IN THE RETURN OF INCOME, SINCE NO ONE FROM THE ASSESSEES SIDE WAS P RESENT. IN RESPECT OF THE FACT THAT THE ASSESSEE HAD INTIMATED THE DEPART MENT OF THE CHANGE OF ADDRESS OF ITS REGISTERED AND ADMINISTRATIVE OFFICE S VIDE LETTER DATED 19.06.2006, THE LEARNED CIT(A) BRUSHED THIS ASIDE S TATING THAT THE SAID LETTER WAS ADDRESSED TO INCOME TAX OFFICER, WARD 10 (2)(3) /ADDL. CIT, RANGE 10(2) WITH RESPECT TO PROCEEDINGS FOR A.Y. 20 04-05 AND SINCE THE PROCEEDINGS FOR A.Y. 2005-06 WAS BEFORE THE DCIT-10 (2), THE SAID LETTER DATED 19.06.2006 OUGHT TO HAVE BEEN FILED BEFORE HI M ONLY. IN THAT VIEW OF THE MATTER, THE LEARNED CIT(A) BRUSHED ASIDE THE AS SESSEES CONTENTIONS AND UPHELD THE VALIDITY OF THE SERVICE OF NOTICE UN DER SECTION 143(2) OF THE ACT FOR A.Y. 2005-06. IN OUR VIEW, THE FACT OF THE MATTER IS THAT WHETHER OR NOT THE AO FOR DIFFERENT ASSESSMENT YEARS IN THE CA SE ON HAND IS AN INCOME TAX OFFICER/DCIT/OR ADDITIONAL CIT, THIS IS DIFFERE NT ON THE BASIS OF INCOME BRACKET IN WHICH THE ASSESSEE FALLS FOR THAT PARTIC ULAR YEAR, WHICH IS AN INTERNAL ADMINISTRATIVE ARRANGEMENT OF THE DEPARTME NT; THE ASSESSMENT RECORDS REMAIN IN THE SAME WARD/RANGE-10, MUMBAI AN D THEREFORE ONCE THE ASSESSEE HAS INTIMATED THE DEPARTMENT VIDE LETT ER DATED 19.06.2006 OF THE CHANGE OF THE PLACE/ADDRESS OF ITS REGISTERED O FFICE/ ADMINISTRATIVE OFFICE, IT WAS INCUMBENT FOR THE DEPARTMENT TO HAVE ITS RECORDS SUITABLY RECTIFIED. HOW WAS THE ASSESSEE ON 19.06.2006 TO KN OW WHICH OFFICER WAS TO TAKE UP ITS ASSESSMENT FOR A.Y. 2005-06 AND THER EFORE RIGHTLY FILED THE SAID LETTER WITH THE AO FOR A.Y. 2004-05 IN WHICH A SSESSMENT PROCEEDINGS WERE ONGOING. WE OBSERVE THAT THE DEPARTMENT WAS WE LL AWARE OF THE CHANGE OF ADDRESS AS INTIMATED BY THE ASSESSEES LE TTER DATED 19.06.2006, FOR THE ORDER OF ASSESSMENT FOR A.Y. 2004-05 DATED 24.10.2006, WAS PASSED ON THE ASSESSEES NEW REGISTERED OFFICE AT BAJAJ BH AVAN, 3 RD FLOOR, 226, NARIMAN POINT, MUMBAI. ONE DAY AFTER NOTICE UNDER S ECTION 143(2) OF THE ACT WAS ISSUED AND STRANGELY, A WEEK LATER, ON 31.1 0.2006 THE DEPARTMENT SERVES THE NOTICE UNDER SECTION 143(2) OF THE ACT B Y AFFIXTURE ON THE OLD ADDRESS OF THE ASSESSEE; WHERE OBVIOUSLY EVEN AS PE R THEIR RECORDS, THE ASSESSEE COULD NOT HAVE BEEN PRESENT. ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 11 4.3.5 WE HAVE PERUSED THE REMAND REPORT DATED 15.06 .2010 (PLACED AT PG. 15 TO 18 OF THE PAPER BOOK) IN WHICH IT IS REPORTED THAT THE NOTICE UNDER SECTION 143(2) OF THE ACT DATED 23.10.2006 WAS SERV ED ON THE ASSESSEE BY AFFIXTURE BY ITIS OF THE AOS OFFICE. THE ITIS REP ORT IN THIS REGARD IS ALSO EXTRACTED THEREIN. FROM THE DETAILS IN THE ITIS RE PORT ON SERVICE OF NOTICE UNDER SECTION 143(2) DATED 23.10.2006 BY AFFIXTURE CLEARLY SHOWS THAT THE FOLLOWING DEFECTS ARE APPARENT: - (I) THE SERVICE BY AFFIXTURE OF THE SAID NOTICE UND ER SECTION 143(2) ON 31.10.2006 WAS AT THE WRONG PLACE, I.E. AT THE OLD ADDRESS OF THE ASSESSEE AT VIDYAVIHAR AND NOT AT THE NEW REGISTERED OFFICE ADDRESS AT BAJAJ BHAVAN, 3 RD FLOOR, 226, NARIMAN POINT, MUMBAI. THE CHANGE OF A DDRESS WAS INTIMATED BY THE ASSESSEE VIDE LETTER DATED 19. 06.2006 AND IN THE KNOWLEDGE OF THE DEPARTMENT, (II) THE ITIS REPORT ESTABLISHES THAT THE AFFIXTUR E OF NOTICE WAS WITNESSED BY A COLLEAGUE OF THE ITI MAKING THE REPORT, WHEREA S IT IS NECESSARY THAT THE SERVICE OF NOTICE BY AFFIXTURE SHOULD HAVE BEEN WIT NESSED AND SIGNED BY TWO INDEPENDENT WITNESSES FROM THE LOCALITY, WHICH HAS NOT BEEN DONE, (III) THE ITIS REPORT IN OUR VIEW ESTABLISHED THAT THERE IS NO EVIDENCE TO SHOW THAT ANY ENQUIRY WAS MADE BY THE ITI TO ASCERT AIN THE WHEREABOUTS OR THE CORRECT ADDRESS OF THE ASSESSEE ON WHICH THE NOTICE UNDER SECTION 143(2) DATED 23.10.2006 WAS TO BE SERVED. FURTHER, IT APPEARS THAT NO ATTEMPT WAS MADE IN THE PERIOD 23.10.2006 TO 31.10. 2006 TO SERVE THE NOTICE BY POST OR TO ASCERTAIN THE NEW ADDRESS FROM THE GIVEN TELEPHONE NUMBERS OF THE COMPANY IN THE RETURN OF INCOME FOR A.Y. 2005-06 BEFORE SERVICE OF NOTICE BY AFFIXTURE WAS TAKEN UP AS A ME ANS OF LEAST RESORT. BEFORE US, REVENUE WAS NOT ABLE TO CONTROVERT THE AFORESAID OBSERVATIONS AT (I), (II) AND (III) ABOVE. THESE DE FECTS LISTED ABOVE, ARE IN THE CLEAR VIOLATION OF THE PROCEDURE LAID DOWN BY THE H ON'BLE HIGH COURT OF ANDHRA PRADESH IN THE CASE OF GODAVARI ELECTRICAL C ONDUCTORS (2015) 120 DTR (AP) 84 AT PARAS 9 TO 13 THEREOF:- ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 12 4.3.6 ONE OF THE CONTENTIONS PUT FORTH BY THE ASSES SEE IN RESPECT OF THE SERVICE OF NOTICE UNDER SECTION 143(2) OF THE ACT B Y AFFIXTURE THE ITIS IN THE CASE ON HAND, SINCE THE DUE PROCESS OF LAW HAS NOT BEEN FOLLOWED BY THE DEPARTMENT, IT HAS THEREBY RENDERED THE SAID SERVIC E AS NOT A VALID SERVICE. IN THIS REGARD WE FIND THAT SIMILAR ISSUE OF PROCED URES TO BE FOLLOWED BY REVENUE FOR SERVICE OF NOTICE BY AFFIXTURE; APPLICA BILITY OR OTHERWISE OF SECTION 292BB OF THE ACT AND THE VALIDITY OF ASSESS MENT PROCEEDINGS ON THE BASIS OF PARTICIPATION OF THE ASSESSEE WHEN THERE H AS BEEN NO VALID SERVICE OF NOTICE, ETC. WAS EXAMINED AT LENGTH BY THE ITAT, AGRA BENCH IN THE CASE OF ARUN LAL VS. ACIT (2010) 124 ITD 85 (AGRA) (TM). THE THIRD MEMBER AT PARAS 20 TO 25 OF HIS ORDER RENDERED IN THE CONTEXT OF NOTICE UNDER SECTION 148 OF THE ACT HELD AS UNDER THAT SINCE THERE WAS N O VALID SERVICE OF NOTICE, THE ASSESSMENT PROCEEDINGS ARE VOID AB INITIO AND L IABLE TO BE QUASHED: - 20. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDE R, ORDER OF CIT(A) AND BOTH THE ORDERS PASSED BY THE LEARNED JM AND TH E LEARNED AM. THE QUESTION REFERRED TO ME HAS ALREADY BEEN REPROD UCED IN THE ABOVE PART OF THIS ORDER. ACCORDING TO THE QUESTION MY FI NDINGS ARE LIMITED TO THE ISSUE REGARDING VALIDITY OR OTHERWISE OF NOTICE ISSUED UNDER S. 148 AND ALSO THE EFFECT THEREOF. 21. THE NOTINGS OF THE NOTICE-SERVER HAVE BEEN REPR ODUCED IN THE ABOVE PART OF THIS ORDER WHICH ALSO, AS MENTIONED ABOVE, FOUND PLACE IN THE ORDER OF CIT(A) AS WELL AS IN THE ORDER PASSED BY T HE LEARNED JM. THE NOTICE-SERVER IN HIS REPORT HAS SUBMITTED THAT THE SERVICE OF AFFIXTURE HAS BEEN MADE AS PER THE DIRECTIONS OF THE AO, DT. 11TH NOV., 2003 IN THE PRESENCE OF SHRI S.C. AGARWAL, INSPECTOR OF IT. THE DATE OF NOTICE ISSUED BY THE AO IS DT. 10TH NOV., 2003. THUS, ON T HE VERY NEXT DAY OF THE ISSUE OF NOTICE, THE AO HAS DIRECTED THE NOTICE -SERVER TO SERVE THE NOTICE BY AFFIXTURE. THE IMPUGNED ASSESSMENT IS OF ASST. YR. 2001-02. IT IS NOT THE CASE OF REVENUE THAT ON 10TH NOV., 2003, IF NOTICE IS NOT SERVED WITHIN A SHORT SPAN, THE INITIATION OF REASS ESSMENT PROCEEDINGS WILL BE BARRED BY TIME, AS IT HAS BEEN THE CONTENTI ON OF THE LEARNED AUTHORISED REPRESENTATIVE THAT THERE WAS AMPLE TIME AVAILABLE WITH THE DEPARTMENT TO INITIATE REASSESSMENT PROCEEDINGS . THUS, IT IS CLEAR THAT THE AO HAD NO EXIGENCY TO ISSUE AND SERVE THE NOTICE UNDER S. 148 ON 11TH NOV., 2003 ITSELF SO AS TO BRING THE SAME W ITHIN THE PERIOD OF LIMITATION. WHEN A NOTICE IS ISSUED ON 10TH NOV., 2 003, AND IT WAS ORDERED TO BE SERVED BY AFFIXTURE ON 11TH NOV., 200 3, THE REVENUE WILL BE UNDER LEGAL OBLIGATION TO SHOW THAT BETWEEN THE PERIOD OF 10TH NOV., 2003 AND 11TH NOV., 2003 WHAT EFFORTS WERE MADE BY THE REVENUE TO EFFECT THE SERVICE OF NOTICE IN A NORMAL MANNER. TH E RECORD IS SILENT ABOUT IT. THERE IS NO MATERIAL ON RECORD TO SHOW OR TO SUGGEST THAT ANY ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 13 EFFORT WAS MADE BY THE AO TO SERVE THE NOTICE IN NO RMAL COURSE BEFORE ISSUING THE DIRECTIONS TO SERVE THE SAME BY WAY OF ALTERNATIVE MODE, I.E., BY WAY OF AFFIXTURE. THE JURISDICTIONAL HIGH COURT IN THE CASE OF JAGANNATH PRASAD VS. CIT (SUPRA) HAS HELD THAT BEFO RE ACTION UNDER ORDER V, R. 20 CAN BE TAKEN, TWO CONDITIONS MUST EX IST, ONE; THAT THE COURT HAS REASON TO BELIEVE THAT THE DEFENDANT IS K EEPING OUT OF THE WAY FOR THE PURPOSE OF AVOIDING SERVICE AND, TWO; T HAT FOR ANY OTHER REASON THE SUMMONS CANNOT BE SERVED IN THE ORDINARY WAY. NEVERTHELESS, THERE MUST BE MATERIAL ON RECORD ON T HE BASIS OF WHICH A REASONABLE PERSON MIGHT COME TO THE CONCLUSION THAT EITHER OF THESE CONDITIONS ARE SATISFIED. IT WAS OBSERVED THAT THE SATISFACTION OF THE COURT CONTEMPLATED BY ORDER V, R. 20 IS AN OBJECTIV E SATISFACTION AND IT IS NOT A SUBJECTIVE ONE. THEREFORE, RELEVANT MATERI AL MUST EXIST ON RECORD TO JUSTIFY THAT CONCLUSION. IN THAT CASE THE REPORT WAS GIVEN BY PROCESS-SERVER TO THE EFFECT THAT HE MADE ENQUIRIES AT NUMBER OF PLACES BUT HE COULD NOT FIND OUT THE ASSESSEE. AFTER SUCH REPORT, THE AO PASSED AN ORDER FOR AFFIXTURE. IT WAS OBSERVED BY T HE HONBLE HIGH COURT THAT THE MERE FACT THAT THE PROCESSOR-SERVER COULD NOT FIND OUT THE ASSESSEE WOULD NOT LEAD TO THE CONCLUSION THAT THE ASSESSEE WAS KEEPING OUT OF THE WAY FOR THE PURPOSE OF AVOIDING SERVICE OR THAT FOR ANY OTHER REASON THE SUMMONS CANNOT BE SERVED. IT W AS OBSERVED THAT THE REPORT OF THE PROCESS-SERVER ITSELF DOES NOT IN DICATE THAT MORE THAN ONE ATTEMPT WAS MADE BY THE PROCESS-SERVER AND ON T HE CONTRARY IT WAS INDICATING THAT ONE SINGLE ATTEMPT OF ENQUIRY W AS MADE AT NUMBER OF PLACES BUT NOTICE-SERVER COULD NOT FIND OUT THE ASSESSEE. THAT FACTOR, ACCORDING TO THE HONBLE HIGH COURT COULD NOT CONST ITUTE SUFFICIENT MATERIAL FOR THE SATISFACTION OF THE AO THAT THE CO NDITIONS REQUIRED FOR APPLICATION OF ORDER V ,R. 20 WERE EXISTING. THEREF ORE, IT WAS HELD THAT THE ORDER OF THE AO DIRECTING THE SERVICE BY AFFIXT URE WAS BASED ON NO RELEVANT MATERIAL ON RECORD AND, THEREFORE, WAS TO BE STRUCK DOWN. THIS CASE OF HONBLE ALLAHABAD HIGH COURT WAS LATER ON C ONSIDERED BY THE SAME HIGH COURT IN THE DECISION IN THE CASE OF GANE SHI LAL & SONS (SUPRA) AND IT WAS FOUND DISTINGUISHABLE ON THE GRO UND THAT THERE WAS MATERIAL ON RECORD TO HOLD THAT THE ASSESSEE WAS EV ADING SERVICE OR WAS KEEPING ITSELF OUT OF THE WAY FOR AVOIDING SERV ICE AS WHEN THE NOTICE-PROCESSOR WENT TO THE PLACE OF THE BUSINESS OF THAT ASSESSEE NO ONE WAS PREPARED TO ACCEPT THE NOTICE. IN THIS MANN ER THE SAID CASE WAS DISTINGUISHED. THEREFORE, IT CANNOT BE SAID THA T THE RATIO OF THE DECISION IN THE CASE OF GANESHI LAL & SONS (SUPRA) IS IN ANY WAY DIFFERENT FROM THE DECISION IN THE CASE OF JAGANNAT H PRASAD VS. CIT (SUPRA). HERE IT WILL BE IMPORTANT TO MENTION THAT IN THE CASE OF GANESHI LAL & SONS (SUPRA), IT HAS BEEN OBSERVED BY THE HON BLE HIGH COURT THAT IN THE SAID CASE THE PROCESS-SERVER, DESPITE D UE DILIGENCE, WAS NOT ABLE TO FIND THE PETITIONERS OR ANY OTHER PERSON WH O WAS WILLING TO ACCEPT THE NOTICE ON BEHALF OF THE ASSESSEE AND IN THAT CIRCUMSTANCE THE SERVICE BY AFFIXTURE WAS MADE. THEREFORE, IN TH AT CASE THERE WAS MATERIAL ON RECORD TO SHOW THAT ATTEMPTS WERE MADE BY THE DEPARTMENT TO EFFECT SERVICE IN NORMAL MODE AND THO SE ATTEMPTS WERE NOT SUCCESSFUL, RESULTANTLY, SERVICE WAS MADE THOUG H AFFIXTURE. ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 14 HOWEVER, IN THE IMPUGNED CASE THERE IS NO MATERIAL ON RECORD TO SUGGEST OR TO HOLD THAT ANY SINCERE ATTEMPT WAS MAD E BY THE REVENUE TO MAKE THE SERVICE THROUGH NORMAL MODE. FOR THE RE ASONS DISCUSSED ABOVE, THE DECISION IN THE CASE OF JAGANNATH PRASAD VS. CIT (SUPRA) WILL HAVE SQUARE APPLICATION TO THE PRESENT CASE AN D RELYING ON THE DECISION IN THE CASE OF GANESHI LAL & SONS (SUPRA), IT CANNOT BE HELD THAT SERVICE OF NOTICE BY AFFIXTURE IN THE PRESENT CASE WAS A VALID SERVICE. 22. SO FAR AS IT RELATES TO THE APPLICABILITY OR OT HERWISE OF S. 292BB, IRRESPECTIVE OF THE FACT THAT WHETHER OR NOT THE CA SE OF THE ASSESSEE IS COVERED BY THE PROVISO, IT IS FOUND THAT THIS ISSUE DOES NOT REMAIN RES INTEGRA AS THAT ISSUE IS COVERED BY THE DECISION OF SPECIAL BENCH IN THE CASE OF KUBER TOBACCO PRODUCTS (P) LTD. VS. DY. CIT (SUPRA), WHEREIN IT HAS BEEN HELD THAT S. 292BB INSERTED BY FINANCE ACT , 2008, W.E.F. 1ST APRIL, 2008 HAS NO RETROSPECTIVE OPERATION AND APPL IES TO AND FROM TO ASST. YR. 2008-09 ONLY. THEREFORE, THE ASSESSEE IS NOT BARRED TO CHALLENGE THE VALIDITY OF BLOCK ASSESSMENT IN APPEL LATE PROCEEDING ON THE GROUND OF NON-ISSUANCE OF NOTICE UNDER S. 148. THE ASSESSMENT YEAR IN THE INSTANT CASE BEING 2001-02, PROVISIONS OF S. 292BB SHALL HAVE NO APPLICATION. 23. SO FAR AS IT RELATES TO THE QUESTION OF VALIDIT Y OF REASSESSMENT PROCEEDINGS ON THE BASIS OF PARTICIPATION OF THE AS SESSEE IN THE REASSESSMENT PROCEEDINGS, REFERENCE CAN BE MADE TO THE DECISION OF CIT VS. SHITAL PRASAD KHARAG PRASAD (SUPRA) WHEREIN THE ISSUE REGARDING VALIDITY OR OTHERWISE AND SERVICE OF NOTI CE UNDER S. 148 WAS CONSIDERED BY THEIR LORDSHIPS OF JURISDICTIONAL HIG H COURT AND IT WAS HELD THAT A NOTICE CONTEMPLATED UNDER S. 148 OF THE ACT IS A JURISDICTIONAL NOTICE AND IS NOT CURABLE UNDER S. 2 92B OF THE ACT. IT WAS OBSERVED THAT THIS ISSUE IS NOW FAIRLY SETTLED THAT AN ASSESSING AUTHORITY GETS JURISDICTION TO REOPEN ITS CONCLUDED ASSESSMENT ONLY AFTER SERVING A VALID NOTICE ON THE ASSESSEE. IT WI LL BE RELEVANT TO REPRODUCE THE FOLLOWING OBSERVATIONS OF THEIR LORDS HIPS FROM THE SAID DECISION : '8. WE HAVE INDEPENDENTLY EXAMINED THE FINDINGS OF THE TRIBUNAL ON THE QUESTION OF ISSUANCE OF A VALID NOTICE UNDER S. 148 OF THE ACT AND ITS SERVICE ON SHRI B.D. AGARWAL, WHO REPRE SENTED SHRI J.B. GUPTA. IT IS NOT IN DISPUTE THAT SHRI J.B. GUP TA HAD DIED ON 13TH AUG., 1974. THEREFORE, NOTICE UNDER S. 148 OF THE ACT COULD NOT BE VALIDLY SERVED ON SHRI B.D. AGRAWAL ON 27TH AUG., 1976. THE AUTHORITY OF SHRI B.D. AGRAWAL CAME TO AN END I PSO FACTO ON 13TH AUG., 1974, ON ACCOUNT OF DEATH OF SHRI J.B. G UPTA. IT IS SETTLED LAW THAT SERVICE OF A VALID NOTICE UNDER S. 148 IS THE FOUNDATION FOR THE INITIATION OF REASSESSMENT PROCE EDINGS AND A CONDITION PRECEDENT FOR THE VALIDITY OF THE NOTICE. THE FURTHER FACT IS THAT THE NOTICE UNDER S. 148 WAS NOT SERVED ON THE ADULT MEMBERS OF THE FAMILY WHO WERE IN EXISTENCE AT THE TIME OF THE PARTITION OF THE JOINT HINDU FAMILY. FILING OF THE RETURN IN CON SEQUENCE OF ILLEGAL SERVICE OF NOTICE ON SHRI B.D. AGRAWAL WILL NOT VAL IDATE THE ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 15 REASSESSMENT PROCEEDINGS. A FULL BENCH DECISION OF THIS COURT RENDERED UNDER S. 21 OF THE UTTAR PRADESH SALES-TAX ACT WHICH IS IN PARI MATERIA OF S. 147 OF THE ACT SAYS NO. THIS HAS BEEN SO HELD IN LAXMI NARAIN ANAND PRAKASH VS. COMMR. OF SALES-T AX (SUPRA). IN THIS CASE THE HIGH COURT HAS RELIED UPON NUMBER OF CASES RELATING TO SERVICE OF REASSESSMENT NOTICE UNDER TH E IT ACT INCLUDING BHAGWAN DEVI SARAOGI & ORS. VS. ITO (1979 ) 118 ITR 906 (CAL) AND QUOTED FOLLOWING PASSAGE FROM IT : IF THE AUTHORITY CONCERNED DOES NOT ACQUIRE JURISD ICTION IN ABSENCE OF A VALID NOTICE BEING SERVED, THE ENTIRE PROCEEDI NGS WILL BE WITHOUT JURISDICTION AND VOID AND EVEN THE CONSENT ON THE PART OF THE ASSESSEE WOULD CONFER NO JURISDICTION ON THE I TO. THE KERALA HIGH COURT IN P.N. SASIKUMAR & ORS. VS. CIT (1988) 69 CTR (KER) 78 : (1988) 170 ITR 80 (KER) HAS HELD THA T THE ISSUE OF A NOTICE UNDER S. 148 OF THE IT ACT, 1961, IS A CONDI TION PRECEDENT TO THE VALIDITY OF ANY ASSESSMENT ORDER TO BE PASSED U NDER S. 147 OF THE ACT. IT IS ALSO SETTLED LAW THAT IF NO SUCH NOT ICE IS ISSUED OR IF THE NOTICE IS INVALID OR IS NOT IN ACCORDANCE WITH LAW OR IS NOT SERVED ON THE PROPER PERSON IN ACCORDANCE WITH LAW, THE ASSESSMENT WOULD BE ILLEGAL AND WITHOUT JURISDICTIO N. THE NOTICE SHOULD SPECIFY THE CORRECT ASSESSMENT YEAR AND SHOU LD BE ISSUED TO PARTICULAR ASSESSEE. THE NOTICE ISSUED TO THE AS SESSEE IN THAT CASE DID NOT SPECIFY THE CAPACITY IN WHICH IT WAS I SSUED TO ONE S, WHETHER AS INDIVIDUAL OR AS PRINCIPAL OFFICER OR AS A MEMBER OF ASSOCIATION OR BOI. THE ASSESSMENT WAS COMPLETED BY THE ITO IN THE STATUS OF AN AOP CONSISTING OF S AND SOME OTHER S. IT WAS HELD THAT BEFORE ASSESSING AN AOP, NOTICE SHOULD BE ADDR ESSED TO THE PRINCIPAL OFFICER OR A MEMBER THEREOF AS REQUIR ED BY S. 282(2)(C), WHICH WAS NOT DONE. SUCH A FUNDAMENTAL INFIRMITY, I T WAS HELD, COULD NOT BE CALLED A TECHNICAL OBJECTION OR A ME RE IRREGULARITY; SUCH VITAL INFIRMITY COULD NOT BE CURED OR OBLITERA TED BY PLACING RELIANCE ON S. 292B. A DIVISION BENCH OF THIS COURT IN THE CASE OF MADAN LAL AGARWAL VS. CIT (1983) 32 CTR (ALL) 179 : (1983) 144 ITR 74 5 (ALL) HAS HELD THAT A NOTICE CONTEMPLATED BY S. 148 IS A JURISDICT IONAL NOTICE FOR INITIATING PROCEEDINGS FOR MAKING AN ASSESSMENT UND ER S. 147 AND ANY DEFECT IN THAT NOTICE CANNOT BE CURED BY ANYTHI NG DONE BY THE ITO SUBSEQUENTLY. A VAGUE NOTICE IS AN INVALID NOTI CE AND IN SUCH A CASE VAGUENESS CANNOT BE REMOVED BY REFERENCE TO THE OTHER DOCUMENTS ON THE RECORD. IF A NOTICE ITSELF IS OTHE RWISE BAD IN LAW, INVALIDITY THEREOF CANNOT BE CURED BY ANY ACT OF TH E ASSESSEE TO WHOM THE SAID NOTICE IS ISSUED. 9. IN VIEW OF THE ABOVE, THE TRIBUNAL HAS RIGHTLY H ELD THAT S. 292B OF THE ACT WILL HAVE NO APPLICATION TO THE FACTS OF THE PRESENT CASE. THE SAID SECTION CONDONES THE INVALIDITY WHICH ARIS ES MERELY BY REASON OF ANY MISTAKE, DEFECT OR OMISSION IN A NOTI CE, IF IN SUBSTANCE AND EFFECT, IT IS IN CONFORMITY WITH OR A CCORDING TO THE ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 16 INTENT AND PURPOSE OF THE ACT. THE NOTICE IN QUESTI ON WAS NOT SERVED ON ALL THE ADULT MEMBERS OF THE FAMILY, AS R EQUIRED UNDER S. 283(1) OF THE ACT. THIS MISTAKE GOES TO THE VERY ROOT OF THE MATTER. IT IS FAIRLY SETTLED THAT AN ASSESSING AUTH ORITY GETS JURISDICTION TO REOPEN A CONCLUDED ASSESSMENT ONLY AFTER SERVING A VALID NOTICE ON THE ASSESSEE. A NOTICE CONTEMPLATED UNDER S. 148 OF THE ACT IS A JURISDICTIONAL NOTICE AND IS NOT CU RABLE UNDER S. 292B OF THE ACT, IF IT WAS NOT SERVED IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. 10. NO OTHER POINT WAS PRESSED OR RAISED BY THE LEA RNED COUNSEL FOR THE DEPARTMENT. 11. IN VIEW OF THE FOREGOING DISCUSSION, WE FIND TH AT THE ORDER OF THE TRIBUNAL IS LEGALLY SOUND. WE, THEREFORE, ANSWE R THE QUESTION IN AFFIRMATIVE I.E., AGAINST THE REVENUE AND IN FAV OUR OF THE ASSESSEE. HOWEVER, THERE SHALL BE NO ORDER AS TO CO STS.' 24. RESPECTFULLY FOLLOWING THE ABOVE DECISION OF HO NBLE JURISDICTIONAL HIGH COURT, IT HAS TO BE HELD THAT THE PARTICIPATIO N OF THE ASSESSEE IN THE REASSESSMENT PROCEEDINGS CANNOT CURE THE DEFECT IN THE REASSESSMENT NOTICE, I.E., THE NOTICE ISSUED UNDER S. 148 AS THE SAID NOTICE IS JURISDICTIONAL NOTICE. THEREFORE, INVALID ISSUANCE OR SERVICE OF NOTICE UNDER S. 148 CANNOT BE SAID TO BE A PROCEDURAL DEFE CT AND IT CANNOT BE CURED EITHER BY THE PARTICIPATION OF THE ASSESSEE I N THE REASSESSMENT PROCEEDINGS OR BY SETTING ASIDE THE SAME TO THE FIL E OF THE AO. 25. IN VIEW OF THE ABOVE DISCUSSIONS, IN MY HUMBLE OPINION, THE VIEW TAKEN BY THE LEARNED JM APPEARS TO BE A CORRECT VIE W WHICH HAS TO BE ADOPTED IN THE PRESENT CASE AND BY ADOPTING THE SAM E IT HAS TO BE HELD THAT THERE WAS NO VALID SERVICE OF NOTICE UNDER S. 148. THE REASSESSMENT PROCEEDINGS ARE VOID AB INITIO AND ARE LIABLE TO BE QUASHED. 4.3.7 FROM A PERUSAL OF THE FINDING RENDERED BY AGR A ITAT (TM) IN THE CASE OF ARUN LAL (SUPRA), WE FIND THAT IN THE CASE ON HA ND, REVENUE HAS NOT BEEN ABLE TO PROVE THAT IT FULFILLED ITS LEGAL OBLI GATIONS TO SHOW WHAT EFFORTS REVENUE MADE BETWEEN THE DATE OF ISSUE OF NOTICE ON 23.10.2006 TO DATE OF SERVICE OF NOTICE BY AFFIXTURE I.E. 31.10.2006 TO E FFECT THE SERVICE OF THE SAID NOTICE UNDER SECTION 143(2) OF THE ACT IN A NORMAL MANNER. NO MATERIAL WAS PLACED ON RECORD BEFORE US TO SHOW THAT ANY EFF ORT WAS MADE BY THE AO TO SERVE THE NOTICE IN A NORMAL MANNER BEFORE SERVI CE BY AFFIXTURE WAS DONE ON 31.10.2006. THE HON'BLE COURTS HAVE HELD THAT BE FORE SERVICE OF NOTICE BY AFFIXTURE CAN BE UNDERTAKEN: - (I) THERE MUST BE REASON TO BELIEVE THAT THE ASSESS EE IS KEEPING OUT OF THE WAY TO AVOID SERVICE THEREOF; ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 17 (II) THAT OF ANY OTHER REASON THE NOTICE CANNOT BE SERVED ON THE NORMAL WAY. IN THE CASE ON HAND WE FIND THERE IS NO MATERIAL O N RECORD TO SHOW THAT ANY ATTEMPT WAS MADE BY REVENUE TO SERVE THE N OTICE UNDER SECTION 143(2) OF THE ACT DATED 23.10.2006 THROUGH THE NORM AL MODE. 4.3.7 IN SO FAR AS THE APPLICABILITY OR OTHERWISE O F SECTION 292BB OF THE ACT TO THE CASE ON HAND IS CONCERNED, THE ITAT SPECIAL BEN CH DELHI IN THE CASE OF KUBER TOBACCO PRODUCTS (I) LTD. (2009) 117 ITD 273 (DELHI) HAS HELD THAT SECTION 292BB OF THE ACT INSERTED BY FINANCE ACT, 2 008 W.E.F. 01.04.2008 IS NOT RETROSPECTIVE AND WOULD APPLY PROSPECTIVELY FOR AND FROM A.Y. 2008-09. FURTHER, IN THE CASE ON HAND, THIS SECTION WOULD NO T APPLY IN VIEW OF THE PROVISO TO SECTION 292BB OF THE ACT, SINCE THE ASSE SSEE HAS RAISED ITS OBJECTION TO THE VALIDITY OF NOTICE UNDER SECTION 143(2) OF T HE ACT VIDE LETTER 07.09.2007, ADMITTEDLY FILED WITH THE AO ON 07.09.2007 ITSELF ( COPY PLACED AT PG. 14 OF THE PAPER BOOK) BEFORE COMPLETION OF ASSESSMENT PROCEED INGS ON 29.11.2007. 4.3.8 TAKING INTO CONSIDERATION THE FACTUAL AND LEG AL MATRIX OF THE CASE ON HAND AS DISCUSSED FROM PARA 4.1.1 TO 4.3.7, WE ARE OF THE CONSIDERED VIEW THAT SINCE THE ALLEGED AFFIXTURE OF NOTICE UNDER SE CTION 143(2) OF THE ACT DATED 23.10.2006 ON 31.10.2006 IS NOT IN ACCORDANCE WITH THE LAW AND PROCEDURE LAID DOWN BY THE HON'BLE COURTS, THE SAID NOTICE IS RENDERED BAD IN LAW AND THEREFORE THE AO HAD NO POWER TO ASSUME JURISDICTION TO TAKE UP THE ASSESSEES CASE FOR SCRUTINY. CONSEQUENTLY, THE ORDER OF ASSESSMENT FRAMED UNDER SECTION 143(3) OF THE ACT VIDE ORDER D ATED 29.11.2007 FOR A.Y. 2005-06 ON THE BASIS OF SUCH INVALID NOTICE UN DER SECTION 143(3) OF THE ACT IS BAD IN LAW AND AB INITIO VOID AND IS LIA BLE TO BE QUASHED. IN COMING TO THIS DECISION, WE DRAW SUPPORT FROM THE D ECISION OF THE HON'BLE COURTS IN THE CASES OF CIT VS. RAMENDRA NATH GHOSH (SUPRA), CIT VS. GODAVARI ELECTRICAL CONDUCTORS (SUPRA), CIT VS. MAS COMPTEL INDIA LTD. (SUPRA) AND OF THE SPECIAL BENCH OF ITAT AGRA IN A RUN LAL VS. ACIT (2010) 124 ITD 85 (AGRA) (TM). WE HOLD AND DIRECT ACCORDIN GLY. CONSEQUENTLY GROUND NO. 1 OF THE ASSESSEES APPEAL IS ALLOWED. 5. IN VIEW OF ALLOWING GROUND NO. 1 OF THE ASSESSEES APPEAL, ON OUR FINDING THAT THE SERVICE OF NOTICE UNDER SECTION 14 3(2) OF THE ACT ON ITA NO. 7469/MUM/2010 M/S. VIDYAVIHAR CONTAINERS LTD. 18 31.10.2006 WAS INVALID AND CONSEQUENTLY QUASHING TH E ORDER OF ASSESSMENT FOR A.Y. 2005-06 UNDER SECTION 143(3) OF THE ACT DATED 29.11.2007 AS VOID AB INITIO, SINCE THE AO HAD NO V ALID REASON TO ASSUME JURISDICTION TO TAKE UP SCRUTINY ASSESSMENT IN THE CASE ON HAND FOR THIS YEAR, THE OTHER GROUNDS AT II TO IV ARE NOT REQUIRE D TO BE ADJUDICATED AT THIS STAGE. 6. IN THE RESULT, THE ASSESSEES APPEAL FOR A.Y. 2005- 06 IS ALLOWED AS INDICATED ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 23 RD DECEMBER, 2016. SD/ - SD/ - (SANDEEP GOSAIN) (JASON P. BOAZ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 23 RD DECEMBER, 2016 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) -22, MUMBAI 4. THE CIT - 10, MUMBAI 5. THE DR, F BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.