DCIT, New Delhi V. M/s. Usha Stud & Agricultural Farms (P) Ltd., New Delhi

ITA 910/DEL/2010

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 69467 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 10-06-2013
• Assessment Year: 1998-1999
• Appeal Filed On: 04-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Assessee Lawyers: MEGHA MITTAL
• Keywords: Reopening of assessment; Additional evidence; Reassessment proceedings
• Section: 45(2); 142(1); 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : H : NEW DELHI BEFORE SHRI A.D. JAIN, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NOS.910 TO 912/DEL/2010 ASSESSMENT YEARS : 1998-98, 1999-2000 & 2003-04 DCIT, CIRCLE-18(1), ROOM NO.211A, CR BUILDING, NEW DELHI. VS. USHA STUD & AGRICULTURAL FARMS (P) LTD., KHASARA 22/2, 2,4,4,/ 1,7/ 1, 8, 9, 12,13,14, NEAR 21A, PALAM FARMS, SHALARPUR BIJWASAN, NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AJAY WADHWA, ADVOCATE & MS MEGHA MITTAL, CA REVENUE BY : SHRI SAMEER SHARMA, DR ORDER PER A.D. JAIN, JUDICIAL MEMBER THESE ARE DEPARTMENTS APPEALS FOR ASSESSMENT YEARS 1998-9 8, 1999-2000 & 2003-04 AGAINST THE ORDERS OF THE CIT (A) -VII, NEW DELHI, DATED 16.12.2009, 16.12.2009 & 07.12.2009, RESPECTIV ELY. 2. THE PARTIES CONTEND THAT THE ISSUE IS THE SAME IN AL L THE THREE YEARS. THE APPEAL FOR ASSESSMENT YEAR 2003-04 HAS, AS SUCH, BEEN ARGUED BEFORE US AND IT IS FROM THIS APPEAL THAT THE FACTS ARE TAKEN, FOR FACILITY. THE GROUND OF APPEAL READS AS UNDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT (A) HAS ERRED IN HOLDING THE RE-ASSESSMENT PROCEEDINGS U/ S 147 AS VOID AB-INITIO ON THE GROUND THAT THERE WAS NO VALID SER VICE OF NOTICE U/S 148 OF THE INCOME TAX ACT, 1961. ITA NOS.910-912/DEL/2010 2 3. THE FACTS ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF HORSE BREEDING AND ALLIED ACTIVITIES. THE OR IGINAL INCOME TAX RETURN FOR A.Y. 2003-04 WAS FILED ON 02.12.2003 DECLARING TAXABLE INCOME OF RS. 11,54,293/-. THE RETURN WAS PROCESSED U /S 143(1) OF THE IT ACT ON 19.12.2003. SUBSEQUENTLY, AFTER THE RECEIP T OF INFORMATION FROM DIT (INV.), NEW DELHI, A NOTICE U/S 148 OF THE ACT WAS ISSUED ON 22-03-2005 AND AS PER THE AO, THE NOTICE WAS SERVED ON THE ASSESSEE ON 24.03.2005. IN COMPLIANCE OF THE SAID NOTICE, A L ETTER DATED NIL WAS RECEIVED IN THE ASSESSING OFFICERS OFFICE ON 18.10.2005 , STATING THEREIN THAT THE NOTICE U/S 148 OF THE ACT DATED 22.03.2005, SERVED ON 24.03.2005, HAD NOT BEEN RECEIVED BY THE COMPANY AN D THE REOPENING OF ASSESSMENT WAS, THEREFORE, BAD IN LAW. IT WAS FURTHER SUBMITTED THAT THE RETURN FILED IN RESPECT OF ASSESSMENT YEAR 2003-04 U /S 139 (1) OF THE ACT MAY BE TREATED AS FILED IN PURSUANCE OF THE N OTICE U/S 148 OF THE ACT. IN RESPONSE TO THE ABOVE LETTER, A LETTER DA TED 28.10.2005 WAS ISSUED BY THE ASSESSING OFFICER ALONG WITH NOTICES U/SS 142 (1) AND 143 (2) OF THE ACT, STATING THEREIN, THAT THE NOTICE U/ S 148 HAD BEEN DULY SERVED ON 24.03.2005 BY THE PROCESS SERVER ON THE ADDRE SS OF THE COMPANY, I.E., D-7/6, VASANT VIHAR, NEW DELHI AND TH E SAME WAS DULY ACKNOWLEDGED. A COPY OF THE NOTICE WAS ALSO ATTACHED WITH THE LETTER. THE ASSESSEE FILED OBJECTIONS IN RESPECT OF THE RE-ASSESSMENT PROCEEDINGS U/S 148 OF THE IT ACT VIDE LETTER DATED 0 2.12.2005, WHICH WAS RECEIVED IN THE OFFICE OF THE ASSESSING OFFICER ON 0 8.12.2005. REPLY DATED 05.01.2006 TO THE SAID LETTER RAISING VAR IOUS OBJECTIONS, WAS WRITTEN TO THE ASSESSEE. 4. THE ASSESSEE AGAIN ALLEGED THAT THE NOTICE U/S 148 OF THE ACT WAS NOT RECEIVED BY THE ASSESSEE COMPANY. THE ASSESSING OFFICER HELD THAT THE ALLEGATION WAS NOT CORRECT. IT WAS OBSERVED THAT: AS ALREADY INFORMED VIDE LETTER DATED 28.02.2005 ENCL OSED WITH COPY OF NOTICE U/S 148, THE NOTICE WAS DULY SERVED ON ITA NOS.910-912/DEL/2010 3 24.03.2005 BY THE PROCESS SERVER ON THE ADDRESS OF THE COMPANY D-7/6, VASANT VIHAR, NEW DELHI AND THE SAME W AS DULY ACKNOWLEDGED. THE ABOVE ADDRESS WAS THE DECLARED ADD RESS OF THE COMPANY, HOWEVER, A CHANGE IN ADDRESS WAS INTIMATE D TO THIS OFFICE BY LETTER DATED 13.07.2005. AT THE TIME OF S ERVICE, THE ABOVE WAS THE ADDRESS OF THE COMPANY WHERE THE NOTICE W AS CAUSED TO BE SERVED. ACCORDINGLY, THE STAND TAKEN OF NO N-RECEIPT OF NOTICE IS UNSUBSTANTIATED. 5. VIDE LETTER DATED 23.03.2006 (ASSESSMENT ORDER PAGES 6-9), THE ASSESSING OFFICER ASKED THE ASSESSEE TO FURNISH EVIDENCE. 6. THE ASSESSEE, VIDE LETTER DATED 27.03.2006, INTER AL IA, AGAIN STATED THAT NO NOTICE U/S 148 OF THE IT ACT WAS SERVED ON IT. THEREAFTER, RE-ASSESSMENT ORDER DATED 29.03.2006 WAS PASSED, WITH THE FOLLOWING OBSERVATIONS REGARDING THE ASSESSEES OBJECTION CONCERNING NON- SERVICE U/S 148 OF THE ACT:- 2. NOTICE U/S 148:- THE ASSESSEE IS HARPING ON NON- RECEIPT FO THE NOTICE U/S 148. THE FACT HAS ALREADY BEEN DISCUSSE D WHILE PASSING SPEAKING ORDER IN REGARD TO THE OBJECTIONS RA ISED TO ISSUE OF NOTICE U/S 148. THE REPLY SIMPLY IS AN ATTEMP T TO DEVIATE AND TO AVOID THE REAL ISSUE OF INVESTMENT MADE OVER AND ABOVE THE DISCLOSED AMOUNT DECLARED IN THE BOOKS OF ACCOUNTS OF PURCHASE OF THE IMPORTED HORSES. THE REPEATED ASSERTIO N SIMPLY PROVES THE FACTS THAT ASSESSEE DO NOT WANT TO COME CLEAN ON THE GROUND OF REOPENING OF THE ASSESSMENT THAT THE VALUE OF THE CHINA VISIT WAS GROSSLY UNDER STATED FOR THE REASON O F PAYING LESS CUSTOM DUTY. THE NOTICE U/S 148 DATED 22.03.2005 W AS DULY SERVED ON THE ADDRESS OF THE COMPANY. IT WAS DURING THE LATER STAGE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE INTIM ATED THAT ITS MAILING ADDRESS HAS BEEN CHANGED. DESPITE THAT F ACT TOO, THE REGISTERED OFFICE AT VASANT VIHAR WAS AND STILL REMA INS TO BE THE RESIDENCE OF THE DIRECTORS. THE ASSESSEE HAS NOT TIL L TODAY PRODUCED ANY EVIDENCE REGARDING INFORMATION GIVEN TO THE OTHER AUTHORITY OTHER THAN THIS DEPARTMENT OF CHANGE OF ADDRESS . THE CONTENTION RAISED IS BEREFT OF ANY MERIT AND HENCE REJ ECTED. 7. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT (A) HELD THAT THERE WAS NO VALID SERVICE OF NOTICE U/S 148 OF THE ACT ON T HE ASSESSEE AND THAT THE RE-ASSESSMENT PROCEEDINGS WERE VOID AB-INITIO LIABLE TO BE QUASHED. HE MADE THE FOLLOWING OBSERVATIONS (RELEVANT PORTIONS):- ITA NOS.910-912/DEL/2010 4 6.1 THE WRITTEN AS WELL ORAL SUBMISSION(S) OF THE AP PELLANT, AND THE FINDINGS OF THE A.O. IN THE RE-ASSESSMENT ORDER & I N THE REMAND REPORT HAVE BEEN CAREFULLY CONSIDERED. I HAVE ALSO CONSIDERED THE CASE LAWS RELIED UPON BY THE AO AND THE APPELLANT. IT IS NOT DISPUTED THAT THE NOTICE UNDER SECTIO N 148 HAS NOT BEEN SERVED ON THE ASSESSEE-COMPANY OR ON ITS AUTHO RIZED PERSONS. THERE IS ALSO NOTHING ON RECORD TO SUGGEST THA T THE NOTICE WAS SERVED ON THE ASSESSEE EVEN AFTER IT WAS POI NTED OUT ON ITS BEHALF THAT NOTICE WAS NOT SERVED ON IT. THEREFOR E THE ISSUE TO BE DECIDED IN THE INSTANT CASE IS THAT IF THE NOTICE IS NOT SERVED ON THE ASSESSEE; WHO IS NAMED IN THE NOTICE, THE SERVIC E IS PROPER OR NOT AND SECONDLY, THE ASSESSING OFFICER WILL ACQUI RE A LEGAL OR VALID JURISDICTION TO PROCEED IN THE MATTER OR NOT. I FIND THAT THERE ARE PLETHORA OF JUDGEMENTS ON THIS PARTICULAR ISSUE, SO ME OF WHICH ARE DISCUSSED HEREUNDER - 6.3 THE RATIO OF JUDGMENTS AND THOSE RELIED UPON BY THE APPELLANT IS THAT THERE HAS TO BE SERVICE OF NOTICE WITH L AW AND MERE PARTICIPATION IN THE PROCEEDINGS WILL NOT VALIDAT E THE AS PROCEEDINGS. ACQUIESCENCE ON THE PART OF THE ASSESSEE CANNOT CONFER JURISDICTION WHICH OTHERWISE IS LACKING FROM TH E VERY BEGINNING. THE ASSESSING OFFICER CAN PROCEED TO COMP LETE ASSESSMENT ONLY AFTER PROPER SERVICE OF NOTICE IN ACC ORDANCE WITH LAW AND UNLESS SUCH NO ICE HAD DULY BEEN SERVED, THE ASSESSING OFFICER CANNOT BE SAID TO HAVE BEEN DULY CLOTHED WITH T HE JURISDICTION TO PASS THE ASSESSMENT ORDER. 6.4 NOW, REFERENCE IS TO BE MADE TO THE RELEVANT STATUTORY PROVISIONS IN THIS REGARD. FIRSTLY, I REFER TO SUB-S ECTION (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 WITH IN SUCH PERIOD, AS MAY BE SPECIFIED IN THE NOTICE A RETURN OF HIS INCOME OR HE INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR COR RESPONDING TO THE RELEVANT ASSESSMENT YEAR, IN THE PRESCRIBED FORM AND VERIFIED IN THE PRESCRIBED MANNER AND SETTING FORTH SUC H OTHER PARTICULARS AS MAY BE PRESCRIBED, AND THE PROVISIONS OF THIS ACT SHALL, SO FAR AS MAY BE APPLY ACCORDINGLY AS IF SUC H RETURN WERE A RETURN REQUIRED TO BE FURNISHED SECTION 139.' THUS, THE MANDATE OF SECTION 148 IS THAT NOTICE SHOULD B E SERVED ON THE ASSESSEE. 6.5 IN REGARD TO SERVICE OF NOTICE, REFERENCE IS MADE TO SECTION 282. SECTION 282 PRESCRIBES SPECIFIC MODE OF SERVICE OF NOTICE. THIS SECTION READS AS UNDER: ITA NOS.910-912/DEL/2010 5 '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 PRO CEDURE, 1908 (5 OF L908).' A BARE READING OF THIS SECTION CLEARLY INDICATES THAT TH E NOTICE UNDER THE ACT CAN BE SERVED ON THE PERSON EITHER BY POS T OR IF NOT BY POST THEN IN THE SAME MANNER IN WHICH SUMMONS ISSUE D BY THE COURT UNDER OR THE CODE OF CIVIL PROCEDURE, 1908 ARE TO BE SERVED. AS THE SERVICE OF S THROUGH NOTICE SERVER OF TH E DEPARTMENT AND NOT BY POST, THE PROCEDURE CONTEMPLATED B Y THE CODE OF CIVIL PROCEDURE UNDER ORDER V FOR SERVICE O F BEEN FOLLOWED. ORDER V AND III OF CODE OF CIVIL PROCEDUR E ARE RELEVANT IN THIS REGARD AND WE REPRODUCE RELEVANT RULES FROM THE S AID ORDER IN ORDER TO DECIDE BEEN EFFECTED IN ACCORDANCE WITH LAW OR NOT. RULE 6 OF ORDER III IS RELEVANT TO FIND OUT AS TO WHO M AY BE APPOINTED AS AGENTS TO ACCEPT SERVICE OF PROCESSES AND HOW. THAT PROVISION IS AS F OLLOWS: '(1) BESIDES THE RECOGNIZED AGENTS DESCRIBED IN RULE 2 ANY PERSON RESIDING WITHIN THE JURISDICTION OF THE COURT MA Y BE APPOINTED AN AGENT TO ACCEPT SERVICE OF PROCESS. (2) SUCH APPOINTMENT MAY BE SPECIAL OR GENERAL AND S HALL BE MADE BY AN INSTRUMENT IN WRITING SIGNED BY THE PRINCIP AL, AND HUTCH INSTRUMENT, OR, IF THE APPOINTMENT IS GENERAL, A CE RTIFIED COPY THERE P1[SHALL BE FILED IN COURT'. RULE 9(1) OF ORDER V 'WHERE THE DEFENDANT RESIDES WITHIN THE JURISDICTION OF THE COURT IN WHICH THE SUIT IS INSTITUTED, OR HAS AN AGENT RESIDENT WITHIN THAT JURISDICTION WHO IS EMPOWERED TO ACCEPT THE SERVICE OF THE SUMMONS, THE SUMMONS SHALL, UNLESS THE COURT OTHERWISE 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 BE ON DEFENDANT IN PERSON WHEN PRACTI CABLE; OR ON HIS AGENT - WHEREVER IT IS PRACTICABLE, SERVICE MA LL BE MADE ON THE DEFENDANT IN PERSON, UNLESS HE HAS AN AGENT EMPOWE RED TO ACCEPT SERVICE, IN WHICH CASE SERVICE ON SUCH AGENT S HALL BE SUFFICIENT. 13. SERVICE ON AGENT BY WHOM DEFENDANT CARRIES ON BU SINESS - (1) IN A SUIT RELATING TO ANY BUSINESS OR WORK AGAIN ST A PERSON WHO DOES NOT RESIDE WITHIN THE LOCAL LIMITS OF THE JURISDICT ION OF THE COURT FROM WHICH THE SUMMONS IS ISSUED, SERVICE ON AN Y MANAGER ITA NOS.910-912/DEL/2010 6 OR E OF SERVICE, PERSONALLY CARRIES ON SUCH BUSINES S OR WORK FOR SUCH ITS, SHALL BE DEEMED GOOD SERVICE. 15 WHERE SERVICE MAY BE ON AN ADULT MEMBER OF DEFEND ANTS FAMILY WHERE IN ANY SUIT THE DEFENDANT IS ABSENT FROM H IS RESIDENCE AT THE TIME WHEN THE SERVICE OF SUMMONS IS SO UGHT TO HIS RESIDENCE AND THERE IS NO LIKELIHOOD OF HIS BEIN G FOUND AT THE REASONABLE TIME AND HE HAS NO AGENT EMPOWERED TO ACCEP T SERVICE OF THE IF SERVICE MAY BE MADE ON ANY ADULT ME MBER OF THE FAMILY, WHETHER RESIDING WITH HIM. 16. PERSON SERVED TO SIGN THE ACKNOWLEDGEMENT - WHERE THE SERVICE OFFICER SERVES OR TENDERS A COPY OF THE SUMMO N TO THE DEFENDANT PERSONALLY, OR TO AN AGENT OR TO OTHER PERSON ON HIS BEHALF HE SHALL REQUIRE THE SIGNATURE OF THE PERSON TO WHOM THE COPY IS SO DELIVERED OR TENDERED TO AN ACKNOWLEDGEMEN T 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 SERVED UNDER RULE 16, ENDORSE OR ANNEX, OR CAUSE TO BE ENDO RSED OR ANNEXED, ON OR TO THE ORIGINAL SUMMONS, A RETURN STATING THE TIME WHEN AND THE MANNER IN WHICH THE SUMMONS WAS SERVED A ND THE NAME AND ADDRESS OF THE PERSON (IF ANY) IDENTIFYING TH E PERSON SERVED AND WITNESSING THE DELIVERY OR TENDER OF THE SU MMONS.' 6.6 FROM RULE 6 OF ORDER III REPRODUCED ABOVE, IT IS EVIDENT THAT WRITTEN, AUTHORITY TO RECEIVE NOTICE IS NECESSARY EITHER BY WAY OF SPECIAL OR GENERAL POWER GIVEN IN THIS REGARD. THE P ERSON SHOULD HAVE BEEN SPECIFICALLY EMPOWERED TO RECEIVE NOTICE, F ROM THE ANALYSIS OF THE RULES REPRODUCED ABOVE IT IS EVIDENT TH AT THE MANDATE OF LEGISLATURE IS THAT AS FAR AS POSSIBLE THE SE RVICE OF SUMMONS SHOULD BE EFFECTED ON THE PERSON NAMED IN THE NOTICE AND, IF IT IS NOT POSSIBLE, THEN SAME SHOULD BE EFFECTE D ON THE PERSON WHO IS DULY VESTED WITH THE AUTHORITY TO RECEIVE S UCH NOTICE BY THE PERSON NAMED IN THE SUMMON. THE LEGISLATU RE HAS FURTHER PROVIDED THAT IN ORDER TO ENSURE PROPER SERVICE OF NOTICE ACKNOWLEDGEMENT OF THE PERSON SERVED SHOULD BE OBTAINE D 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 REVENUE TO ESTABLISH THAT THE SERVICE OF AN ORDER OR A NOTICE WAS M ADE ON THE ASSESSEE HIMSELF OR ON SOMEBODY DULY AUTHORIZED BY HIM IN THAT BEHALF. WHEN THE ASSESSEE PLEADS THAT HE HAS NOT BEEN P ROPERLY SERVED WITH ANY NOTICE, IT IS FOR THE DEPARTMENT TO PLACE THE RELEVANT MATERIAL TO SUBSTANTIATE THE PLEA THAT THE ASSESSEE WAS SERVED WITH PRIOR NOTICE. IN THE PRESENT CASE, NO MATER IAL IS ON RECORD TO SHOW THAT THE PERSON TO WHOM THE NOTICE IS ALL EGED TO HAVE BEEN SERVED WAS SPECIFICALLY AUTHORIZED TO RECEI VE NOTICE, RATHER THAT PERSON IS NOT IDENTIFIABLE. TILL DATE DESPITE REPEATED ITA NOS.910-912/DEL/2010 7 REQUESTS MADE ON BEHALF OF THE APPELLANT AND EVEN AFTER INSTRUCTIONS BY THE UNDERSIGNED, THE A,O, HAS NOT BEEN A BLE TO NAME THE PERSON TO WHOM THE NOTICE WAS SERVED. THE MOST FUNDAMENTAL REQUIREMENT ON SERVICE HAS NOT BEEN ESTABL ISHED. IF NOTICE IN SOME WAY OR THE OTHER REACHED THE ASSESSEE THE N IT CANNOT BE TREATED AS PROPER SERVICE OF NOTICE SINCE STA TUTE PRESCRIBES SPECIFIC MODE OF SERVICE TO BE FOLLOWED. WHEN THE STATUTE PROVIDES THAT A NOTICE SHOULD BE SERVED IN A PART ICULAR MODE, IT IS NOT POSSIBLE TO HOLD THAT THERE HAS BEEN A PR OPER SERVICE OF NOTICE MERELY FROM THE FACT THAT THE PERSON TO WHOM THE NOTICE HAD BEEN ADDRESSED HAD RECEIVED THE NOTICE THROUGH SOME OTHER SOURCE OR THAT HE HAS BECOME AWARE OF THE CO NTENTS OF THE NOTICE. IN PAPARRUNA RAO V. REVENUE DIVISIONAL OFFICER AIR 1918 MAD. 589, A DIVISION BENCH OF MADRAS HIGH COUR T WHILE DEALING WITH THE MANNER OF SERVICE CONTEMPLATED BY SECTI ON 45(2) OF THE LAND ACQUISITION ACT, WHICH ALSO ATTRACTS THE PROV ISIONS OF THE CODE OF CIVIL PROCEDURE, IN 1-HP, MATTER OF SERVI CE OF NOTICES, EXPRESSED THE VIEW THAT UNLESS A PERSON IS APPOINTED A S AGENT O ACCEPT SERVICE OF PROCESSES BY AN INSTRUMENT IN WRITIN G SIGNED 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 S UFFICIENT BUT THERE SHOULD BE A WRITTEN AUTHORITY. SIMILAR VIEW HA S BEEN TAKEN IN CIT V. BAXIRARN RODMAL [1934] 2 ITR 438 (NA G.), CIT V. DEY BROTHERS [1935] 3 ITR 213 (RANG.) AND C.N. NATARA J V. FIFTH ITO [1965] 56 ITR 250 (MYS.). IN CIT V. BAXIRAM ROD MAL [194] 2 ITR 438 (NAG.) IT HAS BEEN HELD THAT THE MERE FACT THAT A PERSON HAD ACCEPTED NOTICES ON BEHALF OF THE ASSESSEE ON PREV IOUS OCCASIONS AND APPEARED FOR THE ASSESSEE WOULD NOT CON STITUTE HIM AN AGENT ON WHOM A NOTICE OR REQUISITION UNDER TH E ACT WOULD BE VALIDLY SERVED NOR WOULD ANY STATEMENT MADE BY HIM BIND THE ASSESSEE. IN C.N. NATARAJ V. FIFTH ITO ([1965] 56 ITR 250, THE MYSORE HIGH COURT TOOK THE VIEW THAT THE SERVICE OF NOTICE UNDER SECTION 148 ON A CLERK OF THE ASSESSEE'S FATHER WHO W AS NEITHER AN AGENT OF THE ASSESSE NOR AUTHORIZED BY HIM TO ACCEPT NOTICES ON HIS BEHALF WAS NOT VALID AND, THEREFORE, THE ASSES SEE WOULD NOT BE ASSESSED UNDER SECTION 147 IN PURSUANCE OF SUCH SERVICE OF NOTICE 6.8 THUS, IN ORDER THAT THERE SHOULD BE A VALID SERVI CE, THE PERSON ON WHOM SERVICE IS EFFECTED MUST HAVE VALID A UTHORIZATION GIVEN TO HIM IN WRITING TO RECEIVE SUCH NOTICE AND MER E IMPLIED AUTHORITY WILL NOT BE ENOUGH. ALTERNATIVELY, IF FOR ARGU MENT SAKE, IT IS TO BE HELD THAT IMPLIED AUTHORITY IS SUFFICIENT FOR SE RVICE OF NOTICE, THEN THAT TOO IS NOT PRESENT IN THE PRESENT CASE. IT IS ALSO NOT THE CASE WHERE THE ASSESSEE HAS AVOIDED THE SERVICE OF NOTICE ON HER. EVEN IN THE SITUATION WHERE THE ASSESSEE WOULD HAVE AVOIDED THE SERVICE OF NOTICE, AS PER ORDER V, RULE 2 0 OF CODE OF CIVIL PROCEDURE, IT IS THE DUTY OF THE DEPARTMENT TO DISCH ARGE ITS ONUS SHOWING THAT THE AUTHORITY CONCERNED HAS REASON TO B ELIEVE THAT THE ASSESSEE WAS KEEPING OUT OF THE FOR THE PURPOSE OF AVOIDING SERVICE OR THAT OTHERWISE THERE WERE OTHER GOOD REASONS ITA NOS.910-912/DEL/2010 8 TO COME TO THE CONCLUSION THAT THE NOTICE COULD NOT BE SERV ED IN THE ORDINARY WAY. 6.9 THE RATIO OF THE DECISIONS CITED ABOVE HAD ALSO B EEN CONSISTENT THAT ACQUIESCENCE IS NOT GOING TO CONFER JURI SDICTION WHICH OTHERWISE IS LACKING FROM THE VERY BEGINNING. A S OBSERVED EARLIER, THE ASSESSING OFFICER CAN PROCEED TO COMPLETE THE RE- ASSESSMENT ONLY WHEN HE ISSUED NOTICE AND SERVED THE S AME ON THE ASSESSEE. IN VIEW OF THESE FINDINGS, THE ASSESSING OFFICER CANNOT ASSUME JURISDICTION TO COMPLETE ASSESSMENT FOR WANT OF NOTICE EVEN THOUGH ASSESSEE HAD APPEARED BEFORE HIM A ND FILED RETURN AND ALSO PARTICIPATED IN THE REASSESSMENT PROCEED INGS. THE PROCEDURAL IRREGULARITIES CAN BE WAIVED, OFF BY THE ASSESSEE, BUT AT THE SAME TIME THE CONDUCT THE ASSESSEE IN PARTICIPA TING IN ASSESSMENT PROCEEDINGS WILL NOT BE SUFFICIENT TO CONFER THE JURISDICTION 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 T HE REASSESSMENT AND AS IT IS LACKING, THIS JURISDICTIONAL DEFECT CANNOT BE CURED BY CONDUCT OF PERSONS ON BEHALF OF THE ASSE SSEE AND THUS ASSESSMENT IS LIABLE TO BE QUASHED ON THIS POINT. I T IS ALSO OBSERVED THAT IN THE INSTANT CASE, THE NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 22-03-2005 WHICH IMPLIES THAT IT W AS ISSUED WITHIN THE TIME-LIMIT PERMISSIBLE IN ACCORDANCE WITH THE PROVISIONS OF SECTION 149 OF THE ACT. BUT THE NOTICE WAS NOT SERVE D ON THE ASSESSEE OR ON ANYONE AUTHORIZED BY IT EVEN AFTER IT WA S POINTED OUT BY IT THAT THE NOTICE WAS NOT SERVED ON IT ON ANYONE AUTHORIZED BY IT, HAD IT BEEN DONE BY THE ASSESSING OFF ICER, JURISDICTIONAL DEFECT COULD HAVE BEEN CURED. RESPECTF ULLY FOLLOWING THE ABOVE DECISION IS, IT HAS TO BE HELD THAT THE PARTICIP ATION OF THE ASSESSEE IN THE REASSESSMENT PROCEEDINGS CAN NOT CU RE THE DEFECT IN THE NOTICE UNDER SECTION 148 OF THE ACT, I.E . THE NOTICE UNDER SECTION 148 IS A JURISDICTIONAL NOTICE. THEREF ORE, INVALID ISSUANCE OR SERVICE OF NOTICE UNDER SECTION 148 CAN NOT BE SAID TO BE A PROCEDURAL DEFECT AND IT CAN NOT B CURED BY THE PA RTICIPATION OF THE ASSESSEE IN THE RE-ASSESSMENT PROCEEDINGS. THER EFORE, IT IS HELD THAT THERE WAS NO VALID SERVICE OF NOTICE UNDER SE CTION 148 OF THE ACT AND THE RE-ASSESSMENT PROCEEDINGS ARE VOID AB I NITIO & THUS LIABLE TO BE QUASHED. AS A RESULT, GROUND NO. 2 R AISED BY THE APPELLANT IS ALLOWED. 8. BEFORE US, THE LD. DR HAS CONTENDED THAT THE LD. C IT (A) HAS ERRED IN HOLDING THE RE-ASSESSMENT PROCEEDINGS U/S 147 OF THE ACT AS VOID AB INITIO ON THE GROUND THAT THERE WAS NO VALID SERVICE OF NOTICE U/S 148 OF THE ACT ON THE ASSESSEE. IT HAS BEEN CONTENDED THAT THE LD. CIT (A) HAS FAILED TO APPRECIATE THE OBSERVATIONS MADE BY THE ASSESSING OFFICER TO THE EFFECT THAT: ITA NOS.910-912/DEL/2010 9 2. NOTICE U/S 148:- THE ASSESSEE IS HARPING ON NON- RECEIPT FO THE NOTICE U/S 148. THE FACT HAS ALREADY BEEN DISCUSSE D WHILE PASSING SPEAKING ORDER IN REGARD TO THE OBJECTIONS RAI SED TO ISSUE OF NOTICE U/S 148. THE REPLY SIMPLY IS AN ATTEMPT TO DE VIATE AND TO AVOID THE REAL ISSUE OF INVESTMENT MADE OVER AND ABOVE THE DISCLOSED AMOUNT DECLARED IN THE BOOKS OF ACCOUNTS OF PURCHASE OF THE IMPORTED HORSES. THE REPEATED ASSERTION SIMPLY PROVES THE FACTS THAT ASSESSEE DO NOT WANT TO COME CLEAN ON THE GROUN D OF REOPENING OF THE ASSESSMENT THAT THE VALUE OF THE CHINA VISIT WAS GROSSLY UNDER STATED FOR THE REASON OF PAYING LES S CUSTOM DUTY. THE NOTICE U/S 148 DATED 22.03.2005 WAS DULY SER VED ON THE ADDRESS OF THE COMPANY. IT WAS DURING THE LATER STAGE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSEE INTIMATED THAT ITS MAILING ADDRESS HAS BEEN CHANGED. DESPITE THAT FACT TOO, THE REG ISTERED OFFICE AT VASANT VIHAR WAS AND STILL REMAINS TO BE THE R ESIDENCE OF THE DIRECTORS. THE ASSESSEE HAS NOT TILL TODAY PRODUCED ANY EVIDENCE REGARDING INFORMATION GIVEN TO THE OTHER AUTHOR ITY OTHER THAN THIS DEPARTMENT OF CHANGE OF ADDRESS. THE CONTENTI ON RAISED IS BEREFT OF ANY MERIT AND HENCE REJECTED. 9. IT HAS BEEN POINTED OUT THAT THE NOTICE U/S 148 OF THE ACT (COPY AT APB 56) WAS SERVED ON THE ASSESSEES ADDRESS, WHICH ALSO HAPPENED TO BE THE RESIDENTIAL ADDRESS OF THE ASSESSEES DIRECTOR A ND SO, THE NOTICE WAS PROPERLY SERVED, AS HAVING BEEN SERVED ON TH E ASSESSEES AGENT. IT HAS FURTHER BEEN CONTENDED THAT THE NOTICE CONTAINS THE SIGNATURE OF THE SERVER, THE DATE AND THE PHONE NUMBE R. IT HAS BEEN SUBMITTED THAT THE CASE LAWS RELIED ON BY THE LD. CIT (A) ARE NOT APPLICABLE TO THE FACTS OF THE CASE; THAT IN COMMISSIO NER OF INCOME-TAX V. HOTLINE INTERNATIONAL P. LTD., [2008] 296 ITR 3 33 (DEL), IT WAS THE CASE OF A SECURITY GUARD; THAT INDEED, SECURITY GUARDS ARE CONTRACT BASED; THAT IN THAT CASE, THE GUARD HAD INFORMED THE OFFICE ON THAT VERY DAY; THAT THESE FACTS ARE NOT PRESENT HERE; AND THAT SO FAR AS REGARDS COMMISSIONER OF INCOME-TAX V. RAJESH KUMAR SHARMA, [ 2009] 311 ITR 235 (DEL), IT WAS THE CASE OF AN INDIVIDUAL, WHEREAS T HE ASSESSEE IN THE PRESENT CASE IS A COMPANY. ITA NOS.910-912/DEL/2010 10 10. THE LD. COUNSEL FOR THE ASSESSEE, PLACING RELIANCE O N THE IMPUGNED ORDER, HAS CONTENDED THAT ISSUANCE OF THE NO TICE U/S 148 OF THE ACT WAS MUCH AFTER THE ASSESSMENT PROCEEDINGS. ATTEN TION HAS BEEN DRAWN TO APB 59, WHICH IS A COPY OF THE ASSESSEES REPLY BEFORE THE ASSESSING OFFICER TO NOTICE U/S 142 (1) OF THE ACT, APB 63-69, WHICH IS A COPY OF THE SUBMISSIONS DATED 02.12.2005 FILED BY T HE ASSESSEE BEFORE THE ASSESSING OFFICER, AND APB 81-82, WHICH IS A COPY OF THE SUBMISSIONS DATED 21.02.2006 FILED BY THE ASSESSEE BEFORE THE ASSESSING OFFICER. IT HAS BEEN CONTENDED THAT THE OBJECT ION WITH REGARD TO NON-SERVICE OF NOTICE U/S 148 OF THE ACT WAS DULY TAKEN PROMPTLY BEFORE THE ASSESSING OFFICER. IT HAS BEEN SUBMITTED THAT THE SERVICEE OF THE NOTICE WAS NEVER IDENTIFIED BY THE PROCESS SERVER; THAT IT IS INCORRECT TO SAY THAT THE ADDRESS AT WHICH THE NOTICE WAS ALLEGEDLY SERVED WAS THE RESIDENTIAL ADDRESS OF THE DIRECTOR OF TH E ASSESSEE COMPANY; AND THAT THERE IS NOTHING ON RECORD TO SHOW THAT THE NOTICE WAS SERVED ON THE DIRECTOR OF THE COMPANY, SO MUCH SO, THAT NOT EVEN THE NAME OF SUCH SERVICEE FINDS MENTION ANYWHERE. 11. WE HAVE HEARD THE PARTIES AND HAVE PERUSED THE MA TERIAL ON RECORD. AS PER THE ASSESSING OFFICER, THE NOTICE DATED 2 2.03.2005, ISSUED U/S 148 OF THE ACT, WAS SERVED ON THE ASSESSEE ON 23. 04.2005. THE ASSESSEE HAS, ALL THROUGH, DISPUTED SUCH ALLEGED SERVIC E OF NOTICE. IN THE REPLY DATED 18.10.2005 (APB 59), THE ASSESSEE SUB MITTED AS FOLLOWS:- 2. IT IS HUMBLY SUBMITTED THAT THE NOTICE U/S 148 OF THE ACT DATED 22.03.05 REFERRED TO BY YOU AND PURPORTEDLY SERV ED ON 24.03.05 HAS NOT BEEN RECEIVED BY THE COMPANY TILL DATE AND THE REOPENING OF ASSESSMENT IS THEREFORE BAD IN LAW. THE ASSESSING OFFICER, IN RESPONSE TO THE SAID REPLY BY THE ASSESSEE, STATED, VIDE LETTER DATED 28.10.2005 (APB 60) , THAT AS PER OUR RECORD, THE NOTICE U/S 148 DATED 22.03.2005 WA S DULY SERVED ON 24.03.2005 BY THE PROCESS SERVER ON THE ADD RESS OF ITA NOS.910-912/DEL/2010 11 THE COMPANY B-7/8, VASANT VIHAR, NEW DELHI AND WAS DU LY ACKNOWLEDGED. 12. VIDE LETTER DATED 02.12.2005 (APB 63-69), THE A SSESSEE AGAIN OBJECTED TO THE NON-SERVICE OF THE NOTICE U/S 148 OF THE ACT. THE ASSESSING OFFICER, VIDE LETTER DATED 05.01.2006, AGAIN REJECTED THE ASSESSEES OBJECTION REGARDING NON-SERVICE OF NOTICE U/S 1 48 OF THE ACT, STATING AS FOLLOWS:- 13. THE ASSESSEE HAS ALLEGED THAT THE NOTICE U/S 148 W AS NOT RECEIVED BY THE APPELLATE COMPANY. THE ALLEGATION IS NOT CORRECT. AS ALREADY INFORMED VIDE LETTER DATED 28.02.2005 ENCL OSED WITH COPY OF NOTICE U/S 148, THE NOTICE WAS DULY SERVED ON 24.03.2005 BY THE PROCESS SERVER ON THE ADDRESS OF THE COMPANY D-7/6, VASANT VIHAR, NEW DELHI AND THE SAME W AS DULY ACKNOWLEDGED. THE ABOVE ADDRESS WAS THE DECLARED ADD RESS OF THE COMPANY, HOWEVER, A CHANGE IN ADDRESS WAS INTIMATE D TO THIS OFFICE BY LETTER DATED 13.07.2005. AT THE TIME OF S ERVICE, THE ABOVE WAS THE ADDRESS OF THE COMPANY WHERE THE NOTICE W AS CAUSED TO BE SERVED. ACCORDINGLY, THE STAND TAKEN OF NO N-RECEIPT OF NOTICE IS UNSUBSTANTIATED. 13. IN THE FIRST APPELLATE PROCEEDINGS, SINCE THE ASSESSEE HAD FILED AN APPLICATION FOR ADMISSION OF ADDITIONAL EVIDENCE ON T HE MERITS OF THE CASE, THE LD. CIT (A) ASKED FOR A REMAND REPORT FROM THE ASSESSING OFFICER. 14. VIDE REMAND REPORT DATED 04.09.2008, APROPOS THE ISSUE OF NON- SERVICE OF NOTICE, THE ASSESSING OFFICER STATED AS FOLLOWS: - I) NOTICE U/S 148 WAS SERVED ON 24.03.2005 BY THE PRO CESS SERVER (SH. S.C. DOGRA) AT THE ADDRESS OF THE COMPANY AT D-7 /6, VASANT VIHAR, NEW DELHI AND THE SAME WAS DULY ACKNOWLEDGED. ITA NOS.910-912/DEL/2010 12 II) NOT ONLY THE SIGNATURE, OF THE PERSON RECEIVING THE NOTICE WAS TAKEN BUT TELEPHONE NUMBER 26145991 WAS ALSO NOTED BY THE PROCESS SERVER WHILE SERVING THE NOTICE. III) THE ASSESSEE DID NOT RAISE ANY OBJECTION OF NON-SERV ICE BEFORE PASSING THE ASSESSMENT ORDER U/S 143(3)/147 OF THE INCOME -TAX ACT, 1961 IV) THERE IS NOTHING ON RECORD WHICH IT CAN BE CONCL UDED THAT THE NOTICE WAS NOT SERVED. EVEN IN ITS LETTER DATED 08.07 .2008 ON PAGE-3 UNDER THE HEAD 'SUBMISSIONS' (VIDE POINT NO. 3), THE A SSESSEE ITSELF ADMITTED THE PROPER SERVICE OF NOTICE BY STATING THAT 'THE NOTICE HAS TOUGH A PROCESS SERVER'. FROM THIS, IT IS CLEAR THAT T HE ASSESSEE IS RAISING TECHNICAL ISSUES TO ESCAPE FROM TAXES LEVIED ON HIGHER INCOME U/S 143(3)1/147. 15. IN ITS REJOINDER DATED 25.02.2009 TO THE AFORESAI D REMAND REPORT OF THE ASSESSING OFFICER (APB 29-47), THE ASSESSEE SUBMITTE D AS FOLLOWS:- 5.1 A COPY OF THE REMAND REPORT WAS HANDED OVER TO TH E A.R. OF THE APPELLANT IN RESPONSE TO WHICH A REJOINDER WAS SUB MITTED BY THE A.R. OF THE APPELLANT ON 25.02.2005. THE RELEVA NT PORTION OF THE REJOINDER IS EXTRACTED BELOW:- VIDE LETTER DATED 25.01.2005 AND 12.07.2005, THE APPE LLANT COMPANY INFORMED THE AO THAT ITS OFFICE HAD BEEN SHIFTED FROM D- 716, VASANT VIHAR, NEW DELHI TO KHASRA NO. 22/2/21A, PALAM PUR, SAHALPUR, BIJWASAN, NEW DELHI. THUS, THE NOTICE U/S 1 48 SAID TO HAVE BEEN ISSUED ON 22.03.2005 AT APPELLANT'S ADDRESS AT D-716, VASANT VIHAR, NEW DELHI WAS NOT SERVED ON THE APPELLAN T COMPANY. THE APPELLANT COMPANY CAME TO KNOW ABOUT THE ISSUE OF N OTICE ONLY WHEN IT RECEIVED SUBSEQUENT NOTICE-CUM-QUESTIONNAI RE U/S 142(1) DATED 05.09.2005 SERVED AT APPELLANT'S NEW OFF ICE ADDRESS AT KHASRA NO. 2212121A, PALAM VIHAR, SHALAPUR, BIJWA SAN, NEW DELHI. IN RESPONSE TO THIS NOTICE, THE APPELLANT COMPANY VIDE ITS ITA NOS.910-912/DEL/2010 13 LETTER DATED 18.10.2005 INFORMED THE AO ABOUT NON-RECEI PT OF NOTICE U/S 148 AND REQUESTED HIM TO SUPPLY THE REASONS RECORDED FOR ISSUE OF SAID NOTICE U/S 148. THE ASSESSING OFFI CER VIDE LETTER DATED 28.10.2005 SUPPLIED THE REASONS AS WELL AS COP Y OF THE NOTICE U/S 148 DATED 22.03.2005 BEARING ADDRESS OF THE COMPANY AS D-7/6, VASANT MAR, NEW DELHI. THE NAME OF THE PERS ON TO WHICH THE NOTICE WAS SERVED CANNOT BE DECIPHERED FROM THE NOTICE. VIDE LETTER DATED 02.12.2005, THE APPELLANT COMPANY STRO NGLY OBJECTED TO THE ISSUE OF NOTICE U/S 148 (COPY AVAILABLE AT PAGE 16- 22 OF THE PAPER BOOK). THE ASSESSING OFFICER VIDE HIS LETTER DATED 05.01.2006 SUMMARILY REJECTED THE OBJECTIONS AND HELD THAT THE NOTICE U/S 148 WAS SERVED ON 24.03. 2005 BY THE PROCE SS SERVER ON THE ADDRESS OF THE COMPANY. HE HAS NOT MENTIONED EVE N THE NAME OF THE PERSON TO WHOM THE NOTICE WAS SERVED. THE NOTICE ISSUED U/ 48 IS INVALID, AMONG OTHERS, BEC AUSE OF THE FOLLOWING REASONS.- (A) IT HAS NOT BEEN SERVED ON THE PROPER PERSON AS PER SECTION 282 OF THE INCOME-TAX ACT, 1961 (B) THE ASSESSING OFFICER HAS NOT EVEN MENTIONED THE NAME OF THE PERSON TO WHOM THE NOTICE IS SERVED. IN FACT IT IS N OT KNOWN TILL DATE AS TO WHO WAS THE PERSON ON WHOM THE NOTICE WAS PURPORTEDLY SERVED. EVEN THE REMAND REPORT DATED 4 TH SEPTEMBER 2008 OF THE AO DOES NOT GIVE THE NAME AND IDENTITY OF THE PERSON ON WHOM THE NOTICE WAS SERVED. (C) WHEN THE NOTICE IS SERVED THROUGH PROCESS SERVER, THE REPORT OF THE PROCESS SERVER IS NECESSARY AS PER THE PROCEDURE LAID DOWN UNDER CODE OF CIVIL PROCEDURE. NO SUCH REPORT SEEMS TO HAVE BEEN FURNISHED BY THE NOTICE SERVER. (D) MERE SAYING THAT PROCESS SERVER NOTED DOWN THE TEL EPHONE NUMBER DOES NOT MEAN THAT THE SERVICE IS VALID. (E) AS PER THE AO 'S REPORT, THE TELEPHONE NUMBER IS IN THE NAME OF ONE MR. RAM LAL MEHRA WHO IS NO WAY CONNECT ED WITH THE APPELLANT COMPANY. THIS ITSELF PROVES THAT NOTICE WAS NOT SERVED ON PROPER PERSON AND HENCE INVALID. T HE NOTICE DOES NOT BEAR NEITHER THE NAME OF THE PERSON TO WHOM IT WAS SERVED NOR STAMP OF THE APPELLANT COMPANY WHICH MEANS THAT THE NOTICE WAS NOT SERVED ON THE PROPER PERSON IN THE MANNER PRESCRIBED U/S 282 OF THE INCOME -TAX ACT, 1961. THE VARIOUS COURTS HAVE HELD THAT IT IS NOT ENOUGH THAT A NOTICE ISSUED U/S 148 SOME HOW FOUND ITS WAY TO THE PROPER AS SESSEE OR ITA NOS.910-912/DEL/2010 14 THAT PROPER ASSESSEE APPEARED AND FILED AN OBJECTION TO THE PROCEEDINGS. UNLESS THE NOTICE IS SERVED ON THE PROPE R PERSON IN THE MANNER PRESCRIBED U/S 282 OF THE INCOME-TAX ACT, 19 61, THE SAME IS INVALID AND THE AO CANNOT ASSUME JURISDICTION TO REASSESS THE ESCAPED INCOME. THE APPELLANT COMPANY HAS PLACED RELIANCE OF THE FOLLOWING JUDGEMENTS: (I) C.N. NATRAJ V. FIFTY ITO (1965) 56 ITR 250 (MYSOR E) (II) THAIGAM TEXTILES V, FIRST ITO (1973) 90 ITR 412 (MAD) (III) LAKSHMIBAI V. ITO (1972) 86 ITR 804 (MYSORE) (IV) CIT V. RAJESH KUMAR SHARMA (2008) 214 CTR (DEL ) 547 IN THE CASE OF CIT V. BHARDWAJ & SONS ('HUF) (2008) 2 DTR (DEL) 108, THE HON'BLE DELHI HIGH COURT HELD THAT WHERE THE NAME OF THE RECIPIENT OF THE NOTICE IS ILLEGIBLE AND NOT DECIPHE RABLE, SERVICE CANNOT BE SAID TO HAVE BEEN EFFECTED. THE APPELLANT COMPANY RELIES UPON THE FOLLOWING DECIS IONS FOR THE PROPOSITION THAT PROPER SERVICE OF NOTICE U/S 148 IS MA NDATORY FOR ASSUMING VALID JURISDICTION TO RE-ASSESS THE ESCAPED I NCOME I) CITV. VARDHMAN ESTATE P. LTD. 287 ITR 368 (DEL) II,) CIT V. BHAN TEXTILES P. LTD. 287 ITR 370 (DEL) 'III CIT V. LUNAR DIAMONDS LTD. 281 ITR 1 (DEL) (IV) VENKAT NAICKEN TRUST V. ITRO 242 ITR 141 (MAD) (V) SUDEV INDUSTRIES LTD. V. ITO 98 TTJ 97 (DEL) (VI) HIND BOOK HOUSE V. ITO 92 LTD 415 (DEL) (VII) DULLI CHAND LAXMI NARAIN V. AC'IT 89 LTD 426 (DEL) (VIII) DINA NATH V. CIT 204 ITR 667 (J&K) (IX) JAYANTHI TALKIES DISTRIBUTORS V. CIT 120 ITR 576 (MAD)' 16. BY VIRTUE OF THE IMPUGNED ORDER, THE LD. CIT (A ), ELABORATELY DISCUSSING THE MATTER, HELD THAT THERE WAS NO VALID SERV ICE OF NOTICE U/S 148 OF THE ACT ON THE ASSESSEE AND THE RE-ASSESSMENT PROCEE DINGS, BEING VOID AB-INITIO, WERE LIABLE TO BE QUASHED. 17. THE ISSUE IS AS TO WHETHER THE SAID ACTION OF THE L D. CIT (A) IS TENABLE IN THE EYE OF THE LAW. THE NOTICE U/S 148 OF THE ACT (APB 56) IS ADDRESSED TO M/S USHA STUD AND AGRICULTURAL FARMS LTD., D-7/6, VASANT VIHAR, NEW DELHI. THIS NOTICE IS DATED 22.03.2005. A S PER THE ASSESSING OFFICER, IT WAS SERVED ON 24.03.2005, BY THE PR OCESS SERVER, AT THE AFORESAID ADDRESS OF THE ASSESSEE COMPANY, AND WAS D ULY ACKNOWLEDGED, INASMUCH AS NOT ONLY THE SIGNATURE OF TH E PERSON ITA NOS.910-912/DEL/2010 15 RECEIVING THE NOTICE WAS TAKEN, BUT ALSO THE TELEPHON E NUMBER, I.E., 26145991, WAS NOTED BY THE PROCESS SERVER ON THE COPY OF THE NOTICE RETAINED BY THE PROCESS SERVER. THE ASSESSEE, HOWEVER, HAS MAINTAINED THAT IT HAD SHIFTED OFFICE FROM ITS ERSTWH ILE ADDRESS TO D- 7/6, VASANT VIHAR, NEW DELHI TO KHASRA NO.22/2/21-A, PALAM FARMS, SHALARPUR, BIJWASAN, NEW DELHI AND THAT THIS CHANGE O F ADDRESS HAD BEEN DULY INTIMATED TO THE ASSESSING OFFICER VIDE LETTE RS DATED 25.01.2005 (APB 55) AND 12.07.2005 (APB 58). FOR FA CILITY, THESE SHORT LETTERS ARE REPRODUCED HEREUNDER:- KINDLY NOTE THE CHANGE IN THE CORRESPONDENCE ADDRESS OF USHA STUD AGRICULTURAL FARM PVT. LTD. FROM D-7/6, VASANT VIHA R, NEW DELHI 110 057 TO KHASARA NO.22/2,2,4,4/1,7/1,8,9,1 2,13,14, NEAR 21A, PALAM FARMS, SHALAPUR, BIJWASAN, NEW DELH I. HENCEFORTH, YOU MAY KINDLY DIRECT ALL THE CORRESPONDEN CE AT THE ABOVE SAID NEW ADDRESS AND OBLIGE. THE CORRESPONDENCE ADDRESS OF USHA STUD AGRICULTURAL FARM PVT. LTD. HAS CHANGED FROM D-7/6, VASANT VIHAR, NEW DELHI 110 057 TO KHASARA NO.22/2,2,4,4/1,7/1,8,9,12,13,14, NEAR 21 A, PALAM FARMS, SHALAPUR, BIJWASAN, NEW DELHI. THIS FACT WAS BOUGHT TO YOUR KIND NOTICE VIDE THE ASSESSEES LETTER DT. 25 TH JANUARY 2005 AS WELL. (COPY ENCLOSED). HENCEFORTH, YOU MAY KINDLY DIRECT ALL THE CORRESPONDEN CE AT THE ABOVE SAID NEW ADDRESS AND OBLIGE. 18. THE QUESTION UP FOR DETERMINATION IS, AS TO WHETH ER THE NOTICE U/S 148 OF THE ACT WAS SERVED ON THE ASSESSEE OR NOT. IN THIS REGARD, FIRST OFF, THE EMPHASIS OF THE ASSESSING OFFICER, AS EVIDENT FR OM THE CORRESPONDENCE BETWEEN THE ASSESSING OFFICER AND THE ASSE SSEE AND THE REMAND REPORT FILED BY THE ASSESSING OFFICER BEFORE THE CIT (A), HAS BEEN THAT THE NOTICE WAS DULY SERVED AT THE ADDRESS OF THE ASSESSEE COMPANY AND IT WAS DULY ACKNOWLEDGED, AND THAT NOT O NLY THE SIGNATURE OF THE PERSON RECEIVING THE NOTICE, BUT ALSO THE TELEPHONE NUMBER WAS NOTED BY THE PROCESS SERVER WHILE SERVING TH E NOTICE. ITA NOS.910-912/DEL/2010 16 19. NOW, SERVICE OF NOTICE IS THE SINE QUA NON FOR A PROCEEDINGS U/S 147 OF THE ACT TO GET UNDERWAY. SECTION 148 (1) OF THE ACT PROVIDES THAT THE ASSESSING OFFICER SHALL SERVE A NOTICE ON THE ASSESSEE, AS REQUIRED THEREIN. AS TO THE PROCEDURE FOR SERVICE OF SUCH NOTICE, SECTION 282 OF THE ACT IS THE GOVERNING SECTION AND IT PROVIDES THAT SUCH A NOTICE MAY BE SERVED EITHER BY POST, OR AS IF IT WAS A SUMMONS ISSUED BY A COURT UNDER THE CODE OF CIVIL PROCEDURE, 1908. IN THE PRESENT CASE, EVIDENTLY, THE SERVICE WAS AS A SUMMONS AND NOT BY POST. THEREFORE, THE SERVICE IS GOVERNED BY THE RELEVA NT PROVISIONS OF THE CPC, I.E., ORDER V THEREOF. NOW, AS PER RULE 12 OF ORDER V, CPC, SERVICE OF A SUMMONS, WHEREVER PRACTICABLE, SHALL BE MA DE ON THE DEFENDANT IN PERSON, UNLESS HE HAS AN AGENT EMPOWERED TO ACCEPT SUCH SERVICE. AS PER RULE 16, THE PROCESS SERVER SHALL REQ UIRE THE SIGNATURE OF THE PERSON TO WHOM THE COPY OF THE SUMMON S IS DELIVERED. ACCORDING TO RULE 18, THE PROCESS SERVER SHALL ENDORSE O R ANNEX, ON OR TO THE ORIGINAL SUMMONS, A RETURN STATING THE TIME WH EN AND THE MANNER IN WHICH THE SUMMONS WAS SERVED, AND THE NAME AN D ADDRESS OF THE PERSON IDENTIFYING THE PERSON SERVED AND WITNESSI NG THE DELIVERY OF THE SUMMONS. 20. IN THE PRESENT CASE, FIRST OF ALL, THOUGH THERE IS A SIGNATURE ON THE COPY OF THE NOTICE RETAINED BY THE PROCESS SERVER (APB 56) AND IT CONTAINS A DATE, I.E., 24.03.2005 AND A NUMBER, I.E. , 26145991, NEITHER THE TIME OF SERVICE, NOR THE MANNER OF SERVICE, NOR T HE NAME AND ADDRESS OF THE PERSON IDENTIFYING THE SERVICE AND WITNE SSING THE DELIVERY OF THE NOTICE, ARE PRESENT. THUS, THE REQUIR EMENT OF ORDER V RULE 18 OF THE CPC HAS EVIDENTLY NOT BEEN MET WITH. 21. THUS, THE SERVICEE OF THE NOTICE HAS NOWHERE BEEN IDENTIFIED IN SPITE OF REPEATED REQUESTS MADE BY THE ASSESSEE TO THE ASSESSI NG ITA NOS.910-912/DEL/2010 17 OFFICER TO DO SO. IN FACT, IN PARA 6.7 OF THE IMPUGN ED ORDER, THE LD. CIT (A) HAS NOTED THAT EVEN AFTER INSTRUCTIONS FROM HIM [T HE CIT (A)], THE ASSESSING OFFICER WAS NOT ABLE TO NAME THE PERSON ON WHOM THE NOTICE WAS SERVED. IN THE ABSENCE OF IDENTIFICATION OF THE SER VICEE, IT IS, OBVIOUSLY, WELL NIGH IMPOSSIBLE TO CONTEND, MUCH LESS PR OVE, THAT THE SERVICEE WAS AN AGENT OF THE ASSESSEE COMPANY. AND, AS SUC H, IT CANNOT BE SAID THAT THE SERVICEE HAD BEEN APPOINTED A S AN AGENT OF THE ASSESSEE TO ACCEPT SERVICE OF NOTICES ON BEHALF OF TH E ASSESSEE. THIS, AS CORRECTLY NOTED BY THE LD. CIT (A) STANDS LONG BACK SETTLED, INTER ALIA, IN THE FOLLOWING CASE LAWS:- I) CIT VS. BAXIRAM RODMALL, 2 ITR 438 (NAGPUR); II) CIT VS. DEY BROTHERS, 3 ITR 213 (RANG); AND III) C.N. NATARAJ VS. FIFTH ITO, 56 ITR 250 (MYS). 22. IT CANNOT BE GAINSAID THAT THE PROVISIONS OF THE C PC, IN KEEPING WITH THOSE OF SECTION 282 OF THE IT ACT, AS RELEVANT HEREIN, ARE NOT A MERE FORMALITY. FULFILLMENT OF THE REQUIREMENTS THER EIN IS THE SINE QUA NON FOR A PROPER AND VALID SERVICE OF NOTICE. HEREIN , NOT ONLY HAS THE ALLEGED SERVICEE NOT BEEN IDENTIFIED, THE PERSON IDEN TIFYING SUCH SERVICEE HAS ALSO NOT BEEN EVEN NAMED, THEREBY VIOLATI NG THE PROVISIONS OF ORDER V, RULE 18, CPC, AS HAS DULY CORREC TLY BEEN TAKEN INTO CONSIDERATION BY THE LD. CIT (A). THEREFORE, TH E LD. CIT (A), IN OUR CONSIDERED OPINION, IS CORRECT IN HOLDING THAT THE IN VALID SERVICE OF NOTICE U/S 148 OF THE IT ACT, CANNOT BE SAID TO BE ME RELY A PROCEDURAL DEFECT AND IT CANNOT BE CURED BY THE PARTICIPATION OF THE ASSESSEE IN THE RE-ASSESSMENT PROCEEDINGS. THE LD. CIT (A), IN THIS V IEW OF THE MATTER AND IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AS DISCUSSED HEREINABOVE, HAS CORRECTLY HELD THAT THERE WAS NO VAL ID SERVICE OF NOTICE U/S 148 OF THE ACT ON THE ASSESSEE AND THAT THE RE-ASSESSMENT ITA NOS.910-912/DEL/2010 18 PROCEEDINGS WERE VOID AB INITIO . THE SAME HAVE CORRECTLY BEEN QUASHED/CANCELLED BY THE LD. CIT (A). 23. FOR THE ABOVE DISCUSSION, WE HEREBY UPHOLD THE ORD ER OF THE LD. CIT (A) ON THIS ISSUE. THE GROUND RAISED BY THE DEPARTM ENT IS REJECTED. 24. AS NOTED AT THE BEGINNING OF THIS ORDER, THE FACT S IN ALL THESE THREE APPEALS FILED BY THE DEPARTMENT ARE, MUTATIS M UTANDIS, EXACTLY SIMILAR. THAT BEING SO, OUR ABOVE OBSERVATIONS ARE APPL ICABLE EQUALLY IN ALL THE CASES. 25. IN THE RESULT, ALL THE THREE APPEALS FILED BY THE DEPARTMENT ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 25.10.20 13. SD/- SD/- [SHAMIM YAHYA] [A.D. JAIN] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 25.10.2013. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT, DELHI BENCHES