The order of the Bench was delivered by
A. D. Jain, Judicial Member-These are department’s appeals for Assessment Years 1998-98, 1999-2000 & 2003-04 against the orders of the CIT (A)-VII, New Delhi, dated 16.12.2009, 16.12.2009 & 07.12.2009, respectively.
2. The parties contend that the issue is the same in all 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 service of notice u/s 148 of the Income Tax Act, 1961.”
3. The facts are that the assessee company is engaged in the business of horse breeding and allied activities. The original 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 receipt 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 letter dated nil was received in the Assessing Officer’s 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 and 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 notice u/s 148 of the Act. In response to the above letter, a letter dated 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 address of the company, i.e., D-7/6, Vasant Vihar, New Delhi and the 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 02.12.2005, which was received in the office of the Assessing Officer on 08.12.2005. Reply dated 05.01.2006 to the said letter raising various 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 enclosed 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 was duly acknowledged. The above address was the declared address of the company, however, a change in address was intimated to this office by letter dated 13.07.2005. At the time of service, the above was the address of the company where the notice was caused to be served. Accordingly, the stand taken of non-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 alia, 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 assessee’s objection concerning nonservice 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 discussed while passing speaking order in regard to the objections raised to issue of notice u/s 148. The reply simply is an attempt 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 assertion 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 of paying less custom duty. The notice u/s 148 dated 22.03.2005 was duly served 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 registered office at Vasant Vihar was and still remains to be the residence of the Directors. The assessee has not till 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 rejected.
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 the assessee and that the re-assessment proceedings were void ab-initio liable to be quashed. He made the following observations (relevant portions):-
“6.1 The written as well oral submission(s) of the appellant, and the findings of the A.O. in the re-assessment order & in 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 section 148 has not been served on the assessee-company or on its authorized persons. There is also nothing on record to suggest that the notice was served on the assessee even after it was pointed out on its behalf that notice was not served on it. Therefore 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 service is proper or not and secondly, the Assessing officer will acquire a legal or valid jurisdiction to proceed in the matter or not. I find that there are plethora of judgements on this particular issue, some 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 law and mere participation in the proceedings will not validate the as proceedings. Acquiescence on the part of the assessee cannot confer jurisdiction which otherwise is lacking from the very beginning. The Assessing Officer can proceed to complete assessment only after proper service of notice in accordance with law and unless such no ice had duly been served, the Assessing Officer cannot be said to have been duly clothed with the 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-section (1) of section 148 Which reads as under:
"148(1) Before making the assessment, reassessment or recomputation under section 147 the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice a return of his income or he income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed, and the provisions of this Act shall, so far as may be apply accordingly as if such return were a return required to be furnished section 139."
Thus, the mandate of section 148 is that notice should be 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:
"282(1) A notice or requisition under this Act may be served on the person therein named either by post or as if it were a summons issued by a court under the Code of Civil Procedure, 1908 (5 of l908)."
A bare reading of this section clearly indicates that the notice under the Act can be served on the person either by post or if not by post then in the same manner in which summons issued by the court under or the Code of Civil Procedure, 1908 are to be served. As the service of s through notice server of the Department and not by post, the procedure contemplated by the Code of Civil Procedure under Order V for service of been followed. Order V and III of Code of Civil Procedure are relevant in this regard and we reproduce relevant rules from the said 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 may be appointed as agents to accept service of processes and how. That provision is as follows:
"(1) Besides the recognized agents described in rule 2 any person residing within the jurisdiction of the Court may be appointed an agent to accept service of process.
(2) Such appointment may be special or general and shall be made by an instrument in writing signed by the principal, and hutch instrument, or, if the appointment is general, a certified copy 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 practicable; or on his agent - Wherever it is practicable, service Mall be made on the defendant in person, unless he has an agent empowered to accept service, in which case service on such agent shall be sufficient.
13. Service on agent by whom defendant carries on business -(1) in a suit relating to any business or work against a person who does not reside within the local limits of the jurisdiction of the Court from which the summons is issued, service on any manager or e of service, personally carries on such business or work for such Its, shall be deemed good service.
15 Where service may be on an adult member of defendant’s family Where in any suit the defendant is absent from his residence at the time when the service of summons is sought to his residence and there is no likelihood of his being found at the reasonable time and he has no agent empowered to accept service of the if service may be made on any adult member 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 summon 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 acknowledgement of service endorsed on the original summons.
18. Endorsement of time and manner of service - The serving officer shall, in all cases in which the summons has been served under Rule 16, endorse or annex, or cause to be endorsed or annexed, on or to the original summons, a return stating the time when and the manner in which the summons was served and the name and address of the person (if any) identifying the person served and witnessing the delivery or tender of the summons."
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 person should have been specifically empowered to receive notice, From the analysis of the Rules reproduced above it is evident that the mandate of Legislature is that as far as possible the service of summons should be effected on the person named in the notice and, if it is not possible, then same should be effected on the person who is duly vested with the authority to receive such notice by the person named in the summon. The Legislature has further provided that in order to ensure proper service of notice acknowledgement of the person served should be obtained 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 made on the assessee himself or on somebody duly authorized by him in that behalf. When the assessee pleads that he has not been properly 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 material is on record to show that the person to whom the notice is alleged to have been served was specifically authorized to receive notice, rather that person is not identifiable. Till date despite repeated requests made on behalf of the appellant and even after instructions by the undersigned, the A,O, has not been able to name the person to whom the notice was served. The most fundamental requirement on service has not been established. If notice in some way or the other reached the assessee then it cannot be treated as proper service of notice since statute prescribes specific mode of service to be followed. When the statute provides that a notice should be served in a particular mode, it is not possible to hold that there has been a proper 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 contents of the notice. In Paparruna Rao v. Revenue Divisional Officer AIR 1918 Mad. 589, a Division Bench of Madras High court while dealing with the manner of service contemplated by section 45(2) of the Land Acquisition Act, which also attracts the provisions of the Code of Civil Procedure, in 1-hp, matter of service of notices, expressed the view that unless a person is appointed as agent o accept service of processes by an instrument in writing 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 sufficient but there should be a written authority. Similar view has been taken in CIT V. Baxirarn Rodmal [1934] 2 ITR 438 (Nag.), CIT v. Dey Brothers [1935] 3 ITR 213 (Rang.) and C.N. Nataraj v. Fifth ITO [1965] 56 ITR 250 (Mys.). In CIT v. Baxiram Rodmal [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 previous occasions and appeared for the assessee would not constitute him an agent on whom a notice or requisition under the 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 was neither an agent of the assesse nor authorized by him to accept notices on his behalf was not valid and, therefore, the assessee 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 service, the person on whom service is effected must have valid authorization given to him in writing to receive such notice and mere implied authority will not be enough. Alternatively, if for argument sake, it is to be held that implied authority is sufficient for service of notice, then that too is not present in the present case. It is also not the case where the 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 20 of code of Civil Procedure, it is the duty of the department to discharge its onus showing that the authority concerned has reason to believe that the assessee was keeping out of the for the purpose of avoiding service or that otherwise there were other good reasons to come to the conclusion that the notice could not be served in the ordinary way.
6.9 The ratio of the decisions cited above had also been consistent that acquiescence is not going to confer jurisdiction which otherwise is lacking from the very beginning. As observed earlier, the Assessing Officer can proceed to complete the reassessment only when he issued notice and served the same 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 and filed return and also participated in the reassessment proceedings. The procedural irregularities can be waived, off by the assessee, but at the same time the conduct the assessee in participating in assessment proceedings will not be sufficient to confer the 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 the reassessment and as it is lacking, this jurisdictional defect cannot be cured by conduct of persons on behalf of the assessee and thus assessment is liable to be quashed on this point. It 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 was issued within the time-limit permissible in accordance with the provisions of section 149 of the Act. But the notice was not served on the assessee or on anyone authorized by it even after it was pointed out by it that the notice was not served on it on anyone authorized by it, Had it been done by the Assessing Officer, jurisdictional defect could have been cured. Respectfully following the above decision is, it has to be held that the participation of the assessee in the reassessment proceedings can not cure the defect in the notice under section 148 of the Act, i.e. the notice under section 148 is a jurisdictional notice. Therefore, 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 participation of the assessee in the re-assessment proceedings. Therefore, it is held that there was no valid service of notice under section 148 of the Act and the re-assessment proceedings are void ab initio & thus liable to be quashed. As a result, Ground No. 2 raised by the appellant is allowed.”
8. Before us, the Ld. DR has contended that the Ld. CIT (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:
“2. Notice u/s 148:- The assessee is harping on non-receipt fo the Notice u/s 148. The fact has already been discussed while passing speaking order in regard to the objections raised to issue of notice u/s 148. The reply simply is an attempt 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 assertion 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 of paying less custom duty. The notice u/s 148 dated 22.03.2005 was duly served 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 registered office at Vasant Vihar was and still remains to be the residence of the Directors. The assessee has not till 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 rejected.”
9. It has been pointed out that the notice u/s 148 of the Act (copy at APB 56) was served on the assessee’s address, which also happened to be the residential address of the assessee’s Director and so, the notice was properly served, as having been served on the assessee’s agent. It has further been contended that the notice contains the signature of the server, the date and the phone number. 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 ‘Commissioner of Income-tax v. Hotline International P. Ltd.’, [2008] 296 ITR 333 (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 the assessee in the present case is a company.
10. The ld. counsel for the assessee, placing reliance on the impugned order, has contended that issuance of the notice u/s 148 of the Act was much after the assessment proceedings. Attention has been drawn to APB 59, which is a copy of the assessee’s 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 the 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 objection 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 the 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 material on record. As per the Assessing Officer, the notice dated 22.03.2005, issued u/s 148 of the Act, was served on the assessee on 23.04.2005. The assessee has, all through, disputed such alleged service of notice. In the reply dated 18.10.2005 (APB 59), the assessee submitted 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 served 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 was duly served on 24.03.2005 by the process server on the address of the company B-7/8, Vasant Vihar, New Delhi and was duly acknowledged.”
12. Vide letter dated 02.12.2005 (APB 63-69), the assessee 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 assessee’s objection regarding non-service of notice u/s 148 of the Act, stating as follows:-
“13. The assessee has alleged that the notice u/s 148 was not received by the appellate company. The allegation is not correct.
“As already informed vide letter dated 28.02.2005 enclosed 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 was duly acknowledged. The above address was the declared address of the company, however, a change in address was intimated to this office by letter dated 13.07.2005. At the time of service, the above was the address of the company where the notice was caused to be served. Accordingly, the stand taken of non-receipt of notice is unsubstantiated.”
13. In the first appellate proceedings, since the assessee had filed an application for admission of additional evidence on the 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 nonservice of notice, the Assessing Officer stated as follows:-
i) Notice u/s 148 was served on 24.03.2005 by the process 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.
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-service 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 concluded 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 assessee itself admitted the proper service of notice by stating that "the notice has tough a process server". From this, it is clear that the 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 aforesaid remand report of the Assessing Officer (APB 29-47), the assessee submitted as follows:-
“5.1 A copy of the remand report was handed over to the A.R. of the appellant in response to which a rejoinder was submitted by the A.R. of the appellant on 25.02.2005. The relevant portion of the rejoinder is extracted below:-
“Vide letter dated 25.01.2005 and 12.07.2005, the appellant 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 148 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 appellant company.
The appellant company came to know about the issue of notice only when it received subsequent notice-cum-questionnaire u/s 142(1) dated 05.09.2005 served at appellant's new office address at Khasra No. 2212121A, Palam Vihar, Shalapur, Bijwasan, New Delhi. In response to this notice, the appellant company vide its letter dated 18.10.2005 informed the AO about non-receipt of notice u/s 148 and requested him to supply the reasons recorded for issue of said notice u/s 148. The Assessing Officer vide letter dated 28.10.2005 supplied the reasons as well as copy 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 person to which the notice was served cannot be deciphered from the notice.
Vide letter dated 02.12.2005, the appellant company strongly 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 process server on the address of the company. He has not mentioned even the name of the person to whom the notice was served.
The notice issued u/ 48 is invalid, among others, because 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 not known till date as to who was the person on whom the notice was purportedly served. Even the remand report dated 4th 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 telephone 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 connected with the appellant company. This itself proves that notice was not served on proper person and hence invalid. The 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 assessee or that proper assessee appeared and filed an objection to the proceedings. Unless the notice is served on the proper person in the manner prescribed u/s 282 of the Income-tax Act, 1961, 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 (Mysore)
(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 decipherable, service cannot be said to have been effected.
The appellant company relies upon the following decisions for the proposition that proper service of notice u/s 148 is mandatory for assuming valid jurisdiction to re-assess the escaped income
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 service of notice u/s 148 of the Act on the assessee and the re-assessment proceedings, being void ab-initio, were liable to be quashed.
17. The issue is as to whether the said action of the Ld. 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. As per the Assessing Officer, it was served on 24.03.2005, by the process server, at the aforesaid address of the assessee company, and was duly acknowledged, inasmuch as not only the signature of the person receiving the notice was taken, but also the telephone 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 erstwhile 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 of address had been duly intimated to the Assessing Officer vide letters dated 25.01.2005 (APB 55) and 12.07.2005 (APB 58). For facility, 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 Vihar, New Delhi – 110 057 to KHASARA NO.22/2,2,4,4/1,7/1,8,9,12,13,14, NEAR 21A, PALAM FARMS, SHALAPUR, BIJWASAN, NEW DELHI.
Henceforth, you may kindly direct all the correspondence 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 21A, PALAM FARMS, SHALAPUR, BIJWASAN, NEW DELHI. This fact was bought to your kind notice vide the assessee’s letter Dt. 25th January 2005 as well. (Copy enclosed).
Henceforth, you may kindly direct all the correspondence at the above said new address and oblige.”
18. The question up for determination is, as to whether 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 from the correspondence between the Assessing Officer and the assessee 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 only the signature of the person receiving the notice, but also the telephone number was noted by the process server while serving the notice.
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 relevant 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 made on the defendant in person, unless he has an agent empowered to accept such service. As per Rule 16, the process server shall require the signature of the person to whom the copy of the summons is delivered. According to Rule 18, the process server shall endorse or annex, on or to the original summons, a return stating the time when and the manner in which the summons was served, and the name and address of the person identifying the person served and witnessing 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 the name and address of the person identifying the service and witnessing the delivery of the notice, are present. Thus, the requirement 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 Assessing Officer to do so. In fact, in para 6.7 of the impugned order, the Ld. CIT (A) has noted that even after instructions from him [the 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 servicee, it is, obviously, well nigh impossible to contend, much less prove, that the servicee was an agent of the assessee company. And, as such, it cannot be said that the servicee had been appointed as an agent of the assessee to accept service of notices on behalf of the 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 CPC, in keeping with those of Section 282 of the IT Act, as relevant herein, are not a mere formality. Fulfillment of the requirements therein 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 identifying such servicee has also not been even named, thereby violating the provisions of Order V, Rule 18, CPC, as has duly correctly been taken into consideration by the Ld. CIT (A). Therefore, the Ld. CIT (A), in our considered opinion, is correct in holding that the invalid service of notice u/s 148 of the IT Act, cannot be said to be merely 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 view of the matter and in the facts and circumstances of the case, as discussed hereinabove, has correctly held that there was no valid service of notice u/s 148 of the Act on the assessee and that the re-assessment 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 order of the Ld. CIT (A) on this issue. The ground raised by the department is rejected.
24. As noted at the beginning of this order, the facts in all these three appeals filed by the department are, mutatis mutandis, exactly similar. That being so, our above observations are applicable 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 25.10.2013.