S/s. 139(1), 148, 282 – Notice issued under section 148 if not served by post has to be served in a manner provided in Code of Civil Procedure, 1908 for the purposes of service of summons. Accordingly, when the copy of the notice retained by the process server did not contain 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, the same cannot be considered as a valid service of notice issued u/s. 148 though the copy retained had the signature of the receiver, date and the phone number.
Facts
For assessment year 2003-04 the Assessing Officer (AO) issued on 22-03-2005 notice u/s. 148 of the Act which according to the AO was duly served. Vide letter dated 18-10-2005 the assessee informed the AO that the said notice was not received by it and in any case the return filed u/s. 139(1) may be treated as a return in response to notice u/s. 148. Upon receiving this letter the AO wrote a letter dated 28-10-2005 informing the assessee that the notice u/s. 48 had been duly served on 24-03-2005 by the process server on the address of the company and that the same was duly acknowledged. The address where the notice was served was the declared address of the assessee company. It was only vide letter dated 13-07-2005 that the assessee had informed the AO about the change in address. A copy of the said notice was attached with the letter. The assessee filed objections in respect of reassessment proceedings u/s. 148 vide letter dated 02-12-2005, filed on 08-12-2005. The AO replied to the objections.
The assessee again contended that the notice u/s. 148 was not served and therefore the proceedings were void ab initio. The AO rejected this argument and completed the assessment.
Aggrieved the assessee preferred an appeal to CIT(A) who considering the provisions of section 282 of the Act and also the provisions of CPC held that the mandate of section 148 is that the notice should be served on the assessee. Since the notice was served through the notice server of the Department and not by post, the procedure contemplated by the CPC under Order V for service has to be followed. Having examined the procedure laid down by CPC he held that there was no material on record to even establish the person to whom notice was allegedly served was authorised to receive the notice, rather that person was not identifiable. Despite repeated requests from the assessee and even after instructions from CIT(A) the AO was not able to name the person on whom the notice was served. If notice in some way or other reached the assessee then it cannot be treated as proper service of notice since statute prescribes specific mode of service to be followed. Acquiescence does not confer jurisdiction. He held that there was no valid service of notice u/s. 148 and consequently reassessment proceedings are void ab initio. He quashed the proceedings.
Aggrieved, the revenue preferred an appeal to the Tribunal.
Held:
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. 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.
The Tribunal observed that 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.
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).
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).
The Tribunal upheld the action of CIT (A) 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. It confirmed the order passed by CIT(A).
The appeal filed by the Revenue was dismissed.
