Sri Syed Meeraj Ahmed,by GPA Sri M.A.Mnnan khan, Hyderabad v. ITO, Hyderabad

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B HYDERABAD BEFORE SHRI CHANDRA POOJARI ACCOUNTANT MEMBER (SMC) ITA NO.1220/HYD/2009 A.Y. 1999 2000 ITA NO.1221/HYD/2009 A.Y. 2000 2001 ITA NO.1222/HYD/2009 A.Y. 2001 2002 ITA NO.1223/HYD/2009 A.Y. 2002 2003 SMT. RUHINA AHMED BY GPA SRI.M.A. MANNAN KHAN HYDERABAD. (PAN R-701/5(3) ) VS. ITO WARD 5 (3) HYDERABAD (APPELLANT) (RESPONDENT) ITA NO.1224/HYD/2009 A.Y. 1999 2000 ITA NO.1225/HYD/2009 A.Y. 2000 2001 ITA NO.1226/HYD/2009 A.Y. 2001 2002 ITA NO.1227/HYD/2009 A.Y. 2002 2003 SHRI SYED MEERAJ AHMED BY GPA SRI M.A. MANNAN KHAN SAIFABAD HYDERABAD (PAN S-701/5(3) ) VS. ITO WARD 5 (3) HYDERABAD (APPELLANT) (RESPONDENT) ITA NO.1228/HYD/2009 A.Y. 1999 2000 ITA NO.1229/HYD/2009 A.Y. 2000 2001 ITA NO.1230/HYD/2009 A.Y. 2001 2002 ITA NO.1231/HYD/2009 A.Y. 2002 2003 SMT. NAYEEMUNNISA BEGUM BY GPA SRI M.A. MANNAN KHAN HYDERABAD (PAN N-701/5(3) ) VS. ITO WARD 5 (3) HYDERABAD (APPELLANT) (RESPONDENT) ITA NO.1232/HYD/2009 A.Y. 1999 2000 ITA NO.1233/HYD/2009 A.Y. 2000 2001 ITA NO.1234/HYD/2009 A.Y. 2001 2002 ITA NO.1235/HYD/2009 A.Y. 2002 2003 ITA NO.1236/HYD/2009 A.Y. 2003 2004 SRI ZIAUDDIN AHMED ABIDS VS. ITO WARD 5 (3) HYDERABAD 2 2 HYDERABAD HYDERABAD (PAN Z-701/5(3) ) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. VASANT KUMAR RESPONDENT BY : SHRI E. NAGENDRA PRASAD DR O R D E R THESE 17 APPEALS PREFERRED BY THE ASSESSEES ARE DIRECTED AGAINST THE DIFFERENT ORDERS PASSED BY THE CIT (A)-V HYDERABAD DATED 8.10.2009 AND PERTAINS TO THE ASSESSMENT YEARS 1999-200 0 2000-01 2001-02 2002-03 AND 2003-04. 2. THE ASSESSEE RAISED THE FOLLOWING COMMON GROUNDS IN IT S APPEALS: 1. THE CIT(A) CONFIRMING THE ORDERS OF THE ASSESSI NG OFFICER IS ERRONEOUS BOTH ON FACTS AND IN LAW. 2. THE CIT(A) ERRED IN HOLDING THAT THE ASSESSMENT IS VALIDLY MADE ON THE NON RESIDENT AND IT IS NOT AN ASSESSMENT MADE TREATING SOMEBODY AS AGENT U/S 163(3). 3. THE CIT(A) ERRED IN HOLDING THAT THE NOTICE SERV ED ON SRI MANNAN KHAN NOT IN THE CAPACITY OF AN AGENT OF THE ASSESSEE BUT AS A GPA HOLDER OF THE ASSESSEE. 4. THE CIT(A) FAILED TO APPRECIATE THE FACT THAT SR I MANNAN KHAN IS NOT HAVING ANY GENERAL POWER OF ATTORNEY TO REPRESENT INCOME T AX MATTERS OR TO DEAL WITH INCOME TAX MATTERS OF THE NON RESIDENT BUT WAS HAVI NG A SPECIFIC POWER OF ATTORNEY JOINTLY WITH ANOTHER TO DEAL WITH MATTER R ELATING TO A SPECIFIC LAND AND THEREBY ERRED IN HOLDING THAT THE NOTICE SERVED ON HIM IS AS A GPA OF NO RESIDENT WHICH IS FACTUALLY INCORRECT AND THEREBY E RRED IN CONFIRMING THE ASSESSMENT. 5. THE CIT(A) OUGHT TO HAVE HELD THAT THERE IS NO ORDER OF THE ASSESSING OFFICER TO HOLD SHRI M.A. MANNAN AS AN AGENT OF THE NON RESIDENT AND THEREBY OUGHT TO HAVE ANNULLED THE ASSESSMENT. 6. THE CIT(A) FURTHER OUGHT TO HAVE APPRECIATED TH E LEGAL PROVISION THAT U/S 149(3) NO NOTICE U/S 148 COULD BE SERVED ON ANY AGE NT OF NON RESIDENT BEYOND TWO YEARS FROM THE END OF THE ASSESSMENT YEA R AND THEREBY OUGHT TO HAVE ANNULLED THE ASSESSMENT. 3 3 THE ASSESSEE IN ITS APPEAL IN ITA NOS. 1228/H/2009 TO ITA 1231./HYD/2009 WHICH ARE AS FOLLOWS: 1. THE CIT(A) FAILED TO APPRECIATE THE LEGAL POSITION WITH REGARD TO YEAR OF ACCESSIBILITY OF CAPITAL GAINS AND ERRED IN CONFIRM ING THE ORDERS OF ASSESSING OFFICER TAXING SUCH CAPITAL GAINS IN THIS YEAR 2. THE CIT(A) 3.1. BRIEF FACTS OF THE CASE ARE THAT IN THE PRESENT CA SE THE ASSESSEE IS ONE OF THE CO-OWNERS OF THE PROPERTY SITUATED A T MIYAPUR SERILINGAMPALLY MANDAL RR DISTRICT ALONG WITH MA BA SITH KHAN & OTHERS. AS PER THE INFORMATION GATHERED DURING THE COURSE OF SCRUTINY PROCEEDINGS IN THE CASE OF SRI MA BASITH KHAN IT WAS FOUN D THAT DURING THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 1999 2000 THE ASSESSEE RECEIVED CAPITAL GAINS ON RELINQUISHMENT OF RIGHT S IN THE SHARE OF A PROPERTY SITUATED AT MIYAPUR HYDERABAD. ACCORDIN GLY A NOTICE U/S 148 OF THE IT ACT 1961 WAS ISSUED. SINCE THERE WAS NO COM PLIANCE TO THE NOTICE ISSUED UNDER SEC 148 TO A FURTHER NOTICE U/S 1 42(1) AND EVEN TO SHOW CAUSE NOTICE AS TO WHICH THE ASSESSMENT BE NOT COMPLET ED AS EX PARTE AS PER THE PROVISIONS OF SECTION 144 OF THE ACT COMPUTING THE INCOME AS INCOME UNDER THE HEAD CAPITAL GAIN U/.S 144 READ WITH SEC. 147. ON APPEAL TO CIT(A) THE ASSESSEE CHALLENGED THE V ALIDITY OF ISSUE OF NOTICE AND DETERMINATION OF CAPITAL GAIN IN THE HA NDS OF THE ASSESSEE. BOTH THE ISSUES ARE DECIDED AGAINST THE ASSESSEE. AGAINST T HIS THE ASSESSEE IS IN APPEAL BEFORE US. THE AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ASSESSI NG OFFICER MADE AN ASSESSMENT ON SRI MANNAN KHAN HOLDING HIM TO BE A GPA HOLDER OF THE NON RESIDENT SRI SYED MEERAJ AHMED FOR ALL THE ASSESSMENT YEARS 1999-2000 TO 2002-03 LEVYING TAX ON CAPITAL GAI NS. THE ASSESSING OFFICER HELD THAT THE CAPITAL GAINS RESULTING BY VIRTU E OF MOU BETWEEN ONE M/S SRI VENKATESWARA BUILDERS AND THE ASSESSEE ALONG W ITH OTHER CO-OWNERS. IN FACT THIS MOU IS TAKEN AS THE BASIS FOR B RINGING TO TAX THE 4 4 CAPITAL GAINS AS COULD BE SEEN FROM PARA 4.2 OF THE ASSESSM ENT ORDER. FURTHER THE ASSESSMENT WHICH IS AN EXPARTE ASSESSMENT IS MADE BASED ON THE INFORMATION FROM ONE MR. BASITH KHAN WHO HAPP ENS TO BE RESIDENT AND WHO FILED HIS RETURN OF INCOME AND FILED WRITTEN SUBMISSIONS AS COULD BE SEEN FROM THE ASSESSMENT ORDER PARA 5.1. 3.2. HE SUBMITTED THAT THE ASSESSEES GROUND BEFORE THE CIT(A) BESIDES OTHER GROUNDS ON COMPUTATION OF CAPITAL GAINS I S THAT THE ASSESSING OFFICER ERRED IN MAKING ASSESSMENT HOLDING SRI MAN NAN KHAN AS GPA HOLDER WITHOUT FOLLOWING THE PROVISIONS OF SEC.16 3(2) SINCE HE WAS A JOINT HOLDER OF GPA FOR SPECIFIC PURPOSE OF SALE OF LAND AND FURTHER THAT THE ISSUE OF NOTICE U/S148 IS BELATED IN VIEW OF PR OVISIONS OF SEC.163(3). 3.3. HE FURTHER SUBMITTED THAT THE CIT(A) HAVING F ELT THAT THE ASSESSEE HAS TO SUCCEED ON THE ABOVE GROUNDS HAS TAKEN A NEW STAND THAT THE ASSESSMENT IS MADE ON THE NON RESIDENT DIRECTLY W ITHOUT HOLDING ANY BODY AS AGENT AS REQUIRED U/S 163 AND THE SERVICE OF NOTICE U/S 148 ON SRI MANNAN KHAN IS MADE BECAUSE HE HAPPENS TO BE THE GPA HOLDER. HE SUBMITTED THAT THE CIT(A) AFTER REPRODUCIN G THE REASONS RECORDED IN THE APPELLATE ORDER HAS CONCLUDED THAT THE PROCEEDINGS IS INITIATED AGAINST THE NON RESIDENT AND THE NOTICE WAS SERVED RIGHTLY AT THE LAST KNOWN ADDRESS ON THE RELATIVE AND GPA HOLDER OF THE ASSESSEE. HE SUBMITTED THAT THE ISSUE NOW IS WHETHER THE SERVICE OF NOTICE ASSUMING FOR A WHILE THAT THE ASSESSMENT IS MADE DIRECTLY ON THE NON RESIDENT AT LAST KNOWN ADDRESS ON SRI MANNAN KHAN HOLDI NG HIM TO GPA IS VALID. 3.4. HE DREW OUR ATTENTION TO THE PROVISIONS OF SEC.282 WHICH DEALS WITH SERVICE OF NOTICE IN CASE OF INDIVIDUALS AS IT STOOD THEN W HICH IS REPRODUCED HERE UNDER: 5 5 282. SERVICE OF NOTICE GENERALLY 1 A NOTICE OR REQUISITION UNDER THIS ACT MAY BE SERVED ON THE PERSON THEREIN NAMED EITHE R BY POST OR AS IF IT IS WERE A SUMMONS ISSUED BY A COURT UNDER THE CODE OF CIVIL PROCEDURE 1908 (5 OF 1908). 2. ANY SUCH NOTICE OR REQUISITION MAY BE ADDRESSED : A) IN THE CASE OF A FIRM OR A HINDU UNDIVIDED FAMIL Y TO ANY MEMBER OF THE FIRM OR TO THE MANAGER OR ANY ADULT MEMBER OF T HE FAMILY B) IN THE CASE OF A LOCL AUTHORITY OR COMPANY TO T HE PRINCIPAL OFFICER THEREOF C) IN THE CASE OF ANY OTHER ASSOCIATION OR BODY OF INDIVIDUALS TO THE PRINCIPAL OFFICER OR ANY MEMBER THEREOF D) IN THE CASE OF ANY OTHER PERSON (NOT BEING AN IN DIVIDUAL) TO THE PERSON WHO MANAGERS OR CONTROLS HIS AFFAIRS. 3.5. HE SUBMITTED THAT SINCE THE ASSESSEE HAPPEN TO BE AN INDIVIDUAL THE SUB SECTION (1) APPLIES AND AS PER THIS S UB SECTION IT HAS TO BE SERVED ON THE PERSON THERE IN NAMED OR AS IF IT WERE A SUMMONS ISSUED BY A COURT UNDER THE CODE OF CIVIL PROCEDURE 19 08. THE CIT(A) ACCEPTS THAT THE ASSESSEE IS A NON RESIDENT. THEREFORE THE VERY FINDING THAT IT COULD BE SERVED ON THE LAST KNOWN ADDRESS IS NOT CORRECT. SUCH A SITUATION CAN ARISE ONLY WHEN THE ASSESSING OFFICER RECORDS A SATISFACTION THAT IT IS NOT POSSIBLE TO SERVE NOTICE THE PERSON. NORM ALLY IT SHOULD BE SERVED ON THE KNOWN ADDRESS ONLY. THE ASSESSING OFFICER AN D THE CIT(A) RELY ON THE MOU AND THE GPA. THEN THEY SHOULD BE KN OWING THE ADDRESS GIVEN IN THE MOU OR IN THE GPA. THAT ADDRESS I S NOT LOCAL ADDRESS. IT IS AN OUTSIDE THE COUNTRY ADDRESS. THEREFORE THE FINDING OF THE CIT(A) THAT IT IS SERVED ON THE LAST KNOWN ADDRESS I S CONTRARY TO FACTS AND PROVISIONS OF LAW. WHEN THE ADDRESS IN THE M OU AND THE GPA WHICH THE ASSESSING OFFICER RELIED UPON THE QUESTION OF CON SIDERING THE ADDRESS GIVEN IN NOTICE U/S 148 TO BE LAST KNOWN ADDRESS I S WITHOUT ANY BASIS. THE ADDRESS 5-8-6000 MUBARAK BAZAR ABIDS IS ADD RESS OF THE GPA HOLDER AND OTHERS WHO CARRY ON BUSINESS AND NOT A R ESIDENTIAL ADDRESS AT ALL. THIS CLEARLY PROVES THAT THE ASSESSING OFF ICER HAS GIVEN 6 6 THE ADDRESS OF SRI MANNAN KHAN AS THAT OF THE NON RESID ENT. THEREFORE THE FINDING THAT IT IS LAST KNOWN ADDRESS OF THE NON RESIDENT IS NOT BASED ON ANY FACT ON RECORD AND IT IS IMAGINATION OF THE CI T(A). 3.6. REGARDING OTHER FINDING THAT NOTICE ON RELATI VE AND GPA OF THE NON RESIDENT HE SUBMITTED THAT THIS ONLY IS FACTUAL LY INCORRECT AND CONTRARY TO PROVISIONS OF LAW REGARDING SERVICE OF NOTICE . THE AR SUBMITTED THAT THE PERSON WHO IS REFERRED TO AS GPA IS N OT GPA FOR RECEIVING NOTICES OR FOR IT MATTERS BUT IS A GPA JOINTLY WITH ANOTHER FOR THE PURPOSE OF SALE OF LAND. HE DREW OUR ATTENTION TO THE COPY OF THE GPA WHICH IS PLACED ON RECORD AT PAGE NO.20 OF PAPER BOOK. HE SUBMITTED THAT IT IS VERY CLEAR FROM THIS THAT SRI MA NNAN KHAN AND SRI M V KRISHNA REDDY ARE APPOINTED AS ATTORNEY FOR SPECIFIC PURPOSES NARRATED THERE UNDER WHICH DOES NOT INCLUDE RECEIPT OF NOTICES FROM INCOME TAX DEPARTMENT BUT IT IS FOR SALE OF THEIR SHAR E IN LANDS IN SURVEY NO.44/1. HENCE HE SUBMITTED THAT THIS FINDING OF CIT(A) IS FACTUALLY INCURRED AND NOT TENABLE. REGARDING SERVICE OF NOTICE ON RELATIVE THE IT WAS SUBMITTED THAT THIS AGAIN IS CON TRARY TO PROVISIONS OF LAW. AS COULD BE SEEN FROM PROVISIONS OF SEC.282 SERVICE SHOULD BE IN ACCORDANCE WITH CPC. HE DREW OUR ATTENTION TO THE RELE VANT PROVISIONS OF CPC WHICH DEALS WITH SERVICE OF SUBMITTING RELEVANT P ROVISIONS OF CPC WHICH DEALS WITH SERVICE ON DEFENDANT WHICH STATES THAT IT CAN BE SERVED ON AGENT IF SUCH AGENT IS AUTHORISED TO ACCEPT SERVICE. RU LE 15 DEALS WITH SERVICE ON AN ADULT MEMBER OF DEFENDANTS FAMILY. FIRSTLY IT IS NOT CORRECT TO STATE THAT SRI MANNAN KHAN IS A FAMILY MEMBE R OF THE NON RESIDENT. HE DREW OUR ATTENTION TO RULE 15 WHICH PERM ITS SERVICE ON ANY ADULT MEMBER OF FAMILY IT IS VERY CLEAR FROM THE RUL E THAT SUCH SERVICE CAN BE RESORTED TO ONLY WHEN THE DEFENDANT IS ABSENT F ROM HIS RESIDENCE AT THE TIME WHEN THE SERVICE OF SUMMONS IS SOUGHT TO BE M ADE. FIRSTLY THE ADDRESS GIVEN IN THE NOTICE U/S 148 IS NOT THAT OF R ESIDENCE OF THE NON RESIDENT AND IT IS AN OFFICE ADDRESS OF SRI MANNAN K HAN. SECONDLY 7 7 IN THE PRESENT CASE IT CANNOT BE SAID THAT THE NON RESIDE NT IS ABSENT WHEN THE SERVICE IS SOUGHT TO BE MADE. THE NON RESIDENT IS ALWAYS ABSENT. THEREFORE INVOKING THIS RULE TO HOLD THE SERV ICE TO BE VALID IS ALSO NOT CORRECT AND ILLEGAL. THE ONLY RULE THAT DEAL S WITH THE SERVICE ON NON RESIDENT IS RULE 25. AS PER THIS RULE 25 OF ORDER 5 OF CPC WHEN THE DEFENDANT RESIDES OUT OF INDIA AND HAS NO AGENT IN IN DIA EMPOWERED TO ACCEPT SERVICE THE SUMMONS SHALL BE ADDRESSED TO THE DEFEND ANT AT THE PLACE WHERE HE IS RESIDING AND SENT TO HIS BY POST IF THE RE IS POSTAL COMMUNICATION BETWEEN SUCH PLACE AND THE PLACE WHERE THE COURT IS SITUATE. 3.7. HE SUBMITTED THAT IN THE PRESENT CASE IT IS KNOW T O THE ASSESSING OFFICER THAT THE ASSESSEE IS A NON RESIDENT AND THER E IS POSTAL COMMUNICATION AND THERE IS NO AGENT WHO IS AUTHORIZED TO RECEIVE NOTICE AS PER RECORD. THEREFORE HE SHOULD HAVE SENT THE NOTICE BY POST. THEREFORE THE ASSESSEE SUBMITS THAT THE CIT(A) FINDING TH AT THE NOTICE IS SERVED ON THE LAST KNOWN INDIAN ADDRESS IS NOT CORRECT EVE N AS PER PROVISIONS OF CPC AND THERE IS NO PROVISION AS FAR AS NO N RESIDENT IS CONCERNED TO SERVE AT KNOWN INDIAN ADDRESS. IT WAS SUBMIT TED THAT SRI MANNAN KHAN IS NOT AGENT APPOINTED TO RECEIVE NOTICES AND HENCE NO NOTICE COULD HAVE BEEN SERVED ON HIM. 3.8 THE LEARNED AR SUBMITTED THAT THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS BOTH ON FACTS AND IN LAW AND NEED TO BE SET ASIDE AND THE ASSESSEE PLEA THAT ONLY PROVISIONS OF SEC. 163 A PPLIES AND THE ASSESSING OFFICER OUGHT TO HAVE PASSED ORDERS U/S 163 TO HO LD SRI MANNAN KHAN AS AGENT AND THEN SHOULD HAVE SERVED NOTI CE U/S 148. THEN IT ATTRACTS THE PROVISIONS OF SEC.149(3) AS PER WHICH NOTICES COULD BE SERVED ONLY WITHIN TWO YEARS FROM THE END OF THE A SSESSMENT YEAR. IN THIS CASE THE NOTICE U/S 148 IS SERVED IN 29.3.2006 WHI CH IS BEYOND TWO YEARS FROM THE END OF ALL THE ASSESSMENT YEARS 1999- 2000 TO AY 8 8 2002-03. THEREFORE HE PRAYED THAT THE ASSESSMENT ORDER IS BAD IN LAW AND SAME BE QUASHED. 3.9. HE FURTHER SUBMITTED THAT FIRSTLY THE DR STATES TH AT THE ASSESSEE HAS TAKEN NEW GROUNDS AND HENCE THE MATTER GO BACK TO THE CIT(A) IN VIEW OF THE DECISION OF MP HIGH COURT REPOR TED IN THE CASE OF CIT VS. TOLLARAM HASSOMAL (MP HC) (298 ITR 22). WHEREAS A READING OF THE DECISION OF MP HIGH COURT CLEARLY SHOW THAT THE GRO UNDS THAT WERE ADMITTED AND DECIDED BY THE HONOURABLE ITAT IN THAT CASE WERE SUCH THAT THEY WERE RAISED FOR THE FIRST TIME AND THERE W AS NO FINDING OF THE CIT(A) ON THOSE GROUNDS. ON ACCOUNT OF THESE REASONS THE HIGH COURT FELT THAT THE MATTER SHOULD HAVE BEEN REMANDED. 3. 10. HE SUBMITTED THAT IN THE ASSESSEES CASE IT IS NOT SO. THE GROUNDS RAISED NOW AS ADDITIONAL GROUNDS WERE BEFORE TH E CIT(A) AND THERE CANNOT BE ANY DOUBT ON THAT. IT IS VERY MUCH BE FORE HIM AND HE HAS ADJUDICATED THE ISSUE BY HOLDING THAT THE ASSESSING OF FICER IS RIGHT IN ASSESSING THE CAPITAL GAINS BASED ON THE MOU. THEREFORE T HE RATIO LAID DOWN BY THE MP HIGH COURT IS NOT APPLICABLE. ANY DECIS ION WILL APPLY BASED ON FACTS AND NOT OTHERWISE. IT CANNOT BE SAID IN EACH AND EVERY CASE WHEN A GROUND IS RAISED AS ADDITIONAL GROUND IT SHOU LD BE SENT BACK. THE ASSESSEE REPEATS THAT THE ADDITIONAL GROUNDS WE RE THERE BEFORE THE CIT(A) AND WERE ADJUDICATED BY HIM AS DEM ONSTRATED DURING THE COURSE OF SUBMISSIONS. HE SUBMITTED THAT THE ARGUMENT OF THE DR IS NOT TENABLE. 3.11. THE LEARNED AR SUBMITTED THAT THE DR IS NOT CO RRECT TO STATE THAT THE NOTICE ITSELF IS PROPER AND ALSO IS NOT CORRECT T O RELY ON OTHER NOTICES. HE SUBMITTED THAT THE QUESTION THAT IS RAISED IS HOW THE ASSESSING OFFICER GETS JURISDICTION TO MAKE ASSESSMENT WITHOUT PROPER SERVICE OF NOTICE. ONCE THE INITIAL NOTICE ITSELF IS INVA LID THE NOTICES ISSUED SUBSEQUENTLY EVEN IF THEY WERE TO BE CORRECT CANNO T VALIDATE THE 9 9 PROCEEDINGS. IT MAY PLEASE BE NOTED THAT THE ASSESSEE NE VER PARTICIPATED IN THE PROCEEDINGS. THE FIRST NOTICE TO G ET JURISDICTION IS NOTICE U/S 148. THIS IS ADDRESSED TO THE NON RESIDENT WIT H OFFICE ADDRESS OF THE CO-OWNERS. THIS WAS SERVED FIRST ON MR. M.A. BASIT H KHAN ON 21.3.2006 AND LATER SERVED ON M.A. MANNAN KHAN ON 29 .3.2006 AS COULD BE SEEN FROM THE ORDER OF CIT(A). AS SUBMITTED EARLIE R THE NOTICE IS TO BE SERVED AS PROVIDED IN SEC.282 AND THIS PROVISION ONCE A GAIN REFERS TO CODE OF CIVIL PROCEDURE 1908 WHERE IT IS NOT BY POST. IN THE PRESENT CASE IT IS NOT BY POST AND HENCE THE CODE OF CIVIL PROCED URE SHOULD BE FOLLOWED. THE RULE 24 OF ORDER 5 OF CODE IS TO BE F OLLOWED. THE ASSESSEE HAS ALREADY FILED COPY OF THE RELEVANT PORTION. IT E XPECTS THE NOTICE TO BE SENT TO THE ADDRESS OF THE NON RESIDENT WHERE HE HAS NO PERSON AUTHORISED TO RECEIVE NOTICE. 3.12. HE SUBMITTED THAT THE CIT(A) AND ALSO THE DR A RE NOT CORRECT IN CANVASSING THAT THE ASSESSMENT IS MADE DIRECTLY ON THE NON RESIDENT BY SERVING IT ON THE GPA HOLDER. THE NOTICE I S ADDRESSED TO THE NON RESIDENT. THERE IS NO MENTION OF GPA NAME. IT I S SENT THROUGH PROCESS SERVER. HOW CAN HE SERVE ON A GPA. HOW DOES HE KNO W WHO IS GPA. IT IS EVIDENT THAT HE SERVED ON WRONG PERSON AND LATER THEY SERVED AGAIN ON MANNAN KHAN. THE QUESTION IS FOR MAKING DIR ECT ASSESSMENT ON NON RESIDENT HOW NOTICE COULD BE SERVED ON GPA HOLDE R. IF IT IS PERMITTED THEN WHERE IS THE NECESSITY TO HAVE PROVISIONS OF SEC.163 WHICH IS FOR THE PURPOSES OF MAKING ASSESSMENT ON NON RESIDE NT. THE PROVISIONS OF SEC.163 BECOMES REDUNDANT. HE DREW OUR ATTE NTION TO THE DECISION OF SUPREME COURT IN THE CASE OF AMIYA BAL PAUL REPORTED IN 262 ITR. 207 WHEREIN THEIR LORDSHIPS HELD THAT THERE WA S NO NECESSITY TO HAVE SEC.55A IF A REFERENCE TO DVO COULD BE MADE U/S 13 1 OR U/S 133(6) AND THEREBY HELD THAT REFERENCE TO VALUATION CELL FOR FINDING OUT UNEXPLAINED INVESTMENT IS NOT VALID. IN THE SAME WA Y IF THE ASSESSING OFFICER COULD MAKE DIRECT ASSESSMENT ON NON RESIDENT BY SER VING NOTICE 10 10 ON THE GPA HOLDER THEN THE PROVISIONS OF SEC.163 BECOME S REDUNDANT AND THEREFORE NO ASSESSMENT COULD BE MADE ON NON RESIDEN T BY SERVICE OF NOTICE ON GPA HOLDER. HE SUBMITTED THAT IN SUCH A CASE ONE HAS TO FOLLOW THE PROVISIONS OF SEC.163. 3.13. HE SUBMITTED THAT IN THE PRESENT CASE THE GPA IS NOT ONE PERSON BUT THERE ARE TWO PERSONS. IT CANNOT BE CHOICE O F ASSESSING OFFICER TO PICK UP ONE PERSON TO SERVE NOTICE TO MAKE ASSE SSMENT. THEREFORE THE WHOLE PROCESS OF THE ASSESSMENT IS INVALID. 3.15. HE SUBMITTED THAT NOW COMING TO THE SUBMISSIONS O F THE DR RELYING ON MEANING OF GPA FROM BLACK LAW DICTIONARY. THERE IS NO DISPUTE ABOUT THE MEANING OF GPA. THE DISPUTE IS FOR WHAT PURPOSE THE PERSON IS ATTORNEY. ALL THE CLAUSES IN GPA ARE SPECIFIC R EFERRING TO THE PROPERTY WHICH IS MENTIONED IN THE GPA. 3.14. HE FURTHER SUBMITTED THAT THE DR TRIED TO REF ER TO A CLAUSE WHICH PERMITS APPOINTMENT OF ADVOCATES ETC. BEFORE THE CONCERNED DEPARTMENTS TO STATE THAT IT AUTHORIZES TO DEAL WITH A LL ISSUES ARISING OUT OF THE LAND TRANSFER. THE DR ALSO STATES THAT INTERPRE TING THE SAME IN DIFFERENT WAYS AT DIFFERENT TIMES TO SUIT THE CONVENIEN CE OF THE ASSESSEE IS NOT CORRECT WHEREAS THE CLAUSE IS LIKE THIS: I) TO APPOINT ADVOCATES ETC. FIX AND PAY REMUNERATIO N AND FILE AND DEFEND SUITS AND SIGN AND VERIFY PLEADINGS PETITIO NS REPRESENTATIONS BEFORE THE CONCERNED DEPARTMENTS TO SETTLE AND COMPROM ISE ALL OR ANY MATTERS IN REGARD TO THE SAID PROPERTY OR PART THEREO F. 3.15. HE SUBMITTED THAT IT IS NOT KNOWN HOW THIS CLAU SE CAN BE INTERPRETED IN DIFFERENT WAYS AND HOW THIS CLAUSE PERM ITS RECEIVING OF NOTICES OF IT DEPARTMENT. IT IS FOR THE DR TO ELABORA TE. IT IS FOR THE DR TO ELABORATE. EVEN A PLAIN READING OF THIS CLAUSE DO NOT GIVE ANY OTHER 11 11 INTERPRETATION THAN ONE AND ONLY ONE INTERPRETATION THAT WITH REGARD TO SETTLEMENT AND COMPROMISE OF THE MATTERS RELATING TO SAI D PROPERTY ADVOCATES CAN BE APPOINTED. THE QUESTION BEFORE THE HON OURABLE ITAT IS ABOUT AUTHORITY TO RECEIVE NOTICE. ONLY IF SUCH AUT HORITY IS THERE THEN IT CAN BE SAID THAT THE GPA IS AUTHORISED TO APPOINT A DVOCATES FOR SUCH PURPOSE. BUT WHERE IS SUCH CLAUSE AUTHORISING RECEIVING NO TICES ON BEHALF OF THE EXECUTANTS OF THE GPA . THE ANSWER TO T HIS QUESTION IS NEGATIVE SINCE THERE IS NO SUCH CLAUSE. 3.16. ON MERIT REGARDING TAXABILITY OF THE CAPITAL GAINS HE SUBMITTED THAT IN THIS YEAR THE DR ONCE AGAIN REFERS T O MOU TO SUBSTANTIATE THAT TRANSFER TOOK PLACE IN JUNE 99 OF A P LOT. THAT IS NOT BEING DISPUTED. THE QUESTION IS UNDER THE PROVISIONS O F IT ACT WHEN CAPITAL GAINS COULD BE TAXED COULD THEY BE TAXED ON RECE IPT BASIS AS AND WHEN THE MONEY IS CONTINUED TO BE RECEIVED. 3.17. HE FURTHER SUBMITTED THAT THE POSSESSION OF THE P ROPERTY WAS TRANSFERRED BY SALE AS NARRATED IN PARA 3.2. OF THE ASSESSMENT ORDER IN 1963 TO SRI RAM GNANESWAR AND FOUR OTHERS WH O IN TURN SOLD THE SAME TO M/S MATHRUSTRI COOPERATIVE HOUSING SOCIETY I N THE YEAR 1979. THE SAID SOCIETY ALLOTTED THIS LAND TO ITS MEMBER S. THE PRESENT REGISTRATION THAT IS REFERRED IN MOU IS ONE SUCH REGISTRA TION BY MATRUSTRI SOCIETY TO ONE OF ITS MEMBERS. THE ASSESSEE GOT TITLE OVER THE PROPERTY THROUGH A PRELIMINARY DECREE ON 29.12.2000 IN OS NO. 38 OF 1993. ONCE TITLE IS CONFERRED IT DATES BACK. THEREFORE THERE IS NO QUESTION OF THERE BEING ANY TRANSFER NOW AFTER BECOMING OWNERS. THE DE CREE WILL NOT STATE THAT THEY ARE OWNERS FROM NOW ON. IT WILL ONLY HOLD THAT THEY ARE ALSO ENTITLED TO SHARE IN THE PROPERTY. WHEN SUCH IS TH E CASE THAT TRANSFER TOOK PLACE IN 1963 AND LATER IN 1979 HOW TH ERE CAN BE TRANSFER IN 1999 AND HOW CAPITAL GAINS COULD BE TAXED. IN THIS REGARD HE RELIED ON THE DECISION OF THIS HONBLE ITAT IN THE CASE OF MR. RAMAKRISHNA IN 12 12 ITA NO. 1152 & 1153/HYD/2009 DATED 26 TH MARCH 2010. HE SUBMITTED THAT IT CAN BE ASSESSED ONLY IN THE YEAR IN WHICH POSSESSI ON IS GIVEN AND NOT AS AND WHEN CONSIDERATION IS RECEIVED. IN FACT TO GE T OVER THE SITUATION ARISING IN CASES OF ACQUISITION CASES THE PROVISION S THEMSELVES WERE AMENDED TO ASSESS COMPENSATION IN THE YEAR OF RECEIPT . BUT SUCH PROVISIONS CANNOT BE APPLIED TO THE PRESENT CASE SINCE IT I S NOT ON ACCOUNT OF ACQUISITION. THE LEARNED AR RELIED ON THE FOLLOWING DECISIONS: 1. ARUN LAL VS. ACIT (THIRD MEMBER BENCH) 30 DTR 1 78 AGRA). 2. RAJEEV KUMAR DONERIA VS. ACIT (94 ITD 345) (AGR A) 3. WEALTH TAX OFFICER CANNANORE VS. K. MADHAVAN N AMBIAR (169 ITR 810) (KERALA HC) 4. SRI NIWAS & OTHERS VS. ITO (ALLAHABAD HC) (30 I TR 381) 5. DINA NATH VS. CIT (204 ITR 667) (J&K HC). 4.1. ON THE OTHER HAND THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT THE ADDITIONAL GROUND RAISED BEFORE TH E HONBLE BENCH ARE NOTHING ABOUT A REFINED VERSION OF THE EXISTING GROUNDS BEFORE THE CIT(A) IS NOT CORRECT AS THESE TWO GROUNDS ARE FRESHLY TAK EN UP BEFORE THE HONBLE BENCH. THIS BENCH HAD BEEN CONSISTENTLY TAKIN G A VIEW THAT NEW GROUNDS WHEN TAKEN SHOULD BE REFERRED BACK TO THE CIT(A) FOR ADJUDICATION. HE RELIED ON THE DECISION IN THE CASE OF CIT VS. TOLLARAM HASSOMAL (298 ITR 22) ( MP) 4.2. THE DR SUBMITTED THAT THE OTHER IMPORTANT ASPE CT WHICH IS SUBJECT MATTER BEFORE THE HONBLE BENCH IS REGARDING THE SERVICE OF NOTICE AS CAN BE SEEN FROM THE CIT(A) ORDER AT PAGE 8. HE SUBMITTED THAT THE NOTICE WAS ISSUED TO SRI MEERAJ AHMED KHAN AN D WAS RECEIVED BY SHRI BASITH KHAN ON 21.3.2006 AND ALSO ACKNOWLEDGE BY SHRI MANNAN KHAN ON 29.3.2006 WHO IS THE GPA HOLDER. IN FACT I N THE GROUNDS OF APPEAL BEFORE THE CIT(A) THE ASSESSEE HIMSELF HAS ADMITTE D THAT THE 13 13 NOTICE WAS SERVED ON SRI BASITH KHAN (GROUND NO.2 OF TH E GROUNDS OF APPEAL BEFORE THE CIT(A)). THE FACT THAT THE NOTICE IS RECEIVED BY SRI MANNAN KHAN HAS BEEN BROUGHT OUT BY THE ASSESSING OFFICER AT PAGE NO.2 OF THE ASSESSMENT ORDER. 4.3. FURTHER THE DR SUBMITTED THAT THE NOTICE IS IT SELF IS NOT PROPER IS ALSO NOT CORRECT AS OTHER NOTICES ISSUED CLEARLY IN DICATE NOTICES ISSUED TO SHRI MEERAJ AHMED GPA OF SHRI MANNAN KHAN. IT IS ALSO BROUGHT TO THE NOTICE OF THE BENCH THAT SHRI MANNAN KHAN HAD ISSUED POA TO SHRI P. JITENDER REDDY CA TO REPRESENT BEFO RE THE DEPARTMENT. NOW CLAIMING THAT THERE IS NO VALID NOTICE GIVEN IS NOT CORRECT. IN FACT BY THE POA GIVEN TO SHRI JITENDER REDDY CA HE HAS A CCEPTED THE PROCEEDINGS INITIATED AND THIS FACT WAS NEVER AGITATED BEFORE THE ASSESSING OFFICER AND WAS TAKEN AS ADDITIONAL GROUND FIRST TIME BEFORE THE CIT(A). THE DEPARTMENT RELIES ON THE DECISION OF THE HONBLE SPECIAL BENCH MUMBAI IN THE CASE OF J.M. BAXI & CO. VS. DCIT ( INTERNATIONAL TAXATION) (MUM) (312 ITR AT 102). 4.4. FURTHER HE SUBMITTED THAT THE BLACKS LAW DICTION ARY DESCRIBES A GPA AS AN INSTRUMENT GRANTING SOMEONE AUTHO RITY TO ACT AS AN AGENT OR ATTORNEY IN FACT FOR THE GRANTOR. COPY OF THE GPA FILED ALONG WITH THE PAPER BOOK WHICH CLEARLY SHOWS THAT THE GPA H OLDER WAS CLEARLY AUTHORISED TO DEAL WITH ALL ISSUES ARISING OUT OF THIS LA ND TRANSFER. INTERPRETING THE SAME IN DIFFERENT WAYS AT DIFFERENT TIMES TO SUIT THE CONVENIENCE OF THE ASSESSEE IS NOT CORRECT. 4.5. HE SUBMITTED THAT COMING TO THE ISSUE OF THE EXPE NDITURE PART NOT ALLOWED BY THE ASSESSING OFFICER AND THE CIT(A ) WHEN ASSESSEE CLAIMS SOME EXPENDITURE. IT IS THE DUTY OF THE ASSESSEE TO HAD THE EVIDENCE IN THE FORM OF BOOKS AND VOUCHERS ETC. BUT THE FACT REMAINS THAT NO EVIDENCE WAS PRODUCED AS WAS BEEN RECORDED BY TH E ASSESSING 14 14 OFFICER IN THE ASSESSMENT ORDER EITHER DURING THE EARLIE R ASSESSMENT PROCEEDINGS OF SRI BASATH KHAN OR OTHER CO OWNERS DURING THE PRESENT ASSESSMENT PROCEEDINGS. IN FACT THE ASSESSING OFFICER HAS ALL OWED THE CLAIM OF THE BROKERAGE AS CAN BE SEEN FROM THE ASSESSMENT ORDER. 4.6. HE SUBMITTED THAT THE FACT THAT NO EVIDENCE FOR EXPENDITURE HAS BEEN PRODUCED. THE SAME WAS RECORDED BY THE CIT(A) WHEREIN THE CIT(A) HAD GIVEN A CATEGORICAL FINDING THAT EVEN DURI NG THE APPEAL PROCEEDINGS NO DETAILS WERE PRODUCED REGARDING THE CLA IM OF THE EXPENDITURE. THE CIT(A) ALSO MENTIONED THAT THE ASSESS ING OFFICER HAS RIGHTLY ALLOWED THE CLAIMS WHERE THE EVIDENCE WERE MA DE AVAILABLE. THE HONBLE MEMBER MAY KINDLY NOTE THE ORDER OF THE ASSESSING OFFICER WAS A 144 ORDER. 4.7. HE SUBMITTED THAT DURING THE COURSE OF SUBMISSIONS B EFORE THIS HONBLE BENCH PRODUCED AN MOU WHERE IN THE SAID CLE ARLY MENTIONED THAT PLOT NO.904 MEANSING 333.33 SQ YARDS RE GISTERED SALE DEED DOCUMENT NO.2894/9 DATED 7/6/99 WHICH CLEARLY IND ICATES THE DATE OF THE REGISTERED SALE DEED DETAILS. HENCE IN VIEW OF THE ABOVE FACTS THE TAX ON THE CAPITAL GAINS WAS CORRECTLY LEVIED BY THE ASSESSING OFFICER AND RIGHTLY DELETED BY THE CIT(A). IT IS SUBMITTED T HAT THE ORDER OF THE ASSESSING OFFICER AND THE CIT(A) MAY KINDLY BE UPHELD. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. NOW THE MAIN CONTENTION OF TH E ASSESSEE COUNSEL IS THAT THE ISSUE OF NOTICE IS BAD IN LAW. WE HAVE TO SE E SERVICE OF NOTICE ON THE FACTUAL BACKGROUND OF THE MATTER. NOW WE WI LL TAKE UP ONE OF THE CASE I.E. SHRI SYED MEERAJ AHMED. IN THIS CASE A NOTICE U/S 148 OF THE IT ACT DATED 17/21 -3-2006 WAS SERVED ON MANNAN KHAN W HO IS A GPA HOLDER OF THE ASSESSEE. THEREAFTER FURTHER NOTICE WAS SE RVED ON ONE OF THE CO-OWNERS AND ALSO A FAMILY MEMBER MR. BASHIR KHAN. CONSEQUENT 15 15 TO THIS A NOTICE U/S 143 (2) WAS ALSO SERVED ON 4/12/2006 TO THE ASSESSEE THROUGH GPA SHRI MANNAN KHAN. THERE IS NO DISP UTE REGARDING THIS. AFTER THE RECEIPT OF THE NOTICE SHRI MANNAN KHAN AUTHORISED ONE SHRI P. JITENDRA REDDY TO REPRESENT THE ASSESSEES CASE BEFORE THE ASSESSING OFFICER. (THE POWER IS PLACED ON RECORD.) LATER THERE IS NO REPRESENTATION FROM THE ASSESSEES SIDE. EX PARTE ORDER WAS PASSED. IT MEANS THAT THE ASSESSEE GPA HOLDER RECEIVE THE NOTICE AND TAKEN THE ASSISTANCE OF CA TO REPRESENT THE CASE ON BEHALF OF THE ASSE SSEE. THOUGH IT MAY BE TRUE THAT GPA HOLDER HAD NOT HAD A NY AUTHORITY TO ACCEPT THE NOTICE ON BEHALF OF THE ASSESSEE BUT THE FACTS REMAINS THAT THE GPA HOLDER DID RECEIVE THE NOTICE AND HAD HIRED T HE CHARTERED ACCOUNTANT TO REPRESENT THE CASE BEFORE THE ITO. IN MY VIEW THE FACTS IN THE MATTER UNDER CONSIDERATION DO NOT LEND ANY SUPP ORT TO CONTENTION OF THE ASSESSEES COUNSEL THAT NOTICE CANNOT EVEN BE DEEME D TO HAVE BEEN RECEIVED AND SERVED WAS AS TO FOIST JURISDICTION OF T HE ITO TO PROCEED WITH THE MATTER. THE VARIOUS DECISIONS RELIED B Y THE ASSESSEES COUNSEL THUS DO NOT LEAD ANY ASSISTANCE TO THE ASSESSEES CONTE NTION. ADMITTEDLY A NOTICE HAS BEEN ISSUED AND HAS BEEN RECEIV ED BY THE PERSON CONCERNED I.E. THE GPA HOLDER OF THE ASSESSEE AND H E HAS ACTED ON THE BASIS OF NOTICE WITH THE ASSISTANCE OF HIS CHARTERED ACCOUNTANT. THE CHAIN OF EVENTS IN MY VIEW DO NOT JUSTIFY THE SUBMISSION OF SHRI K. VASANT KUMAR IN ANY EVENT ASSUMING THERE IS CERTAIN IRRE GULARITY. THE IRREGULARITY CANNOT BE SAID TO GO TO THE ROOT OF THE MATTER BUT MERE IRREGULARITY WHICH CAN ALWAYS BE WAIVED BY THE PARTIE S. IN FACT IT HAS BEEN WAIVED BY THE ASSESSEES GPA HOLDER BY HIRING THE C A FOR THE CASE. HAD THE ASSESSEE GPA HOLDER NOT AT ALL REPRESENTED THE CASE THEN DEPARTMENT WOULD HAVE TAKEN ALTERNATIVE MEANS OF SER VING OF THE NOTICE. THE ASSESSEES REPRESENTATIVE STOPPED THE DEPARTME NT IN PERUSING ALTERNATIVE COURSE OF SERVING THE NOTICE BY REP RESENTING THE ASSESSEE. IN SUCH AN EVENTUALITY I CANNOT FIND ANY INFIR MITY IN SERVICING OF THE NOTICE. FURTHER IN MY HUMBLE OPINION THERE IS A VALID SERVICE OF 16 16 NOTICE. ORIGINALLY SEC. 148 NOTICE WAS SERVED IN THE NAM E OF THE ASSESSEE WAS RECEIVED BY SHRI M.A. BASITH KHAN 21.3.2006 AND THE SAME WAS ACKNOWLEDGED BY SRI MANNAN KHAN ON 29.3.2006 WHO IS THE GPA HOLDER OF THE ASSESSEE. THIS FACT WAS DULY ADMITTED B Y THE ASSESSEE BEFORE THE CIT(A). BEFORE THE ASSESSING OFFICER T HE ASSESSEE HAS NO OBJECTION REGARDING SERVICE OF NOTICE. THERE WA S A POWER OF ATTORNEY GIVEN BY MANNAN KHAN TO SHRI P. JITENDRA R EDDY CHARTERED ACCOUNTANT. THUS THERE WAS NO OBJECTION BY THE ASSESSEE BE FORE THE ITO AS TO THE VALIDITY OF THE SERVICE OF NOTICE. IN TH IS FACTUAL SITUATION THE QUESTION THAT HAS TO BE CONSIDERED IS WHETHER THE SER VICE OF NOTICE U/S 148 OF THE ACT WAS VALID AND PROPER. THERE IS NO DISPUTE THAT U/S 148 OF THE ACT ISSUE OF NOTICE AS WELL AS SERVICE OF NOTICE U/S 148 ON THE ASSESSEE IS A CONDITION PRECEDENT TO THE VALIDITY OF THE R EASSESSMENT PROCEEDINGS U/S 148 OF THE ACT. THE SERVICE ON THE ASSESSEE IN A MANNER KNOWN TO LAW AND IN ACCORDANCE WITH LAW IS A SINE QUA NON FOR THE VALID INITIATION OF THE REASSESSMENT PROCEEDINGS. TH EREFORE THE SERVICE OF NOTICE PRESCRIBED U/S 148 OF THE ACT IS A CONDIT ION PRECEDENT TO THE VALIDITY OF ANY ASSESSMENT U/S 148 OF THE ACT AND IT IS NOT A MERE PROCEDURAL REQUIREMENT FOR THE EXERCISE OF JURISDICTIO N U/S 148 OF THE ACT. THE ASSESSEE COUNSEL TAKEN A PLEA THAT GPA HOLDER IS NOT AUTHORIZED TO RECEIVE THE NOTICE U/S 148 OF THE IT ACT. I AM HOW EVER UNABLE TO ACCEPT THE CONTENTION OF THE LEARNED AR AS UNDER ORDER 5 RULE 12 OF CPC WHEREVER IT IS PRACTICABLE SERVICE SHALL BE MADE ON THE D EFENDANT IN PERSON UNLESS HE HAS AN AGENT EMPOWERED TO ACCEPT SERVICE IN WHICH CASE SERVICE ON SUCH AGENT SHALL BE SUFFICIENT. UNDER ORDER 5 RULE 13 IN A SUIT RELATING TO ANY BUSINESS OR WORK AGAINST A PERSON WHO DOES NOT RESIDE WITHIN THE LOCAL LIMITS OF THE JURISDICTION OF TH E COURT FROM WHICH SUMMONS WAS ISSUED THE SERVICE ON ANY MANAGER OR AGENT WHO WAS PERSONALLY CARRYING ON SUCH BUSINESS OR WORK FOR SUCH PERSO N WITHIN THE LIMITS OF THE COURTS JURISDICTION SHOULD BE DEEMED TO BE A GOOD SERVICE. ADMITTEDLY THE ASSESSEE WAS NOT WITHIN THE LOCAL LIMIT O F THE JURISDICTION 17 17 OF THE ITO BUT THE TRANSACTIONS LIABLE FOR TAXATION T OOK PLACE WITHIN LOCAL LIMIT OF THE JURISDICTION OF THE ITO. IN SUCH SITUATI ON THE SERVICE ON THE AGENT WHO WAS PERSONALLY CARRYING ON THE BUSINESS ON BEHA LF OF THE ASSESSEE WOULD BE SUFFICIENT. IN THE INSTANT CASE THE GPA HOLDER OF THE ASSESSEE RECEIVED THE NOTICE WHICH IS EVIDENT FROM THE ACKNOWLEDGEMENT FURNISHED BEFORE US. THE ASSESSEE WAS HAVI NG TRANSACTIONS IN INDIA AND WHEN THE NOTICE WAS SERVICED THR OUGH THE PROCESS SERVER OF THE DEPARTMENT THE NOTICE IS DEEMED T O HAVE BEEN SERVED AS IT CAN ORDINARILY BE EXPECTED THAT THE PROCESS SE RVER KNEW THE PERSON ON WHOM THE SERVICE WAS EFFECTED. FURTHER IT I S ALSO NOT THE CASE THAT ASSESSEE HAD FILED ANY AUTHORIZATION FORM EMPOW ERING ANY ONE PARTICULAR PERSON TO RECEIVE NOTICE ON HIS BEHALF. THEREFORE THE NOTICE SERVED ON THE PERSON WHO IS A GPA HOLDER OF THE ASSESSEE AND WHO HAS ACTUALLY RECEIVED THE NOTICE CANNOT BE SAID TO BE INVALID. IT IS NO DOUBT TRUE THAT THERE SHOULD BE VALID SERVICE OF N OTICE AND NOTICE HAS TO BE SERVED IN TERMS OF CODE OF CPC AND THE MERE FACT THAT THE RECIPIENT REPRESENTING THE ASSESSEE WOULD NOT BE SUFFICIEN T TO HOLD THAT HE WAS AUTHORIZED TO RECEIVE NOTICE. BUT ON THE FACT S OF THE CASE SUBSEQUENT CONDUCT OF THE ASSESSEE IN NOT RAISING OBJECTION A T THE TIME OF ASSESSMENT REGARDING THE VALIDITY OF THE NOTICE SHOUL D BE TAKEN INTO ACCOUNT WHETHER THERE WAS A VALID SERVICE OF NOTICE OR NO T. AS SUCH IN THE PRESENT CASE THE ASSESSEE WAS NOT ABLE TO ESTABLISH THAT THE RECIPIENT NOT AUTHORIZED TO RECEIVE THE NOTICE. FURTH ER IN OUR OPINION THE SERVICE OF NOTICE WAS VALID THOUGH THE PERSON ON WH OM THE NOTICE WAS SERVED WAS NOT AUTHORIZED TO RECEIVE NOTICE WHEN TH E ASSESSEE PARTICIPATED IN THE REASSESSMENT PROCEEDINGS OR NOT RAISED ANY OBJECTIONS REGARDING IRREGULARITY IN SERVICE OF NOTICE B EFORE THE ASSESSING OFFICER THAT WOULD NOT INVALIDATE THE ASSESSMENT. IN T HE INSTANT CASE ASSESSEE DID NOT RAISE ANY OBJECTION REGARDING SERVICE OF T IME AT ANY TIME BEFORE ASSESSING OFFICER REGARDING THE VALIDITY OF SERVICE OF NOTICE. AS SUCH VALIDITY OF SERVICE OF NOTICE HAS LOST ITS SIGNIFICAN CE WHEN THE 18 18 ASSESSEE ACTED UPON THE NOTICE. I THEREFORE HOLD THAT C IT(A) HAS COME TO THE CORRECT CONCLUSION IN HOLDING THAT NOTICE U/S 148 WAS VALIDLY SERVED ON ASSESSEE. REGARDING THE PROVISIONS OF SEC.149(3) OR SEC.163 IN THE PRESENT CASE NOTICE SERVED AT THE KNOWN AD DRESS OF THE ASSESSEE IN INDIA AND WAS DULY RECEIVED AND ACKNOWLEDGED B Y THE ASSESSEES GPA HOLDER AND THE ASSESSMENT WAS MADE IN THE NAME OF THE ASSESSEE ONLY AND THERE IS NO QUESTION OF APPLICABILITY OF SEC.149(3) OR SEC.163 OF THE IT ACT. THE ASSESSEE ALSO RAISED THE ADDI TIONAL GROUND WITH REGARD TO YEAR OF ACCESSIBILITY OF CAPITAL GAINS AND ALSO ALLOWABILITY OF EXPENDITURE. THE ISSUE RELATING TO YEAR OF TAXAB ILITY OF CAPITAL GAIN WAS NOT AT ALL CONSIDERED BY THE CIT(A) IN THE INTE REST OF JUSTICE AFTER ADMITTING THIS GROUND I SET ASIDE THIS ISSUE TO THE F ILE OF CIT(A) TO CONSIDER THE SAME AFRESH. REGARDING THE ALLOWABILITY O F EXPENDITURE SINCE THE ASSESSEE NOT PRODUCED EVIDENCE REGARDING INCURRING OF EXPENDITURE THE SAME WAS NOT ALLOWED BY THE LOWER AUT HORITIES AND EVEN BEFORE US NOTHING BROUGHT ON RECORD AND ACCORDINGLY WE DISMISS THIS GROUND. 7. SINCE THE ISSUES INVOLVED IN THE OTHER APPEALS ARE IDENTICAL APPLYING THE SAME REASONING HEREIN ABOVE THOSE APPEAL S ARE ALSO DISPOSED OFF ON SIMILAR LINE. 8. IN THE RESULT ALL THE APPEALS FILED BY THE ASSESSEE S ARE PARTLY ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT 30.4.2010 SD/- (CHANDRA POOJARI) ACCO UNTANT MEMBER DATED THE 30 TH APRIL 2010 19 19 COPY FORWARDED TO: 1. 1.SMT. RUHINA AHMED BY GPA SRI.M.A. MANNAN KHAN HYDERABAD. 2.SHRI SYED MEERAJ AHMED BY GPA SRI M.A. MANNAN KHA N SAIFABAD HYDERABAD 3.SMT. NAYEEMUNNISA BEGUM BY GPA SRI M.A. MANNAN KHA N HYDERABAD 4.SRI ZIAUDDIN AHMED ABIDS HYDERABAD C/O SHRI K. VASANT KUMAR AV RAGHURA RAM & B. PEDDI RAJULU ADVOCATES 403 MANISHA TOWERS D.NO.10-1- 18/31 SHYAM NAGAR HYDERABAD.4 2. ITO WARD NO.5(3) HYDERABAD 3. CIT(A)-V HYDERABAD. 4. CIT HYDERABAD 5. THE D.R. ITAT HYDERABAD. NP