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2022 (6) TMI 956 - AT - Income TaxReopening of assessment u/s 147 - absence of mandatory service of notice - HELD THAT - There is no proof of service of notice u/s 148 of the Act by the AO to the assessee. The order sheet noting recorded on 21.03.2016 only suggest that notice u/s 148 was issued with the prior approval of the Ld. Pr. CIT, Ghaziabad. Therefore, the submissions of the assessee that notice u/s 148 was not served on the assessee could not be controverted with evidences by the Revenue. In the case of RK Upadhyaya Vs. Shanabhai P. Patel 1987 (4) TMI 5 - SUPREME COURT held that section 148(1) provides for service of notice as a condition precedent to make the assessment order. The Hon ble Supreme Court held that once a notice is issued within the period of limitation jurisdiction becomes vested in the Assessing Officer to proceed to make reassessment. Further, it was held that the mandate of section 148(1) is that reassessment shall not be made until there has been service of notice. Alsi in the case of CIT Vs. Chetan Gupta 2015 (9) TMI 756 - DELHI HIGH COURT wherein the Hon ble High Court held that where notice u/s 148 was not served on the assessee in accordance with law the reassessment made consequent thereto was without jurisdiction and liable to be quashed. In the case on hand as the Revenue could not prove the service of notice u/s 148 on the assessee in accordance with law the re-assessment made u/s 147 read with section 144 pursuant to such notice is void ab initio and bad in law. Hence, the reassessment order made u/s 144 read with section 147 is quashed. - Decided in favour of assessee.
Issues involved:
Assessee's appeal against the order of Ld. Commissioner of Income Tax (Appeals) for AY 2009-10 - Grounds on merits and jurisdiction of Assessing Officer in reopening assessment - Additional grounds challenging validity of 148 proceedings and consequential assessment order - Service of notice u/s 148 not followed - Admissibility of additional grounds - Proof of service of notice u/s 148 - Legal arguments and precedents cited - Lack of evidence of notice service - Legal requirements for reassessment - Quashing of reassessment order. Detailed Analysis: 1. Jurisdiction of Assessing Officer in Reopening Assessment: The assessee challenged the jurisdiction of the Assessing Officer in reopening the assessment for AY 2009-10. Additional grounds were raised regarding the validity of the 148 proceedings and the consequential assessment order. The Ld. Counsel contended that the mandatory requirement of service of notice u/s 148 was not followed, vitiating the reassessment proceedings. Citing legal precedents, the Ld. Counsel argued that the notice u/s 148 was not served on the assessee as the address mentioned was incomplete, rendering the assessment made pursuant to such notice as bad in law. 2. Admissibility of Additional Grounds: The Ld. Counsel argued that the additional grounds raised were purely legal in nature and did not require fresh investigation of facts. Reliance was placed on a decision of the Hon'ble Delhi High Court. The Tribunal admitted the additional grounds as they were deemed to be purely legal grounds going to the root of the matter. 3. Proof of Service of Notice u/s 148: Upon examination of the original assessment record, it was found that there was no proof of service of notice u/s 148 by the Assessing Officer to the assessee. The order sheet noted the issuance of the notice but did not confirm its service. The Ld. DR admitted that the proof of service was not traceable from the records presented. The absence of evidence of notice service supported the assessee's contention that the notice u/s 148 was not served on them. 4. Legal Precedents and Decision: Citing legal precedents such as RK Upadhyaya Vs. Shanabhai P. Patel and CIT Vs. Eshaan Holdings (P) Ltd., the Tribunal emphasized the importance of proper service of notice u/s 148 as a condition precedent for making a valid reassessment order. The Tribunal highlighted that the lack of evidence of notice service rendered the reassessment made pursuant to such notice as void ab initio and bad in law. Consequently, the reassessment order u/s 144 read with section 147 was quashed, and the appeal of the assessee was allowed on preliminary grounds. 5. Conclusion: The Tribunal's decision to quash the reassessment order was based on the lack of evidence of proper service of notice u/s 148, in line with legal requirements and precedents. As the reassessment was deemed void ab initio, the Tribunal did not delve into other legal grounds or merits of the case. The appeal of the assessee was allowed, emphasizing the significance of compliance with procedural requirements in reassessment proceedings.
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