2015 (6) TMI 354 - AT - Income Tax

Reopening of assessment - validity of notice - Held that - First Appellate Authority has passed a well reasoned order by stating that the AO has not been able to substantiate the fact that the notice u/s. 148 of the I.T. Act, 1961 for the Asstt. year uder consideration was served upon the assessee company at any time before completing the assessment. Accordingly, he rightly held that the proceedings u/s. 147/148 of the Act, 1961 are held to be not sustainable. Therefore, we find no infirmity in the order of the Ld. CIT(A) and therefore, no interfere is required on our part, hence, we uphold the impugned order passed by the Ld. CIT(A) on these issues - Decided against the Revenue.

Summary

Issues:
Appeal against order of Ld. Commissioner of Income Tax (Appeals) for asstt. year 2003-04 - Notice u/s. 148 not served - Sustainability of proceedings u/s. 147 - Assessment order challenged.

Analysis:

Issue 1: Notice u/s. 148 not served
The appellant contested that no notice u/s. 148 was received within the prescribed period, challenging the validity of the assessment proceedings. The appellant maintained that the notice was not served at the correct address despite regular filings and communications at the known address. The appellant presented an affidavit affirming the lack of receipt of any notice relevant to the assessment. The Ld. CIT(A) examined the facts and affirmed that the AO failed to prove the service of notice u/s. 148 before completing the assessment. Consequently, the proceedings u/s. 147/148 were deemed unsustainable.

Issue 2: Sustainability of proceedings u/s. 147
The Ld. CIT(A) concluded that since the notice u/s. 148 was not served as required, the proceedings under sections 147/148 were considered legally unsustainable. The appellant's argument regarding the incorrect address for notice delivery and the absence of any substantiating evidence from the AO supported the decision to dismiss the appeal. The Ld. CIT(A) emphasized the importance of proper notice issuance and service as a prerequisite for a valid assessment order under section 147.

Issue 3: Assessment order challenged
The Revenue's appeal was dismissed based on the findings related to the notice u/s. 148 and the subsequent sustainability of the proceedings u/s. 147. The appellate tribunal upheld the decision of the Ld. CIT(A) after thorough examination of the facts and legal provisions. The tribunal found no fault in the Ld. CIT(A)'s reasoning and decision, leading to the dismissal of the Revenue's appeal against the impugned order for the assessment year 2003-04.

In conclusion, the judgment highlighted the significance of proper notice issuance and service in assessment proceedings, emphasizing the legal requirement for a valid assessment order under section 147. The decision to dismiss the Revenue's appeal was based on the failure to prove the service of notice u/s. 148, rendering the proceedings u/s. 147/148 legally unsustainable.