2018 (3) TMI 787 - AT - Income Tax

Reopening of assessment u/s 147 - service of notice by affixture was done at the wrong address - notice served to the assessee not in accordance with the procedure - Held that -.CIT(A) has rightly held that no notice is served on the assessee because affixture of notice by the Inspector is at a wrong address. The correct address is at D.No. 45-57-14/3, Narasimha Nagar, Visakhapatnam. The notice affixed at D.No. 49-57-14/3 is an invalid notice and set aside the order by following the judgment of Hon ble Supreme Court in the case of Y. Narayana Chetty & another Vs. ITO (1958 (10) TMI 10 - SUPREME Court) - Decided against revenue

Summary

Issues:
Validity of notice served under section 148 for reassessment.

Analysis:
The appeal pertains to the validity of the notice served under section 148 for reassessment for the Assessment Year 2007-08. The Assessing Officer initiated proceedings under section 147 as the assessee had sold a property without offering capital gains. The notice under section 148 was served by affixture at an address different from the assessee's actual address. The contention was that the notice served at the wrong address rendered the proceedings invalid. The Commissioner of Income Tax (Appeals) found that the notice was not served to the assessee as there was no nexus between the address in the notice and the actual address of the assessee. The Department challenged this decision before the Tribunal.

The Tribunal analyzed the facts and found that the notice was indeed served at the wrong address, which was not the address of the assessee. The Tribunal noted that the initial letter, subsequent notices, and the notice of demand were sent to the correct address of the assessee. The Departmental Representative failed to provide a valid reason for affixing the notice at the wrong address. Citing legal precedents, including the judgments of the Hon'ble Supreme Court and High Courts, the Tribunal held that the service of a valid notice is a condition precedent for reassessment proceedings. As the notice was not served on the assessee at the correct address, the reassessment was deemed invalid. Therefore, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) and dismissed the appeal filed by the Revenue.

In conclusion, the Tribunal found that the notice served under section 148 for reassessment was invalid due to being affixed at the wrong address, which did not belong to the assessee. The legal requirement of serving a valid notice was not fulfilled, rendering the reassessment proceedings void. The Tribunal's decision was in line with established legal principles and precedents, leading to the dismissal of the Revenue's appeal.