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2018 (5) TMI 639 - HC - Income TaxReopening of assessment - valid service of notice - serving notice to the Chartered Accountant (CA) - Change of address in the PAN - service of notice on the address given in the ITR returned with the mark as left - burden of proof that notice was issued - period of limitation - Held that - Burden to establish that notice under Section 149(1)(b) read with Section 148(1) has been issued to the petitioner was on the Revenue which the Revenue has failed to discharge, as the Revenue has clearly failed to establish that the notice was issued on or before 31-3-2016 on the assessee / petitioner s correct address and it was dispatched on or before 31-3-2016 and it was put to the proper serving officer for serving in accordance with law. Therefore, no hesitation to hold that no notice under Section 149(1)(b) read with Section 148(1) was issued to the petitioner well within the period of limitation on or before 31-3-2016 on the officially notified correct address available in the official record for service of notice to the petitioner which is a jurisdictional fact and condition precedent for initiation of assessment proceeding under Section 148(1) of the IT Act. No hesitation to hold that no notice was served to the petitioner under Section 148(1) of the IT Act and service of notice to the Chartered Accountant of the petitioner Company is not service at all and participation of the petitioner Company by filing return and filing objection to the notice to the reasons to believe cannot be held to be a valid service of notice as held by the Delhi High Court in Chetan Gupta s case (2015 (9) TMI 756 - DELHI HIGH COURT) and, therefore, it cannot be held that the petitioner was served with notice under Section 148(1) of the IT Act - decided in favour of assessee
Issues Involved:
1. Maintainability of the writ petition challenging the reassessment notice under Section 147 read with Section 148 of the Income Tax Act, 1961. 2. Issuance of notice under Section 148 within the prescribed limitation period as per Section 149. 3. Service of notice under Section 148 to the petitioner. Issue-wise Detailed Analysis: 1. Maintainability of the Writ Petition: The court considered whether the writ petition challenging the reassessment notice under Section 147 read with Section 148 of the IT Act is maintainable. The respondents argued, relying on the Supreme Court's decision in *Commissioner of Income Tax v. Chhabil Dass Agarwal*, that such a writ petition is not maintainable. Conversely, the petitioner cited *Calcutta Discount Co. Ltd. v. Income-Tax Officer*, where the Supreme Court held that the High Court can issue an order prohibiting the Income Tax Officer from proceeding to reassess the income when conditions precedent do not exist. The court also referenced *The Commissioner of Income-tax, Gujarat v. M/s. A. Raman and Co.* and *Jeans Knit Private Ltd. Bangalore v. Deputy Commissioner of Income Tax Bangalore*, reiterating that the High Court has the jurisdiction to set aside a notice issued under Section 147 if the conditions precedent do not exist. Consequently, the court held that the writ petition is maintainable. 2. Issuance of Notice Under Section 148: The court examined whether the notice under Section 148 was issued within the limitation period prescribed under Section 149. Section 149(1) stipulates that no notice under Section 148 shall be issued after six years from the end of the relevant assessment year. The court noted that the relevant assessment year was 2009-10, and the notice was allegedly issued on 15-3-2016. However, the petitioner contended that the notice was issued to an incorrect address despite the updated address being available in the PAN database. The court emphasized that the issuance of notice must be on the correct address and should be dispatched properly. The court found that the Revenue failed to establish that the notice was issued and dispatched correctly within the limitation period. Thus, the court concluded that no notice under Section 149(1)(b) read with Section 148(1) was issued to the petitioner within the prescribed period. 3. Service of Notice Under Section 148: The court addressed whether the notice under Section 148 was properly served to the petitioner. The Revenue argued that the petitioner participated in the assessment proceedings, thus waiving the requirement of proper service under Section 292BB of the IT Act. However, the petitioner raised objections regarding non-service of the notice before the completion of the assessment. The court highlighted that service of notice is a jurisdictional requirement and not merely procedural. It referenced *Chetan Gupta v. Commissioner of Income-tax (Central)-I*, where it was held that reassessment proceedings without proper service of notice are invalid. The court determined that the petitioner had not been served with the notice under Section 148, and participation in the proceedings did not constitute valid service. Therefore, the reassessment proceedings were deemed invalid. Conclusion: The court quashed the notices dated 15-3-2016 and 13-4-2016 and the order dated 5-8-2016, holding that the reassessment proceedings were without jurisdiction and authority of law. The petitioner was awarded costs of ?25,000, to be paid by the respondents within two weeks.
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