2019 (5) TMI 731 - AT - Income Tax

Reopening of assessment u/s 147 - no notice u/s 148 have been issued on correct address - service of notice u/s 148 - HELD THAT - In A.Y. 2007-2008, the assessee filed the return of income giving the correct address at F-55D, GTB Enclave, New Delhi. Same address have been mentioned by the A.O. in the assessment orders for the A.Ys. 2005-2006 and 2006- 2007 u/s 143(3) which were passed before issuing of the notice u/s 148. Therefore, it was, within the knowledge of the A.O. that assessee is not available at F-16 Preet Vihar, Delhi. Therefore, there was no reason to prepare the notice u/s 148, on that address. No assessment record has been produced before us to show if the notice u/s 148 have even issued to the assessee through registered post. Copy of the Office record of the A.O. is filed with regard to speed-post but no postal receipt have been produced to show even if the notice u/s 148 have been issued through speed-post at the correct address of the assessee. Therefore, in the absence of production of assessment record, nothing is proved if any notice u/s 148 have been issued to the assessee. It is clear that no notice under section 148 have been served upon the assessee for completion of the assessment. Therefore, the jurisdictional pre-condition, is not satisfied for finalizing the reassessment order. The decisions relied upon by Assessee are squarely apply to the facts and circumstances of the case. We are of the view that Revenue has failed to prove that notice u/s 148 have been served open the assessee which is mandatory in nature - quash the re-assessment order - Appeal of Assessee is allowed.

Summary

Issues: Jurisdiction under section 148, Service of notice under section 148, Validity of reassessment order

Jurisdiction under section 148:
The appeal involved challenging the assumption of jurisdiction under section 148 of the Income Tax Act. The assessee contended that no notice under section 148 had been served within the prescribed time limit, rendering the reassessment order null and void. The correct address of the assessee was a crucial point of contention in establishing the validity of the reassessment order.

Service of notice under section 148:
The key argument revolved around the failure to serve a notice under section 148 upon the assessee within the stipulated time frame. The assessee emphasized that the Department was aware of the correct address prior to issuing the notice. The absence of a postal receipt proving the dispatch of the notice raised doubts about its service. Legal precedents were cited to support the contention that proper service of notice is a jurisdictional precondition for finalizing reassessment.

Validity of reassessment order:
The Tribunal analyzed the provisions of the Income Tax Act related to the service of notices, including Section 292BB, which deems notice as valid under certain circumstances. However, it was established that the assessee had raised objections regarding the lack of notice service before the completion of the assessment. The Tribunal noted discrepancies in the address used for the notice and the known address of the assessee, emphasizing the importance of proper service for maintaining the validity of the reassessment order.

In the judgment, the Tribunal highlighted the legal requirement of serving notices under section 148 to ensure the validity of reassessment proceedings. The failure to provide concrete evidence of notice service led to the quashing of the reassessment order. The Tribunal emphasized that the jurisdictional pre-condition of serving notice upon the assessee was not satisfied, resulting in the deletion of all additions made in the reassessment. Ultimately, the Tribunal allowed the appeal of the assessee, setting aside the orders of the lower authorities and quashing the reassessment order.