2019 (11) TMI 264 - AT - Income Tax

Validity of reopening u/s.147 r.w.s. 148 - Notice sent to wrong address - HELD THAT - We find that the assessee was regularly assessed to tax with Range-4(3) Kanpur with PAN ABZPT6114G. Since Assessment Year 2003-04, the assessee has been regularly filing the return of income and even up to Assessment Year 2018-19, the income tax return has been filed with the same PAN to be Ward 4(3) Kanpur and address mentioned is, 117/H-1/1529, Pandu Nagar, Kanpur. If in the Income Tax records and in PAN data, assessee s address as well as the jurisdiction of the Assessing Officer has been categorically given, then without verifying the same, how ITO Ward-2(5) NOIDA ca issue a notice at a wrong address. Not only that, even going by the records of deeds on the basis of which assessee s case was reopened that he has sold some immovable property at NOIDA, mentions address A-72, 1st Floor Sector 17, NOIDA whereas the address on which notice has been sent mention A-72N, Sector-17, NOIDA, which, as brought out by the ld. counsel is not an address at all. Also it is an admitted fact that neither notice u/s.148 has been served upon the assessee by the AO nor has been sent at a proper address. Thus, in absence of any valid service of notice, u/s.148, which is condition precedent for assuming the jurisdiction for reopening the case u/s.147, the entire proceedings gets void ab initio and is to be held as null and void. Accordingly, the impugned assessment order is quashed as null and void as held in the Commissioner of Income Tax vs. Shital Prasad Kharag Prasad 2004 (12) TMI 28 - ALLAHABAD HIGH COURT - Decided in favour of assessee.

Summary

Issues:
Validity of reopening u/s.147 r.w.s. 148 due to improper notice service, mechanical approval u/s.151, addition of &8377; 1,95,20,000/- under 'capital gain' on property sale.

Validity of Reopening u/s.147 r.w.s. 148:
The appeal challenged the reopening based on improper notice service. The Assessing Officer reopened the case due to non-PAN AIR information about property sale. However, the notice was sent to a wrong address, not matching the assessee's regular tax assessment address. The Tribunal found that without verifying the correct address, the notice was invalid. The judgment cited the necessity of valid notice service as a condition to assume jurisdiction for reopening under section 147. The entire proceedings were declared void ab initio, following a precedent from the Jurisdictional High Court.

Mechanical Approval u/s.151:
The appellant contended that the approval given by the Pr.CIT u/s.151 was mechanical. However, the Tribunal did not delve into this issue in the detailed analysis provided.

Addition of &8377; 1,95,20,000/- under 'capital gain' on property sale:
The Assessing Officer made an addition of &8377; 1,95,20,000/- as Short Term Capital Gain due to property sale. The CIT (A) confirmed this addition and rejected objections on notice service and merits. The Tribunal, after detailed examination, found the notice service invalid due to the wrong address, rendering the entire assessment null and void. The judgment emphasized the importance of proper notice service for jurisdiction in such cases.

The Tribunal's decision was based on the incorrect notice service, leading to the quashing of the assessment order. The appeal was allowed in favor of the assessee.