2020 (8) TMI 720 - AT - Income Tax

Reopening of assessment u/s 147 - notice issued at the old address of the assessee company and that too through affixture - non-issuance of notice under section 143(2) - HELD THAT - There is no material available on record to show that the assessee had ever used the email ID [email protected]. On the other hand, the snapshot of the MCA record available with the learned Assessing Officer, copy of which is filed at page 7 of the paper book, clearly shows that the email ID of the assessee is [email protected]. It is, therefore, difficult for us to hold that there is any proper service of notice under section 148 of the Act on the assessee. Further, there is no denial of the fact pleaded by the assessee that the assessee was being assessed by the ITO, Ward No. 5 (3) till the assessment year 2013-14 and the return of income for the assessment year 2013-14 was also filed before the, Ward number 5 (3). Circumstance that is brought to our notice by the Ld. AR and on verification of the order sheet entries made by the learned Assessing Officer what we found is that the order sheet entries do not contain any entry regarding the issuance of notice under section 148 on 30/3/2015, nor about the service thereof, in as much as subsequent to the entry regarding the recording of reasons on 20/3/2015, the next entry is dated 3/6/2015 and the order sheet silent as to the proceedings that it took place on 30/3/2015. Under order V, rule 17 of the code of civil procedure, the affixation can be done only when the assessee or his agent refuses to sign the acknowledgement or could not be found; whereas in this matter is not the case of the Revenue that the assessee is not traceable or anyone representing the assessee refused to receive the notice or to sign the acknowledgement thereof. In the circumstances we are of the considered opinion that the decision of the Hon ble Apex Court in the case of M/s I-Ven interactive Ltd 2019 (10) TMI 785 - SUPREME COURT has no application to the facts of the case. Non Service of notice under section 143 - conjointly reading of section 148 (1) of the Act with section 139 (4) of the Act and section 144 of the Act makes it abundantly clear that pursuant to the notice under section 148 of the Act, if an assessee files a belated return or letter reiterating his earlier written then the learned Assessing Officer is bound to issue notice under section 143(2) of the Act if he frames the reassessment under section 144/143(3) of the Act. In the case on hand, there is no denial of the fact that by letter dated 29/12/2015, in response to the notice dated 12/6/2016 under section 142 (1) of the Act issue to the assessee, the assessee submitted before the, learned Assessing Officer that the return of income filed on 4/12/2015 was in response to the notice issued and section 148 of the Act. When once the assessee submitted so that in response to the notice under section 148 of the Act the return dated 4/12/2015 was filed, it is incumbent upon the learned Assessing Officer, if at all, he proceeds to frame the assessment under section 144/143(3) of the Act, to issue notice under section 143(2) of the Act, without which, in the assessment framed would not be legal. - Decided in favour of assessee.

Summary

Issues Involved:

1. Improper service of notice under section 148 of the Income Tax Act, 1961.
2. Non-issuance of notice under section 143(2) of the Income Tax Act, 1961.
3. Legality of the assessment proceedings under section 147/144 of the Income Tax Act, 1961.

Detailed Analysis:

1. Improper Service of Notice under Section 148:

The assessee challenged the validity of the notice issued under section 148 on the grounds that it was served at an old address despite the Revenue being aware of the new address. The assessee had informed the Revenue of the new address on 14/3/2014, and this was corroborated by an intimation under section 143(1) for the assessment year 2013-14 issued on 7/3/2014 at the new address. The Tribunal found that the Revenue had the new address on record before issuing the notice under section 148 on 30/3/2015. The notice was also claimed to be sent to an incorrect email address, which was not used by the assessee. The Tribunal concluded that there was no proper service of notice under section 148, making the notice invalid.

2. Non-Issuance of Notice under Section 143(2):

The assessee argued that no notice under section 143(2) was issued after filing the return of income on 4/12/2015 in response to the notice under section 148. The Tribunal noted that the issuance of notice under section 143(2) is mandatory for the Assessing Officer to proceed with the assessment. The Tribunal referred to various judicial precedents, including the Supreme Court's decision in CIT vs. Laxman Dass Khandelwal and the Delhi High Court's decisions, which held that the absence of a notice under section 143(2) renders the assessment invalid. The Tribunal found that the Assessing Officer did not issue a notice under section 143(2) and proceeded with the assessment, which was not legally sustainable.

3. Legality of the Assessment Proceedings under Section 147/144:

The Tribunal examined the legality of the assessment proceedings initiated under section 147/144. The assessee contended that the assessment was void due to the lack of proper service of notice under section 148 and the non-issuance of notice under section 143(2). The Tribunal agreed with the assessee's contention, stating that the assessment order dated 28/3/2016 under section 147/144 could not be sustained due to these procedural lapses. The Tribunal emphasized that compliance with the statutory requirements of issuing notices under sections 148 and 143(2) is crucial for the validity of the assessment proceedings.

Conclusion:

The Tribunal quashed the assessment order dated 28/3/2016 under section 147/144 of the Income Tax Act, 1961, due to improper service of notice under section 148 and the absence of a notice under section 143(2). The appeal of the assessee was allowed, and the assessment proceedings were declared invalid.