2021 (1) TMI 730 - AT - Income Tax

Validity of reopening of assessment - non-service of notice u/s 147/148 - no due and proper service of notice issued - change in address - as per assessee West Punjabi Bagh, New Delhi premises was sold out and the assessee moved out of the same during the year 2007-08 and thereafter filed the return of income from the new address - According to the CIT(A), there is no specific information to the Department as to the change of address - HELD THAT - As seen from the record that there is no dispute that when the assessment order was passed on 20/12/2010, and dispatched to the address of the assessee at 5/48, West Punjabi Bagh on 27/12/2010, the same was returned with the endorsement left made by the postal servant on 28/12/2010. Basing on this learned DR submitted that when the notice could not be served, as on 28/12/2010, the postal envelope was returned by the postal department with suitable endorsement and this is conspicuously absent when the notice under section 148 was issued on 26/3/2010 which indicates that as on 26/3/2010, the assessee was very much present in the said address or received such mail addressed to the old address, and that is reason why the postal envelope was not returned by the postal department. DR further submitted that there is no evidence as to when exactly the assessee moved out of the property and merely because the return was filed from the new address of 28/72, West Virginia be Bagh, it cannot be said that the assessee was not available at 5/48, West Punjabi Bagh or because the assessee was living in the same locality the postal servant must have delivered the mail to the old address at the new address, and the fact that the postal envelope was not returned indicates that the assessee accepted the same. When the notice could not be served in the old address, the postal and envelope was returned. Since the presumption as to the service of notice when the notice was issued to proper address by registered mail with postage prepaid is in favour of the Department, it is for the assessee to rebut the same with cogent evidence. It is always open for the assessee to verify with the postal authorities with reference to the speed post number and submit the evidence of non-service to him, which the assessee did not do. In the circumstances, mere statement of the assessee that there is no service of notice under section 148 of the Act cannot rebut the presumption. No reason to reject the reasoning and finding of the Ld. CIT(A) - Decided against assessee.

Summary

Issues:
1. Challenge to the service of notice under section 147/148 of the Income Tax Act, 1961.
2. Validity of the assessment order passed by the Assessing Officer.
3. Justification of addition to the income of the assessee.

Analysis:

Issue 1: Challenge to the service of notice under section 147/148 of the Income Tax Act, 1961
The appeal was filed by the assessee challenging the finding of the Commissioner of Income Tax (Appeals) that the notice under section 147/148 of the Act was duly served on the assessee at her address. The notice was issued based on information received regarding entry providers in the form of bogus transactions. The assessee contended that the notice was not served properly as she had moved to a new address. However, the CIT(A) found that the notice was duly issued to the old address by speed post, and there was no evidence of a change in address provided to the department. The Tribunal held that the presumption of service is in favor of the department when notice is sent to the correct address, and the burden is on the assessee to provide evidence of non-service, which was not done in this case. Therefore, the challenge to the service of notice was dismissed.

Issue 2: Validity of the assessment order passed by the Assessing Officer
The Assessing Officer made an addition to the income of the assessee based on deposits in her bank account and non-response to notices. The assessee appealed, claiming the assessment order was ante-dated. The CIT(A) confirmed the assessment, stating that the allegations of the assessee were not supported by the circumstances of the case. The Tribunal did not address this issue in detail as the appeal was confined to the challenge of non-service of notice under section 147/148 of the Act.

Issue 3: Justification of addition to the income of the assessee
The addition to the income of the assessee was challenged on merits by the assessee. The CIT(A) justified the addition of the specified amounts. However, since the appeal was limited to the challenge of non-service of notice, the Tribunal did not delve into the merits of the addition further.

In conclusion, the Tribunal dismissed the appeal of the assessee concerning the service of notice under section 147/148 of the Act, emphasizing the importance of providing evidence to rebut the presumption of service. The other issues raised by the assessee regarding the validity of the assessment order and the addition to income were not addressed in detail as the appeal was primarily focused on the service of notice.