2021 (7) TMI 72 - HC - Income Tax

Reopening of assessment u/s 147 - TDS liability u/s 195 - notice issued beyond the period of limitation - jurisdictional office difference - 1st respondent jurisdiction to issue notice under Section 148 - when the department came to know that the 2nd respondent is the jurisdictional officer, the files were transferred to the 2nd respondent, who in turn, issued a letter to the petitioner - Since the petitioner is a Non-Resident Indian, he has not filed any Income Tax Returns for the last fifteen years and the said factors are known to the respondents-Income Tax Department also - HELD THAT - The department issued notice based on the last known address, which is available in the PAN of the assessee. It is not in dispute, the notice under Section 148 of the Act was issued to the address furnished by the petitioner and recorded in the PAN records. Therefore, the department cannot be blamed and in the event of any change of address, it is the duty of the assessee to submit proper application and change the address in PAN, which the petitioner has failed to do. Therefore, he cannot now rely on the ground that the notice under Section 148 of the Act was issued in a wrong note. Even in respect of the subsequent order passed by the 2nd respondent, it is clearly stated that the petitioner has to submit his reply, which should reach the office of the 2nd respondent on or before 14.12.2018, as the case is getting time barred on 31.12.2018. Instead of furnishing the details and producing the documents, the petitioner has chosen to file the Writ Petition, mainly on the ground that the notice was issued beyond the period of limitation. As far as the last date for issuance of notice, under Section 148 of the Act, in the present case is concerned, it is 31.03.2017 and the respondents have produced the postal receipt, showing that the notice was registered before the concerned Post-Office on 31.03.2017. Thus, for all purposes, the notice has been issued on 31.03.2017 and delivery of the cover to the assessee or in the last known address, may not be a deciding factor for the purpose of retaining the period of limitation. Once the notice under Section 148 of the Act is issued within the period of limitation by despatching the notice in the Post-Office, the same would be sufficient to meet out the requirements. Section 149 of the Act itself contemplates time limit for notice. Once the time limit is contemplated and within the time limit, the notice has been despatched from the office of the Income Tax Department, the same would be sufficient to meet out the requirement and delivery of the notice cannot be considered for the purpose of invalidating the notice issued by the authority, before the time limit. It is possible in many circumstances, the addressee may receive the cover one or two days later or on account of various other reasons, the postal department may deliver after three or four days and all these circumstances are possible. Thus, the delivery of cover is immaterial and if the department could able to establish that the notice was issued and despatched before the expiry of limitation, the same would be sufficient to meet out the requirement of Section 149 of the Act. In the present case, the postal receipt is produced to establish that the notice was despatched on 31.03.2017 and therefore, the point of limitation raised stands failed. The authorities once identified that the jurisdictional office is different, then transfer of such files to the jurisdictional office is the procedure to be followed and in the present case, the 1st respondent rightly transferred the case to the 2nd respondent to proceed with reopening of assessment proceedings and the 2nd respondent, in turn, sent a letter to the petitioner/assessee on 06.12.2018 and the petitioner, instead of responding to the letter, has chosen to file the Writ Petition and therefore, this Court is of the considered opinion that the Writ Petition is pre-matured and the petitioner has to establish his case by producing documents and furnishing information to the 2nd respondent, who, in turn, has to follow the procedures contemplated and proceed with re-assessment proceedings - Decided against assessee.

Summary

Issues:
1. Jurisdiction of the Income Tax Department to issue notice under Section 148 of the Income Tax Act.
2. Validity of the notice issued beyond the period of limitation.
3. Duty of the assessee to inform the department of any change in address.
4. Premature filing of the Writ Petition before furnishing required details to the jurisdictional officer.
5. Requirement of change of address in the PAN database for proper communication by the department.

Analysis:

Jurisdiction Issue:
The petitioner, a Non-Resident Indian residing in Belgium, challenges the jurisdiction of the Income Tax Department regarding the notice issued under Section 148 of the Act. The petitioner argues that being a non-resident with no taxable income in India, the initiation of proceedings is without jurisdiction. The department contends that the notice was issued to the address provided by the petitioner for PAN allotment, and any change of address is the assessee's responsibility. The Court emphasizes that the notice was sent to the last known address and transfer of files to the jurisdictional officer was done correctly.

Validity of Notice:
The petitioner contests the validity of the notice issued beyond the period of limitation, claiming it was delivered late. However, the Court holds that once a notice is dispatched within the time limit, the date of delivery is not crucial. The department produced postal receipts confirming the dispatch date, supporting the validity of the notice under Section 148.

Duty to Inform Change of Address:
The department argues that the petitioner failed to update his address in the PAN database, leading to the notice being sent to the address on record. The Court underscores the importance of informing the department about any address changes to ensure proper communication and adherence to legal procedures.

Premature Writ Petition:
The petitioner's decision to file a Writ Petition before responding to the subsequent letter from the jurisdictional officer is deemed premature by the Court. The petitioner is directed to provide necessary information and documents for reassessment proceedings to proceed in accordance with legal requirements.

Change of Address in PAN Database:
Citing a Supreme Court ruling, the Court emphasizes the necessity of updating the address in the PAN database for effective communication between the assessee and the department. Failure to do so may result in notices being sent to the address on record, as in the present case where the petitioner did not inform the department of the address change.

In conclusion, the Court dismisses the Writ Petition, finding it lacking in merit and imposes no costs. The petitioner is instructed to comply with procedural requirements and furnish the required information to the jurisdictional officer for reassessment proceedings to continue as per the law.