2022 (5) TMI 163 - AT - Income Tax

Validity of reopening of assessment - non-service of notice u/s 148 and also notice u/s 143(2) - assessee submits that on inspection of the records it is found that the notice was sent to the old address of the assessee and the notice was returned by the postal authorities and the same was kept on record by the AO and, therefore, the said notice was never served on the assessee - HELD THAT - As in the case of CIT Vs. Chetan Gupta 2015 (9) TMI 756 - DELHI HIGH COURT wherein the Hon ble High Court held that where notice u/s 148 was not served on the assessee in accordance with law the reassessment made consequent thereto was without jurisdiction and liable to be quashed. In the case on hand as the Revenue could not prove the service of notice u/s 148 on the assessee in accordance with law the re-assessment made u/s 147 read with section 144 pursuant to such notice is void ab initio and bad in law. Hence, the reassessment order made u/s 144 read with section 147 is quashed. - Decided in favour of assessee.

Summary

Issues:
1. Validity of notice u/s 148 for reopening assessment.
2. Jurisdiction of the Assessing Officer in completing the assessment.

Analysis:
1. Validity of notice u/s 148 for reopening assessment:
The appeal was filed challenging the order of the Ld. Commissioner of Income Tax (Appeals) for the AY 2009-10. The Assessee contended that no notice u/s 148 was served, rendering the reopening of assessment void ab initio and bad in law. The Assessee's counsel cited various decisions to support this claim. It was revealed that the notice was sent to the old address of the Assessee and was returned by postal authorities, thus never served on the Assessee. The Ld. DR failed to provide evidence to counter these submissions during the hearing. The assessment was completed u/s 147 with the AO determining long term capital gain, despite the Assessee's objections regarding the non-service of notice u/s 148.

2. Jurisdiction of the Assessing Officer in completing the assessment:
The Ld. CIT(A) sustained the assessment, rejecting the Assessee's objections on the grounds of notice u/s 148 non-service. The Ld. CIT(A) stated that the AO had issued the notice as per due procedure and there was no response from the Assessee. However, the Assessee's counsel reiterated that no notice u/s 148 had been served, which was not refuted by the Ld. DR with supporting evidence. Citing previous judgments, including CIT Vs. Eshaan Holdings and CIT Vs. Chetan Gupta, the Tribunal held that if notice u/s 148 was not served in accordance with the law, the reassessment made was without jurisdiction and liable to be quashed. As the Revenue failed to prove the service of notice u/s 148, the reassessment made u/s 147 read with section 144 was deemed void ab initio and bad in law. Consequently, the appeal of the Assessee was allowed on the preliminary ground, rendering other legal grounds and merits of the case academic.

In conclusion, the Tribunal upheld the Assessee's appeal, emphasizing the importance of valid notice service in reassessment proceedings and asserting that the assessment completed without proper notice was void and without jurisdiction.