2024 (3) TMI 653 - AT - Income Tax

Validity of reopening of assessment - onus to prove the service of notice - Notice u/s 148 is not a valid notice - HELD THAT - It is settled position in law that valid notice u/s 148 of the Act is a jurisdictional requirement must be complied with this contention of assessee is supported by case of Commissioner of Income-Tax Vs. Rajesh Kumar Sharma 2007 (8) TMI 322 - DELHI HIGH COURT Non-service of notice u/s 148 - It is relevant to mention assessment u/s 147/143(3) r.w.s. 144 of the Act has been framed without service of notice u/s 148 of the Act and this action of AO is contravention section 148 of the Act, which impose binding condition on the Assessing Officer to serve on the notice u/s 148 of the Act before making assessment u/s 147. It is settled position in law that service of notice under section 148 of the Act is a jurisdictional requirement must be complied with and the onus to prove the service of notice lies upon the Revenue and this contention of assessee is supported by the order of the Hon ble Delhi High Court in the case of CIT Vs. Chetan Gupta 2015 (9) TMI 756 - DELHI HIGH COURT . Thus as service of notice under section 148 of the Act is a jurisdictional requirement must be complied with and the onus to prove the service of notice lies upon the Revenue, we hold that the re-assessment proceedings completed without service of valid notice u/s 148 of the Act are liable to be quashed. Decided in favour of assessee.

Summary

Issues involved:
The issues involved in this legal judgment include the deletion of addition on account of undisclosed capital gain, validity of notice under section 148 of the Act, and the jurisdictional requirement of serving notice before making assessment under section 147 of the Act.

Deletion of Addition on Account of Undisclosed Capital Gain:
The Revenue raised concerns regarding the deletion of the addition on account of undisclosed capital gain. It was argued that the seized documents had evidentiary value, as the amount mentioned in the seized documents matched the amount in the Registered Deed. The Revenue contended that the cash transaction mentioned in the seized documents should be considered part of the sale consideration for the computation of capital gains. Additionally, the Revenue highlighted discrepancies in the sale proceeds related to property transactions.

Validity of Notice under Section 148 of the Act:
The assessee challenged the validity of the notice under section 148 of the Act, stating that the Assessment Order under section 147/144 of the Act was passed without a valid notice. The address mentioned in the notice did not match the correct address of the assessee, raising concerns about jurisdictional compliance. Citing legal precedents, it was emphasized that the service of notice under section 148 was a jurisdictional requirement that must be fulfilled by the Revenue.

Jurisdictional Requirement of Serving Notice:
The legal position was clarified that a valid notice under section 148 of the Act is essential before making an assessment under section 147. The judgment highlighted that the onus to prove the service of notice lies with the Revenue. Several judicial pronouncements were referenced to support the contention that the reassessment proceedings conducted without the service of a valid notice under section 148 of the Act are invalid and liable to be quashed. The judgment concluded that the reassessment proceedings completed without the proper notice are not in compliance with the jurisdictional requirements.