2024 (1) TMI 1327 - HC - Income Tax

Reopening notice sent on wrong address - whether the Revenue can proceed with the reopening sought to be initiated u/s 147 of the Act in absence of any notice u/s 148 of the Act actually served upon the assessee? - HELD THAT - The notice u/s 148 of the Act was served on the wrong address by stating incorrect name of village. The said fact could not be disputed by learned advocate Mr.Nikunt Raval for the Revenue as the very fact has been recorded by the authorities while rejecting the objections. In our considered opinion there is no scope available for any debate or doubt towards the factum of non-service of notice under Section 148 of the Act within limitation period as prescribed u/s 149 of the Act. Resultantly the impugned order passed by the respondent authority as well as initiation of reassessment proceedings cannot be allowed to stand in absence of actual service of notice u/s 148.

Summary

Issues Involved:

1. Validity of reassessment proceedings initiated without proper service of notice under Section 148 of the Income-Tax Act, 1961.
2. Jurisdictional requirement of serving notice under Section 148 for reassessment.
3. Implications of non-service of notice within the limitation period prescribed under Section 149.
4. Applicability of Section 292BB regarding deemed service of notice.

Issue-wise Detailed Analysis:

1. Validity of Reassessment Proceedings:
The petitioner challenged the initiation and conclusion of reassessment proceedings, arguing that the mandatory notice under Section 148 of the Income-Tax Act was never served. The petitioner claimed that the notice was sent to an incorrect address, thereby invalidating the reassessment proceedings. The court considered whether the Revenue could proceed with reassessment in the absence of actual service of notice under Section 148. It was concluded that without proper service of notice, the reassessment proceedings are void.

2. Jurisdictional Requirement of Serving Notice:
The court examined whether the service of notice under Section 148 is a jurisdictional requirement. Citing precedents, the court emphasized that service of notice is a condition precedent for reassessment. The Supreme Court in R.K. Upadhyaya v. Shanhai P. Patel clarified that reassessment cannot proceed without service of notice. The court reiterated that service of notice is foundational for jurisdiction under Section 148.

3. Implications of Non-service of Notice:
The court addressed the implications of non-service of notice within the limitation period prescribed under Section 149. It was noted that the notice was sent to an incorrect address, which was acknowledged by the Revenue. The court highlighted that the service of notice within the limitation period is crucial, and failure to do so renders the reassessment proceedings invalid. The court cited multiple cases to support the stance that proper service is imperative for jurisdiction.

4. Applicability of Section 292BB:
The court discussed the applicability of Section 292BB, which deems notice to be valid if the assessee appears or cooperates in proceedings. However, the court noted that this provision does not apply if the assessee objects to the service before the completion of reassessment. In this case, the petitioner raised objections before the completion, thus Section 292BB could not be invoked by the Revenue to claim deemed service of notice.

Conclusion:
The court concluded that the reassessment proceedings were invalid due to the non-service of notice under Section 148 within the prescribed limitation period. The impugned order dated 22.11.2019 was quashed, and the petition was allowed. The court emphasized the jurisdictional necessity of serving notice for reassessment and upheld the petitioner's objections regarding improper service.