2019 (1) TMI 596 - HC - Income Tax

Reopening of assessment u/s 148 - notice sent on wrong/old address - curable defect u/s 292B - Held that - The AO appears to have completely and mechanically proceeded on the information supplied to him by the bank without caring to address himself to the correct position in law and deduced to ensure that the reassessment notice (which is a matter of moment as far as the assessee is concerned) was issued properly and served at the correct address in the manner known to law. The assessee has relied upon a screenshot of the PAN database at the stage when the petition was filed to say that the Revenue always had the wherewithal to access the correct address, PAN number and all other relevant details including the e-mail ID as well as the bank account. The omissions of the Assessing Officer deserves, therefore, to be not only adversely noticed but appropriately reflected in his or her confidential reports and appropriate proceedings initiated by the Revenue authorities, which is so directed. The concerned Commissioner, Principal Commissioner or other superior authorities, as the case may be, are directed to file a report in this regard within eight weeks from today. - reassessment notice as well as the order under section 144/147, and the consequential action, i. e., attachment of the assessee s accounts are hereby quashed. - Decided in favour of assessee.

Summary

Issues:
1. Validity of assessment order dated February 13, 2015 for the assessment year 2010-11 and consequent proceedings.
2. Proper service of notice under section 148 of the Income-tax Act, 1961.
3. Compliance with Rule 127 of the Income-tax Rules for service of notices.

Analysis:
1. The assessee challenged an assessment order dated February 13, 2015, for the assessment year 2010-11, completed under section 144 of the Income-tax Act, 1961, following a reassessment notice issued on December 24, 2013. The issue arose when the assessee claimed that the notice was never served upon her, rendering the reassessment proceedings invalid.
2. The Assessing Officer sent multiple notices to the old address of the assessee under section 148(1) without receiving any response, leading to a final notice proposing an ex parte assessment order under section 144/147. The assessment was completed without the assessee's knowledge, raising concerns about the validity of the proceedings due to improper service of notice.
3. Rule 127 of the Income-tax Rules stipulates the mode of service of notices, emphasizing the use of addresses available in the PAN database, Income-tax return, or the last filed return. In this case, the assessee had updated her address in subsequent returns, but the Assessing Officer failed to access the correct address information, leading to the completion of reassessment on a best judgment basis. The court highlighted the mandatory nature of following prescribed procedures and rejected the Revenue's argument invoking section 292B to justify the lack of proper notice.
4. The court referred to legal precedents emphasizing that adherence to prescribed procedures is essential, and any deviation renders the proceedings invalid. The Assessing Officer's mechanical approach, relying on outdated information without verifying the correct address, was criticized. The court directed appropriate action against the Assessing Officer for the lapses in following legal requirements.
5. Consequently, the writ petition was allowed, quashing the reassessment notice, the order under section 144/147, and the consequential actions. The court directed the concerned authorities to file a report within eight weeks and listed the case for compliance on a specific date.

This detailed analysis highlights the issues regarding the validity of the assessment order, proper service of notice, and compliance with legal procedures, leading to the judgment in favor of the assessee based on the failure of the Assessing Officer to adhere to the prescribed rules.