2022 (9) TMI 1082 - AT - Income Tax

Validity of proceeding u/s 147 - validity of the assessment order passed under the said provision - as argued notice was not validly served on the assessee - HELD THAT - The address of the assessee as mentioned in the assessment order does not match with the address in which the notice u/s 148 was issued. It is further relevant to observe, much prior to initiation of proceeding under section 147 of the Act, the assessee had filed return of income for some other assessment years mentioning the address as has been mentioned in the assessment order. Even, copy of the Aadhar Car and Passport placed in the paper-book mentions the address as H. No. 124, Ward No. 1, Panipat. Therefore, there cannot be any manner of doubt that the correct address of the assessee is, as mentioned in the body of the assessment order and not on which the notice under section 148 of the Act was issued. Therefore, it is evident, the notice issued by the Assessing Officer was not validly served on the assessee. Valid service of notice under section 148 of the Act is sine qua non for proceeding under section 147 of the Act. In absence of valid service of notice under section 148 of the Act, the assessment proceeding under section 147 of the Act has to be declared as invalid - Thus the impugned assessment order passed under section 147/144 of the Act is invalid in absence of a valid service of notice issued under section 148 of the Act on the assessee - Appeal of assessee allowed.

Summary

Issues:
1. Condonation of delay in filing the appeal.
2. Validity of the assessment order under section 147 of the Income Tax Act.
3. Service of notice under section 148 of the Act.

Analysis:
1. The appellant filed an appeal against the order of the Commissioner of Income Tax (Appeals) for the assessment year 2010-11, with a delay of 93 days. The appellant sought condonation of the delay citing personal difficulties faced by the counsel. The Tribunal, after considering the reasons provided, condoned the delay and admitted the appeal for adjudication.

2. The primary grievance of the appellant was against the initiation of proceedings under section 147 of the Income Tax Act and the validity of the assessment order passed under this provision. The Assessing Officer reopened the assessment based on information that the appellant had not declared the sale of an immovable property for tax. The assessment was completed ex-parte, adding a short-term capital gain amount. The appellant challenged the validity of the assessment order before the Commissioner (Appeals), who dismissed the appeal. The appellant contended that the notice under section 148 was not served on them, rendering the assessment order invalid. The Tribunal found discrepancies in the address mentioned in the notice and the actual address of the appellant, concluding that the notice was not validly served. As per legal principles, valid service of notice under section 148 is essential for proceedings under section 147. Therefore, the Tribunal held the assessment order invalid due to the lack of valid notice service and set aside the Commissioner's order.

3. The Tribunal examined the address discrepancy between the notice under section 148 and the appellant's actual address mentioned in the assessment order and previous filings. It was established that the notice was not served at the correct address, leading to the conclusion that the service was invalid. The Tribunal emphasized the importance of proper notice service for proceedings under section 147, declaring the assessment order invalid and quashing it. Consequently, the Commissioner's order was set aside, and the appeal was allowed.