2023 (2) TMI 757 - HC - Income Tax

Reopening of assessment u/s 147 - default servicing notice - notice served on the secondary email id registered with PAN instead of the registered primary email id or updated email id filed with the last Return of Income - HELD THAT - AO clearly erred in issuing a notice on the secondary email address when there was a primary email address given by the petitioner. It is common knowledge that a secondary email address has to be used as an alternative or in such circumstances when the authority is unable to effect service of any communication on the primary address. There is no prudence in issuing an email on the secondary email address. AO ought to have sent the notice u/s 148 to both the primary address and the email address mentioned in the last Return of Income filed to preempt a jurisdictional error on account of valid service; there was neither any cost to it or any prejudice to any party for sending it on more than one email in a given circumstance as in the present case. We see no wrong with the petitioner s refusal to participate in a proceeding vitiated by valid service of notice. This Court in the case of Mrs. Chitra Supekar 2023 (2) TMI 655 - BOMBAY HIGH COURT has held that it was imperative for the AO to have checked if there was a change of address before initiating a proceeding; and that a valid service of notice u/s 48 is a condition precedent lest it would be a jurisdictional error. We accordingly quash and set aside the notice and all consequential proceedings including the show cause notice for proposed variation and assessment order u/s 144B r.w s.144. Decided in favour of assessee.

Summary

Issues:
Challenge to reassessment notice under section 148 of the Income Tax Act due to service on secondary email id instead of primary email id.

Analysis:
The petitioner, a registered partnership firm engaged in real estate development, challenged the reassessment notice for three assessment years, along with a show cause notice and assessment order issued under section 144B. The main issue raised was whether subsequent proceedings initiated by the revenue authorities would be vitiated due to the service of notice under section 148 on the secondary email id instead of the primary or updated email id. The petitioner argued that the notice was not served on the correct email id as per the last Return of Income filed. The petitioner contended that the notice was in contravention of the Income Tax Act and related rules. The petitioner relied on specific notifications related to the service of communication electronically, emphasizing the importance of correct email addresses for valid service of notices.

The respondent, on the other hand, argued that the notice was issued in accordance with the law and that the email id used was registered with the PAN database. The respondent highlighted that the petitioner had not filed returns for certain assessment years, and therefore, the notice was issued based on the email address from a previous return. The respondent contended that the responsibility lies with the assessee to update their email id with the authorities. The respondent urged for the dismissal of the petition.

After considering the arguments from both sides and examining the facts of the case, the court found that the notice served on the secondary email id was erroneous. The court emphasized that the primary email id or the one from the last Return of Income should have been used for communication. The court noted that there was no justification for not sending the notice to both the primary and last filed email addresses. Citing a previous judgment, the court emphasized the importance of valid service of notice as a jurisdictional requirement. As a result, the court quashed the notice and all subsequent proceedings, allowing the respondent to proceed with assessment after issuing a fresh notice in accordance with the law.

Therefore, the petitions were allowed, with no order as to costs.