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TMI Blog2018 (9) TMI 466X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing grounds of appeal: "1. For that, the assessment order passed by the Ld. A.O. is illegal, arbitrary and without jurisdiction. 2. For that, the Ld. AO is erred in making of assessment"! without issuance of notice U/s.148 of the I.T. Act in clear/ violation of natural justice leads to quashing order of assessment. 3. For that, the Ld. AO is erred in not following due procedure of law for making an assessment U/s.147 of the IT Act in clear violation of Sec-148(l), Sec-148 need with Sec.282(l) and Sec- 153(2] as well as order-Ill Rule-6 CPC 1908. 4. For that, the Learned AO without invoking Sec. 131 or U/s. 133 [a] of the I.T. Act has not allowed development expenses and interest on borrowed capital leads to arbitrary exercise of power thereby order of assessment ought to be set aside. 5. For that any other grounds incidental to the grounds of this case may kindly be permitted to urge at the time of hearing of the case. 6. For that, any other evidences incidental to the grounds of this case may kindly be permitted to adduce at the time of hearing of the case." 4. The Assessing Officer observed that the assessee was a doctor in postal department and was posted a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant. I find that the appellant had sold the property in Kota, but, had not filed the return of income declaring capital gain. The assessing officer came to know the instant the sale of property by the information received from Sub Registrar, Kota. The assessing officer issued the notice u/s. 148 of I.T Act, 1961, on the last known address of the appellant, being 10, Binayak Complex, Dadabai Extention, Kota. This notice was returned by postal department with comment 'left'. Thereafter, the assessing officer issued notice u/s. 142(1) at his Odisha address being Plot No 678, Malipada, Near Sum Hospital, Bhubaneswar, Odisha. In response to this notice, the appellant wrote letter dated 25.02.2016, to transfer his case to the Income Tax Officer, Ward -1(1), Bhubaneswar. This letter was received by the Income Tax Officer, Ward- 1(2), Kota on 29.02.2016. It is seen that the assessing officer could not have transferred the proceed to the Income Tax Officer, .Ward-1(1), Bhubaneswar as time barring date in this a was 31.03.2016. Moreover, the appellant ought to have made request to : Commissioner of Income Tax, having jurisdiction over the Income Tax Officer, Wai 1(2), Kota, u/s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer passed the order U/s.147/144 of the I.T.Act, on 29/03/2016 for AY 2008-2009 ex parte computing the assessed income of Rs. 8, 34, 810/- thereby demanding tax of Rs. 4, 40, 120/-. 5. That after coming to know the order of assessment, the appellant filed appeal before the CIT (A), Kota which was, on request, transferred to CIT (A)-2, BBSR and numbered as 0299/2016-17 in which by filing the documents/materials the Appellant has substantiated that order of the Assessing Officer was without competency and jurisdiction for the same being passed in gross violation of the statutory and mandatory provisions of the I.T. Act and the principles of natural justice and the order of the assessment amounts reason to suspicion rather the reason to believe. 6. That the CIT (A)-2, BBSR without considering as to whether notice u/s.148 of the I.T. Act, 1961 was really served on the Appellant, within the period of time barred, giving adequate opportunity to the Appellant, in compliance with the basic principle of natural justice as per sec. 148 (1) of the I.T. Act, the CIT (A)-2,BBSR confirmed the order of assessment vide order dated 22/09/2017. 7. That 30/03/2015 was the last day of issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade it clear that without such service of notice the AO could not proceed to make the re-assessment. The onus was on the Revenue to show that service of notice had been effected on the Assessee. The failure to serve such notice would lead to the inevitable result of invalidating the assessment order. 10. That Section 148 of the Act is a jurisdictional requirement. The relevant portion of Section 148 (1) provides that "148. Issue of notice where income has escaped assessment - (1) Before making the assessment, reassessment or recomputation under Section 147, the Income-tax Officer shall serve on the Assessee a notice containing all or any of the requirements which may be included in a notice under subsection (2) of Section 139; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section." The Hon'ble Apex Court in very many cases have explained that there was a distinct shift in the scheme of the provisions of the 1961 Act in comparison with the corresponding provision i.e. Section 34 under the 1922 Act under which the mandatory requirement was that both the issuance and service of notice had to be compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nding the period of assessment [2008-2009], service of notice U/s 148 the order of assessment is valid. In this regard, it is respectfully submitted that the learned CIT (A) is erred in law to the effect that the ground so implanted to make an order which is void ab initio from the beginning is against the sound principle of law laid down in the case of Commissioner of Income Tax (Central) I v Chetan Gupta by the Hon'ble High Court of Delhi dated 15.9.2015 in ITA 72 of 2014 holding that the provision inserted under section 292 BB of the I.T. Act is prospective in nature because the assessment in question relates to the period prior to coming into force the provision under section 292 BB of the I.T. Act. Hence the order of the CIT (A), BBSR is not sustainable in the eyes of law. In view of the above the orders of the Learned AO and CIT (A) are liable to be quashed." 9. Ld D.R. relied on the order of the CIT(A) and filed during the course of hearing xerox copy of the envelope and the postal receipt evidencing the fact that notice u/s 148 was returned unserved to the Assessing Officer with the remark "Left". 10. After considering the rival submissions and materials available o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... must be mandatorily complied with. They are not mere procedural requirements. (ii) For the AO to exercise jurisdiction to reopen an assessment, notice under Section 148 (1) has to be mandatorily issued to the Assessee. Further the AO cannot complete the reassessment without service of the notice so issued upon the Assessee in accordance with Section 282 (1) of the Act read with Order V Rule 12 CPC and Order III Rule 6 CPC. (iii) Although there is change in the scheme of Sections 147, 148 and 149 of the Act from the corresponding Section 34 of the 1922 Act, the legal requirement of service of notice upon the Assessee in terms of Section 148 read with Section 282 (1) and Section 153 (2) of the Act is a jurisdictional pre-condition to finalizing the reassessment. (iv) The onus is on the Revenue to show that proper service of notice has been effected under Section 148 of the Act on the Assessee or an agent duly empowered by him to accept notices on his behalf. In the present case, the Revenue has failed to discharge that onus. (v) to (vii) xxx xxx xxx" 20. The requirement of issue of notice is satisfied when a notice is actually issued within the period of limitation pre ..... 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