ITAT Quashes Assessment Order as Notice u/s 143(2) Sent to Wrong Address [Read Order]

The Income Tax Appellate Tribunal (ITAT) Pune Bench has quashed the assessment order passed against the assessee on the ground that the notice under Section 143(2) of the Income Tax Act, 1961 was issued at an incorrect address and therefore not validly served within the prescribed statutory time limit.

The appellant, Dhanottam Vasant Lonkar, had filed his return of income for Assessment Year 2013-14 declaring a total income of Rs.1,76,25,230. His case was selected for scrutiny under CASS, and a notice under Section 143(2) dated 3 September 2014 was issued by the Assessing Officer (AO). The AO claimed that the notice was sent through RPAD to the address “268A, Shivaji Nagar, Pune – 411005.” However, the appellant contended that he never resided at that address and that his correct address, as mentioned in his PAN database and return of income, was “301, Kamala Residency, CTS No.1050, Model Colony, Pune – 411016.” He argued that he had never received the notice under Section 143(2) and that therefore, the assessment proceedings were invalid and void ab initio.

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The Tribunal found that although the AO relied on the office address from the PAN database, the appellant had specifically opted for his residential address as the communication address in the PAN data and also used it in his return of income. Further, it was observed that the AO had himself later acknowledged that when notice under Section 142(1) was issued at “268A, Shivaji Nagar,” it was returned unserved with a postal remark that the assessee was not found at the given address. The Tribunal noted that this established that the initial notice under Section 143(2) was also issued at a wrong and non-existent address.

The Tribunal observed that the Revenue failed to prove valid service of notice. There was no postal acknowledgment or delivery proof available, and a Right to Information (RTI) reply from the postal department confirmed that no delivery records were available for the article number mentioned by the AO. The Tribunal emphasized that under Section 143(2), mere issuance of notice was not sufficient; valid service at the correct address within six months from the end of the financial year in which the return was filed was mandatory for assuming jurisdiction.

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The Tribunal further noted that the address at “301, Kamala Residency, Model Colony” was consistently used by the assessee for communication, including during earlier and subsequent assessment years. The assessment order also mentioned this correct residential address. It was thus concluded that the AO’s action of issuing notice to a wrong address rendered the entire assessment process invalid.

The ITAT Bench comprising Dr. Manish Borad (Accountant Member) and Vinay Bhamore (Judicial Member) held that absence of valid service of notice under Section 143(2) vitiated the assessment proceedings, making them void ab initio. Accordingly, the Tribunal quashed the assessment order dated 31 March 2016 and allowed the assessee’s appeal.

To Read the full text of the Order CLICK HERE

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