Non-Issuance of Re-Assessment Notice within prescribed Time: Madras HC quashes Proceedings [Read Order]

The Madras High Court quashed proceedings holding, non-issuance of re assessment notice within prescribed time.

In the writ petition, the appellant, Smt. Parveen Amin Bhathara sought to quash the reassessment notice dated 31.03.2018 issued by the respondent on the ground of limitation. Originally, she filed her return of income in Form ITR-V for the assessment year 2011-2012 on 27 th July 2011. She also submitted her return of income for the subsequent assessment years and lastly for the assessment year 2017-2018, electronically, which were duly acknowledged by the respondent. While so, after a lapse of more than six years from the date of submission of return of income for the assessment year 2011-2012, the appellant received an e-mailon 18.04.2018 is time barred as per Section 149 of the Act, the appellant preferred the writ petition bearing No. 11399 of 2018 to quash the same.

Opposing the relief sought by the petitioner, the respondent filed a detailed counter affidavit,stating that the notice under section 148 of the Act for re-opening the assessment was signed on 31.03.2018 and it was given to the process server for despatch to the appellant on her last known address on the same day, but the same was returned unserved by the process server on 06.04.2018 with an endorsement that “no such person is residing in the said address”. Thereafter, on the basis of the particulars furnished by the appellant in her last return of income for the assessment year 2017-2018, the notice dated 31.03.2018 was sent to the appellant's e-mail I.D. on 18.04.2018. Hence, the same is well within the period prescribed under Section 149 of the Act.

 The counter affidavit further proceeded to state that under section 147 of the Act, the respondent is empowered to assess, re-assess and re-compute the assessment, when there is reason to believe that certain income of the appellant has escaped from the assessment and that, the initiation of re-assessment proceedings commenced from the moment the notice dated 31.03.2018 was signed by the respondent. Therefore, the notice dated 31.03.2018 issued under section 148, received by the appellant through her mail on 18.04.2018 is well within the period of limitation. It was also stated that on receipt of the notice for re-assessment, the appellant ought to have firstfiled her return of income and thereafter, she can seek remedies available under law. Without doing so, the appellant rushed to this court by filing writ petition under Article 226 of the Constitution of India.

The Coram consisting of Justice R Mahadevan and Justice J Sathya Narayana Prasad held that “, in this case, there is no document made available to prove that the notice under section 148 dated 31.03.2018 was sent for despatch to the appellant, within the end of the relevant assessment year i.e., 31.03.2018. Thus, it is crystal clear that the notice under section 148 for reopening the assessment was not sent to the appellant, within the time stipulated under section 149 of the Act and hence, the same vitiates the reassessment proceedings initiated under section 147 of the Act.”

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