Presumption of Service of Notice not applicable If Dept had correct address of Assessee: Allahabad High Court [Read Order]

A two-judge bench of the Allahabad High Court has held that the presumption of valid service of notice under Section 282 of the Income Tax Act is not applicable in a case where the department had the correct address of the assessee and the notice was sent to an incorrect address.

The return filed by the assessee was rejected by the Assessing Officer on ground of failure to prove the genuineness of purchase and sale of shares. The notice for assessment was sent to an address i.e, 109, North Idgah Colony, Agra, which he had left the address two years back. The assessee had filed his return at his new address i.e. 2, Rishi Marg, Shahganj, Agra. The Department had with it the new address of the assessee, but the notice was sent at old address on the ground that it was the address available with the Bank in respect of bank account of the assessee.

The assessee contended that the notice under Section 148 of the was never served on him.

The department, on the other hand, contended that the notice under Section 148 was duly sent by speed post which was not returned back by the postal authority with the remarks “not found or not served or refused”. The notice was served on the correct address. Therefore, the plea of non-service of notice could not be accepted in absence of change in address having been informed to the postal authority.

A division bench comprising Justices Bharati Sapru and Dinesh Kumar Singh held that “Considering the aforesaid aspect of the matter, when the Department had correct address of the assessee, sending notice at incorrect address and then presumption drawn of service of notice is wholly erroneous. We find that the presumption drawn by the Tribunal on the ground that since notice was not received back unserved, it would be deemed to be service of notice, cannot be sustained.”