‘Proper Service’ of Notice is mandatory requirement for Re-Assessment: ITAT quashes Proceedings [Read Order]

The Jaipur bench of the Income Tax Appellate Tribunal (ITAT), while quashing the re-assessment proceedings, has held that the ‘proper service’ of notice is a mandatory requirement for reopening of assessment under section 148 of the Income Tax Act, 1961.

The two-member bench comprising Judicial Member Mr. Sandeep Gosain and Accountant Member Mr. Ramesh S Sharma was hearing an appeal filed by a company against whom the income tax department initiated re-assessment proceedings by making an addition of Rs. 2,76,51,300/- on account of short-term capital gains.

The assessee contended that the service of notice under section 148 and the Assessing Officer has not mentioned the date of service of notice under section 148. According to them, this clearly establishes that notice under section 148 was not served upon the assessee. It is also submitted that it is settled position of law that when service is effected by notice server of the department or by post in such case it is for the department to prove that notice has been served in accordance with provisions of Order V of the Code of Civil Procedure, particularly rules 16 to 20 thereof.

Allowing the plea of the assessee, the Tribunal held that “from the entire crux of the matter, we found that the revenue has failed to bring on record any positive evidence to prove that the notice U/s 148 of the Act was served upon the assessee whereas the assessee has successfully placed on record letter dated 07/11/2017 issued by the department wherein it has no where been mentioned that the notice U/s 148 was ever served upon the assessee. In view of the above facts and circumstances, we can safely conclude that there was no ‘proper service’ of notice U/s 148 of the Act was effected in the present case before completion of reassessment u/s 147 r.w.s 143(3). Therefore, we set aside the orders of the lower authorities and quash the proceeding U/s 148 of the Act.”

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