Re-Assessment proceeding under section 147 is Invalid In absence of valid Service of Notice: ITAT [Read Order]

The Delhi Bench of the Income Tax Appellate Tribunal (ITAT)has held that the re-assessment proceeding under section 147 is invalid in absence of valid service of notice.

Smt. Shashi Kanta, the assessee is a resident individual. Upon receiving information that the assessee along with another person has sold an immovable property for a consideration of Rs.35,07,000/-, which was not offered to tax.

The Assessing Officer reopened the assessment under section 147 of the Income Tax Act by issuing a notice under section 148 of the Income Tax Act and completed the assessment ex-parte under section 147/144 of the Income Tax Act alleging that the assessee did not appear in the proceeding despite service of notice issued under section 148 as well as section 142(1) of the Income Tax Act . The Assessing Officer added back an amount of Rs.9,98,277/- as a short-term capital gain. Commissioner (Appeals) dismissed the appeal. 

It was contended that notice issued under section 148 of the Income Tax Act was never served on the assessee. The notice under section 148 of the Income Tax Act was issued to the assessee at the address “7-B, Prahlad Colony, Panipat’ and the purported notice was not only issued through the registered post but also served by way of affixture at the given address.

It was observed that the address of the assessee as mentioned in the assessment order does not match the address in which the notice under section 148 of the Income Tax Act was issued. It is further relevant to observe, much before the initiation of proceeding under section 147 of the Income Tax Act , the assessee had filed a return of income for some other assessment years mentioning the address as has been mentioned in the assessment order. Even, a copy of the Aadhar Car and Passport placed in the paper book mentions the address as H. No. 124, Ward No. 1, Panipat.

A Coram of Shri Saktijit Dey, Judicial Member observed that valid service of notice under section 148 of the Income Tax Act is a sine qua non for proceeding under section 147 of the Income Tax Act . In absence of valid service of notice under section 148 of the Act, the assessment proceeding under section 147 of the Income Tax Act is invalid and quashed the assessment order.

The Appellant was represented by Sh. Satyam Aneja and the respondent were represented by Sh. Om Parkash.

To Read the full text of the Order CLICK HERE

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