VIKRANT TIWARI,KANPUR vs. ITO WARD 2(6), NOIDA

The facts in brief are that the assessee is an individual and doctor by profession and during the year under consideration had shown sale of immovable property for a consideration of Rs.3,75,20,000/-. On the basis of non PAN AIR information, that assessee has sold immovable property at Noida, the assessee’s case has been reopened u/s.147 by issuance of notice dated 16.03.2016 u/s.148. As observed by the Assessing Officer in the assessment order, none of the notices sent to the assessee including that all notices u/s.148 were complied with the assessee. Accordingly, the Assessing passed exparte order u/s 144 and had made addition of Rs.1,95,20,000/- by holding that sale consideration as per Section 50C of the property was Rs.3,95,20,000/- and index cost of acquisition was estimated by him at Rs.2 crores.

Ld. CIT (A) has confirmed the addition and held that income is to be taxed at Rs.1,93,00,806/- as Short Term Capital Gain and rejected all the objections of service of notice and assessee’s submission on merits.

Before us, ld. counsel for the assessee, Mr. Rakesh Garg challenging the validity of issuance and service of notice u/s 148, first of all drew out attention to notice u/s.148 dated 16.03.2016 (copy placed in the paper book), and pointed out that it has been addressed and sent on the wrong address, even when assessee was regularly assessed to tax at Kanpur with PAN jurisdiction at Kanpur. The relevant notice issued u/s 148, is reproduced hereunder:

He submitted that assessee was regularly assessed to tax in Range-4(3) at Kanpur with having PAN ABZPT6114G. This fact was duly brought before the Ld. CIT (A) also vide letter filed on 23.07.2018. The assessee never resided at the given address at NOIDA and even the address mentioned as per the sale/lease deed and the notice dated 01.04.2018 is also different. This is evident from the fact that in the notice, the address mentioned is “A-72N Sector 17 NOIDA-201301”, whereas in the lease deed different address was mentioned, “A-72, 1st floor Sector, 17 NOIDA”. Thus, even if the Assessing Officer had taken the notice as the address mentioned in the lease deed which was the subject matter of CIB information and reopening, then also the address on which notice sent was wrong, because there is no such address A-72N. Accordingly, if jurisdictional notice u/s.148 has not been served in accordance with law then entire proceedings is void ab initio and in support he relied upon the judgment of Hon’ble Jurisdictional High Court in the case of Commissioner Of Income Tax vs. Shital Prasad Kharag Prasad, (2006) 280 ITR 541 (Alld.)

On the other hand, ld. DR strongly relied upon the Assessing Officer and ld. CIT (A) and submitted that in the case of non PAN financial transaction, the address mentioned for sale deed or lease deed is considered to be the address. In any case, the matter can be restored back to the file of the Assessing Officer to deal with the assessee’s objection on the validity of notice u/s.148.

After considering the rival submissions and on perusal of the relevant material placed on record, we find that the assessee was regularly assessed to tax with Range-4(3) Kanpur with PAN ABZPT6114G. Since Assessment Year 2003-04, the assessee has been regularly filing the return of income and even up to Assessment Year 2018-19, the income tax return has been filed with the same PAN to be Ward 4(3) Kanpur and address mentioned is, 117/H-1/1529, Pandu Nagar, Kanpur. If in the Income Tax records and in PAN data, assessee’s address as well as the jurisdiction of the Assessing Officer has been categorically given, then without verifying the same, how ITO Ward-2(5) NOIDA ca issue a notice at a wrong address. Not only that, even going by the records of deeds on the basis of which assessee’s case was reopened that he has sold some immovable property at NOIDA, mentions address A-72, 1st Floor Sector 17, NOIDA whereas the address on which notice has been sent mention A-72N, Sector-17, NOIDA, which, as brought out by the ld. counsel is not an address at all. Also it is an admitted fact that neither notice u/s.148 has been served upon the assessee by the Assessing Officer nor has been sent at a proper address. Thus, in absence of any valid service of notice, u/s.148, which is condition precedent for assuming the jurisdiction for reopening the case u/s.147, the entire proceedings gets void ab initio and is to be held as null and void. Accordingly, the impugned assessment order is quashed as null and void as held by the Hon’ble Jurisdictional High Court in the Commissioner of Income Tax vs. Shital Prasad Kharag Prasad, (2006) (supra).

In the result, the appeal of the assessee is allowed.