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Facts
The assessee filed an appeal with a 60-day delay, which was attributed to medical reasons and supported by documents. An additional ground was raised challenging the validity of the assessment initiated under Section 148 for AY 2011-12, asserting that the notice dated 28.03.2018 was never served, rendering the subsequent assessment order of Rs. 27,00,000/- void ab initio.
Held
The Tribunal condoned the delay in filing the appeal, finding the medical reason genuine. It admitted the additional legal ground regarding the non-service of the Section 148 notice. As the notice was admittedly not served, the Tribunal held that the initiation of assessment proceedings lacked basis, and consequently, the assessment order was declared void ab initio and quashed.
Key Issues
Whether the delay in filing the appeal should be condoned; and whether assessment proceedings initiated under Section 148 are valid if the notice was not served on the assessee.
Sections Cited
Section 148, Section 144, Section 147
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Income Tax Appellate Tribunal, “SMC” BENCH, DELHI
Before: MS. MADHUMITA ROY
The assessee has filed an application for additional ground alleging that the notice dated 28.03.2018 under Section 148 since never been served upon by the assessee, the assessment order is void-ab-initio and thus, liable to be quashed.
Since, the issue raised is legal one and there is no change of facts, keeping in view the ratio laid down by the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Vs. CIT, reported in (1998) 229 ITr 383 (SC), the ground of appeal is admitted.
4. The assessee’s case is this that the initiation of proceeding though claimed to have been made by issuing of notice under Section 148 of the Income Tax Act 1961, dated 28.03.2018 by the Assessing officer on the ground of escaping ssessment for Assessment Year 2011-12 due to failure on the part of the assessee to disclose and fully and truly all material facts after obtaining the necessary approval the said notice since remained unserved which has duly been mentioned by the ld. AO at paragraph 2 in his order dated 10.12.2018 passed under Section 144 r.w.s 147 of the Act, the initiation of assessment is invalid. Consequently, the order of assessment upon making addition of Rs.27, 00,000/- is void ab initio and therefore, liable to be quashed. Such submission made by the assessee’s counsel has not been able to be controverted by the Ld. D.R.
5. Thus, having regard to the facts and circumstances of the matter particularly taking into consideration the notice under Section 148 dated 28.03.2018 since, admittedly, having been not served upon the assessee as it is evident from the impugned assessment order dated 10.12.2018, the initiation of proceeding under Section 148 is found to have no basis and thus, not sustainable in eyes of law. Consequently, the order of assessment is also found to be void ab initio and therefore, quashed.
The appeal of the assessee is allowed.