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Income Tax Appellate Tribunal, DELHI BENCH “SMC” NEW DELHI
Before: SHRI B.P. JAIN
PER B.P. JAIN, ACCOUNTANT MEMBER:
This appeal of the revenue arises from the order of ld. CIT(A)-3, New Delhi vide order dated 11.2.2016 for the A.Y. 2004-05. The revenue has raised the following grounds of appeal:-
1. Ld.CIT(A) erred in law and on facts of the case in quashing the re-assessment proceedings by holding that notice u/s 148 has not been validly served on the appellant.
2. Ld.CIT(A) erred in not appreciating the legal position that Page 1 of 7 the notice u/s 148 is required to be issued by the stipulated date and the service of the notice cannot be linked to he issue of the notice.
3. Ld.CIT(A) erred in not appreciating the factual position of the case that the assesses, before the completion of re- assessment ,has never raised objection regarding service of service of notice u/s 148 of the IT Act on it.
4. The appellant craves leave, modify, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal”.
2. The brief facts of the case are that the assessee has challenged that there is no service of notice on the given address and without service of notice at the given address the assessment/reassessment is nullity and is directed to be quashed. The decision of ld. CIT(A) accepted the contention of the assessee and allowed the appeal of the assessee.
The ld. Dr argued that there is proper service of the notice once the notice has been issued, that should be deemed to have been served. The ld. DR relied upon of Hon’ble Delhi High Court in the case of CIT vs. Three Dee Exim P. Ltd. (2011) 55 DTR (Del) 147 for the assessment year 1999- 2000 it was held that notice has not been received back when it is sent by registered post when no objection for non issue of notice has been raised Page 2 of 7 by the assessee. The ld. counsel for the assessee relied upon the decision of Hon’ble High Court of Delhi it is the later decision in the case of CIT vs. Chetan Gupta (2015) 62 taxman.com 249 (Delhi) in this regard.
After perusing the material on record it is evident from the material available before us that there is no service of notice and the ld. DR has not brought on record that there is a service of notice issued. The ld. DR argued that the issue of notice should be deemed to be the service of notice, in view of the decision of Hon’ble High Court of Delhi in case CIT vs. Three Dee Exim P. Ltd. (2011) 55 DTR (Del) 147. As a matter of fact the later decision of Hon’ble High Court of Delhi prevails over earlier decision. The later decision is in the case of Chetan Gupta (supra) where the conclusion by the Hon’ble High Court is drawn as under:-
“(i) Under Section 148 of the Act, the issue of notice to the Assessee and service of such notice upon the Assessee are jurisdictional requirements that must be mandatorily complied with. They are not mere procedural requirements. (ii) For the AO to exercise jurisdiction to reopen an assessment, notice under Section 148 (1) has to be mandatorily issued to the Assessee. Further the AO cannot complete the reassessment without service of the notice so issued upon the Assessee in accordance with Section 282 (1) of the Act read with Order V Rule 12 CPC and Order III Rule 6 CPC.
(iii) Although there is change in the scheme of Sections 147, 148 and 149 of the Act from the corresponding Section 34 of the 1922 Act, the legal requirement of service of notice upon the Assessee in terms of Section 148 read with Section 282 (1) and Section 153 (2) of the Act is a jurisdictional pre-condition to finalizing the reassessment.
(iv) The onus is on the Revenue to show that proper service of notice has been effected under Section 148 of the Act on the Assessee or an agent duly empowered by him to accept notices on his behalf. In the present case, the Revenue has failed to discharge that onus.
(v) The mere fact that an Assessee or some other person on his behalf not duly authorised participated in the reassessment proceedings after coming to know of it will not constitute a waiver of the requirement of effecting proper service of notice on the Assessee under Section 148 of the Act.
(vi) Reassessment proceedings finalised by an AO without effecting proper service of notice on the Assessee under Section 148 (1) of the Act are invalid and liable to be quashed.
(vii) Section 292 BB is prospective. In any event the Assessee in the present case, having raised an objection regarding the failure by the Revenue to effect service of notice upon him, the main part of Section 292 BB is not attracted.”
5. In the circumstances and facts of the case in the absence of service of notice the assessment is treated as invalid and ld. CIT (A) has rightly directed to quash the assessment. However I am reproducing the order of the ld. CIT (A) for the sake of convenience as under:-
“4. In the instant case, it is clear from the remand report submitted by the Assessing Officer that the notice u/s 148 of the Act has been sent on the following address: "6103, Block-1, Gali No. 7, Dev Nagar, New Delhi" Whereas, the same Assessing Officer had sent the notice u/s 148 of the Act for A2/. 2003-04 on the correct address. The order of assessment for the A.Y. 2003-04 completed by the same Assessing Officer contain the new and correct address i.e. A-3, Greater Kailash-I, New Delhi. Under Section 148 of the Act, the issue of notice to the Assessee and service of such notice upon the Assessee are jurisdictional requirements that must be mandatorily complied with. They are not mere procedural requirements. For the Assessing Officer to exercise jurisdiction to reopen an assessment, notice under Section 148(1) of the Act has to be mandatorily issued to the Assessee. Further the Assessing Officer cannot complete the reassessment proceedings without service of the notice so issued upon the Assessee in accordance with Section 282 (1) of the Act read with Order V Rule 12 CPC and Order III Rule 6 CPC. The onus is on the Assessing Officer to show that proper service of notice has been effected under Section 148 of the Act on the Assessee. In the present case, the Assessing Officer has failed to discharge Page 5 of 7 that onus. In view of the detailed discussion, it is held that notice u/s 148 of the Act has not been validly served on the appellant and the consequent re-assessment proceedings initiated are invalid and were liable to be quashed.
Since, the re-assessment proceedings initiated by the Assessing Officer are invalid and were liable to be quashed, there is no need to adjudicate the other grounds raised
by the appellant.
6. In view of the above, the appeal of the appellant is treated as allowed.”
In the circumstances and facts of the case I find no infirmity in the order of ld. CIT (A) who has rightly had quashed the assessment and accordingly all the grounds of the appeal of the Revenue are dismissed.
In the result the appeal of the Revenue is dismissed. 8. Pronounced in the open court on .03.2017. Sd/- (B.P. JAIN) ACCOUNTANT MEMBER Dated: 09.03.2017 Narender Copy forwarded to: 1) Appellant 2) Respondent 3) CIT 4) CIT (Appeals) 5) DR: ITAT ASSISTANT REGISTRAR
Date Draft dictated on 8.03.2017 Draft placed before author 9.03.2017 Draft proposed & placed before the second member Draft discussed/approved by Second Member. Approved Draft comes to the Sr.PS/PS 9 .3.2017 Kept for pronouncement on File sent to the Bench Clerk 9.3.2017 Date on which file goes to the AR Date on which file goes to the Head Clerk. Date of dispatch of Order.