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Facts
The assessee's assessment for AY 2011-12 was reopened based on cash deposits, and a notice under section 148 was issued. The assessee did not respond, leading to an ex-parte assessment under section 144 with an addition of Rs. 16,00,000/-. The assessee appealed to the CIT(A) with a significant delay, claiming non-service of notices.
Held
The Tribunal held that the notice under section 148 was not validly served as it was issued to an incorrect address after the assessee's retirement, and service by affixture was also improper. Consequently, the entire reassessment proceedings were invalid and made in violation of natural justice.
Key Issues
Whether the reassessment proceedings initiated under section 147 were valid without proper service of notice under section 148 of the Income Tax Act, 1961?
Sections Cited
148, 144, 147, 69C
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”, DELHI
Before: SHRI VIKAS AWASTHY
(A.Y.2011-12) Ranbir Singh, H.No 7/26, Brahm Colony, Rohtak Road, Near Nav Jeevan Hospital, Sonipat, Haryana 131001 ...... अपीलार्थी/Appellant PAN: BXJPS-4963-F बिाम Vs. Income Tax Officer, Ward-47(3), ..... प्रधििािी/Respondent Delhi 110002 अपीलार्थी द्वारा/Appellant by : Shri Mukesh Kumar Mittal, Chartered Accountant प्रधििािीद्वारा/Respondent by : Shri Manoj Kumar, Sr. DR (Through VC) सुििाई की धिधर्थ/Date of hearing : 23/03/2026 घोषणा की धिधर्थ/Date of pronouncement : 23/03/2026 आिेश/ORDER PER VIKAS AWASTHY, JM:
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] dated 17.12.2025, for Assessment Year 2011-12.
Facts of the case in brief as emanating from records are: The assessment for A.Y. 2011-12 in the case of the assessee was reopened, and notice u/s. 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) was issued to the assessee on 30.04.2010. The assessment was reopened on the basis of information that there were cash deposits/time deposits of Rs.16,00,000/- in the bank account of the assessee during the period 01.04.2010 to 31.03.2011. Since there was no response to the notice issued u/s. 148 of the Act and the subsequent show cause notice, the Assessing Officer (AO) completed the assessment by invoking provisions of section 144 of the Act and made addition of Rs.16,00,000/- as unexplained (A.Y.2011-12) investment u/s.69C of the Act. Against the assessment order dated 14.12.2018 passed u/s. 147 r.w.s. 144 of the Act, the assessee filed an appeal before the CIT(A) on 03.08.2024, i.e., with a delay of almost six years. The assessee explained that the assessment order was never served on him. As per the submissions of the assessee, even the notice u/s.148 of the Act was never served on him. The CIT(A) dismissed appeal of the assessee in limine on the ground of limitation and also considered merits of the addition, and dismissed the appeal on merits as well. Hence, the present appeal by the assessee.
Shri Mukesh Kumar Mittal, appearing on behalf of the assessee, submits that the assessee is an ex-serviceman and was later working as a driver with Delhi Transport Corporation (DTC). The assessee retired from the service of DTC on 30.04.2010. The amounts credited in the savings bank account of the assessee with Bank of Maharashtra were amounts transferred from his own account in State Bank of India (SBI), wherein the retiral benefits of the assessee were deposited. The ld. AR submitted that the assessment proceedings are liable to be quashed on the legal issue of non-service of notice u/s.148 of the Act, as well as on the merits of the addition. The ld. AR further submitted that, the CIT(A) without appreciating the reasons for delay in filing appeal which were duly explained and supported by cogent evidences, erred in rejecting the same.
Per contra, Shri Manoj Kumar representing the department strongly supporting the order of CIT(A) prayed for dismissing appeal of the assessee. The ld. DR reiterated the reasons recorded by the CIT(A) in dismissing appeal of the assessee on the ground of limitation, as well as on merits.
(A.Y.2011-12) 5. Both sides heard, orders of the authorities below examined. At the outset I observe that the CIT(A) after having dismissed the appeal in limine on account of delay has thereafter proceeded on to decide the appeal on merits as well.
The primary issue for consideration is, whether reassessment proceedings have been validity initiated against the assessee. The stand of the assessee before the CIT(A), as well as, before the Tribunal is that the assessment u/s.147 of the Act has been made at the back of assessee without service of notice u/s.148 of the Act. A perusal of the notice dated 31.03.2018 at page 1 of the paper book shows that the notice was addressed to the assessee at his office erstwhile address, whereas the assessee had retired from DTC w.e.f. 30.04.2010. Thus, the notice was issued to the assessee on an incorrect address and was never served on the assessee. Further, it is noted from the assessment order that the AO has recorded that the show cause notice was served by affixture. It is difficult to understand as to how a notice could be served by affixture at an office address (which happens to be a State Govt. Undertaking), where the assessee had ceased to work long back. No effort was made by the AO to ascertain the correct address of the assessee or even to verify whether the assessee was still working at the said address before resorting to service by affixture. The provisions of section 148 of the Act obligates the AO to serve notice on the assessee and not merely issue notice. Thus, service of notice u/s.148 of the Act is a mandatory condition before completing assessment u/s.147 of the Act. Thus, in the given facts, I hold that there was no valid service of notice u/s. 148 of the Act. The entire assessment proceedings u/s.147 of the Act were carried out at the back of assessee and the assessee was oblivious of such proceedings in absence of notice. This also explains the delay in filing the appeal before the CIT(A). The assessment was made in violation of principles of natural justice. In my considered view, since the notice under section 148 of the Act was
In the result, assessment is quashed and appeal of the assessee is allowed.
Order pronounced in the open court on Monday the 23rd day of March, 2026.