TMI Blog2023 (11) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... available with the MCA indicating a change of address. The argument advanced on behalf of the appellant/revenue that, as per Section 292BB, Section 148 notice would be deemed as served on the respondent/assessee as it did not object to it during the assessment proceedings is misconceived as perusal of the reply would show that, amongst other aspects, the respondent/assessee had objected to the notice under Section 148 being directed to the old address - Since the objection was taken before the completion of the assessment/reassessment proceedings, in our opinion, the provision of Section 292BB would have no application. Consequences of the failure of the appellant/revenue to issue notice under Section 143(2) of the Act before framing the assessment order - Concededly, the appellant/revenue did not issue a notice under Section 143(2) of the Act, although it had on record the ROI filed by the respondent/assessee for the AY in issue, i.e., 2010-11. The return was, concededly, filed on 04.12.2015. This return was considered while framing the assessment under Section 147/144 of the Act. The only reason furnished for not issuing a notice u/s 143(2) of the Act is that the ROI was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rst issue is concerned, what is required to be ascertained is whether the appellant/revenue had the correct address available in its record when it triggered the reassessment proceedings qua the respondent/assessee, as the controversy centres on the availability of the new address in the database of the appellant/revenue. 3.1 The old address of the respondent/assessee [which then went by the name Kiwi Infrabuild Private Limited] was the following: C-78, Ganga Vihar, Delhi-110094. [hereafter referred to as old address ] 3.2 While the new address of the respondent/assessee was as follows: Mahajan House, E-1, South Extension, Part-II, New Delhi-110049. [hereafter referred to as new address ] 4. The facts, as gleaned from the record concerning the above-mentioned issues, reveal the following. 4.1 The respondent/assessee had not filed its Return of Income (ROI) for the AY in issue, i.e., AY 2010-11 up until 04.12.2015. However, insofar as ROI for AY 2013-14 was concerned, it was filed on 01.08.2013, bearing the old address. The ROI for AY 2013-14 was processed under Section 143(1) of the Act, and an intimation in this behalf, dated 07.03.2014, was directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he respondent/assessee was not represented at the proceedings that day, a final show cause notice dated 29.02.2016 was issued, fixing the hearing on 04.03.2016. On this date, the AO claims to have received a letter from the respondent/assessee with a request to adjourn the case, and accordingly, at its request, the case was adjourned to 07.03.2016. The record shows that no one from the respondent's/assessee's side attended the hearing on 07.03.2016. However, on 08.03.2016, the CA of the respondent/assessee participated in the assessment proceedings and filed a letter dated 07.03.2016 requesting to be furnished with a copy of the approval granted by the Joint Commissioner of Income Tax (JCIT) to reopen the case. This query of the respondent/assessee was disposed of via final show cause notice dated 09.03.2016. Furthermore, it is also noticed that through a letter dated 10.03.2016 [received by the AO on 14.03.2016], the respondent/assessee had stated that the assessment proceedings initiated under Section 147 were illegal and void as no permission was granted as per the provisions of Section 151 of the Act. 8. Regarding the second issue, it has come to the fore that the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (iii) In the letter dated 16.03.2016, filed with the AO during the assessment proceedings, the respondent/assessee did not raise the issue that it had not been served at the correct address. The focus of the said letter was that the Section 148 notice issued to the respondent/assessee was beyond the period prescribed under Section 149 of the Act. It was emphasised that six (6) years, as prescribed, concerning the AY in issue, i.e., AY 2010-11, had expired on 31.03.2016. Besides this, the other objection raised was that the notice under Section 148 could not have been issued by an officer below the rank of JCIT. In sum, practically no objection was raised about the Section 148 notice being directed to the wrong address, i.e., the old address. (iv) The conclusion reached by the Tribunal concerning service of notice under Section 148 is contrary to the ratio of the following decisions: Principal Commissioner of Income Tax-Mumbai v. I-Ven Interactive Ltd. (2019) 110 taxmann.com 332 (SC) and Commissioner of Income-tax-III v. Sudev Industries Ltd. (2018) 94 taxmann.com 373 (Delhi). (v) As regards the issue concerning obligation cast on the appellant/revenue with r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that too, at the old address, the service said to have been affected via affixation is invalid in law. It must be highlighted that there is no reference to the notice server's report in the assessment order. The burden of service of Section 148 notice rests on the appellant/revenue, which has not been discharged in this case. [ See CIT v. Hotline International Pvt. Ltd. (2008) 296 ITR 333 (Delhi HC); CIT v. Chetan Gupta (2016) 382 ITR 613 (Delhi HC)]. (ii) The reliance placed on the provisions of Section 292BB of the Act is misdirected for the following reasons. First, the appellant/revenue did not advance this argument before the Tribunal. The Tribunal, therefore, had no occasion to deal with this submission. Second, in the reply dated 16.03.2016, the respondent/assessee had, amongst other objections, squarely taken the objection that the proceedings were invalid in the eyes of law as the Section 148 notice had not been directed to the correct address. [ See CIT v. Chand Ratan Bagri (2010) 329 ITR 356 (Delhi); CIT v. Indoconut Finance Ltd. (2004) 136 Taxman 23 (Delhi); Rambhai Mafatlal Patel v. ITO (2021) 281 Taxman 196 (Gujarat)]. 11.1 As regards the second issue, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to it during the assessment proceedings is misconceived for the following reason. 13.1 A perusal of the reply dated 16.03.2016 would show that, amongst other aspects, the respondent/assessee had objected to the notice under Section 148 being directed to the old address. The reply bears out this fact. For convenience, the relevant extract from the reply is set out hereafter: Dear Sir, The assessee is in receipt [of] notice U/s 148 of the Income Tax Act, 1961 (hereinafter called as ACT for short) dated 12.06.2015 for the Assessment year 2010-11. The assessee['s] broad submissions is, this regard are given in as under: 1. The registered office of the company was changed and same has been informed to department of Income Tax Ward 5(3) on dated 14-3-2014. This change was properly registered with [the]Registrar of Companies Delhi and Haryana. 2. The assessee has first time received the notice at the above address on 12.06.2015. xxx xxx xxx Sir during the last communication it came to our notice that Your goodself is addressing letter at old address. Your goodself is requested to update your records. You are also further requested that if you ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice under Section 143(2) of the Act because it was not filed within the timeframe given in the Section 148 notice is untenable in law, since the ROI, which was belated, was considered by the AO while carrying out the assessment. 15.2 The absence of notice, under Section 143(2), impregnates the proceedings with a jurisdictional defect and, hence, renders it invalid in the eyes of the law. This position is no longer res integra, as demonstrated by the observations made in Principal Commissioner of Income-tax v. Shri Jai Shiv Shankar Traders (P.) Ltd. (2015) 64 taxmann.com 220 (Delhi): 12. The narration of facts as noted above by the court makes it clear that no notice under section 143(2) of the Act was issued to the assessee after December 16, 2010, the date on which the assessee informed the Assessing Officer that the return originally filed should be treated as the return filed pursuant to the notice under section 148 of the Act. 13. In DIT v. Society for Worldwide Interbank Financial Telecommunications [2010] 323 ITR 249 (Delhi), this court invalidated a reassessment proceeding after noting that the notice under section 143(2) of the Act was not issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s into operation, the assessee is precluded from raising a challenge about the service of a notice, service within time or service in an improper manner. The proviso to section 292BB of the Act, however, carves out an exception to the effect that the section shall not apply where the assessee has raised an objection before the completion of the assessment or reassessment. Section 292BB of the Act cannot obviate the requirement or complying with a jurisdictional condition. For the Assessing Officer to make an order of assessment under section 143(3) of the Act, it is necessary to issue a notice under section 143(2) of the Act and in the absence of a notice under section 143(2) of the Act, the assumption of jurisdiction itself would be invalid. 16. In the same decision in Salarpur Cold Storage (P.) Ltd. (supra), the Allahabad High Court noticed that the decision of the Supreme Court in Hotel Blue Moon (supra) where in relation to block assessment, the Supreme Court held that the requirement to issue notice under Section 143(2) was mandatory. It was not a procedural irregularity and the same is not curable and, therefore, the requirement of notice under Section 143(2) cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In other words, the failure of the AO, in re-assessment proceedings, to issue notice under Section 143(2) of the Act, prior to finalising the re-assessment order, cannot be condoned by referring to Section 292BB of the Act. 19. The resultant position is that as far as the present case is concerned the failure by the AO to issue a notice to the Assessee under Section 143(2) of the Act subsequent to 16th December 2010 when the Assessee made a statement before the AO to the effect that the original return filed should be treated as a return pursuant to a notice under Section 148 of the Act, is fatal to the order of re-assessment. [Emphasis is ours] IV. Conclusion: 16. On both aspects, the Tribunal is right. The Tribunal has returned findings of fact on the two issues adverted to hereinabove. 17. Thus, for the foregoing reasons, which are i) that notice under Section 148 of the Act was improperly served, and ii) that notice under Section 143(2) should have been issued before framing of assessment order under Section 147/144 of the Act, we are not inclined to interfere with the impugned order passed by the Tribunal. 18. According to us, no substantial q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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