2021 (4) TMI 966 - HC - Income Tax

Reopening of assessment u/s 147 - invalid service of notice under Section 148(1) - HELD THAT - The entire proceedings ought not to have been brought to naught even if the conclusion reached was that notice under Section 148(1) had not been served. According to Mr. Hossain the matter could have been remanded to the AO so as to give opportunity to the respondent/assessee to defend the proceedings. This is an aspect that we will consider once service is effected on the respondent/assessee. List the matter on 20.05.2021.

Summary

Issues: Condonation of delay in re-filing the appeal, Validity of service of notice under Section 148(1) of the Income Tax Act, 1961

In the present case, an application for condonation of delay in re-filing the appeal was filed, indicating a delay of 231 days, which was contested by the appellant's counsel, Mr. Zoheb Hossain, who claimed the delay to be 191 days instead. The High Court issued notice to the respondent/assessee and listed the application for further proceedings. Moving on to the main appeal, the impugned order by the Income Tax Appellate Tribunal allowed the respondent/assessee's appeal based on the invalid service of notice under Section 148(1) of the Income Tax Act, 1961, as it was served at the old address available in the PAN database. The appellant relied on the judgment of the Supreme Court and Rule 127 of the Income Tax Rules, 1962, to support the argument that service at the address in the PAN database suffices if the assessee fails to update the AO about the address change. Mr. Hossain contended that even if the notice was not served, the proceedings should not have been nullified entirely, suggesting a remand to the AO for the respondent/assessee to defend the proceedings. The High Court scheduled further proceedings to consider this aspect once service is successfully effected on the respondent/assessee.