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2016 (5) TMI 1020 - ITAT DELHI

2016 (5) TMI 1020 - ITAT DELHI - TMI - Reopening of assessment - Addition u/s 68 - Non issue of notice - Held that:- Whenever a reassessment is sought to be made u/s 147, issuing and serving of a valid notice u/s 148 is a mandatory precondition. The onus lies on the Revenue authorities to prove that the notice was served on the assessee within the stipulated period. It is only if the said notice is served on the assessee that the assessing officer would be justified in taking up proceedings agai .....

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g Officer cannot be said to have been clothed with the jurisdiction to pass the assessment order.

Thus in the present case we hold that in absence of valid service of notice u/s 148 of the Act within the stipulated period, the reassessment proceedings are void ab initio - Decided in favour of assessee - ITA No. 818/Del/2014 - Dated:- 29-4-2016 - Shri N. K. Saini, Accountant Member And Shri Sudhanshu Srivastava, Judicial Member For the Appellant : Shri Ved Jain,CA & Ashish Chadha F .....

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ome Subsequently, on receiving certain information from the Investigation Wing, the case of the assessee was re-opened and notice u/s 148 of the Act was issued to the assessee company on 28.03.2011 at the address S-524, Vikas Marg, Shakarpur, Delhi. The assessee, subsequently in September, raised the primary issue that no notice u/s 148 of the Act (dated 28.03.2011) was ever received by the assessee. The assessee raised objection to the proceedings u/s 148 on the ground of non-service of the sta .....

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s also dismissed by the Ld. CIT (A). The assessee also challenged the impugned additions of ₹ 20 lacs on merits but these grounds were also dismissed and the addition was confirmed. 3. Now, in this appeal before us, the assessee has raised as many as 11 grounds of appeal, however, we are proceeding to adjudicate ground no. 3 first which is germane to the entire reassessment proceedings and depending on the outcome of the fate of this ground of appeal, we shall proceed to adjudicate the rem .....

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suance of statutory notice u/s 148 of the Act. 5. In this regard, it was submitted that the case of the assessee was reopened u/s 148 of the Act. The assessee received a notice dated 09.09.2011 (Paper Book Page 14) from the AO, referring to an earlier notice issued by his predecessor u/s 148 of the Act. The assessee, however, vide reply dated 14.09.2011 (Paper Book Page 15) submitted that the assessee had not received any notice u/s 148 of the Act. Similar notice was again received by the assess .....

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s done. The Ld. AR further submitted that it is not disputed that the notice u/s 148 was issued on 28.03.2011, but the same was sent by speed post at the address S - 524, Vikas Marg, Shakarpur, Delhi, which has also been confirmed by the Ld. CIT (A). The address of the assessee company, however, as on the said date was changed to C - 52, Vivek Vihar - I, New Delhi - 110095. All the correspondence made by the AO with the assessee company was at the said address only, as is evident from the variou .....

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that the address of the assessee was updated in the records of the Department. Thus, the allegation of the Ld. CIT (A) that it was the duty of the assessee to inform the Department about the change of address was factually incorrect. The Ld. AR submitted that , it was clear that the notice u/s 148 of the Act was issued at a wrong address, and thus, was not served on the assessee, in the absence of which, the order passed by the AO and sustained by the Ld. CIT(A) was bad in law and liable to be .....

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the assessment order that the notice u/s 148 of the Act was issued on 28.3.2011 which was duly served on the assessee by speed post. The Assessing Officer has further noted in para 1 of his order that the assessee had submitted a letter dated 14.09.2011 and 19.09.2011 stating that it had not received the notice u/s 148 dated 28.03.2011 and vide order sheet entry dated 21.09.2011, a copy of the notice u/s 148 issued on 28.03.2011 was handed over to the representative of the assessee Mr. Manoj Sha .....

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e than she years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that year. Explanation: In determining income chargeable to tax which has escaped assessment for the purposes of this sub section, the provisions of Explanation 2 of section 147 shall apply as they apply for the purposes of that section. (2) The provisions of sub-section (1) as to the issue of .....

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ld be issued". In this case, notice was issued within time. 5.2 In the case of Mayawati v CIT and Others (2010) 321 ITR 349 (Delhi) the Court observed as under:- Reassessment - Notice-Notice u/s 149 - Notice should be issued within prescribed period - Not , necessary that notice should be served within prescribed period - Notice served by inspector of Income tax - information that assessee had shifted her residence and consequent service by speed post - Presumption that notice had been serv .....

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ellant as the notice was issued on time and in compliance with law. 8. Thus, the Ld. CIT(A) has, on one hand, concluded that issued tantamount to served and, on the other hand, has raised a presumption against the assessee that since the notice was sent through speed post and was not returned, the notice is presumed to have been served. However, the Department has not been able to controvert the submission of the assessee that the Department was in possession of the correct/new address of the as .....

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erved on the assessee that the assessing officer would be justified in taking up proceedings against the assessee. If no notice is issued, or if the notice issued is shown to be invalid, then the proceedings taken up by the assessing officer would be illegal and void. In this case, it is very much apparent that the notice u/s 148 had not been served on the assessee within the stipulated period. The Assessing Officer can assume jurisdiction to complete the assessment only after valid and legal se .....

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Hon'ble Delhi High Court in CIT vs Chetan Gupta (I.T.A. No. 72 of 2014) has discussed the entire law and summarised the legal position in its judgement dated 15th September, 2015 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 un .....

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