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The ITO, Ward 2 (3) , Chandigarh Versus Shri Om Parkash Kukreja

Reopening of assessment - non service of notice - Held that:- Notice under section 148 of the Act dated 22.03.2013 have not been served upon assessee, therefore, the re-assessment made under section 147/148 cannot be held to be valid because the same is bad in law. There is no question of service by affixture by the Inspector at the wrong address upon assessee. The ld. CIT(Appeals), therefore, in proper perspective correctly set aside the re-assessment proceedings. We do not find any justificati .....

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Representatives of both the parties, perused the material available on record and also perused the assessment record produced by the ld. DR. Both the appeals are decided as under. ITA 335/2015 3. This appeal by revenue has been filed on the following grounds : 1. The order of the learned CIT (A) is erroneous & contrary to facts & law. 2. The Ld. CIT(A) has erred in accepting the arguments of the assessee that the Assessment proceedings were not in his knowledge as this is entirely unbel .....

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notice u/s 148 were served. 4. It is prayed that the order of the Ld. CIT(A) be cancelled and that of the assessing officer may be restored. 4. The assessee filed original return of income on 11.01.2007. Later on, case was reopened by issue of notice under section 148 of the Act dated 22.03.2013 after recording the reasons as reproduced at page 1 to 3 of the assessment order. The Assessing Officer noted that notice under section 148 issued on 22.03.2013 was served upon assessee on 26.03.2013 by .....

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ed that assessee is liable to tax for capital gains and accordingly, completed the assessment under section 147/148 of the Act vide order dated 27.03.2014. 5. The assessee challenged the re-assessment order before ld. CIT(Appeals) and it was submitted that since proceedings are invalid and barred by limitation and no notice under section 148 of the Income Tax Act was served by the assessee, therefore, re-assessment is bad in law. The assessee further submitted that Assessing Officer had issued n .....

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e assessment record, annulled the re-assessment proceedings because no notice under section 148 have been served upon assessee. His findings in para 5 and 6 of the appellate order are reproduced as under : 5. I have considered the submission of the Ld. Counsel. I have also perused the case records for the year under consideration and discussed the matter with the Assessing Officer. As per assessment records, notice u/s 148 dated 22.03.2013 was issued in the name of the appellant at the address & .....

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It is, therefore, evident that the reassessment was initiated on the basis of notice u/s 148, which was never served on the appellant and so the reassessment made as a consequence of this notice is null and void. Hence, reassessment made is hereby annulled. As the reassessment order has been annulled, the other grounds of appeal become infructuous. 6. In the result, the appeal is allowed. 7. We have considered rival submissions. The ld. DR furnished copy of the return filed by assessee, copy of .....

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nulled the re-assessment order. He has relied upon decision of Hon'ble Supreme Court in the case of M/s Deepak Agro Foods Vs State of Rajasthan dated 11.07.2008 in Civil Appeal Nos. 4327-28 of 2008, decision of Hon'ble Punjab & Haryana High Court in the case of V.R.A. Cotton Mills Pvt. Ltd. Vs. Union of India 359 ITR 495 and decision of the Hon'ble Supreme Court in the case of Estate of Late Ranga Lal Jajodia 79 ITR 505. The ld. DR submitted that since Assessing Officer has juris .....

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evaji Kapasi 66 ITR 147. The ld. counsel for the assessee submitted that assessee has not received any notice under section 148 of the Act and was not residing at house No. 1626, Sector 18-D, Chandigarh. The Assessing Officer has wrongly mentioned this address in the reasons recorded for re-assessment but later on passed the re-assessment order at the correct address i.e. 1627, Sector 18-D, Chandigarh. He has submitted that no notice under section 148 have been served upon assessee, therefore, l .....

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ave considered rival submissions. Section 148 of the Act provides as under : 148. [(1)] "Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the .....

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sequently a notice has been served under sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to sub-section (2) of section 143, as it stood immediately before the amendment of said sub-section by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, re-assessment or recomputation as specified in sub- section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice: P .....

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t, reassessment or recomputation as specified in sub- section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice.] [Explanation.-For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section.] [(2) The Assessing Officer shall, before issuing any notice u .....

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under section 148 of the Income Tax Act. This is, therefore, upon service of notice u/s 148 of IT Act provides jurisdiction to the Assessing Officer to proceed under section 148 of the Act for re-assessment under section 148 of the Act. Hon'ble Madras High Court in the case of Jayanthi Talkies Distributors Vs CIT 120 ITR 576 held as under : "Held (1) that the ITO will have no jurisdiction to make an assessment under s. 147 unless the notice under s. 148 is validly issued to and served o .....

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n served in this case had no written authority from the partners to receive the notices on behalf of the firm. Consequently, the notice under s. 148 had not been validly served on the assessee and the re-assessment made under s. 147 cannot be held to be valid." 10. In this judgement, Hon'ble Madras High Court has referred to the decision of Hon'ble Supreme Court in the case of N. Narayana Chetty Vs ITO 35 ITR 388 in which it was held by the Hon'ble Supreme Court that; "The .....

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nd void". Hon'ble Delhi High Court in the case of CIT Vs Hotline International P. Ltd. 296 ITR 333 held as under : "Section 282 of the Income-tax Act, 1961, lays down the mode of service of notices. According to it, any notice under the Income-tax Act has to be served on the person named therein either by post or as if it were a summons issued by the court under the Code of Civil Procedure, 1908. Order V of rule 19A of the Code of the Civil Procedure, provides for simultaneous serv .....

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serving officer to locate the assessee. The notice sent by registered post ought to have been sent along with the acknowledgment due but admittedly this was not done. Since there had been no proper service of notice, the reassessment proceeding resulting in the order dated January 30, 2003, was not valid." 11. In the light of the above decisions and provisions of law contained under section 148 of the Act, we examine the facts of the case. In the present case, Assessing Officer recorded the .....

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the re-assessment order dated 27.03.2014 in the opening para itself has mentioned that assessee has filed its original return of income on 11.01.2007. This fact is also confirmed from the record produced by the ld. DR which shows that assessee has filed original return of income for assessment year under appeal prior to the initiation of re-assessment proceedings. It may also be noted here that in the return of income, originally filed by assessee, the assessee has given his address to be house .....

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affixture at wrong address on 26.03.2013. The Assessing Officer, thereafter, completed re-assessment on 27.03.2014 and correctly mentioned the address of the assessee in the re-assessment order as House No. 1627, Sector 18-D Chandigarh. Therefore, the Assessing Officer did not attempt to verify the address of the assessee from his own record as well as did not mention the correct address in the notice under section 148 of the Income Tax Act. Since assessee was not residing at the given address, .....

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r 18-D Chandigarh. First of all, this letter is filed after alleged service of the notice under section 148 by affixture, therefore, it may not be relevant for the purpose of deciding the issue. Further, according to submission of ld. counsel for the assessee, this wrong address was mentioned because the same address was mentioned in the notice of the Assessing Officer under section 142(1) of the Act as well. Therefore, explanation of the assessee is acceptable that again wrong address has been .....

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nder section 148 was never served upon assessee, therefore, resultant proceedings under section 148 would be invalid and bad in law. 12. The ld. DR relied upon decision of the Supreme Court in the case of M/s Deepak Agro Foods Vs State of Rajasthan (supra) in which the issue was with reference to proceedings under Rajasthan Sales Tax Act in which Hon'ble Supreme Court observed there is a fine distinction between the orders which are null and void and the orders which are irregular, wrong or .....

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ly issued and served upon assessee. Therefore, this decision would not support case of the Revenue. The other decision relied upon by ld. DR in the case of V.R.A. Cotton Mills Pvt. Ltd. (supra) relates to the service of the notice under section 143(2) of the Income Tax Act and another decision in the case of Estate of Late Rangalal Jojodia (supra) deals with service upon the legal heirs and is not with reference to the proceedings under section 148 of the Act. The decision relied upon by ld. DR, .....

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