Reassessment quashed as void ab-initio for service of notice u/s 148 at wrong address

Reassessment quashed as void ab-initio for service of notice u/s 148 at wrong address when assessee had communicated changed new address

ABCAUS Case Law Citation
ABCAUS 3392 (2020) (09) ITAT

In the instant case, the assessee had challenged the order passed by the CIT(A) in rejecting the objection raised with respect to the validity of notice u/s 148 of the Income Tax Act, 1961 (the Act).  

The assessee had challenged the validity of the notice u/s 148 of the Act for reopening of assessment on the ground there was a violation of service of notice within prescribed time u/s 282 of the Act as the notice was served on the wrong address.

The assessee had duly filed his return of income declaring inter alia capital gains. The aid return of income was not selected for scrutiny by issuance of notice u/s 143(2) of the Act within six months from the end of the FY, in which, the return was filed. Hence, the assessment stood terminated/completed.

The assessee being in service had filed his return of income with ITO Salary Ward in the applicable Range. Later, the assessee shifted his residence and change of address was duly intimated to the said Assessing Officer (AO) by the assessee by way of written communication. 

The assessee had also taken steps to modify his address in the   PAN Portal and obtained a new PAN Card with new address in database.

When the notice u/s 148 of the Act was received by the assessee, he objected to the service of notice being beyond the limitation period mentioned in section 149(1)(b) of the Act.

The AO rejecting the objections of the assessee, stated that the notice issued u/s 148 of the Act was not barred by limitation. That the notice had been validly issued within the due date but, it was   served on the assessee later.

The AO also stated that section 149 of the Act does not speak about service of notice and talks only about the issue of notice.

The Tribunal observed that the notice u/s 148 was first served within the limitation period but at the wrong address and when it came back unserved to the Department, the notice was served on the correct address of the assessee.

The Tribunal observed that the AO restarted the process of service of notice u/s 148 of the Act at the correct address of the assessee only after a gap of more than three months after the notice returned unserved. The period of delay from the side of the AO did not stand explained.

The Tribunal stated that there could not be any allegation that could be levelled on the assessee of non-intimation of the change of address to the IT Department. 

The Tribunal observed that the assessee had duly intimated the  new address to the IT Department and had changed the in the  PAN Portal and also the TDS certificate issued by the bank also mentioned the new address of the assessee. Even the assessee  had written several letters to the AO seeking for payment of tax  arrears in the new address of the assessee.

Even a letter addressed by ITO (Intelligence) was issued to the assessee in new address calling for certain information u/s 133(6) of the Act which clearly indicated that the changed address had been duly incorporated in the PAN Portal.

The Tribunal stated that there was no valid service of notice u/s 148 of the Act in terms of section 282 of the Act at the correct address of the assessee within a reasonable period of time by the revenue. 

The Tribunal also stated that when the assessee had duly informed the change of address to the new jurisdictional AO and had been  having regular correspondence with that Officer and returns of  income  for next four assessment years were duly filed mentioning  new address of the assessee  with  said AO, there was no reason  as to why the said AO should not exercise jurisdiction over the  assessee by issuing notice u/s 148 of the Act.  The previous AO had no jurisdiction over the assessee to trigger the initiation of the reassessment proceedings after recording of reasons for reopening of assessment. 

Accordingly, the reassessment framed by the AO was quashed as void ab-initio for want of jurisdiction and for want of proper service of notice at the correct address of the assessee within the reasonable time.

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