2019 (10) TMI 785 - SC - Income Tax

Section 143(2) assessment notices sent to PAN database addresses remain valid despite assessee address changes without PAN updates

Principal Commissioner of Income Tax, Mumbai Versus M/s I-Ven Interactive Limited, Mumbai

The SC held that assessment notices under Section 143(2) sent to addresses in the PAN database are valid even when the assessee has changed address ... Validity of scrutiny assessment - Notices u/s 143(2) not issued on new address - period of limitation - Compliance with notice requirements under Section 143(2) - address as mentioned in the PAN database - filing of return of income with the new address - HELD THAT:- In absence of any specific intimation to the Assessing Officer with respect to change in address and/or change in the name of the assessee, the Assessing Officer would be justified in sending the notice at the available address mentioned in the PAN database of the assessee, more particularly when the return has been filed under E Module scheme. It is required to be noted that notices under Section 143(2) of the 1961 Act are issued on selection of case generated under automated system of the Department which picks up the address of the assessee from the database of the PAN. Therefore, the change of address in the database of PAN is must, in case of change in the name of the company and/or any change in the registered office or the corporate office and the same has to be intimated to the Registrar of Companies in the prescribed format (Form 18) and after completing with the said requirement, the assessee is required to approach the Department with the copy of the said document and the assessee is also required to make an application for change of address in the departmental database of PAN, which in the present case the assessee has failed to do so. Now so far as the submission on behalf of the assessee that with respect to the Assessment Years 2004-05 and 2005-06, communications and the assessment orders were sent at the new address and therefore the Assessing Officer was in the knowledge of the new address is concerned, the same has been sufficiently explained by the Revenue. In view of our findings the impugned judgment and order passed by the High Court as well as the orders passed by the learned C.I.T (Appeals) and the I.T.A.T holding the assessment order bad in law on the aforesaid ground cannot be sustained and the same deserve to be quashed and set aside. Issues Involved:1. Validity of the assessment order under Section 143(3) of the Income Tax Act, 1961.2. Compliance with notice requirements under Section 143(2) of the Income Tax Act, 1961.3. Change of address notification to the Assessing Officer.4. Jurisdiction of the Assessing Officer under Section 143(2) of the Income Tax Act, 1961.Issue-wise Detailed Analysis:1. Validity of the assessment order under Section 143(3) of the Income Tax Act, 1961:The respondent-assessee filed a return of income for the Assessment Year 2006-07, which was processed under Section 143(1) of the Income Tax Act, 1961. The Assessing Officer completed the assessment under Section 143(3) on 24.12.2008, making a disallowance and computing the total income. The assessee challenged the assessment order on the grounds of jurisdiction, arguing that notices under Sections 143(2) and 142(1) were not served within the prescribed time, rendering the assessment invalid.2. Compliance with notice requirements under Section 143(2) of the Income Tax Act, 1961:The Assessing Officer issued a notice under Section 143(2) on 05.10.2007 to the address available in the PAN database. The assessee contended that the notice was not served at the correct address, as they had moved to a new address. The subsequent notices were served beyond the limitation period prescribed under the proviso to Section 143(2), leading to the argument that the assessment order was invalid.3. Change of address notification to the Assessing Officer:The assessee claimed to have informed the Assessing Officer about the change of address via a communication dated 06.12.2005. However, this communication was not produced before the Assessing Officer or the Court. The only document available was Form No.18 filed with the Registrar of Companies, which does not constitute an official intimation to the Assessing Officer. The Court held that filing Form 18 with the ROC is insufficient for notifying the Assessing Officer of a change in address.4. Jurisdiction of the Assessing Officer under Section 143(2) of the Income Tax Act, 1961:The Court concluded that the Assessing Officer was justified in sending the notice to the address available in the PAN database, as there was no formal intimation of the change of address. The notice issued on 05.10.2007 was within the prescribed period, and thus, the assessment order could not be invalidated on this ground. The Court emphasized that mere filing of a return with a new address is not enough; the assessee must specifically inform the Assessing Officer and update the PAN database.Conclusion:The Supreme Court set aside the judgments of the High Court, C.I.T (Appeals), and I.T.A.T., which had held the assessment order invalid. The case was remanded to the C.I.T (Appeals) to consider the appeal on other grounds. The Court underscored the necessity for the assessee to formally notify the Assessing Officer of any change in address and to update the PAN database accordingly. The appeal by the Revenue was allowed, and the assessment order was reinstated for reconsideration on its merits.