2022 (6) TMI 956 - AT - Income Tax

Reassessment Order Quashed for Lack of Proper Notice: Legal Precedents Emphasize Procedural Compliance

Naveen Tyagi C/o M/s Sanjeev Anand And Associates Versus ITO Ward 1 (2), Ghaziabad.

Naveen Tyagi C/o M/s Sanjeev Anand And Associates Versus ITO Ward 1 (2), Ghaziabad. - TMI Issues involved:Assessee's appeal against the order of Ld. Commissioner of Income Tax (Appeals) for AY 2009-10 - Grounds on merits and jurisdiction of Assessing Officer in reopening assessment - Additional grounds challenging validity of 148 proceedings and consequential assessment order - Service of notice u/s 148 not followed - Admissibility of additional grounds - Proof of service of notice u/s 148 - Legal arguments and precedents cited - Lack of evidence of notice service - Legal requirements for reassessment - Quashing of reassessment order.Detailed Analysis:1. Jurisdiction of Assessing Officer in Reopening Assessment:The assessee challenged the jurisdiction of the Assessing Officer in reopening the assessment for AY 2009-10. Additional grounds were raised regarding the validity of the 148 proceedings and the consequential assessment order. The Ld. Counsel contended that the mandatory requirement of service of notice u/s 148 was not followed, vitiating the reassessment proceedings. Citing legal precedents, the Ld. Counsel argued that the notice u/s 148 was not served on the assessee as the address mentioned was incomplete, rendering the assessment made pursuant to such notice as bad in law.2. Admissibility of Additional Grounds:The Ld. Counsel argued that the additional grounds raised were purely legal in nature and did not require fresh investigation of facts. Reliance was placed on a decision of the Hon'ble Delhi High Court. The Tribunal admitted the additional grounds as they were deemed to be purely legal grounds going to the root of the matter.3. Proof of Service of Notice u/s 148:Upon examination of the original assessment record, it was found that there was no proof of service of notice u/s 148 by the Assessing Officer to the assessee. The order sheet noted the issuance of the notice but did not confirm its service. The Ld. DR admitted that the proof of service was not traceable from the records presented. The absence of evidence of notice service supported the assessee's contention that the notice u/s 148 was not served on them.4. Legal Precedents and Decision:Citing legal precedents such as RK Upadhyaya Vs. Shanabhai P. Patel and CIT Vs. Eshaan Holdings (P) Ltd., the Tribunal emphasized the importance of proper service of notice u/s 148 as a condition precedent for making a valid reassessment order. The Tribunal highlighted that the lack of evidence of notice service rendered the reassessment made pursuant to such notice as void ab initio and bad in law. Consequently, the reassessment order u/s 144 read with section 147 was quashed, and the appeal of the assessee was allowed on preliminary grounds.5. Conclusion:The Tribunal's decision to quash the reassessment order was based on the lack of evidence of proper service of notice u/s 148, in line with legal requirements and precedents. As the reassessment was deemed void ab initio, the Tribunal did not delve into other legal grounds or merits of the case. The appeal of the assessee was allowed, emphasizing the significance of compliance with procedural requirements in reassessment proceedings.