Section 148 notice invalid due to service at old address and missing Section 143(2) notice, assessment quashed

DELHI HC held for the assessee: the Section 148 notice was improperly served to the old address despite the AO having the new address on record, and the assessee had objected to incorrect service before completion of proceedings (so Section 292BB did not apply). Further, the AO failed to issue a Section 143(2) notice before framing assessment under Sections 147/144, yet considered a belated return; this omission vitiated the assessment. Tribunal's order in favour of the assessee was upheld.

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Issues Involved:
1. Whether the notice dated 30.03.2015 issued under Section 148 of the Income-tax Act, 1961 was served at the correct address of the respondent/assessee.
2. Whether the appellant/revenue was obliged to mandatorily serve a notice under Section 143(2) of the Act before passing the assessment order dated 28.03.2016 under Section 147/144 of the Act.

Summary:

Issue 1: Service of Notice under Section 148
The court examined whether the notice dated 30.03.2015 was served at the correct address. The respondent/assessee had informed the appellant/revenue about the change of address on 14.03.2014. Despite this, the notice was issued to the old address. The Tribunal found that the new address was available in the records of the AO, including a screenshot from the Ministry of Corporate Affairs (MCA) website. The appellant/revenue argued that service was effectuated via affixation at the old address and relied on Section 292BB, which deems service if the assessee does not object before the completion of assessment proceedings. However, the court noted that the respondent/assessee had objected to the service at the old address in its reply dated 16.03.2016, making Section 292BB inapplicable.

Issue 2: Requirement of Notice under Section 143(2)
The appellant/revenue did not issue a notice under Section 143(2) before passing the assessment order, arguing that the ROI was filed beyond the 30-day period stipulated in the Section 148 notice. The court found this argument unconvincing, noting that the ROI was considered while framing the assessment order. The absence of a Section 143(2) notice constituted a jurisdictional defect, rendering the assessment order invalid. The court cited multiple precedents, including Principal Commissioner of Income-tax v. Shri Jai Shiv Shankar Traders (P.) Ltd., affirming that failure to issue a Section 143(2) notice is fatal to the reassessment proceedings.

Conclusion:
The Tribunal's findings were upheld on both issues. The notice under Section 148 was improperly served, and the failure to issue a Section 143(2) notice before framing the assessment order was a jurisdictional defect. Consequently, the appeal was closed with no substantial question of law arising for consideration.

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