Reassessment without service of notice under section 148: assessment quashed for lack of mandatory notice

Assessment was framed under reassessment provisions without service of the mandatory notice under the reassessment procedure and related procedural notices, and the notices issued to an incorrect address were never served on the assessee. Because service of the mandatory notice is a jurisdictional requirement, the reassessment is vitiated and liable to be quashed. The appellate officer's contrary finding that the notice was received and a return filed is inconsistent with assessment records and does not cure the fundamental defect of non service, resulting in invalidation of the assessment.

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Issues: Whether the assessment/reassessment framed under section 144 read with section 147 of the Income-tax Act, 1961 is valid where notice under section 148 of the Income-tax Act, 1961 was not served on the assessee.

Analysis: The Tribunal examined records showing the notice under section 148 of the Income-tax Act, 1961 was issued to an address different from the assessee's PAN database address and found no evidence of service of notices under sections 148 or 142(1) of the Income-tax Act, 1961. The Tribunal noted that service of the notice is a mandatory jurisdictional requirement before making assessment/reassessment under section 147 of the Income-tax Act, 1961 and that the assessing officer proceeded to pass an order under section 144 r.w.s. 147 in the absence of proof of service. The Tribunal further observed that the first appellate authority did not decide the jurisdictional ground but recorded facts contrary to the record regarding compliance with the notices; on the established record the notices remained unserved.

Conclusion: The assessment order passed under section 144 r.w.s. 147 of the Income-tax Act, 1961 is quashed for non-service of the mandatory notice under section 148 of the Income-tax Act, 1961; decision in favour of the assessee.

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