Electronic notice service and revision for lack of inquiry: non-service challenge failed, and section 263 revision was sustained.

Electronic service of notice under the Income-tax Act may be valid through the email address available in the return or otherwise furnished under section 282 and Rule 127, and a challenge based on non-service fails where the assessee does not show the correct email address or actual non-service. In revision under section 263, an assessment can be treated as erroneous and prejudicial to the interests of the Revenue if the Assessing Officer makes no meaningful inquiry or verification on a material issue, including where information suggests undisclosed on-money payment. The revisional authority may examine the record available for section 263 purposes, including subsequent material forming part of the record.

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Issues: (i) Whether the revisional order under section 263 was vitiated for want of valid service of notice. (ii) Whether the assessment order was erroneous and prejudicial to the interests of the Revenue for lack of inquiry on the issue triggering reopening.

Issue (i): Whether the revisional order under section 263 was vitiated for want of valid service of notice.

Analysis: Service of notice under the Income-tax Act may be effected electronically in terms of section 282 and Rule 127 of the Income Tax Rules, 1962, including through the email address available in the return or otherwise furnished to the income-tax authority. The assessee did not establish the correct email address available with the Department at the relevant time, and the notices were reflected on the portal. The burden to show non-service was not discharged.

Conclusion: The challenge based on alleged non-service of notice failed and the revisional order was not invalid on this ground.

Issue (ii): Whether the assessment order was erroneous and prejudicial to the interests of the Revenue for lack of inquiry on the issue triggering reopening.

Analysis: The Assessing Officer had information that the assessee had allegedly paid on-money in cash for purchase of the unit, but made no meaningful inquiry or verification and merely accepted the denial. An order passed without making inquiries or verification which should have been made falls within Explanation 2(a) to section 263. The Principal Commissioner was also entitled to examine records available at the time of revision, including subsequent material forming part of the record for section 263 purposes under Explanation 1(b).

Conclusion: The assessment order was rightly held to be erroneous and prejudicial to the interests of the Revenue, and the revision was sustained.

Final Conclusion: The revisional order under section 263 was upheld in entirety, and the assessee's appeal did not succeed.

Ratio Decidendi: An assessment order passed without conducting the inquiry or verification that the available material reasonably required is erroneous and prejudicial to the interests of the Revenue, and a revisional challenge based on alleged non-service of electronically issued notice fails when the assessee does not establish the incorrectness of the email address or actual non-service in the manner prescribed.

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