Delhi High Court invalidates assessment due to late notice under Income-tax Act

The High Court of Delhi allowed the appeal filed by the assessee, setting aside the Tribunal's order. The court held that the notice under section 143(2) of the Income-tax Act, 1961 was not served within the prescribed period, rendering the assessment invalid. The court ruled in favor of the assessee, concluding that the mandatory requirement of serving the notice within the specified time was not met, leading to the disposal of the appeal in favor of the assessee and against the Revenue.

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Issues:
Notice under section 143(2) of the Income-tax Act, 1961 not served within the mandatory period as prescribed under the law.

Analysis:
The High Court of Delhi heard an appeal challenging an order passed by the Income-tax Appellate Tribunal, Delhi Bench, regarding the service of a notice under section 143(2) of the Income-tax Act, 1961. The notice was sent to the address mentioned in the return of income but was redirected to a different address and served there. The Assessing Officer and the Commissioner of Income-tax (Appeals) held that the notice was validly served within the prescribed time. However, the Tribunal also upheld this view, stating that the notice was sent within the period of limitation, leading to a valid assessment.

The petitioner argued that there was no evidence to support the service date claimed by the authorities, and since the notice was served after the mandatory period, the assessment could not be sustained. On the other hand, the Revenue contended that the notice was dispatched and received within the prescribed time, even though it was redirected to a different address at the assessee's request. The court noted that there was no clear evidence of when the notice was received at the original address and redirected to the new address, casting doubt on the service date claimed by the authorities.

The court examined the material on record, including a statement by the Assessing Officer, which presumed the notice was delivered within 24 hours of dispatch. However, the court emphasized that there was no legal presumption that a notice sent by speed post must be delivered within 24 hours. Additionally, there was no clarity on who requested the redirection of the notice to the new address. Based on the available evidence, the court concluded that the notice under section 143(2) was not served within the prescribed period, a mandatory requirement of the law.

Consequently, the court allowed the appeal filed by the assessee, setting aside the Tribunal's order. The substantial question of law was answered in favor of the assessee and against the Revenue, leading to the disposal of the appeal.

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