2025 (10) TMI 697 - AT - Income Tax

Notices must be served to the assessee's ITR address; PAN/MCA addresses cannot replace ITR address for substituted service

ITAT (Del.) allowed the appeal, holding that notices issued to an address not furnished in the ITR cannot be justified by the AO relying on addresses from ... Service of Notice u/s 143(2) on incorrect address - acknowledging the intimation and issuance to the assessee on the correct address - CIT(A) has dismissed this ground on the basis that copy of notice was e-mailed to the assessee at the e-mail address available at the MCA website and the physical address of the assessee was picked up from PAN data base - HELD THAT:- When assesse has provided correct address then issuing of notices on an address which is not mentioned in the ITR cannot be justified by the tax authorities on the basis that the addresses of the assessee as available at MCA portal or PAN data base was preferred. If that is accepted then sanctity of presumption to be drawn of notices being served in due course will be lost. The presumption of notice being served by substituted services is based on establishing that last known correct address was mentioned to serve the notice. The facts narrated above are self speaking of the fact that it is not a case where assesse was not confronting AO of possible prejudice due to sending notices on incorrect addresses by informing of present address in pending assessment of a previous assessment year and which was duly acknowledged by AO by mentioning same in assessment year yet incorrect address was used to communicate further that too by affixation of notice. Thus principle laid in PCIT vs. Iven Interactive Ltd. [2019 (10) TMI 785 - SUPREME COURT] case law as relied by ld. CIT(A), that in absence of any specific intimation to the AO with respect to change in address and/or change in the name of the assessee, the AO would be justified in sending the notice at the available address mentioned in the PAN database of the assessee, is applicable to the benefit of assessee only, and same is ignored by CIT(A). Thus on facts same was distinguishable. Appeal of assesse is allowed. ISSUES PRESENTED AND CONSIDERED 1. Whether notice under section 143(2) was validly served where departmental records show service by electronic communication to email addresses associated with the assessee and by physical delivery at an address appearing in PAN/MCA records, but the assessee contends notice was not served at the correct address which it had earlier intimated to the Assessing Officer. 2. Whether service by affixture or by electronic means can be sustained where the assessee had earlier provided a different and correct address to the Assessing Officer during pending assessment proceedings and the Assessing Officer had acknowledged that address in related proceedings. 3. The evidentiary weight of multiple concurrent modes of service and the extent of the rebuttable presumption of service under relevant provisions of the Evidence Act when the assessee asserts non-receipt and points to prior communication of a different address to the assessing authority. ISSUE-WISE DETAILED ANALYSIS Issue 1 - Validity of service of notice under section 143(2) by email and physical delivery taken from PAN/MCA records Legal framework: Service of notices under the Act may be effected electronically to addresses provided by the assessee (statutory scheme including section 282 and relevant rules permitting electronic delivery and recognized modes of service); Rule providing for service and rules of evidence including presumption of service where recognized modes are used. Precedent treatment: The tribunal referenced authoritative decisions treating email addressed to the address available in the return or on official records as valid service, and decisions upholding service effected at addresses available in PAN or company records. Those authorities were relied upon by the department to support the validity of electronic and physical service to addresses appearing on record. Interpretation and reasoning: The record before the Tribunal shows the return for the assessment year carried a registered physical address and at least one email address used by the assessee in the ITBA system; an additional email and a physical address appear on MCA/PAN records. The department sent the notice by email to the addresses traceable to the assessee and effected physical delivery at the address appearing in official records. Under the statutory scheme and consistent decisions, electronic transmission to an email address maintained on official systems and physical delivery to the registered address constitute modes of valid service. Ratio vs. Obiter: The proposition that email to an address on record and physical delivery to the registered address constitute valid service is applied as ratio to the facts; the tribunal treats the cited authorities as directly applicable precedent. Conclusions: Service by email and physical delivery to addresses on departmental records is prima facie valid and compliant with section 282 and rules governing electronic service; such service attracts the statutory/ evidentiary presumption of proper service unless convincingly rebutted. Issue 2 - Effect of prior intimation of a different address to the Assessing Officer on validity of subsequent service to record addresses Legal framework: The law recognizes substituted or constructive modes of service where prescribed modes are followed, but service validity must be assessed in context of the last known address and any specific intimation to the authority. The presumption of service under evidence law can be rebutted by showing the authority had notice of a correct address and still sent notice elsewhere. Precedent treatment: The Tribunal considered precedent that supports sending notices to addresses available in PAN/MCA where there is no specific intimation of change; however, the Tribunal distinguished those authorities on the facts where the assessee had given specific intimation and the Assessing Officer had acknowledged the correct address in earlier assessment proceedings. Interpretation and reasoning: The Tribunal found factually that the assessee had, during earlier assessment proceedings, communicated the correct physical address to the Assessing Officer on two occasions and that the Assessing Officer had acted on that address for the related assessment year (issuing an order at that address). Despite that, the departmental notices for the subject assessment year were issued to a different address (including affixture at that incorrect location) and an email was sent to an email ID not matching the email stated in the return. On these facts, the Tribunal reasoned that reliance by the department on PAN/MCA records could not justify issuing notices to an address different from the one specifically communicated and acknowledged in prior pending proceedings; doing so undermines the presumption of valid service and can prejudice the assessee. Ratio vs. Obiter: The holding that prior, acknowledged intimation of a correct address to the Assessing Officer displaces the department's reliance on other record addresses (for purposes of valid service) is applied as ratio; the distinction of authority relying on PAN/MCA records is an essential part of the Court's reasoning. Conclusions: Where the assessee has specifically and timely informed the Assessing Officer of a change or correct address during pending proceedings and the Assessing Officer has acknowledged and acted upon that address in related assessments, subsequent departmental service to a different address on record (including by affixture) is not justified and may render the notice invalid. Issue 3 - Rebuttable presumption of service when multiple modes are used and the assessee asserts non-receipt Legal framework: Evidence law creates a presumption that where recognized modes of service are employed, service is effected (section 114(f) of the Evidence Act); however, this presumption is rebuttable by substantive material proving lack of service or that the authority was on notice of a different address. Precedent treatment: Authorities were invoked that confirm the presumption arising from proper despatch and recognized modes of service, and other authorities that confirm non-acknowledgment does not necessarily vitiate service where statutory modes are followed. Interpretation and reasoning: The Tribunal applied the evidentiary presumption to the departmental proof of email transmission and physical delivery; but it also assessed the assesseespecific evidence that the Assessing Officer had been informed on two occasions of the correct address and had used that address in previous assessment proceedings. The Tribunal found the assessee's assertion of non-receipt, combined with the prior specific intimation and the department's choice to issue the impugned notices to an address different from the one acknowledged earlier, amounted to a successful challenge to the presumption of service in the circumstances of this case. Ratio vs. Obiter: The principle that the presumption of service may be displaced where the assessee demonstrates the Assessing Officer had been specifically informed and had acknowledged a different address is applied as ratio to the facts. Conclusions: The presumption of valid service arising from use of recognized modes may be rebutted if the assessee shows substantive proof that the authority had been specifically apprised of a different address and had accepted it in related proceedings; on the facts, the presumption was rebutted and service was held invalid. Overall Disposition and Consequence Because the Tribunal concluded that the Assessing Officer issued the impugned notices to an address different from the one specifically intimated and acknowledged in prior proceedings, the Tribunal held the notice under section 143(2) to be invalid on the facts; this invalidated the entire assessment proceedings based on that notice, resulting in allowance of the assessee's ground and dismissal of the Revenue's appeal.