NRI notice service at PAN or passport address, but reassessment failed for lack of proper hearing and service.

For an NRI assessee, service or attempted service of notice at the PAN or passport address was treated as sufficient in normal circumstances, and the tax was not expected to trace an unprovided bank address. However, the Court found serious procedural infirmities on the record, including lack of proper service and denial of an effective hearing, and held that alternative remedy did not bar interference on the peculiar facts. The reassessment order, consequential demand and penalty proceedings were quashed, while fresh notice and continuation of proceedings were left open in accordance with law, without a limitation objection to such fresh notice.

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Issues: Whether service of notice on the PAN and passport address of an NRI assessee was sufficient, and whether the reassessment order and consequential demand and penalty proceedings could survive when no notice was actually served and no hearing was afforded.

Analysis: The Court held that, in the case of an NRI, service or attempted service at the address available in the PAN or passport is sufficient compliance in normal circumstances, and the Assessing Officer cannot be expected to trace the assessee's bank address in the absence of such particulars with the Department. The Court also accepted that the plea of alternative remedy did not prevent interference in the peculiar facts, particularly where the assessee had approached the Court after obtaining knowledge of the order and the proceedings disclosed serious procedural infirmities. The record further showed lack of proper service and denial of an effective opportunity of hearing, including in the rectification proceedings.

Conclusion: The reassessment order, the consequential demand and penalty orders, and all further proceedings were quashed and set aside. Fresh notice and continuation of proceedings were left open in accordance with law, and the assessee was not permitted to object on limitation grounds to such fresh notice.

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