2016 (6) TMI 117

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....No. 2 which reads as under:- "Because the Ld. CIT (A) erred in upholding the validity of service of notice u/s 148 which was never served upon the assessee, hence proceedings of reassessment are void ab initio." 2. The main controversy involved in the present appeal relates to the service of notice u/s 148 of the Income Tax Act, 1961 (hereinafter called 'the Act'). It is seen that the return of income was filed on 9.11.2000 and the same was processed u/s 143(1) of the Act at the returned income. Subsequently, reassessment proceedings were initiated in 2007 on receipt of information from DIT (Inv), New Delhi that the assessee company was in receipt of accommodation entries totalling to Rs. 5.00 lacs. The chronology of events has been n....

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....complied with. A final opportunity was provided to the assessee vide this office letter dated 13.11.2007 thereby fixing the case for hearing on 22.11.07 which was served through affixture at the last known address as per Income Tax return. On 22.11.07 again neither anybody attended nor any written reply has been filed. Since more than sufficient opportunities have been provided and the assessee was also aware of the proceedings and the assessee has chosen not to comply with the proceedings, I am left with no other alternative but to complete the proceedings ex-parte on merits to the best of my judgment on the basis of the information available on record." 3. It is the assessee's contention that the notice dated 28.03.2007 issued u/s 148 ....

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.... quashed. 4. The Ld. DR, in response, submitted that the Department had issued notice at the address provided in the Return of Income for the year under appeal and, therefore, the issuance of notice was at the correct address. He also submitted that since the assessee had not effected any change in the PAN data base, the address provided in the Return of Income should be taken as the correct address and hence the service of notice was valid and so were the proceedings u/s 148 of the Act. He also submitted that this kind of defect, if at all, cannot be used to vitiate the entire reassessment proceedings and submitted that the order of the Ld. CIT (A) does not call for any interference. 5. We have heard both the parties and have also pe....

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....been clothed with the jurisdiction to pass the assessment order. The mandate of section 148 is that notice should be served on the assessee, by prescribed mode of service, which has undeniably not been carried out in this case. In the absence of a valid service of notice u/s 148, the reassessment order passed by the Assessing Officer is illegal and void ab initio. The Hon'ble Delhi High Court in CIT vs Chetan Gupta (I.T.A. No. 72 of 2014) has discussed the entire law and summarised the legal position in its judgement dated 15th September, 2015 as under:- "(i) Under Section 148 of the Act, the issue of notice to the Assessee and service of such notice upon the Assessee are jurisdictional requirements that must be mandatorily complied ....