Delhi H.C : Service of notice issued under section 148 at old address of assessee, though return of income filed before issue of notice showed new address, was not valid

High Court Of Delhi

CIT vs. Eshaan Holding (P.) Ltd.

Assessment Year : 2003-04

Section : 148

A.K. Sikri And Valmiki J. Mehta, JJ.

IT Appeal No. 1171 Of 2008

August 31, 2009


1. Notice under section 148 of the Income-tax Act, 1961 (for short, the “Act”), was issued by the Assessing Officer on January 29, 2004. It was sent at 438, Mount Kailash Towers, East of Kailash, New Delhi (hereinafter referred to as the “old address”). By that time, the assessee had shifted from the said address to N-118, Panchsheel Park, New Delhi (hereinafter referred to as the “new address”). Return for the assessment year 2003-04 was also filed on November 28, 2003, i.e. before the issue of the aforesaid notice on January 29, 2004, showing the new address. However, not a single communication was sent at that address and further steps for serving the notice under section 148 of the Act were also taken showing the old address.

2. The Commissioner of Income-tax (Appeals), in these circumstances, held that no valid notice was served upon the assessee under section 148 of the Act. The entire discussion in this behalf, in appeal, is summarized by the Income-tax Appellate Tribunal in para. 8 of its order, relevant portion whereof makes the following reading :

“8. We have carefully considered the matter. We have also perused the record produced by the Department. In our humble opinion, the Commissioner of Income-tax (Appeals) has taken the correct view of the matter in holding that there was no valid service of notice under section 148 and, hence the reassessment proceedings are null and void. The first notice issued on January 29, 2004, by speed-post was said to have been served on the old address at East of Kailash. There is no proof of service on record. Even otherwise, this is not valid service because the assessee had already filed its return for the assessment year 2003-04 on November 28, 2003, and in this return the address shown was Panchsheel Park. Thus, the record of the Department already contained the new address of the assessee. Before issuing the notice under section 148 it was expected of the Assessing Officer to have checked up if there was any change of address, because valid service of a notice of reopening the assessment is a jurisdictional matter and this is a condition precedent for a valid reassessment. The contention of the learned counsel for the assessee that the Act does not provide for a formal intimation of the change of address and, therefore, the only place where one would find if there has been a change in the address is the return of income (for later years) contains force.

So far as the presumption to be drawn under section 27 of the General Clauses Act is concerned, it can be drawn only if the notice is properly addressed which is not the case here. As already noted, it was sent to the old address. Further, in the letter dated November 20, 2004, written to the Assessing Officer the assessee has denied service of the notice under section 148. Hence, even if there is scope for drawing a presumption, the assessee has come before the Assessing Officer and denied service. The notice served by affixture is also not valid service because it was done at the old address, which is not the last-known address, as the new address has already been intimated to the Department in the return of income filed for the assessment year 2003-04 and that is the last-known address.”

3. Learned counsel for the Revenue argued that no doubt in the return filed on November 28, 2003, for the assessment year 2003-04, on the first page new address is given, the assessee had also shown the old address in the annexure to the said return showing “computation of assessable income”. However, learned counsel for the assessee had explained that the assessee had sold and disposed of the old premises at East of Kailash by a sale deed and even given the possession to the purchaser on September 3, 2003. Affidavit to that effect is filed along with the copy of the sale deed.

4. After hearing the arguments at length and going through various documents, we gather the impression that it may be a case of bona fide mistake on the part of the Assessing Officer. However, a valuable right accrued to the respondent and, furthermore, when we find that the tax effect is only Rs. 4,13,210 (as per the CBDT circular, appeals with tax effect up to Rs. 4 lakhs are not to be filed). Going by these considerations, we are of the opinion that the aforesaid findings need no interference in the present appeal.

5. Dismissed.

[Citation : 344 ITR 541]

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