Facts of the Case

The Revenue filed an appeal against the order of the Income Tax Appellate Tribunal (ITAT), which upheld the findings of the Commissioner of Income Tax (Appeals) [CIT(A)].

The core issue revolved around the validity of reassessment proceedings initiated under Section 148. The Assessing Officer (AO) issued a notice dated 25.03.2013 to the assessee at an address (Asiad Games Village, New Delhi). However, the notice was returned with a remark that the property had already been sold years earlier.

Despite this, the AO proceeded to pass an assessment order under Sections 148/144 on 20.03.2014.

Importantly, the assessee had consistently mentioned a different and correct address (Pitampura, Delhi) in her Income Tax Returns from AY 2007–08 to AY 2013–14, which was already available with the AO.

Issues Involved

  1. Whether reassessment proceedings under Section 148 are valid when the notice is not served on the correct address of the assessee?
  2. Whether service of notice at an outdated address (despite correct address being available on record) is legally sustainable?
  3. Whether failure of proper service invalidates the entire reassessment proceedings?

Petitioner’s (Revenue’s) Arguments

  • The Revenue contended that the notice issued under Section 148 was valid as it was sent to the address available in the PAN database.
  • It relied on the Supreme Court judgment in Principal Commissioner of Income Tax vs I-Ven Interactive Ltd. (2019), arguing that proceedings are not invalid merely because notice is sent to an old address if the assessee participates.
  • The Revenue argued that the assessee had not updated the PAN database, hence service was valid.

Respondent’s (Assessee’s) Arguments

  • The assessee contended that no valid service of notice under Section 148 was effected.
  • The correct address was consistently mentioned in all Income Tax Returns, which were available with the AO.
  • The AO was aware that the notice was not served (as it was returned), yet proceeded with reassessment.
  • Therefore, the entire reassessment proceedings were void ab initio.

Court’s Findings / Order

  • Service of notice under Section 148 is mandatory for initiating reassessment proceedings.
  • The notice was not served on the assessee, and this fact was already known to the AO before passing the assessment order.
  • Both CIT(A) and ITAT had recorded a concurrent finding of fact that notice was not properly served.
  • The AO failed to use the correct address available in official records (ITRs).
  • The reliance on I-Ven Interactive Ltd. case was misplaced as facts were distinguishable.

 The Court concluded that:

  • Reassessment proceedings were invalid.
  • No substantial question of law arose.
  • The appeal was dismissed.

Important Clarification

  • Proper service of notice under Section 148 is a jurisdictional requirement.
  • Even if notice is issued, non-service or improper service renders reassessment void.
  • Availability of correct address in official records (like ITRs) imposes a duty on the AO to serve notice correctly.
  • PAN database address alone cannot override updated address in filed returns.

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS12102023ITA2862022_144426.pdf

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