Factual Error in Date of Notice Invalidates Assessment as It Was Claimed to Be Served Before That Date

Case Details: Mandeep Malli vs. ACIT - [2024] 162 taxmann.com 637 (Amritsar - Trib.)

Judiciary and Counsel Details

• Dr. M.L. Meena, Accountant Member & Udayan Dasgupta, Judicial Member
• Rohit Kapoor, CA, & V.S. Aggarwal, ITP, for the Appellant.
• Rajiv Wadhera, Sr. DR for the Respondent.

Facts of the Case

The assessee filed its return of income for the relevant assessment year. Subsequently, the Assessing Officer (AO) issued a notice under section 148 after recording the reasons for reopening the assessment. The notice was dated 27-03-2017. However, AO claimed that it was issued on 15.03.2017 and served upon the assessee on 20.03.2017 by way of affixture through the inspector without the presence or signature of two independent witnesses of the neighbourhood and, consequently, AO passed the assessment order.

The assessee contended that the notice cannot be issued and served a week before the mentioned date on the notice. Further, there was a gross violation of the procedure in the service of the notice by way of affixture as laid down under section 282 read with rule 12, 17 and rule 19 of Order (v) of Civil Procedure Code, 1908.

The assessee challenged the assessment order before CIT(A) that the assessment order passed by AO was bad in law, but the CIT(A) affirmed the AO’s order. The matter then reached before the Amritsar Tribunal.

ITAT Held

The Tribunal held that the date mentioned on the notice issued under section 148 was 27-03-2017. However, the AO has stated that the notice was issued on 15.03.2017 and served upon the assessee on 20.03.2017. In our view, it is beyond human probabilities to issue and serve notice a week before a date mentioned in the alleged notice issued under section 148. Such factual mistakes and errors in the dates mentioned on the notice, and that of the date of issue and date of service discussed in the assessment order rendered the basic foundation of the assessment erroneous and void ab-initio.

Further, an affixture report shows that there was no independent local person as a witness, and there was no evidence that anyone identified the place as belonging to the assessee before such affixture. This lead to gross violation of procedure in service of notice by way of affixture as laid down under section 282 read with rule 12, 17 and 19 of Order V of Civil Procedure Code, 1908 as the notice under section 148 was served through affixture has been witnessed by TA and Inspector of the office and not by two independent witnesses as required under the law.

It had been found to be a flagrant violation of rule 17 of Order (v) of the Code, which lays down a procedure to serve notice by affixture. Hence, it was held by the Tribunal that the requirements of the Code of Civil Procedure had not been fulfilled. Therefore, the reopening assessment completed in pursuance to the alleged notice under section 148 of the Act was held to be not valid and the assessment order was quashed as void ab initio.

List of Cases Reviewed

• CIT v. Naveen Chander [2010] 323 ITR 49 (P&H) (para 10)
• Parshotam Singh v. ITO [2016] (8) TMI 1180 (Amritsar – Trib.) (para 10) followed.

List of Cases Referred to

• CIT v. Ramendra Nath Ghosh [1971] 82 ITR 888 (SC) (para 2),
• CIT v. Naveen Chander [2010] 233 CTR 518/323 ITR 49 (Punjab & Haryana) (para 7)
• Parshotam Singh v. ITO TMI 1180 (para 8).