Improper service of Section 148 notice renders assessment order invalid

By CA Sandeep Kanoi Income Tax Judiciary May 25, 2024

TaxGuru Citation: 2024 taxguru.in 2648
Case Name: Mandeep Malli Vs ACIT (ITAT Amritsar)
Appeal Number: Only available for paid members
Date of Judgement/Order: Only available for paid members
Related Assessment Year: 2010-11
Courts: All ITAT, ITAT Amritsar

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Mandeep Malli Vs ACIT (ITAT Amritsar)

The Income Tax Appellate Tribunal (ITAT) Amritsar presided over the case of Mandeep Malli vs. ACIT, wherein the appellant challenged the validity of an assessment order for the Assessment Year 2010-11. The appeal was filed against the order dated 01.09.2023 from the CIT(A) National Faceless Appeal Centre (NFAC), Delhi, which originated from an assessment order issued on 30.11.2016 by the Income Tax Officer, Ward Nakodar, under Section 144 of the Income Tax Act, 1961. The primary issue in contention was the alleged improper service of notice under Section 148 of the Income Tax Act.

Key Contentions by the Appellant (Mandeep Malli):

1. Improper Service of Notice:

The appellant’s counsel argued that the notice under Section 148, dated 27.03.2017, was invalidly served. The notice, allegedly issued on 15.03.2017 and served via affixture on 20.03.2017, did not follow the prescribed legal procedures.
Specifically, the service was conducted without the presence or signatures of two independent witnesses from the neighborhood, violating the procedures outlined in Section 282 of the Income Tax Act, read with Rules 12, 17, and 19 of Order V of the Civil Procedure Code (CPC), 1908.
A copy of the affixture order was provided, showing the lack of adherence to proper procedures.

2. Non-Adjudication by CIT(A):

The appellant contended that the CIT(A) did not properly adjudicate the issue of improper service of notice raised in the appeal.
The appellant argued that non-service of notice is a legal issue that renders the assessment order invalid. The counsel relied on the Supreme Court’s judgment in Commissioner of Income Tax v. Ramendra Nath Ghosh (1971) 82 ITR 888 (SC), which stated that improper service of notice denies the assessee a proper opportunity to present their case.

Arguments by the Respondent (ACIT):

The Department’s representative upheld the impugned order but failed to effectively counter the appellant’s argument regarding the improper service of notice under Section 148.

ITAT’s Detailed Analysis: