General Traders Vs Principal Chief Commissioner of Income Tax (Jharkhand High Court)
Conclusion: Since valid service of notice was a mandatory jurisdictional requirement before initiating reassessment proceedings, therefore, purported notices issued under Section 148 including reassessment proceedings under Section 147 as also under Section 142(1) against assessee, as well as the ex parte assessment orders passed under Section 147 read with Section 144 read with Section 144B and ex parte penalty Orders under Sections 271(1)(c) and 271(1)(b) which were subject matter of both these writ petitions, could not be sustained in the eyes of law.
Held: Assessee trader had filed writ petition before the high court that reassessment proceedings, ex parte assessment orders and penalty orders were vitiated when statutory notices under Sections 148 and 142(1) were not properly served on the assessee. Assessee contended that although it had updated its active email ID with the Income Tax Department in July 2020 after the earlier email became inactive following the closure of the service provider the Department continued issuing statutory notices to the old, defunct email address. It was held that for AO to exercise jurisdiction to reopen an assessment notice under Section 148(1) had to be mandatorily issued to assessee. Further, AO could not complete the reassessment without service of the notice so issued upon the assessee in accordance with Section 282(1) of the Act read with Order V Rule 12 and Order III Rule 6 of the Code of Civil Procedure. The onus was on AO to show that proper service of notice had been effected under Section 148 on assessee or an agent duly empowered by him to accept notices on his behalf. In the present case, Revenue had failed to discharge that onus. The purported notices issued under Section 148 including reassessment proceedings under Section 147 as also under Section 142(1) against the assessee, as well as the ex parte assessment orders passed under Section 147 read with Section 144 read with Section 144B and ex parte penalty Orders under Sections 271(1)(c) and 271(1)(b) which were subject matter of both these writ petitions, could not be sustained in the eyes of law and as such, the same were quashed. Accordingly, the matter was remitted to the concerned AO for considering the matter afresh after providing due opportunity of hearing to assessee as well as to the Revenue, by passing a fresh order in accordance with law expeditiously.
