No Valid Service, No Reassessment: AY 2009-10 ₹418 Cr Addition Order Struck Down

ACIT Vs Highvista Buildcon P. Ltd. (ITAT Delhi)

Overview- The reassessment order for AY 2009-10 was quashed due to invalid service of the reopening notice under Section 148, rendering the proceedings legally void.

Facts-

• Both Revenue and Assessee appealed against the CIT(A) order for AY 2009-10. The Revenue filed its appeal with a 26-day delay due to misplaced files, but the delay was condoned after considering reasonable cause and no serious objection from the assessee.
• The Revenue challenged the deletion of a huge addition (₹418,33,73,058) made under section 68 for unexplained credits, while the assessee’s cross objection questioned the validity of the reassessment, asserting the notice under section 148 was not properly served and thus the order is void ab initio.
• The assessee argued and provided evidence that the notice u/s 148 was sent to a wrong, old address despite informing the Department about their new address in advance, raising questions about proper service of notice and the legal validity of the reassessment process.
• Revenue claimed notices were served at three different addresses using methods like speed post and affixture, but the assessee contested the effectiveness and legality of such service, especially the lack of independent witness signatures and the timing of affixture.
• Assessee’s counsel argue that the service of notice by affixture was not valid, especially since it was done without prior attempt at normal service or proper procedural compliance.
• When information was sought via RTI, it was revealed that the Department had continued correspondence to the wrong address, and details about service were only furnished later, casting further doubt on the authenticity and lawfulness of the affixture service.

Issue- whether the reassessment order passed under Section 143(3) read with Section 147 of the Income Tax Act for AY 2009-10 was legally valid in the absence of proper and valid service of notice under Section 148 on the assessee.