By TIOL News Service

KOLKATA, NOV 05, 2018: THE ISSUE BEFORE THE BENCH IS - Whether when name and address of registered office of the assessee have changed, which fact was also known to the Revenue, notice for reopening of assessment sent by the CIT u/s 263 at the old address, with old name of the assessee is valid. NO IS THE ANSWER.

Facts of the case

THE assessee was formerly known as Sadabahar Vanijya Pvt. Ltd. However, the name of the assessee was changed as Co-ordination Vanijya Pvt. Ltd (CVPL) and subsequently, a new PAN was issued to it. Thereafter, assessee filed its return for the AY 2011-12 in the new name and assessment was also completed. However, the CIT passed an order under the provisions of Section 263 to reopen the assessment of the assessee. However, the assessee objected to such action of the CIT by contending that it was incumbent upon the CIT to serve a notice to CVPL and after affording CVPL an opportunity of hearing should have passed the order. According to the assessee, any attempted service on Sadabahar after it had came to be known as CVPL could not be held to be a proper and valid service and the Court should set aside such order directing rehearing of the matter after giving CVPL an opportunity of hearing.

The High Court held that,

++ the Revenue was aware that Sadabahar is now known as CVPL with its registered office at 12-B Cossipore Road, Kolkata-700002 and not with its address at P-41 Princep Street, Kolkata-700072. Any affixation of notice at premises no. P-41 Princep Street, Kolkata-700072 cannot, therefore, be said to be a notice upon CVPL in the year 2012-2013. CVPL has, therefore, not been served though entitled to before the Commissioner passed his order dated 14th January, 2013 and, as such, there is violation of principles of natural justice. Moreover, when the statute is very clear that the Commissioner should afford an opportunity to the assessee of being heard, CVPL should have been heard when Sadabahar much prior to 2012-13 has become CVPL and is the assessee or representing the interest of Sadabahar, the assessee. The word 'may' used in Section 263 should be presumed to be shall or otherwise interpreting the word "may" as not mandatory, orders can be passed even without affording an opportunity to the assessee of being heard while the Commissioner exercises his jurisdiction under Section 263 of the Income tax Act, 1961 thereby violating the principles of natural justice.

(See 2018-TIOL-2343-HC-KOL-IT)