By TIOL News Service

NEW DELHI, NOV 15, 2018: THE ISSUE BEFORE THE BENCH IS - Whether an assessee can seek revision of assessment order where it does not file appeal against notices served or re-assessment order passed. NO is the answer.

The bench also held that the assessee cannot claim non-service of notice, when in fact similar notices pertaining to subsequent AYs were received at the same premises at which notice for the relevant AY returned unserved.

Facts of the case

The assessee is the proprietor of a company & was served penalty notice u/s 271F during the relevant AY. Search & seizure operations were carried out at the premises of some third persons. Based on material gathered & statements recorded, the AO proposed to re-open assessment for a particular AY. The jurisdictional Additional CIT gave his approval for such procedure. However, on the same day, the AO also served notice u/s 148 in the name of the company owned by the assessee. However, such notice could not be served as the shop was closed. Nonetheless, the notice was affixed, when it was found that the shop had in fact been sold long ago. The AO then issued & affixed notices u/s 142(1) as well as notices of hearing, but they did not elicit any response. Hence re-assessment was completed, a sum of about Rs 12.5 lakhs was found payable & interest u/s 234A, 234B, 234C & 234D was levied. Penalty proceedings were also initiated u/s 271(1)(b) & 271(1)(c). The assessee approached the PCIT seeking revision of the re-assessment order u/s 264. The CIT directed the AO to consider certain evidence put forth by the assessee, but dismissed the revision application.

In writ, the High Court held that,

++ the assessee had one PAN number; furthermore, it is not in dispute that he was served with proceedings relating to re-assessment notice. However, according to his admission (in the averments in the revision petition) notice of assessment and notice of demand for the subsequent assessment years were received by him. These established that he was functioning at the address to which the reassessment notices (and hearing notices) were addressed. In these circumstances, his claim that the process server's file noting conclusively established that notice could not be served (due to his absence) and the defect alleged in the affixture (at the address) is insubstantial and unmerited. The revision petition admitted in clear terms that the reassessment order and subsequent demand notice, were received. In the circumstances, the argument that notice of reassessment and hearing notices were not received, rings hollow;

++ reassessment proceedings can be initiated and completed after notice to the assessees and granting opportunity to them. However, the facts of this case reveal that not only were the notices received, even the reassessment order was received (the revision petition admits as much) and the assessee did not care to appeal against it; concededly, he filed the revision petition after the period of limitation. Given these facts, the Commissioner cannot be faulted for rejecting the revision petition on the ground that there was no jurisdictional error.

(See 2018-TIOL-2421-HC-DEL-IT)