Section 144, 147 and 148 – Reassessment – Service of notice u/s. 148 – Notice sent to old address – Assessee’s returns for earlier years already on file and reflecting new address – Issue of notice at old address mechanically – Notice and order of reassessment and consequential attachment of bank accounts – Liable to be quashed

56. Veena Devi Karnani vs. ITO; 410 ITR 23
(Del) Date of order: 14^th September,
2018 A. Y. 2010-11

Section 144, 147 and 148 – Reassessment –
Service of notice u/s. 148 – Notice sent to old address – Assessee’s returns
for earlier years already on file and reflecting new address – Issue of notice
at old address mechanically – Notice and order of reassessment and
consequential attachment of bank accounts – Liable to be quashed

In the F. Y. 2010-11, the assessee shifted
her residence and filed returns of income under the same permanent account
number and e-mail ID. The returns disclosed the changed address. For the A. Y.
2010-11, the Assessing Officer sent a series of notices u/s. 148 of the Act for
reopening the assessment to the assessee’s old address. As there was no
response, the reassessment was completed on best judgment basis and an ex-parte
order was passed u/s. 144 read with 147. Upon issuance of an attachment order
to satisfy the demand raised in the reassessment order, the assessee filed a
writ petition contending that the reassessment proceedings were a nullity
because the notice was never served upon her and that the Assessing Officer did
not comply with the provisions of Rule 127 of the Income-tax Rules, 1962 which
stipulated examining the permanent account number database or the subsequent
years returns to ascertain the correct address of the assessee.

The Delhi High Court allowed the writ
petition and held as under:

“i)    Rule 127(2) states that the addresses to
which a notice or summons or requisition or order or any other communication
may be delivered or transmitted shall be either available in the permanent
account number database of the assesse or the address available in the
income-tax return to which the communication relates or the address available
in the last income-tax return filed by the assesse. All these options have to
be resorted to by the concerned authority, in this case the Assessing Officer.

ii)    When the Assessing Officer issued the
reassessment notice on December 13, 2013, he was under a duty to access the
available permanent account number database of the addressee or the address
available in the income-tax return to which the communication related or the
address available in the last return filed by the addressee. The return for the
A. Ys. 2011-12 and 2012-13 had already been filed on 22/02/2012 and 13/12/2012
respectively, reflecting the changed address but with the same permanent
account number and before the same Assessing Officer.

iii)    The Assessing Officer had omitted to access
the changed permanent account number database and had mechanically sent notices
to the old address of the assessee. The subsequent notices u/s. 142(1) were
also sent to the old address and the reassessment proceedings were completed on
best judgment basis. The Assessing Officer had mechanically proceeded on the
information supplied to him by the bank without following the correct procedure
in law and had failed to ensure that the reassessment notice was issued
properly and served at the correct address in the manner known to law.

iv)   The reassessment notice issued u/s. 148, the
subsequent order u/s. 144 r.w.s. 147 and the consequential action of attachment
of the assessee’s bank accounts were quashed.”