Allahabad High Court Quashes Tribunal Order on Reassessment Notice Service
Service of Notice by Speed Post Deemed Insufficient Under Income Tax Act, 1961
In a significant ruling, the Allahabad High Court has set aside the order of the Income Tax Appellate Tribunal, Agra Bench, concerning the validity of reassessment proceedings initiated against Mahesh Gautam, appellant in the case, due to improper service of notice under Section 148 of the Income Tax Act, 1961. The court emphasized that the service of notice is a precondition for initiating reassessment proceedings and must strictly adhere to the statutory requirements.
The case revolved around the contention that notices for reassessment were sent via speed post rather than registered post, as mandated under Section 282 of the Income Tax Act and Section 27 of the General Clauses Act. The Tribunal had earlier upheld the reassessment notices, presuming service based on the absence of returned envelopes and relying on Section 114(f) of the Indian Evidence Act, 1872.
Justice Arun Kumar Singh Deshwal, delivering the judgment, clarified that the presumption of service could not be invoked for notices sent through speed post without proper acknowledgment, as speed post does not equate to registered post under the statutory provisions. The court also emphasized the necessity of affixing the notice at the last known address when personal service is not feasible, a step that was reportedly overlooked by the authorities.
The judgment has underscored the importance of strict adherence to procedural norms in tax-related matters and serves as a reminder of the stringent interpretation required for taxing statutes. The decision is expected to have significant implications on similar cases where the method of service of notices is contested.
Bottom Line:
Service of notice under Section 148 of the Income Tax Act, 1961 is a precondition to initiate reassessment proceedings - Speed post cannot be considered equivalent to registered post for deemed service under Section 27 of the General Clauses Act, 1897 - Affixation of notice at the last known address is mandatory when personal service is not possible.
Statutory provision(s): Income Tax Act, 1961 Section 148, General Clauses Act, 1897 Section 27, Income Tax Act, 1961 Section 282(i), Code of Civil Procedure, Order V Rule 17, Indian Evidence Act, 1872 Section 114(f).
Mahesh Gautam v. Commissioner of Income Tax, (Allahabad)(DB) : Law Finder Doc Id # 2781302
