Court Rules "Proper Service" is a Mandatory Jurisdictional Fact, Not a Mere Procedural Formality
Meetu Kumari | Apr 3, 2026 |
HC Quashes Assessment for Non-Service of SCN, Orders Fresh Proceedings
The petitioner, Sunil Kumar Sahoo, proprietor of M/s. Bhagabati Cashew, challenged an assessment order dated November 14, 2017, and a subsequent demand notice for the Assessment Year 2015-16. The dispute arose following a survey conducted under Section 133A of the Income Tax Act. The petitioner contended that he was never served with the mandatory Show Cause Notice (SCN) or the draft assessment order prior to the finalization of the assessment.
He argued that the Revenue’s claim of service was flawed as the notices were allegedly sent to an incorrect address or not served at all, leading to an ex-parte order that lacked his input. The Revenue maintained that notices were issued through speed post and that the petitioner had knowledge of the proceedings due to the preceding survey.
Central Issue: Whether the assessment order was passed in violation of the principles of natural justice due to the non-service of the statutory Show Cause Notice, and whether the mere issuance of a notice (without proof of delivery to the correct address) satisfies the legal requirement of “service.”
HC’s Decision: The Division Bench of the Orissa High Court, led by the Hon’ble Chief Justice and Hon’ble Mr. Justice Murahari Sri Raman, allowed the writ petition and set aside the impugned assessment order and demand notice. The Court held that the service of an SCN is a “jurisdictional fact” and a mandatory condition precedent for a valid assessment.
The Bench observed that the Revenue failed to provide conclusive proof that the notice was delivered to the petitioner’s actual place of business. Relying on the principle that “notice must be real and not a mere pretense,” the Court ruled that the lack of a meaningful opportunity to respond vitiated the entire proceeding. However, the Court granted the Revenue liberty to proceed afresh, directing the petitioner to appear before the Assessing Officer on a fixed date to complete the assessment in a time-bound manner.
To Read Full Judgment, Download PDF Given Below
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