ITAT granted Tax Relief to Brett Lee in invalid Notice Service Case

The Delhi bench of the Income Tax Appellate Tribunal (ITAT) granted relief to former Australian cricketer Brett Lee in a tax dispute on the basis that he was sent notice under the Income Tax Act after the limitation period had expired.

The lawsuit involves the department’s income tax demand for Rs.3 crore endorsement money received by the fast bowler from three Indian corporations, Reebok India Company, Castrol India Limited, and Knight Riders Sports Private Ltd, for the assessment year 2013-14.

The income tax department found that no income tax had been paid on the endorsement fee and issued a tax notice to the cricketer under Section 148 of the income tax notice. However, the tribunal pointed out that the notice should have been issued on or before March 31, 2021. The income tax department issued the tax notice a day before the deadline, but to the incorrect email address, which bounced back.

The bench concluded that in this case, the court will not consider it a valid service of notice under Section 148 of the Act on the assessee.

“That being the factual position arising from the record, the assessment order made must be considered invalid. As a result, we overturn the assessment order,” ruled the appellate tribunal bench of Saktijit Dey and Brajesh Kumar Singh.

The assessing officer (AO) stated that on March 30, 2021, the Income Tax Business Application (ITBA)-generated notice was issued under the Act and served on the assessee.

However, Lee’s attorney stated that “the notice purportedly issued under the Act was never conveyed to the assessee in the correct e-mail ID, but was sent to some unknown e-mail ID.” The lawyer argued that “the assessee registered his e-mail ID in the ITBA portal only on March 31, 2022.”

The tribunal agreed with Lee’s counsel’s argument that the pacer first submitted on the e-filing platform on March 31, 2022, not earlier.

The tribunal stated that the fast bowler could only have viewed the notice in March 2022, and that “the date on which the assessee might have viewed the notice in the e-filing portal has to be considered as the date of issuance of notice.”