No reassessment shall be made until there has been service of notice u/s 148

The assessee had raised several grounds on merits and also on the jurisdiction of the AO in reopening the assessment. The assessee also raised additional grounds challenging the validity of S. 148 proceedings.

The tribunal verified the original assessment record and found that there is no proof of service of notice u/s 148 of the Act by the AO to the assessee. The order sheet only suggests that notice u/s 148 was issued with the prior approval of the Ld. Pr. CIT, Ghaziabad. Therefore, the submissions of the assessee that notice u/s 148 was not served on the assessee could not be controverted with evidence by the Revenue.

In the case of RK Upadhyaya Vs. Shanabhai P. Patel, the Hon’ble Supreme Court held that section 148(1) provides for service of notice as a condition precedent to make the assessment order. The Hon’ble Supreme Court held that once a notice is issued within the period of limitation jurisdiction becomes vested in the AO to proceed to make a reassessment. Also, it was held that the mandate of section 148(1) is that reassessment shall not be made until there has been service of notice.

The tribunal relied on the case of CIT Vs. Chetan Gupta, wherein the Hon’ble High Court held that where notice u/s. 148 was not served on the assessee in accordance with law the reassessment made consequent thereto was without jurisdiction and liable to be quashed.

The tribunal observed that in the case on hand as the Revenue could not prove the service of notice u/s. 148 on the assessee in accordance with law the re-assessment made u/s. 147 read with section 144 pursuant to such notice is void ab initio and bad in law. Hence, the reassessment order made u/s 144 read with section 147 was quashed. As the appeal of the assessee is allowed on the preliminary ground that the tribunal did not go into other legal grounds as they are academic. The appeal of the assessee was allowed.