Reassessment proceedings void if notice not properly served and income already disclosed in ITR:

Reassessment proceedings void if notice not properly served and income already disclosed in ITR

The Income Tax Appellate Tribunal (ITAT) Delhi has recently decided on an appeal filed by Rohit Manchanda, challenging an order dated August 18, 2025, passed by the CIT(A)/NFAC for the Assessment Year 2012-13. The impugned order had ruled in favour of the assessee. During the assessment of the return filed by the assessee during the year in consideration, the Assessing Officer (AO) issued a notice under Section 48 of the Income Tax based on the information received that the assessee had purchased an immovable property amounting to Rs. 1.83 crores during FY 2011-12.

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The AO completed the assessment ex parte, meaning without hearing the assessee, assuming that he had not filed his ITR and had not disclosed capital gains. The officer calculated capital gains and made an addition amounting to Rs. 64.05 lakh to his income. When the assessee approached the CIT(A), the first appellate authority upheld the assessment and the impugned addition; therefore, the assessee filed an appeal before the ITAT Delhi. Before the tribunal, the assessee claimed that they were never served with a proper reassessment notice because it was sent to a property address that had already been sold much earlier. The assessee further claimed that he had already filed his income tax return (ITR), declaring the property sale in question and claiming exemption; therefore, there was no intention of escaping assessment.

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When the tribunal examined the arguments of the assessee, it noted that the notice was indeed not served properly, and also the AO failed to verify the assessee’s PAN details and existing records. Also, the reassessment proceedings were initiated beyond the statutory time limit allowed as per the law and without proper jurisdiction. Considering the aforesaid findings, the tribunal held the reassessment proceedings invalid after finding no undisclosed income and deleted the impugned addition. The appeal has been decided in favour of the assessee.