Speed Post Not Equivalent to Registered Post for Section 148 Notice: High Court:

Speed Post Not Equivalent to Registered Post for Section 148 Notice: High Court The assessee filed his ITR for A.Y. 2002-03 declaring Rs. 3,90,860. On receiving information from Central Excise Department, the AO issued notices under Section 148 of the Income Tax Act for A.Ys 2001-02 to 2003-04 through speed post. As no return or appearance was made, the AO proceeded ex parte under Sections 147/144, assessing income at Rs. 11,87,980 for A.Y. 2003-04. CIT(A) Held: Aggrieved, the assessee appealed before the CIT(A), which was allowed on the ground that notice was not validly served. Thereafter, the Revenue Department appealed to the ITAT, whereby the decision by the CIT(A) was upheld, the reassessment, presuming valid service of notice under Section 114(f) of the Indian Evidence Act. Thus leading to the present appeal. Issue Raised: Whether service of notice under Section 148 of the Income Tax Act through speed post constitutes valid service, and failure to affix notice when the assessee was untraceable vitiates reassessment proceedings. SC's Judgment: The Division Bench allowed the appeal, setting aside the ITAT’s order. The Court held that reassessment proceedings were invalid as no valid service of notice under Section 148 was made. The Court held that while both fall within the definition of “post,” the statutory presumption of service under Section 27 of the General Clauses Act applies only to registered post, not to speed post. Since Section 148 proceedings are jurisdictional, compliance with statutory service requirements must be strict, not liberal. As the assessee was untraceable, the AO was obliged to serve notice by affixture at the last known address under Order V Rule 17 CPC read with Section 282(1) of the Income Tax Act. This was not done. Since service of notice under Section 148 is a precondition to jurisdiction, the absence of valid service renders the entire reassessment void. The Court disagreed with the decision in Milan Poddar v. CIT  which held speed post to be equivalent to registered post, and reaffirmed that only registered post ensures personal delivery and acknowledgement. Thus, the reassessment order and ITAT’s decision were quashed. To Read Full Judgment, Download PDF Given Below