Non service of notice physically for reopening: Assessment order quashed set aside for de-novo consideration by Bombay High Court
In a matter before Bombay High Court, the Petitioner (Assessee) was a non-resident and did not receive any notice for the reopening of assessment proceedings under section 147 of the Income Tax Act, 1961. The notices were only uploaded on the Income Tax e-filing portal.
The Revenue contended that, the assessment proceedings were carried out in accordance with the guidelines issued by CBDT. There were no e-mail ID mentioned in the profile of the Petitioner at the time of the reopening of assessment proceedings (which could not be conclusively determined by the Hon’ble Court).
The Hon’ble Bombay High Court determined that, the clause G.3 of the SOP released by the NFAC on 03.08.2022 shall be complied with by the Respondents in all cases and not just in faceless assessment proceedings under section 144B of the Income Tax Act, 1961. Thus, all proceedings which are carried out by the National Faceless Assessment Centre (NFAC) shall comply with clause G.3 of the NFAC SOP.
One may note that Clause G-3 of the above referred CBDT guidelines read as under:
Centralized Communication to improve compliance of notice under section 142(1)
G.3.1 In all cases where assessee is not responsive to the notice under section 142(1), on directions of NaFAC, Insight shall:
G.3.1.1 Prepare centralized communication, as per format, about non-responsiveness;
G.3.1.2 Send physical letter at the latest known address through Speed Post; and
G.3.1.3 Send SMS about non-responsiveness, on the latest available mobile number of the assessee.
G.3.2 All attributes of the communication, including PAN, AY, address at which the letter is sent, speed post tracking ID, date on which letter is sent, mobile number on which SMS is sent along with the date and time of sending, will be updated in the database accessible to AU on Insight;
G.3.3 To ensure completeness of record, the AU shall enter all the details referred in Para
G.3.2 above, along with the date of delivery, if any, of the Speed Post letter in the Case History.
The assessment order is quashed and set aside for de-novo consideration. Also, the consequential demand notice and the penalty notice issued under sections 271 and 271F of the Income Tax Act, 1961 have been quashed and set aside.
The copy of the order passed by Bombay High Court is as under:
