Pune ITAT Declares Assessment Invalid as notice not served at Correct Address
In Dhanottam Lonkar vs. ITO (ITA No.214/PUN/2022), the Tribunal quashed an assessment where the notice under Section 143(2) was not served at the correct address, despite the correct details being available in the PAN and return records.
The Pune ITAT has once again highlighted a foundational principle in tax law-a Valid assessment must begin with valid service of notice.
The assessee had updated his residential address in the PAN database and used the same in his ITR. However, the department issued the notice to a different address, one not linked to the assessee, and not traceable. No acknowledgment or delivery proof was available. The AO still proceeded with the assessment, claiming that service was deemed valid as the notice wasn’t returned undelivered.
The ITAT held that issuance of notice is not the same as service, and jurisdiction under Section 143(2) arises only upon valid service within the prescribed timeline.
Key Ratios from the Ruling:
1. Issuance = Service
Mere dispatch of notice is not sufficient. Valid service on the correct communication address is mandatory to assume jurisdiction.
2. PAN Address Must Be Respected
Where the assessee updates the PAN and uses that address in the return, the department must serve notices accordingly.
3. Burden of Proof Lies on the Revenue
It is for the department to establish that notice was served properly. Absence of acknowledgment or postal confirmation weakens its case.
Impact on Pending and Future Proceedings:
This ruling strengthens the legal position for assessees in cases where scrutiny assessments or reassessments are initiated without proper service. In the age of faceless proceedings and digitised notices, errors in email address selection are not uncommon. This order underscores the need for procedural precision. For the department, this is a reminder that jurisdictional safeguards cannot be bypassed by presuming deemed service.
Final Thought:
Service of notice is not a technicality-it’s the legal foundation of an assessment. If that foundation is weak, the entire process collapses. When a taxpayer updates his address and follows the law, shouldn’t the system do the same? Procedural fairness begins with knowing where to knock.
The Copy Of the order is as under:
