This blog discusses the recent Supreme Court judgment regarding the necessity for corporate entities to update their address details with the Income Tax Department. The case delves into the implications faced by a corporate assessee due to non-updation of address information, leading to a deemed invalid assessment order. Understanding the legal obligations surrounding address updates is crucial for corporate compliance. Stay informed on the consequences highlighted in the case.
Facts
- Assessee challenged notices under Sections 143(2) and 142(1) of the 1961 Act, claiming non-receipt of notices.
- Assessment order dated 24.12.2008 was contested by the assessee, leading to appeal before the C.I.T (Appeals).
- Assessee filed return of income for Assessment Year 2006-07 on 28.11.2006 with a total income declaration of Rs. 3,38,71,716/-.
- Notices under Section 143(2) were issued on 25.07.2008 and 05.10.2007, with the representative of the company appearing in response on 28.11.2008 and 04.12.2008.
- Assessment under Section 143(3) of the 1961 Act was completed on 24.12.2008, with a disallowance of Rs. 8,91,17,643/- under Section 14A.
- Total income was computed at Rs. 5,52,45,930/- as per the assessment order.
- The return was initially filed under the E-Module Scheme, followed by a hard copy submission on 05.12.2006.
- High Court dismissed the appeal by the Revenue
- Confirmed the orders passed by C.I.T (Appeals) and I.T.A.T
- Orders passed by Assessing Officer under Section 143(3) were deemed invalid
- Appeal allowed by C.I.T (Appeals) on grounds of lack of valid jurisdiction under Section 143(2)
- Assessment for A.Y. 2006-07 was quashed and set aside
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Arguments
- The assessee participated in the assessment proceedings after receiving notice under Section 143(2) of the 1961 Act.
- The communication dated 06.12.2005, allegedly informing the change of address, was not produced by the assessee.
- The Assessing Officer sent notices to the old address of the assessee, which were never served.
- Subsequent notices were sent to the new address after the limitation period, making the assessment order invalid.
- Change of address and company name was officially registered with the Registrar of Companies.
- The High Court erred in confirming the cancellation of the assessment order due to the late notice under Section 143(2).
- Notice under Section 143(2) of the 1961 Act was not served upon the assessee within the prescribed time.
- Assessment order was deemed bad in law due to the failure of timely notice service.
- The learned C.I.T (Appeals) rightly set aside the assessment order.
- The decision of the C.I.T (Appeals) was confirmed up to the High Court.
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Analysis
- The Assessing Officer was justified in sending the notice at the address available in the PAN database as no application was made by the assessee to change the address.
- Notice under Section 143(2) of the 1961 Act was sent on 05.10.2007 within the prescribed time limit.
- Merely filing Form-18 with the ROC does not constitute intimation to the Assessing Officer of a change in address.
- The alleged communication dated 06.12.2005 regarding the address change was not proven by the assessee.
- The High Court’s view that mentioning a new address in the income tax return is not sufficient unless specifically informing the Assessing Officer is justified.
- Issuing the notice within the prescribed time period is crucial, as seen in the case of Hotel Blue Moon.
- The High Court’s decision to dismiss the appeal and uphold the orders of the lower authorities was incorrect in the given circumstances.
- Notices under Section 143(2) of the 1961 Act are issued based on automated system selection of the case, using the address from the PAN database.
- Change in address in PAN database is necessary after changes in company name or office address, to be intimated to Registrar of Companies in prescribed format.
- Assessee must approach the Department with documented proof of change of address and apply for updating the address in the PAN database.
- Assessee failed to update the address in PAN database despite changes in company name and office address.
- Communication and assessment orders for Assessment Years 2004-05 and 2005-06 were sent to new address, but this does not exempt the assessee from updating address in PAN database.
- The High Court’s decision, as well as the orders of the C.I.T (Appeals) and the I.T.A.T. holding the assessment order as bad in law, cannot be sustained and should be quashed and set aside.
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Decision
- The Impugned Judgment and Order passed by the High Court as well as the orders passed by the C.I.T (Appeals) and the I.T.A.T are quashed and set aside.
- The present Appeal is allowed.
- The matter is remanded to the learned C.I.T (Appeals) for consideration on other grounds.
- The C.I.T (Appeals) is directed to consider the appeal on merits in accordance with the law.
- No costs are awarded in this matter.
Case Title: PRINCIPAL COMMISSIONER OF INCOME TAX. 6 Vs. M/S I VEN INTERACTIVE LTD.
Case Number: C.A. No.-008132-008132 / 2019
