PRINCIPAL COMMISSIONER OF INCOME TAX v. MAHLA REAL ESTATE (P) LTD

Case snapshot

Sections / provisions: a valid service of notice u/s 148

Questions before the Court / Tribunal

• The High Court confirmed the quashing of the reassessment order by the Tribunal in absence of a valid service of notice u/s 148 prior to making of the assessment, holding that the Tribunal came to the factual finding that before passing the order of the assessment, notice of reopening was never served on the assessee / authorized representatives. The Tribunal in that case found that no notice was ever served upon the registered address of the assessee company nor sent through the registered post or speed post nor any efforts were made to serve the notice through affixture. Despite raising objection even, copy of notice u/s 148 was not served upon the assessee. The claim of Department of service of notice on the Advocate / CA, or an employee not authorized by the assesse company, cannot be accepted, hence there was no valid service effected as per Section 282 of the Act read with Order 5…
• Which factual, statutory and procedural conditions controlled the requested relief?
• How did the forum apply the governing provisions to the evidence and procedural history recorded in this case?

Material facts and procedural background

PRINCIPAL COMMISSIONER OF INCOME TAX vs. MAHLA REAL ESTATE (P) LTD. HIGH COURT OF RAJASTHAN : JAIPUR BENCH Judge(s) : Akil Kureshi & Ms. Rekha Borana, JJ. IT Appeal No. 47 of 2020 Date of Decision 9th November, 2021 Source (2022) 6 NYPCTR 74 (Raj) Statutes referred to : Income-tax Act, 1961, ss. 148 & 292BB Case decided in favour of : In favour of : Assessee Reassessment—Notice under s. 148—Absence of service of notice—Tribunal was came to the factual finding that before passing the order of assessment, notice of reopening of the assessment was never served on the assessee or its Authorised Representative—Tribunal has correctly observed that s. 292BB cannot be given a retrospective effect—Admittedly, the said provision was inserted in the IT Act in 2008—CIT vs.

Chetan Gupta (2015) 126 DTR (Del) 401 : (2015) 62 Taxman.com 249 (Del) followed (Para ) Conclusion : Notice for reopening of the assessment was never secured on the assessee; s. 292BB is prospective and was not applicable for the relevant assessment year; reopening was therefore liable to be quashed. Circular referred to Circular No. 1 of 2009, dt. 27th March, 2009 Counsel appeared : Anuroop Singhi, for the Appellant : Mahendra Gargieya & Devang Gargieya, for the Respondent JUDGMENT by the court : This appeal has been filed challenging the judgment of the Income Tax Tribunal raising the following questions for our consideration: (i) Whether on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the notice issued under s.

148 was not served upon the assessee, contrary to the findings recorded in Assessment order as well as in remand report, which duly mentions that the notice was served on the Authorised Representative of the assessee as well as on one Shri Chandan under the instructions of Director of the assesseecompany ? 1 / 2

(ii) Whether, on the facts and in the circumstances of the case and in law, the Tribunal, Jaipur was justified in holding that s. 292BB is applicable prospectively, without appreciating the clarification issued by the CBDT vide its Circular No. 1 of 2009, dt. 27th March, 2009 [ (2009) 222 CTR (St) 69 ], clarifying that the provisions of new s. 292BB shall apply in all proceedings which are pending on 1st April, 2008, thereby not restricting the applicability of the provisions to asst. yr. 2009-10 onwards ? The issue pertains to the re-opening of assessment of the respondent-assessee for the asst. yr. 2007-08. The Tribunal in the impugned judgment came to the factual finding that before passing the order of assessment, notice of reopening of the assessment was never served on the assessee or its Authorised Representative.

The following observation of the Tribunal need to be noted : "After having heard the learned counsels for both the parties at length and after going through the facts of the present case, we find that there are certain undisputed facts in this case i.e. the AO has not admittedly sent any notice issued under s. 148 of the IT Act to the registered office address of the assessee-company at 12-13, Patel Colony, Laxmi Path, Sardar Patel Marg, Jaipur either through registered post or speed post and further the AO has made no efforts to serve notice through Affixture at the above registered office address. Although the assessee has categorically raised the objection about non service of notice under s.

Appellant / petitioner / assessee submissions

The judgment does not separately label this side’s submissions in an independently extractable passage. No contention is inferred; read the full record.

Revenue / respondent submissions

Although the learned Departmental Representative submitted before us that the service of notice was effected on Shri Chandan but the fact remains that the said Shri Chandan was neither the employee of the assessee nor was authorized to receive such notice, and, therefore, in such a situation we canon treat the said alleged service on Shri Chandan to be a valid service in view of the provisions of s. 282 of the Act r/w Order 5 of the C.P.C. 1908. Even otherwise, the said Shri Chandan while allegedly receiving the notice on 14th March, 2014 had affixed the stamp of M/s Durga Motor Company which also goes to show that the said notice was never served upon the assessee." In that view of the matter, we do not find that the Tribunal has committed any error in setting aside the assessment.

The counsel for the Revenue however has strenuously argued that in view of s. 292BB inserted in the IT Act, mere defect in service of notice had to be factually ignored. The Tribunal has however correctly observed as held by the Delhi High Court in CIT vs. Chetan Gupta (2015) 126 DTR (Del) 401 : (2015) 62 Taxman.com 249 (Del) that s. 292BB of the Act cannot be given a retrospective effect. Admittedly, the said provision was inserted in the IT Act in 2008. In the result, no question of law arises. The income-tax appeal is dismissed. 2 / 2

Court / Tribunal analysis and reasoning

148 of the Act but still no copy of notice issued under s. 148 of the Act was served upon the assessee at any subsequent point of time but before completing the order of assessment on 24th March, 2015. From the record, we also notice that there is no power of attorney of Shri Anand Sharma, chartered accountants given by the assessee, therefore, in such circumstances even if any notice was served on Shri Anand Sharma under s. 148 of the Act, but the same is of no consequence in the absence of any valid authority/authorization given by the assessee company to the said Shri Anand Sharma, chartered accountants. The learned CIT(A) has also pointed out that in the completed order sheet there no indication of the fact that any point of time any Power of Attorney or Authorization was filed by the assessee company in favour of Shri Anand Sharma on or before 14th March, 2014 for the year under consideration.

Operative decision and relief

The operative relief must be read from the final paragraphs of the complete packaged judgment.

Ratio and legal principle

The narrow proposition associated with PRINCIPAL COMMISSIONER OF INCOME TAX v. MAHLA REAL ESTATE (P) LTD concerns the high court confirmed the quashing of the reassessment order by the tribunal in absence of a valid service of notice u/s 148 prior to making of the assessment, holding that the tribunal came to the factual finding that before passing the order of the assessment, notice of reopening was never served on the assessee / authorized representatives. the tribunal in that case found that no notice was ever served upon the registered address of the assessee company nor sent through the registered post or speed post nor any efforts were made to serve the notice through affixture. despite raising objection even, copy of notice u/s 148 was not served upon the assessee. the claim of department of service of notice on the advocate / ca, or an employee not authorized by the assesse company, cannot be accepted, hence there was no valid service effected as per section 282 of the act read with order 5… The proposition cannot be separated from the judgment’s facts, the governing statutory version, the forum’s jurisdiction, and the exact relief recorded in IT Appeal No. 47 of 2020.

For working-paper purposes, the decision should be cited only after matching the material facts and reading the passages under the judgment-grounded record above. The editorial outcome label “Quashed / set aside” is a navigation aid; it does not replace the operative order or explain every issue in a multi-issue case.

Why this judgment matters

This decision is relevant when a file raises the same central question identified in the source headnote: The High Court confirmed the quashing of the reassessment order by the Tribunal in absence of a valid service of notice u/s 148 prior to making of the assessment, holding that the Tribunal came to the factual finding that before passing the order of the assessment, notice of reopening was never served on the assessee / authorized representatives. The Tribunal in that case found that no notice was ever served upon the registered address of the assessee company nor sent through the registered post or speed post nor any efforts were made to serve the notice through affixture. Despite raising objection even, copy of notice u/s 148 was not served upon the assessee. The claim of Department of service of notice on the Advocate / CA, or an employee not authorized by the assesse company, cannot be accepted, hence there was no valid service effected as per Section 282 of the Act read with Order 5… Its practical value lies in the way the Rajasthan High Court connected the governing provisions—a valid service of notice u/s 148—to the procedural posture and evidence before it.

The authority level is High Court. That affects persuasive or binding weight, but authority level alone is never enough. Territorial jurisdiction, statutory period, the identity of the challenged order, and later appellate treatment must all be checked before the case is used in advice, a submission, or litigation strategy.

Practitioner action points

• Begin with the complete judgment and mark the paragraphs supporting the exact proposition relied upon.
• Match the statutory version of a valid service of notice u/s 148 and the decision date 2021-11-09; do not assume the current text is identical.
• Compare the notice, assessment, appeal or other procedural sequence with the chronology recorded in this case.
• Verify the stated later-history status and any review, appeal, SLP, curative or rectification proceedings before citation.
• Record why the client’s evidence is materially similar, and also record any fact capable of distinguishing the result.

Does this case match your facts?

Detailed reliance and distinction analysis

Identity check. Confirm that the cited cause title is PRINCIPAL COMMISSIONER OF INCOME TAX v. MAHLA REAL ESTATE (P) LTD, the proceeding is IT Appeal No. 47 of 2020, and the decision is dated 2021-11-09. These fields are taken from the judgment record and should appear exactly in the citation note.

Bench check. The judgment identifies the coram as Hon'ble Chief Justice Akil Kureshi; Hon'ble Ms. Justice Rekha Borana. A later order by another bench, a larger bench, or a higher forum may alter the weight or interpretation of the proposition.

Provision check. The source associates the dispute with a valid service of notice u/s 148. The practitioner should place the historical statutory text next to the current text and identify every amendment, proviso, explanation, rule or notification that could change the analysis.

Fact check. The source issue is not a free-standing abstract rule. It arises from the concrete record summarized above. A reliable application note should list the common facts, the different facts, and whether each difference affects jurisdiction, admissibility, limitation, burden, computation or relief.

Remedy check. The recorded result is Quashed / set aside. Where a matter is remanded, set aside, partly allowed, or disposed with directions, the exact operative language is more important than a binary winner/loser label.

History check. The current closure state is REVIEW_APPEAL_SLP_CHECK_PENDING. If that state is pending, the page does not assert that no later case exists. It means the check remains open and must be completed at the point of professional reliance.

Section / provision impact

• a valid service of notice u/s 148 — apply the exact version considered in the judgment.

Case network

• Shree Arihant Oil & General Mills v. UOI — Rajasthan High Court · Quashed / set aside
• Late Shobha Mehta through Legal Heir Kanhaiya Lal Mehta v. ACIT — Rajasthan High Court · Quashed / set aside
• Divya Capital One (P) Ltd. v. ACIT — Delhi High Court · Quashed / set aside
• ITO (Exemption) v. Innovative Welfare and Educational Society — ITAT Delhi · Quashed / set aside

Related Finin2min resources

• Case Law Hub
• Search all 592 judgments
• Explore Reassessment & Reopening

Full judgment and source control

Read / download packaged judgment record

Source class: OFFICIAL_PRIMARY_SEARCH_PENDING · Repository status: PUBLISH_READY