The service of a notice under Section 148 of the Income Tax Act is a mandatory requirement for reassessment; failure to properly serve notice renders the reassessment order invalid.

आदेश /ORDER

PER C.N. PRASAD, J.M.

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This appeal and cross objection are filed by the Revenue and Assessee against the order of the Ld.CIT(Appeals)-32, New Delhi dated 15.12.2017 for the AY 2009-10.

2. The appeal of the Revenue is filed with a delay of 26 days and the Revenue has filed a petition for condonation of delay in filing the appeal requesting to condone the delay. On perusing the reasons for delay in filing it is observed that the files got misplaced along with project papers and therefore the appeal could not be filed in time by the Revenue. The Ld. Counsel for the assessee do not have any serious objection for condoning the delay of 26 days.

3. Considering the submissions of both the parties and the reasons for filing appeal with a delay of 26 days, we observe that Revenue has reasonable cause in filing the appeal belatedly. Thus, the delay is condoned.

4. The Revenue in its appeal challenged the order of the Ld.CIT(Appeals) in deleting the addition made u/s 68 of the Act and the assessee in its cross objection challenged the validity of reopening of assessment on the ground that notice u/s 148 of the Act was not served and therefore, reassessment order passed u/s 143(3) r.w.s 147 is illegal and void ab initio.

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5. The brief facts of the case are that the assessee company is engaged in the business of Real Estate Development filed its return of income on 30.09.2009 declaring loss of Rs.61,96,003/-. The return was processed u/s 143(1) on 04.11.2011 and subsequently notice dated 30.03.2016 u/s 148 of the Act was issued for reopening the assessment u/s 147 of the Act. The basis for assumption of jurisdiction u/s 147 of the Act was information regarding genuineness of credits received by the assessee company from various parties. The reassessment was completed vide order dated 31.12.2016 u/s 143(3) r.w.s. 147 of the Act making addition of Rs.418,33,73,058/- u/s 68 of the Act.

6. Aggrieved by the assessment order, the assessee company filed appeal before the Ld.CIT(Appeals) challenging the reassessment order on various grounds including the ground relating to non- service of notice u/s 148 of the Act. The Ld.CIT(A) by his impugned order dated 15.12.2017 deleted the addition on merits after examining the material placed on record. However, the Ld.CIT(A) did not specifically adjudicate the legal grounds raised by the assessee challenging the validity of assumption of jurisdiction u/s 147 of the Act as well as non-service of notice u/s 148 of the Act. Against the order of the Ld.CIT(A) the Revenue is in appeal and has raised the following grounds: -

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1. “That the Ld.CIT(A) has erred in law as well as on the facts and the circumstances of the case in deleting the addition of Rs.4183373058/- on account of unexplained credits u/s 68 of the I.T. Act, 1961 without calling for any report from the AO inspite of the fact that the AO in his order dated 31.12.2016 passed u/s 147/143(3) of the I.T. Act, 1961 had clearly mentioned that no much time was left with him during the assessment proceedings to verify the identity, genuineness and creditworthiness of the parties from whom the assessee company has received these credit entries.

2. The Appellant craves to be allowed to amend, delete or add any other grounds/s of appeal during the course of hearing of this appeal.”

7. The assessee in its cross objection raised the following legal grounds:

1. “(i) That on the facts and circumstances of the case, the reasons for issued of notice u/s 148 having been recorded without proper application of mind and same being vague and sweeping, the assumption of jurisdiction u/s 147 is illegal and not sustainable under the law.

(ii) That the reasons being