I moved my registered office and put the new address on my return and in Form 18 with the Registrar of Companies. The scrutiny notice went to the old address. Is the assessment bad?
No. The Supreme Court held that a notice under section 143(2) sent within the prescribed time to the address in the PAN database is sufficient compliance, and actual service afterwards is immaterial. Filing Form 18 with the Registrar of Companies is not intimation to the assessing officer, and merely showing the new address in the return is not enough. The assessee must apply to have the PAN database changed, because scrutiny notices are generated by an automated system that picks the address from PAN. The appeal was allowed and the matter remanded to the CIT (Appeals) to decide the other grounds on merits.
Decided by the Supreme Court (Supreme Court of India — M.R. Shah J (author), Uday Umesh Lalit J and Indira Banerjee J) on 2019-10-18, reported as AIR 2019 SC 5561; (2019) 10 SCC 13; (2019) 14 SCALE 113; 2020 (1) ABR 641; AIR 2020 SC (Civ) 658. It bears on section 143(2), section 143(3), section 142(1) of the Income Tax Act 1961, in Assessment & Scrutiny and Appeals matters.
This is the case that decides what an assessee has to do about a change of address, and it is strict. Three things that practitioners often treat as sufficient are held not to be: Form 18 with the Registrar of Companies, the new address printed on the return, and the Department having used the new address in earlier years. The only safe course is a specific intimation to the assessing officer plus an application to change the PAN database. Its second holding matters just as much in limitation disputes: what the proviso to section 143(2) requires is issue of the notice within time, not service within time, so once the notice goes out to the PAN address in time, later service is immaterial — the Court noting that an assessee could otherwise evade service until the period expired. It confines Hotel Blue Moon to the requirement that the notice be issued within time.
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The assessee filed its return for assessment year 2006-07 on 28 November 2006 under the E-Module scheme, declaring income of Rs 3,38,71,716. The return was processed under section 143(1). A notice under section 143(2) was issued on 5 October 2007 to the address in the PAN database, within the time allowed by the proviso, and a further such notice on 25 July 2008. Notices under section 142(1) were issued in January, July and October 2008 and duly served, and the company's representative appeared in November and December 2008 and participated. The assessee nonetheless objected that it had never received the earlier notices, having changed its name and address earlier, and that the notices it did receive were beyond the limitation in the proviso. It relied on a communication dated 6 December 2005 said to have intimated the new address, on Form 18 filed with the Registrar of Companies, and on the Department having sent the 2004-05 and 2005-06 assessment orders to the new address. The assessment under section 143(3) disallowed Rs 8,91,17,643 under section 14A. The CIT (Appeals) annulled the assessment for want of valid jurisdiction, the Tribunal dismissed the Revenue's appeal and the Bombay High Court confirmed. The communication of 6 December 2005 was never produced, and an affidavit filed in the Supreme Court said it was unavailable.
The appeal was allowed with no order as to costs. The judgment of the High Court and the orders of the CIT (Appeals) and the Tribunal holding the assessment bad in law were quashed and set aside, and the matter was remanded to the CIT (Appeals) to consider the appeal on merits on the other grounds. In the absence of any intimation to the assessing officer about the change of address, and with no application made to change the PAN database, the assessing officer was justified in issuing the notice at the address available in the PAN database, so the notice of 5 October 2007 was within the period prescribed by the proviso to section 143(2). Once a notice is issued within that period, that is sufficient compliance with section 143(2) and actual service on the assessee afterwards is immaterial. Filing Form 18 with the Registrar of Companies is not intimation to the assessing officer, and merely mentioning the new address in the return, without specific intimation and without getting the PAN database changed, is not enough.
The Court began with the evidence. The assessee's whole case rested on a letter of 6 December 2005 that was never produced before the assessing officer or the Supreme Court, and which its own affidavit said was unavailable, so the intimation was not proved. What remained was Form 18 filed with the Registrar of Companies, which is a filing under the Companies Act and not a communication to the Department. No application had been made to change the PAN database, in which the old address continued. The Court then explained why the PAN database matters: notices under section 143(2) are issued on selection of a case by the Department's automated system, which picks the address from the PAN database, so a change there is a must whenever a company changes its name, registered office or corporate office. The correct sequence is Form 18 to the Registrar, then approach the Department with a copy, then apply for change of address in the PAN database. This is all the more so where the return is filed under the E-Module scheme. On limitation, the Court read the proviso as fixing a time for issue of the notice, not for its service: once the notice was sent within time to the address the Department was entitled to use, later service was immaterial, and the Court noted that an assessee might otherwise avoid actual service until the period expired. Hotel Blue Moon, relied on by the assessee, was read as requiring only that the assessing officer must issue the notice within the prescribed time. The assessee's point about earlier years' orders going to the new address was held to have been sufficiently explained by the Revenue.
Once the notice is sent within the period prescribed in the proviso to Section 143(2) of the 1961 Act, in that case, actual service of the notice upon the assessee thereafter would be immaterial.
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Handle my notice → Ask a CA on WhatsAppNo. The Supreme Court held that a notice under section 143(2) sent within the prescribed time to the address in the PAN database is sufficient compliance, and actual service afterwards is immaterial. Filing Form 18 with the Registrar of Companies is not intimation to the assessing officer, and merely showing the new address in the return is not enough. The assessee must apply to have the PAN database changed, because scrutiny notices are generated by an automated system that picks the address from PAN. The appeal was allowed and the matter remanded to the CIT (Appeals) to decide the other grounds on merits. This was decided by the Supreme Court (Supreme Court of India — M.R. Shah J (author), Uday Umesh Lalit J and Indira Banerjee J) and bears on section 143(2), section 143(3), section 142(1) of the Income Tax Act 1961. It is reported as AIR 2019 SC 5561; (2019) 10 SCC 13; (2019) 14 SCALE 113; 2020 (1) ABR 641; AIR 2020 SC (Civ) 658. This is the case that decides what an assessee has to do about a change of address, and it is strict. Three things that practitioners often treat as sufficient are held not to be: Form 18 with the Registrar of Companies, the new address printed on the return, and the Department having used the new address in earlier years. The only safe course is a specific intimation to the assessing officer plus an application to change the PAN database. Its second holding matters just as much in limitation disputes: what the proviso to section 143(2) requires is issue of the notice within time, not service within time, so once the notice goes out to the PAN address in time, later service is immaterial — the Court noting that an assessee could otherwise evade service until the period expired. It confines Hotel Blue Moon to the requirement that the notice be issued within time. If it applies to you, the first step is this: On any change of registered office, corporate office or name, file Form 18 with the Registrar of Companies and then separately apply to the Department to change the address in the PAN database, and keep the acknowledgement.
The assessee filed its return for assessment year 2006-07 on 28 November 2006 under the E-Module scheme, declaring income of Rs 3,38,71,716. The return was processed under section 143(1). A notice under section 143(2) was issued on 5 October 2007 to the address in the PAN database, within the time allowed by the proviso, and a further such notice on 25 July 2008. Notices under section 142(1) were issued in January, July and October 2008 and duly served, and the company's representative appeared in November and December 2008 and participated. The assessee nonetheless objected that it had never received the earlier notices, having changed its name and address earlier, and that the notices it did receive were beyond the limitation in the proviso. It relied on a communication dated 6 December 2005 said to have intimated the new address, on Form 18 filed with the Registrar of Companies, and on the Department having sent the 2004-05 and 2005-06 assessment orders to the new address. The assessment under section 143(3) disallowed Rs 8,91,17,643 under section 14A. The CIT (Appeals) annulled the assessment for want of valid jurisdiction, the Tribunal dismissed the Revenue's appeal and the Bombay High Court confirmed. The communication of 6 December 2005 was never produced, and an affidavit filed in the Supreme Court said it was unavailable. The matter was decided on 2019-10-18 by the Supreme Court (Supreme Court of India — M.R. Shah J (author), Uday Umesh Lalit J and Indira Banerjee J). On those facts the Supreme Court held as follows. The appeal was allowed with no order as to costs. The judgment of the High Court and the orders of the CIT (Appeals) and the Tribunal holding the assessment bad in law were quashed and set aside, and the matter was remanded to the CIT (Appeals) to consider the appeal on merits on the other grounds. In the absence of any intimation to the assessing officer about the change of address, and with no application made to change the PAN database, the assessing officer was justified in issuing the notice at the address available in the PAN database, so the notice of 5 October 2007 was within the period prescribed by the proviso to section 143(2). Once a notice is issued within that period, that is sufficient compliance with section 143(2) and actual service on the assessee afterwards is immaterial. Filing Form 18 with the Registrar of Companies is not intimation to the assessing officer, and merely mentioning the new address in the return, without specific intimation and without getting the PAN database changed, is not enough.
The Court began with the evidence. The assessee's whole case rested on a letter of 6 December 2005 that was never produced before the assessing officer or the Supreme Court, and which its own affidavit said was unavailable, so the intimation was not proved. What remained was Form 18 filed with the Registrar of Companies, which is a filing under the Companies Act and not a communication to the Department. No application had been made to change the PAN database, in which the old address continued. The Court then explained why the PAN database matters: notices under section 143(2) are issued on selection of a case by the Department's automated system, which picks the address from the PAN database, so a change there is a must whenever a company changes its name, registered office or corporate office. The correct sequence is Form 18 to the Registrar, then approach the Department with a copy, then apply for change of address in the PAN database. This is all the more so where the return is filed under the E-Module scheme. On limitation, the Court read the proviso as fixing a time for issue of the notice, not for its service: once the notice was sent within time to the address the Department was entitled to use, later service was immaterial, and the Court noted that an assessee might otherwise avoid actual service until the period expired. Hotel Blue Moon, relied on by the assessee, was read as requiring only that the assessing officer must issue the notice within the prescribed time. The assessee's point about earlier years' orders going to the new address was held to have been sufficiently explained by the Revenue. In the words reproduced by the source cited on this page: "Once the notice is sent within the period prescribed in the proviso to Section 143(2) of the 1961 Act, in that case, actual service of the notice upon the assessee thereafter would be immaterial."
It was decided by the Supreme Court on 2019-10-18 and is reported as AIR 2019 SC 5561; (2019) 10 SCC 13; (2019) 14 SCALE 113; 2020 (1) ABR 641; AIR 2020 SC (Civ) 658. Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 143(2), section 143(3), section 142(1), the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the department, and it appears in this library for that reason — you need to know what the Assessing Officer will cite against you. The appeal was allowed with no order as to costs. The judgment of the High Court and the orders of the CIT (Appeals) and the Tribunal holding the assessment bad in law were quashed and set aside, and the matter was remanded to the CIT (Appeals) to consider the appeal on merits on the other grounds. In the absence of any intimation to the assessing officer about the change of address, and with no application made to change the PAN database, the assessing officer was justified in issuing the notice at the address available in the PAN database, so the notice of 5 October 2007 was within the period prescribed by the proviso to section 143(2). Once a notice is issued within that period, that is sufficient compliance with section 143(2) and actual service on the assessee afterwards is immaterial. Filing Form 18 with the Registrar of Companies is not intimation to the assessing officer, and merely mentioning the new address in the return, without specific intimation and without getting the PAN database changed, is not enough. It arises in Assessment & Scrutiny and Appeals matters, on section 143(2), section 143(3), section 142(1) of the Income Tax Act 1961, and was decided by Supreme Court of India — M.R. Shah J (author), Uday Umesh Lalit J and Indira Banerjee J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Send a specific written intimation of the change to the assessing officer and retain proof of despatch; the assessee here lost because the letter it relied on could not be produced. Do not rest a limitation objection on late service alone; check the date the section 143(2) notice was issued and the address in the PAN database as it then stood. If an assessment is set aside on a jurisdictional ground before the first appellate authority, press your grounds on merits as well, since a remand on merits is the likely outcome if the jurisdictional point fails.
Still good law. A reportable three-judge judgment of October 2019, widely reported; the source page records it cited in fifteen later matters. No later decision was available here to check it against. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The Court says the assessee's point about assessment orders for 2004-05 and 2005-06 having been sent to the new address was sufficiently explained by the Revenue, but does not say how. The merits of the section 14A disallowance of Rs 8,91,17,643 were not decided and go back to the CIT (Appeals). The judgment does not address the effect of section 292BB, and does not deal with the assessee's participation in the proceedings as an independent ground. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was allowed with no order as to costs. The judgment of the High Court and the orders of the CIT (Appeals) and the Tribunal holding the assessment bad in law were quashed and set aside, and the matter was remanded to the CIT (Appeals) to consider the appeal on merits on the other grounds. In the absence of any intimation to the assessing officer about the change of address, and with no application made to change the PAN database, the assessing officer was justified in issuing the notice at the address available in the PAN database, so the notice of 5 October 2007 was within the period prescribed by the proviso to section 143(2). Once a notice is issued within that period, that is sufficient compliance with section 143(2) and actual service on the assessee afterwards is immaterial. Filing Form 18 with the Registrar of Companies is not intimation to the assessing officer, and merely mentioning the new address in the return, without specific intimation and without getting the PAN database changed, is not enough.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
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