S. 148 notice “issued” within limitation period is valid even if “service” is later

ITO vs. Lal Chand Agarwal (ITAT Agra Third Member)

For AY 1998-99, the AO issued a notice u/s 148 dated 28.3.2005 (within the limitation period of 6 years). However, as this notice was returned un-served, a second notice dated 17.6.2005 (beyond 6 years) which issued & served. The assessee contended that since the AO had issued a second notice, the first one was non-est and as the second notice was issued beyond limitation period, the assessment proceedings were null and void. The CIT (A) upheld the plea. Before the Tribunal, the AM held that there was a difference between “issue” of the notice and its “service” and that the notice dated 28.3.2005 was valid, though not served, and the second notice was invalid and non-est. The JM took a contrary view and held that the first notice was invalid and the second notice having been issued after the limitation period did not give jurisdiction to make the assessment. On a reference to the Third Member, HELD: