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Taxpayers can object to wrong service of notice before assessment completion
May, 08th 2008

The assessee has now been given a pre-emptive right to raise objection before the completion of assessment.

Income tax assesses will now be required to bring to notice any improper service of tax notices before the assessing officer itself, i.e. at the first stage of assessment, if they want to keep the issue of legality of notice alive at the appellate levels, say tax experts.

Hitherto, in assessment procedures, assesses were not objecting to wrong or improper service of notice before the assessing officer.

They were directly taking the plea at the appellate level that notices were not issued in time or in accordance with law and therefore the assessment should be invalid in law.

To put an end to litigation on notices and ensure that tax evaders do not take shelter on technical defaults, the Finance Bill 2008 had proposed that notice will be deemed to have been duly served if any assessee were to appear on any proceeding or cooperate in any inquiry relating to an assessment or re-assessment.

Moreover, an assessee would not be permitted to take any objections on improper service of notice in any subsequent inquiry or proceeding.


Faced with requests for review of the department friendly provision, the Finance Minister, Mr P. Chidambaram, has, through amendments to the Finance Bill 2008, said that the provision will not apply if the assessee has raised objection (on the service of notice) before the completion of such assessment or reassessment.

The assessee has now been given a pre-emptive right to raise objection before the completion of assessment.

The assessee will have to raise objection at the first stage of assessment itself.

Otherwise, he cannot take the issue of improper service of notice at the appellate level, Mr G. Ramaswamy, Central Council member of ICAI.

Time factor

Mr Aseem Chawla, Partner, Amarchand & Mangaldas, said that the Finance Bill provision (Section 292 BB) will have far reaching implications, particularly where time limitation is a cause for agitation.

The tax authorities may seek to enforce the attendance of the assessee or his appearance even in those cases where proceedings have been time barred.

On the other side, it may now be reasonable cause for a person to defy summon or notice on the ground that such appearance will lead to losing the legal right.

The said provisions are not in tune with the basic principles of natural justice.

Further, the said provision is required to be evaluated on the touchstone of fairness, in a situation the objections are being raised against the same assessing officer, who has not complied with the basic tenants of the natural justice at the first instance, Mr Chawla said.

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