Notice under Section 143 (2) is sent to the assessee when the Income Tax department finds any minor or major discrepancies in the ITR. These discrepancies may include under-reporting or over-reporting of losses.
Has your address mentioned in the PAN database changed? It is important to get the address in PAN database updated. If this is not done, the Income Tax Assessing Officer would be right in sending notice under Section 143 (2) of the Income Tax Act 1961 on the old address and you cannot escape by claiming you didn’t receive the notice on your new address, according to a latest Supreme Court judgement. There is no need to panic for those who don’t have any discrepancies in their ITR. Notice under Section 143 (2) is sent to the assessee when the Income Tax department finds any minor or major discrepancies in the ITR. These discrepancies may include under-reporting or over-reporting of losses.
In PCIT vs. IVen Interactive Limited, the Supreme Court’s judgement dated 18-10-2019, says, “…mere mentioning of the new address in the return of income without specifically intimating the Assessing Officer with respect to change of address and without getting the PAN database changed, is not enough and sufficient.”
The top court said, “It is required to be noted that notices under Section143(2) of the 1961 Act are issued on selection of case generated under automated system of the Department which picks up the address of the assessee from the database of the PAN. Therefore, the change of address in the database of PAN is must…”
“…in case of change in the name of the company and/or any change in the registered office or the corporate office and the same has to be intimated to the Registrar of Companies in the prescribed format,” it added.
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The assessee, IVen Interactive Limited, had filed return of income for the Assessment Year 2006-07 on 28.11.2006 declaring total income of Rs 3,38,71,716 under E-Module Scheme and thereafter filed a hard copy of the same on 05.12.2006. The assessee had also submitted the balance sheet and profit and loss account along with the return, which was processed under Section 143(1) of the Income Tax Act, 1961.
After processing the return, the assessing officer had computed the total income of the assessee at Rs 5,52,45,930. The IT department issued a notice to the assessee under Section 143 (2) on 05.10.2007. It was sent to the assessee’s address available in PAN database. Another notice was sent to the same address under Section 153 (2) on 25.07.2008. The notice was sent to all addresses of the assessee available in the PAN database. Further notices under Section 142(1)along with questionnaires calling for various details were issued to the assessee in January, July and October of 2008 to the assessee-company. The company’s representative appeared on 28.11.2008 and 04.12.2008 before the Assessing Officer. The assessee, however, challenged the notice under Sections 143(2) and 143 (1), claiming they were not “served upon the assessee as the assessee-company never received those notices and the subsequent notices served and received by the assessee-company were beyond the period of limitation prescribed under proviso to Section 143 of the 1961 Act.”
The assessee claimed in court that the “said notice was not served upon the assessee as the assessee changed its name and address and shifted to new address prior thereto and therefore the said notice was not served upon the assessee and by the time when subsequently the notices were served upon the assessee, notice under Section 143(2) of the 1961 Act was barred by the period prescribed in proviso to Section 143(2) of the 1961 Act and therefore the assessment order is bad in law.”
However, the apex court noted that “no application was made by the assessee to change the address in the PAN database and in the PAN database, the old address continued. Therefore, in absence of any intimation to the Assessing Officer with respect to change inaddress, the Assessing Officer was justified in issuing the notice at the address available as per the PAN database.”
How to update PAN address
Currently, PAN data can be updated online by going to the ‘Update PAN/Aadhaar Details’ section of the Income Tax e-filing website, or by directly going to this link: https://www.onlineservices.nsdl.com/paam/endUserRegisterContact.html.