The case of PCIT (Central) v. Narayan Kumar Khaitan involved a search and seizure operation under section 132 on SM and group, where incriminating documents were found. After completing the assessment in the case of the assessee under section 153C read with section 143(3), the Principal Commissioner invoked revisionary jurisdiction under section 263 against the said assessment order. Subsequently, the Principal Commissioner issued a notice to the assessee for being served at his last known address.
In response, a staff member of the assessee appeared and informed the Principal Commissioner that the assessee was in judicial custody. The Principal Commissioner treated the appearance of the staff member as sufficient in terms of section 292BB and passed an order under section 263. However, the Tribunal held that the assessee, who was in judicial custody, was deprived of many constitutional rights which he could otherwise exercise. Therefore, any officer of the government, including the Principal Commissioner, should be conscious that once they receive information that a person to whom a notice was issued was in judicial custody, they should pass an appropriate order requiring service of notice on such person through the superintendent of the concerned jail.
The Tribunal further stated that since the Principal Commissioner failed to serve notice to the assessee through the Superintendent of Jail, it was not open to the department to contend that the mere appearance of the staff of the assessee in judicial custody before the Principal Commissioner should be taken as appearance by the noticee/assessee himself. Thus, the service of notice by speed post on the last-known address did not amount to a valid service as per the provisions of the Act.
As a result, the impugned order passed under section 263 was liable to be quashed in favor of the assessee. The assessment year in question was 2010-11.
In summary, the case highlights the importance of ensuring that proper procedures are followed when serving notices to individuals who are in judicial custody. Failure to do so may result in the service of the notice being deemed invalid and may lead to the quashing of any subsequent orders or decisions made based on the invalid notice.
