Shiv Kumar Mittal, Hyderabad V. Income Tax Officer, Ward-8(2), Hyderabad

ITA 633/Hyd/2018

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 4884 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-B
• Next Hearing Date: 04-06-2019
• Assessment Year: 2009-2010
• Appeal Filed On: 06-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V APARNA
• Assessee Lawyers: VIKASH MODI
• Keywords: Sale consideration of property below Jantri Value; Invalid notice; Period of limitation; Cost of acquisition; Time period of passing order; Reassessment proceedings; Set aside; Capital Gains
• Section: 50C; 142(1); 201; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B ', HYDERABAD BEFORE SMT. P. MADHAVI DEVI, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY , ACCOUNTANT MEMBER ITA NO. 633 / HYD/201 8 ASSESSMENT YEAR: 20 09 - 10 SHIV KUMAR MITTAL , HYDERABAD. PAN A CIPM 3813 D VS. INCOME - TAX OFFICER, WARD 8(2), HYDERABAD. A PPELLANT RESPONDENT ASSESSEE BY: S H RI VIKASH MODI REVENUE BY: S MT. V. APARNA DATE OF HEARING: 0 4 / 0 6 / 201 9 DATE OF PRONOUNCEMENT: 30 / 0 8 /201 9 O R D E R PER SMT. P. MADHAVI DEVI, J.M. T H IS IS AN APPEAL OF THE ASSESSEE FOR THE AY 20 09 - 10 AGAINST THE ORDER OF CIT(A) 8 , HYDERABAD , DATED, 1 6 /0 2 /201 8. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE , AN INDIVIDUAL, HAD SOLD A PROPERTY SITUATED AT KONDAPUR GRAMPANCHAYAT, SERILINGAMPALLY MANDA L , RR DISTRICT VIDE SALE DEED NO. 4100/2008 DATED 5 TH JUNE, 2008 FOR A CONSIDERATION OF RS. 15,48,000/ - , WHEREAS THE GUIDELINE VALUE OF THE PROPERTY AS ADOPTED BY THE STAMP VALUATION AUTHORITY WAS RS. 50,56,000/ - . SINCE THE ASSESSEE DID NOT OFFER ANY CAPITAL GAINS ON THIS TRANSACTION TO TAX , AO INITIATED PROCEEDINGS U/S 147 OF THE ACT BY ISSUING A NOTICE U/S 148 ON 24/03/2016, WHICH WAS SERVED ON THE ASSESSEE BY WA Y OF AFFIXTURE AT THE LAST KN OWN ADDRESS AND THERE AFTER NOTICE U/S 142(1) WAS ALSO ISSUED ON 09/05/2016. SINCE THERE WAS NO REPLY FROM THE ASSESSEE, A I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 2 FURTHER NOTICE WAS ISSUED AND IN RESPONSE TO THE SAME, ASSESSEE , VIDE LETTER DATED NIL , SUBMITTED THAT HIS ADDRESS HAS CHANGED AND INTIMATED NEW ADDRESS. IT WAS ALSO SUBMITTED THAT THE ASSESSEE HAS NOT RECEIVED EARLIER NOTICES DATED 24/03/2016 AND 09/05/2016 AND SINCE THE NOTICE DATED 24/03/2016, WHICH COULD HAVE BEEN RECEIVED BY THE ASSESSEE ON OR BEFORE 31/03/2016, BUT, WAS NOT ISSUED TO THE CORRECT ADDRESS, T HE REASSESSMENT PROCEEDING INITIATED BY THE AO IS NOT VALID. THE AO, HOWEVER, DID NOT ACCEPT THE ASSESSEES CONTENTION S AND OBSERVED THAT PROCEEDINGS WERE INITIATED WITH THE PRIOR APPROVAL OF THE PR. CIT - II, HYDERABAD VIDE PROCEEDINGS DATED 23/03/2016 AND NOTICE DATED 24/03/2016 U/S 148 WAS ALSO ISSUED AND SERVED ON THE ASSESSEE BY AFFIXTURE AT THE LAST KNOWN ADDRESS . T HEREFORE, HE HELD IT TO BE VALID SERVICE OF NOTICE AND PROCEEDED TO ADOPT THE SALE CONSIDERATION U/S 50C OF THE ACT AT RS. 50,56,000/ - AND TREATED THE ENTIRE CONSIDERATION AS LONG TERM CAPITAL GAINS AND BROUGHT THE SAME TO TAX. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT(A), WHO CONFIRMED THE ORDER OF AO AS FAR AS SERVICE OF NOTICE U/S 148 IS CONCERNED. HOWEVER, HE GRANTED PARTIAL RELIEF BY DIRECTING THE AO TO COMPUTE THE LTCG BY REDUCING THE COST OF ACQUISITION ALONG WITH INDEXA TION. THUS, THE ASSESSEE GOT RELIEF ON MERITS. 4. AGGRIEVED, ASSESSEE IS IN SECOND APPEAL BEFORE US BY RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. GROUND NO.1 THE APPELLANT HAD RECEIVED NOTICE FOR ASSESSMENT YEAR 2009 - 10 U/S 148 ON 27.06.2016 DATED 03,06,2016 WHICH WAS SERVED ON ADDRESS H.NO.1 - 8 - 344, INDIAN AIRLINES COLONY, BEGUMPET, HYDERABAD - 500016 AND NO NOTICE WAS RECEIVED BY THE APPELLANT I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 3 PRIOR TO THIS DATE. SINCE THE LAST DATE FOR SERVICE OF NOTICE WAS 31.03.2016 AND NO PROPER SERVICE OF NOTI CE HAD BEEN EFFECTED UNDER SECTION 148 (1) OF THE ACT AS ON THE DUE DATE ON THE APPELLANT, THE REASSESSMENT PROCEEDINGS ARE INVALID AND ILLEGAL. HENCEFORTH 'THE LEARNED ITO HAS VIOLATED SEC 144,147 AND 148 OF INCOME TAX ACT BY NOT SERVING NOTICE ON APPEL LANT WITHIN THE REQUIRED TIME FRAME AND CONDUCTING REASSESSMENT PROCEEDINGS AFTER THE NOTICE GOT TIME BARRED. SINCE NO PROPER SERVICE OF NOTICE HAD BEEN EFFECTED UNDER SECTION 148 (1) OF THE ACT ON THE APPELLANT, THE REASSESSMENT PROCEEDINGS ARE INVALID AN D ILLEGAL'. THE ABOVE POSITION HAS BEEN SUPPORTED BY THE FOLLOWING CASE LAWS. A) 1 INCOME TAX OFFICER WARD 2 3 VS OM PARKASH KUKRE'A IT APPEAL NO. 335 & 336 OF 2015 A P RIL 08.2016, ITAT CHANDIGARH BRANCH) & OTH ERS PVT LIMITED ITA NO, 3608 DE L/ 2014 ITAT DE L H I IT WAS HELD IN THE ABOVE CASES THAT SERVICE OF NOTICE UNDER SECTION 148 BY AFFIXTURE, AT ADDRESS WHERE ASSESSEE WAS NOT RESIDING, WAS NOT VALID SERVICE AND REASSESSMENT PROCEEDINGS INITIATED IN PURSUANCE TO SUCH NOTICE WOULD ALSO BE INVALID. B) COMMISSIONER OF INCOME TAX CENTRAL - I VS CHETAN GU P TA IT APPEAL NO. 72 OF 2014 SE P TEMBER 15,2015, HIGH COURT OF DE L H I - LT HAS BEEN HELD THAT IN ORDER TO COMPLETE REASSESSMENT, NOTICE UNDER SECTION 148 HAS TO BE MANDATORILY SERVED UPON ASSESSEE IN ACCORDA NCE WITH SECTION 282(1), READ WITH ORDER V, RULE 12 CPC AND ORDER III RULE 6 CPC . LT HAS BEEN ALSO HELD THAT THE BURDEN OF SHOWING THAT SERVICE OF NOTICE HAS BEEN EFFECTED ON THE ASSESSEE OR HIS DULY AUTHORIZED REPRESENTATIVE IS ON THE REVENUE UNDER SECT ION 282(1) OF THE ACT, SERVICE OF NOTICE MAY BE MADE BY DELIVERING OR TRANSMITTING A COPY THEREOF TO THE PERSON TO WHOM THE NOTICE IS ADDRESSED BY MORE THAN ONE MODE. ONE OF THE MODES IS 'IN SUCH MANNER AS PROVIDED UNDER THE CODE OF CIVIL PROCEDURE, 1908 ( 'CPC)'. FOR THE PURPOSE OF SERVICE OF SUMMONS UNDER ORDER V RULE 12 CPC, SERVICE CAN BE TAKEN TO COMPLETE, IF IT IS EFFECTED, ON PERSON TO WHOM HIS ADDRESS OR TO I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 4 ANOTHER PERSON WHO IS EMPOWERED TO RECEIVE SUCH NOTICE ON HIS BEHALF. C: CIT VS DR ALA PRAKA SH ( IT A PP EAL NO 551 OF 2009 SE P TE M BER 12 2013 HI G H COURT OF ALLAHABAD - IT HAS BEEN HELD THAT SINCE THE NOTICE WAS NOT ISSUED ON THE KNOWN ADDRESS OF THE ASSESSEE AND THERE BEING NO VALID EVIDENCE OF PROPER SERVICE OF THIS NOTICE, THE IMPUGNED ORDER PASSED BY THE ASSESSING OFFICER BECOMES BAD IN LAW D) I) CIT VS SUNIL KUMAR CHHABRA (IT APPEAL NO. 85 OF 2011, FEBRUARY 01, 2012, HIGH C OURT OF PUNJAB AND HARYANA) & II) CIT - 3 VS ABACUS DISTRIBUTION S STEMS 2017, BOMBAY HIGH COURT) & III) INCOME TAX OFFICER VS RACHNA GU TA ITA NO. 5527 DEL 2012 ITAT DELHI IT WAS HELD THAT ASSESSMENT WAS INVALID WHERE NOTICE UNDER SECTION 143(2)/148 WAS SENT AT WRONG/OLD ADDRESS AND NO EVIDENCE HAD BEEN PLACED ON RECORD SHOWING THAT THE SAID NOTICE WAS DELIVERED TO ASSESSEE OR HIS AUTHORIZED REPRESENTATIVE. E. FURTHER, SUP REME COURT IN R.K. UPADHYAYA V. SHANBHAI P. PATEL [1987] EXPLAINED THAT THERE WAS A DISTINCT SHIFT IN THE SCHEME OF THE PROVISIONS OF THE 1961 ACT IN COMPARISON WITH THE CORRESPONDING PROVISION I .E, SECTION 34 UNDER THE 1922 ACT UNDER WHICH THE MANDATORY R EQUIREMENT WAS THAT BOTH THE ISSUANCE AND SERVICE OF NOTICE HAD TO BE COMPLETED WITHIN THE PRESCRIBED PERIOD. CONSEQUENTLY, THE SERVICE OF NOTICE WITHIN THE LIMITATION PERIOD WAS THE FOUNDATION OF JURISDICTION UNDER THE 1922 ACT. IN Y. NARAYANA CHETTY V. I TO [1959] 35 ITR 388 THE SUPREME COURT OBSERVED IN THE CONTEXT OF SECTION 34 OF THE 1922 ACT, 'THE NOTICE PRESCRIBED BY SECTION 34 OF THE INCOME TAX ACT FOR THE PURPOSE OF INITIATING REASSESSMENT PROCEEDINGS IS NOT A MERE PROCEDURAL REQUIREMENT; THE SERV ICE OF THE PRESCRIBED NOTICE ON THE ASSESSEE IS A CONDITION PRECEDENT TO THE VALIDITY OF ANY REASSESSMENT MADE UNDER SECTION 34. IF NO NOTICE IS ISSUED OR IF THE NOTICE ISSUED IS SHOWN TO BE INVALID THEN THE PROCEEDINGS TAKEN BY THE INCOME TAX OFFICER WITH OUT A I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 5 NOTICE OR IN PURSUANCE OF AN INVALID NOTICE WOULD BE ILLEGAL AND VOID.' IN R.K. UPADHYAYA (SUPRA) THE SUPREME COURT EXPLAINED THAT 'THE MANDATE OF SECTION 148 (1) IS THAT REASSESSMENT SHALL NOT BE MADE UNTIL THERE HAS BEEN SERVICE.' HOWEVER, THE SA ID DECISION DOES STATE THAT JURISDICTION BECOMES VESTED IN THE AO TO PROCEED WITH THE ASSESSMENT ONCE NOTICE IS ISSUED WITHIN A PERIOD OF LIMITATION. IT ALSO EMPHASIZED THAT NO REASSESSMENT SHALL BE MADE 'UNTIL THERE HAS BEEN SERVICE.' THE LEGAL POSITION T HEREFORE, EVEN UNDER THE 1961 ACT, IS THAT SERVICE OF NOTICE UNDER SECTION 148 IS A JURISDICTIONAL REQUIREMENT FOR COMPLETING THE REASSESSMENT. THIS HAS BEEN EMPHASIZED IN SEVERAL OTHER DECISIONS OF THE HIGH COURTS AS WELL. BASED ON ALL THE ABOVE JUDGEME NTS, I T IS VERY EVIDENT THAT THE LEARNED ITO HAS VIOLATED SEC 144,147 AND 148 OF INCOME TAX ACT BY NOT SERVING THE NOTICE U/S 148 ON THE APPELLANT AND CONDUCTING REASSESSMENT PROCEEDINGS AFTER THE NOTICE GOT TIME BARRED. HENCEFORTH, SINCE NO PROPER SERVI CE OF NOTICE HAD BEEN EFFECTED UNDER SECTION 148(1) OF THE ACT ON THE APPELLANT, THE REASSESSMENT PROCEEDINGS ARE ILLEGAL AND LIABLE TO BE SQUASHED. 5. LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS BEEN FILING HIS RETURNS OF INCOME FROM 2 007 - 08 ONWARDS MENTIONING NEW ADDRESS ONLY I.E., INDIAN AIRLINES COLONY, BEGUMPET, HYDERABAD 16 AND HAS DRAWN OUR ATTENTION TO THE INCOME - TAX RETURN S , THE COPIES OF WHICH ARE FILED BEFORE US IN THE FORM OF A PAPER BOOK , WHEREIN THE SAID ADDRESS IS MENTIO NED . A S PROOF THEREOF, H E HAS ALSO DRAWN OUR ATTENTION TO HIS PAN CARD DETAILS WHEREIN THE ADDRESS OF INDIAN AIRLINES COLONY IS MENTIONED . HE HAS DRAWN OUR ATTENTION TO THE NOTICE U/S 142(1) DATED 03/06/2016 WHEREIN IN THE NOTICE, THE ADDRESS GIVEN IS OL D ADDRESS , WHEREAS THE COVER CONTAINS NEW ADDRESS, WHICH IS PLACED AT PAGES 12 & 13 OF THE PAPER BOOK. HE SUBMITTED THAT IT IS FOR THIS REASON THAT THOUGH ASSESSEE DID NOT RECEIVE THE NOTICE U/S 14 8 OF THE ACT, I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 6 THE NOTIC E U/S 142(1) WAS SERVED ON THE ASSESSEE . HE THEREFORE PRAYED THAT THE APPEAL OF THE ASSESSEE BE ALLOWED AND REASSESSMENT PROCEEDINGS BE HELD AS INVALID FOR NON SERVICE OF THE NOTICE U/S 148 OF THE ACT. 6. LD. DR, HOWEVER, SUPPORTED THE ORDERS OF REVENUE AUTHORITIES. 7. HAVING REGARD TO THE RIVAL CONTENTIONS AND THE MATERIAL ON RECORD , WE FIND THAT ASSESSEE HAS BEEN VIGILANT AND HAS BEEN FILING RETURNS OF INCOME REGULARLY WITH THE NEW ADDRESS. IT IS NOT KNOWN AS TO WHY AO CHOSE TO ISSUE NOTICE U/S 148 DA TED 24/03/2016 WITH THE OLD ADDRESS DIRECTLY BY WAY OF AN AFFIXTURE WITHOUT MAKING A TRIAL TO SERVE THE NOTICE BY POST OR IN PERSON . U NDER RULE 127 OF THE IT RULES, AND SUB - SECTION (2) THEREUNDER, THE ADDRESSES TO WHICH THE NOTICE OR SUMMONS OR REQUISITIO N OR ORDER OR ANY OTHER COMMUNICATION UNDER THE ACT MAY BE DELIVERED IS PROVIDED AS UNDER: 127 .(1) FOR THE PURPOSES OF SUB - SECTION (1) OF SECTION 282, THE ADDRESSES (INCLUDING THE ADDRESS FOR ELECTRONIC MAIL OR ELECTRONIC MAIL MESSAGE) TO WHICH A NOTICE O R SUMMONS OR REQUISITION OR ORDER OR ANY OTHER COMMUNICATION UNDER THE ACT (HEREAFTER IN THIS RULE REFERRED TO AS 'COMMUNICATION') MAY BE DELIVERED OR TRANSMITTED SHALL BE AS PER SUB - RULE (2). (2) THE ADDRESSES REFERRED TO IN SUB - RULE (1) SHALL BE (A) FOR COMMUNICATIONS DELIVERED OR TRANSMITTED IN THE MANNER PROVIDED IN CLAUSE (A) OR CLAUSE (B) OF SUB - SECTION (1) OF SECTION 282 (I) THE ADDRESS AVAILABLE IN THE PAN DATABASE OF THE ADDRESSEE; OR (II) THE ADDRESS AVAILABLE IN THE INCOME - TAX RETURN TO WHICH THE COMMUNICATION RELATES; OR (III) THE ADDRESS AVAILABLE IN THE LAST INCOME - TAX RETURN FURNISHED BY THE ADDRESSEE; OR (IV) IN THE CASE OF ADDRESSEE BEING A COMPANY, ADDRESS OF REGISTERED OFFICE AS AVAILABLE ON THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS: PROVIDED THAT THE COMMUNICATION SHALL NOT BE DELIVERED OR I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 7 TRANSMITTED TO THE ADDRESS MENTIONED IN ITEM (I) TO (IV) WHE RE THE ADDRESSEE FURNISHES IN WRITING ANY OTHER ADDRESS FOR THE PURPOSES OF COMMUNICATION TO THE INCOME - TAX AUTHORITY OR ANY PERSON AUTHORISED BY SUCH AUTHORITY ISSUING THE COMMUNICATION: 1 [ PROVIDED FURTHER THAT WH ERE THE COMMUNICATION CANNOT BE DELIVERED OR TRANSMITTED TO THE ADDRESS MENTIONED IN ITEM (I) TO (IV) OR ANY OTHER ADDRESS FURNISHED BY THE ADDRESSEE AS REFERRED TO IN FIRST PROVISO, THE COMMUNICATION SHALL BE DELIVERED OR TRANSMITTED TO THE FOLLOWING ADDR ESS: (I) THE ADDRESS OF THE ASSESSEE AS AVAILABLE WITH A BANKING COMPANY OR A CO - OPERATIVE BANK TO WHICH THE BANKING REGULATION ACT, 1949 (10 OF 1949) APPLIES (INCLUDING ANY BANK OR BANKING INSTITUTION REFERRED TO IN SECTION 51 OF THE SAID ACT); OR ( II) THE ADDR ESS OF THE ASSESSEE AS AVAILABLE WITH THE POST MASTER GENERAL AS REFERRED TO IN CLAUSE (J) OF SECTION 2 OF THE INDIAN POST OFFICE ACT, 1898 (6 OF 1898); OR (III) THE ADDRESS OF THE ASSESSEE AS AVAILABLE WITH THE INSURER AS DEFINED IN CLAUSE (9) OF SECTI ON 2 OF THE INSURANCE ACT, 1938 (4 OF 1938); OR (IV) THE ADDRESS OF THE ASSESSEE AS FURNISHED IN FORM NO.61 TO THE DIRECTOR OF INCOME - TAX (INTELLIGENCE AND CRIMINAL INVESTIGATION) OR TO THE JOINT DIRECTOR OF INCOME - TAX (INTELLIGENCE AND CRIMINAL INVESTI GATION) UNDER SUB - RULE (1) OF RULE 114D; OR (V) THE ADDRESS OF THE ASSESSEE AS FURNISHED IN FORM NO.61A UNDER SUB - RULE (1) OF RULE 114E TO THE DIRECTOR OF INCOME - TAX (INTELLIGENCE AND CRIMINAL INVESTIGATION) OR TO THE JOINT DIRECTOR OF INCOME - TAX (INTEL LIGENCE AND CRIMINAL INVESTIGATION); OR (VI) THE ADDRESS OF THE ASSESSEE AS AVAILABLE IN THE RECORDS OF THE GOVERNMENT; OR (VII) THE ADDRESS OF THE ASS ESSEE AS AVAILABLE IN THE RECORDS OF A LOCAL AUTHORITY AS REFERRED TO IN THE EXPLANATION BELOW CLAUSE (20) OF SECTION 10 OF THE ACT. ] (B) FOR COMMUNICATIONS DELIVERED OR TRANSMITTED ELECTRONICALLY (I) E - MAIL ADDRESS AVAILABLE IN THE INCOME - TAX RETURN FURNISHED BY THE ADDRESSEE TO WHICH THE COMMUNICATION RELATES; OR (II) THE E - MAIL ADDRESS AVAILABLE IN THE LAST INCOME - TAX RETURN FURNISHED BY THE ADDRESSEE; OR (III) IN THE CASE OF ADDRESSEE BEING A COMPANY, E - MAIL ADDRESS OF THE COMPANY AS AVAILABLE ON THE WEBSITE OF MINISTRY OF CORPORATE AFFAIRS; OR I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 8 (IV) ANY E - MAIL ADDRESS MADE AVAILABLE BY THE ADDRESSEE TO THE INCOME - TAX AUTHORITY OR ANY PERSON AUTHORISED BY SUCH INCOME - TAX AUTHORITY. 7.1 THU S, THE AO HAS TO SERVE THE NOTICE TO THE ADDRESS GIVEN BY THE ASSESSEE AND IF IT COULD NOT BE SERVED, THEREUNDER, HE HAS TO ADOPT THE PROCEDURE LAID DOWN IN THE ABOVE SUB - RULE . HOWEVER, THE AO HAS NOT ADOPTED ANY OF THE PROCEDURE S LAID DOWN AS ABOVE . HE HAS NOT MADE ANY ATTEMPT TO SERVE THE NOTICE BY POST OR IN PERSON OR MADE ANY ENQUIRY TO FIND OUT THE CORRECT ADDRESS OF THE ASSESSEE BEFORE SERVING A NOTICE BY WAY OF AFFIXTURE . H E ALSO DID NOT VERIF Y THE ADDRESS ON PAN. AS RIGHTLY POINTED O UT BY THE LD. COUNSEL FOR THE ASSESSEE, NOTICE CONTAINED OLD ADDRESS , WHEREAS THE COVER CONTAINED NEW ADDRESS FOR SERVICE OF NOTICE U/S 142(1) OF THE ACT. THEREFORE, IT CANNOT BE SAID THAT THE ASSESSEE WAS GIVEN PROPER NOTICE FOR REOPENING OF THE ASSESSMEN T U/S 147 O F THE ACT. SIMILAR ISSUE HAD ARISEN BEFORE US, IN THE CASE OF RAJKUMAR JINDAL IN ITA NO. 56 & 57/HYD/2019 AND VIDE ORDER DATED , IT WAS HELD AS UNDER: 3. LD. COUNSEL FOR THE ASSESSEE, WHILE REITERATING THE SUBMISSIONS MADE BEFORE THE AUTHORITI ES BELOW, SUBMITTED THAT THE ASSESSEES FILED THEIR RETURNS OF INCOME FOR THE AY.2010 - 11 ON 15 - 09 - 2010, GIVING THE ADDRESS THEY WERE RESIDING IN AT THAT POINT OF TIME IN THE RETURNS OF INCOME. HE SUBMITTED THAT SUBSEQUENTLY, ASSESSEES HAVE CHANGED THEIR ADDRESS AND HAD ALSO FILED THEIR RETURNS OF INCOME FOR THE AY.2012 - 13 ONWARDS WITH THE NEW ADDRESS AND THERE WAS ALSO CORRESPONDENCE FROM THE DEPARTMENT AT THE NEW ADDRESS VIDE LETTERS DT.01 - 09 - 2014 AND 06 - 03 - 2017. THUS, IT IS SUBMITTED THAT THE ASSESSING OFFICER HAD THE KNOWLEDGE OF CHANGE OF ADDRESS AND ALSO HAD KNOWN THE CORRECT ADDRESS, BUT, FOR THE REASONS BEST KNOWN TO HIM, THE NOTICES WERE SENT TO THE OLD ADDRESS AFTER THE PERIOD OF LIMITATION AND THEREFORE, THEY WERE CLEARLY NOT SERVED ON THE ASSES SEES. HE DREW OUR ATTENTION TO THE PROVISIONS OF RULE 127 OF I.T. RULES, I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 9 WHEREIN THE ADDRESSES AT WHICH, THE NOTICES CAN BE SERVED ON AN ASSESSEE ARE GIVEN. HE SUBMITTED THAT EVEN AFTER THE ASSESSEES HAVE BROUGHT TO THE NOTICE OF THE ASSESSING OFFICER ABOU T THE CHANGE OF ADDRESS, THERE WAS NO ACTION TAKEN BY THE DEPARTMENT BY SERVING OF FRESH NOTICE AT THE NEW ADDRESS AND THE DEPARTMENT CANNOT PLEAD IGNORANCE ABOUT THE NEW ADDRESS AND HENCE THE NOTICE U/S.148 OF THE ACT WAS NOT VALIDLY SERVED ON THE ASSESSE ES. IN SUPPORT OF THIS CONTENTION, HE PLACED RELIANCE UPON THE FOLLOWING : (I) JUDGMENT OF THE HON'BLE SUPREME COURT OF INDIA IN THE CASE OF (I) Y. NARAYANA CHETTY AND ANOTHER VS. ITO [35 ITR 388] (SC), WHEREIN IT WAS HELD THAT - THE SERVICE OF THE PRESCRIBED NOTICE ON THE ASSESSEE IS A CONDITION PRECEDENT TO THE VALIDITY OF ANY RE - ASSESSMENT MADE UNDER SECTION 34 OF THE 1922 ACT AND IF NO NOTICE IS ISSUED OR IF THE NOTICE ISSUED IS SHOWN TO BE INVALID, THEN THE PROCEEDINGS TAKEN BY THE INCOME TAX OFFICER WOULD BE ILLEGAL AND VOID. (II) THE JUDGMENT OF THE HON'BLE HIGH COURT IN THE CASE OF CIT KERALA VS. THAYABALLI MULLA JEEVAJI KAPASI (DECEASED) [66 ITR 147] (SC), WHEREIN IT WAS HELD THAT THE SERVICE OF THE NOTICE PRESCRIBED BY SECTION 34 OF THE INDIAN INCOME - TAX ACT, 1922, FOR THE PURPOSE OF COMMENCING PROCEEDINGS FOR REASSESSMENT IS NOT A MERE PROCEDURAL REQUIREMENT: IT IS A CONDITION PRECEDENT TO THE INITIATION OF PROCEEDINGS FOR ASSESSMENT UNDER SECTION 34 OF THE ACT. (III) THE DECISION OF HON'BLE GUJARAT HIGH COURT IN THE CASE OF CIT VS. MINTU KALITA [253 ITR 334] (GAU), WHEREIN IT WAS HELD THAT AFTER CONSIDERIN G THAT THE NOTICE U/S. 148 WAS NOT SERVED ON THE ASSESSEE, IT WAS HELD THAT IT IS A CONDITION PRECEDENT TO INITIATION OF PROCEEDINGS FOR THE ASSESSMENT U/S.147 AND HENCE WHERE THERE IS NO EVIDENCE OF I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 10 SERVICE OF NOTICE, THAT RE - ASSESSMENT IS NOT VALID. (IV) THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF VEENA DEVI KARNANI VS. ITO [410 ITR 23] (DEL), WHEREIN IN SIMILAR FACTS IT WAS HELD THAT WHERE THE RE - ASSESSMENT NOTICES WERE SERVED ON THE OTHER ADDRESS INSPITE OF INTIMATION OF CHANGED ADDRESS, T HE RE - ASSESSMENT PROCEEDINGS ARE NOT VALID AND THE RELIANCE UPON SECTION 292B OF THE ACT IS NOT SUSTAINABLE. (V) THE DECISION OF THE HON'BLE CALCUTTA HIGH COURT IN THE CASE OF RAMESHWAR SIRKAR VS. ITO [88 ITR 374] (CAL), WHEREIN IT WAS HELD THAT THE SE RVICE OF NOTICE UNDER SECTION 148 IS MANDATORY AND IS A CONDITION PRECEDENT FOR THE INITIATION OF REASSESSMENT PROCEEDINGS. THE MERE FACT THAT THE SERVING OFFICER DID NOT FIND THE ASSESSEE TO BE SERVED WITH THE NOTICE AT HIS ADDRESS IS NOT SUFFICIENT TO E STABLISH THAT HE COULD NOT BE FOUND AND THE SERVICE OF NOTICE BY AFFIXTURE WITHOUT REASONABLE ATTEMPT TO FIND ASSESSEE IS NOT PROPER. (VI) ALSO IN THE CASE OF CIT VS. HOTLINE INTERNATIONAL P. LTD., [296 ITR 333] (DEL), IT WAS HELD THAT WITHOUT MAKING ANY EFFORTS TO SERVE THE NOTICE TO ASSESSEE, SERVICE OF NOTICE BY AFFIXTURE IS NOT CORRECT. (VII) IN THE CASE OF CIT VS. AVI - OIL INDIA P. LTD., [323 ITR 242] (P&H), IT WAS HELD THAT WHERE THERE IS NO PERSONAL SERVICE OF NOTICE AND NOTICE IS SERVED BY AFFI XTURE WITHOUT ANY PROOF OF SERVING THE SAME TO ASSESSEE, SUCH NOTICE IS INVALID AND CONSEQUENTLY, THE ASSESSMENT IS ALSO INVALID. IN SUPPORT OF HIS CONTENTIONS THAT - NON - SERVICE OF NOTICE IS A JURISDICTIONAL DEFECT AND CANNOT BE CURED BY SECTION 292B OF THE ACT, THE LD. I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 11 COUNSEL FOR THE ASSESSEE PLACED RELIANCE UPON THE FOLLOWING DECISIONS: I. CIT VS. SMT. PHOOLMATI DEVI [144 ITR 954] (ALL); II. PN SASIKUMAR AND OTHERS VS. CIT [170 ITR 80] (KER); III. CIT VS. SHITAL PRASAD KARAG PRASAD [280 ITR 541] (ALL) ; IV. CIT VS. NORTON MOTORS [275 ITR 595] (P&H) 4. LD. DR, ON THE OTHER HAND, SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW TO SUBMIT T HAT THE DEPARTMENT HAS TAKEN STEPS TO SERVE THE NOTICE ON THE ASSESSEE AND SINCE THE NOTICE WAS UN - SERVED, IT WAS SERVED BY AFFIXTURE AT THE ADDRESS GIVEN BY THE ASSESSEES IN THEIR RETURNS OF INCOME AND THEREFORE THE NOTICES ARE VALIDLY SERVED. 5. HAVING REGARD TO THE RIVAL CONTENTIONS AND MATERIAL ON RECORD, WE FIND THAT THE TRANSACTION OF SALE OF PROPERTY HAS TAKEN PLACE IN THE FINANCIAL YEAR 2009 - 10 AND THOUGH THE ASSESSEES HAVE FILED THEIR RETURNS OF INCOME, THEY DID NOT OFFER THE CAPITAL GAINS TO TAX . THE ASSESSING OFFICER, THEREFORE, COULD HAVE RE - OPENED THE ASSESSMENT BY ISSUANCE OF NOTICE U/S.148 OF THE ACT WITHIN A PERIOD OF SIX YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR I.E., ON OR BEFORE 31 - 03 - 2017. THE ASSESSING OFFICER HAS THOUGHT IT FIT TO ISSUE NOTICE ONLY ON THE LAST DAY DT.31 - 03 - 2017 AND HAS SENT THE NOTICE BY SPEED POST TO THE ADDRESS MENTIONED IN THE SALE DEED. THE SAID ADDRESS IS THE SAME AS MENTIONED IN THE RETURN OF INCOME FOR THE AY.2009 - 10. RULE 127 OF THE I.T RULES PROVI DES THAT THE NOTICES CAN BE SERVED ON ANY OF THE PLACES GIVEN THERE UNDER. IF THE NOTICE IS SENT TO THE ADDRESS GIVEN IN THE RETURN OF INCOME, BUT COULD NOT BE SERVED ON THE ASSESSEE, THEN, IT IS INCUMBENT UPON THE ASSESSING OFFICER TO VERIFY THE CORRECT ADDRESS OF THE ASSESSEE AND SEND THE NOTICE ACCORDINGLY IN THE MODE AND ORDER PRESCRIBED UNDER RULE 127. IN THE CASE BEFORE US, WE FIND THAT THE ASSESSING OFFICER HAS RESORTED TO SERVICE OF NOTICE BY AFFIXTURE AT THE OLD ADDRESS AFTER NOTICE U/S.148 OF TH E ACT WAS RETURNED UNSERVED ON THE I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 12 ASSESSEE. AS RIGHTLY POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE, THE DEPARTMENT HAS BEEN COMMUNICATING WITH THE ASSESSEE AT THE NEW ADDRESS ONLY ON 16 - 03 - 2017 FOR THE AYS.2015 - 16 AND 2017 - 18 WITH REGARD TO ASSES SMENTS OF ASSESSEES INCOMES, AND THEREFORE, IT CANNOT BE SAID THAT THE DEPARTMENT HAD NO KNOWLEDGE ABOUT THE NEW ADDRESS. AS HELD BY THE HON'BLE SUPREME COURT AND OTHER COURTS, IN THE CASES CITED (SUPRA) AND RELIED UPON BY THE ASSESSEE, THE ISSUANCE OF NO TICE U/S.148 OF THE ACT IS A QUESTION OF JURISDICTION AND NOT A PROCEDURAL ASPECT. BY ISSUING A VALID NOTICE WITHIN THE PRESCRIBED TIME LIMIT, ONLY THE ASSESSING OFFICER GETS THE JURISDICTION TO RE - OPEN THE ASSESSMENT. IN THE CASES BEFORE US, THE NOTICES U/S.148 OF THE ACT, THOUGH WERE ISSUED ON THE LAST DAY OF THE RELEVANT ASSESSMENT YEAR, WERE NEVER SERVED ON THE ASSESSEES. EVEN AFTER THE ASSESSEES HAVE BROUGHT TO THE NOTICE OF ASSESSING OFFICER THAT THE NOTICES HAVE NOT BEEN SERVED ON THEM, NO STEPS HA VE BEEN TAKEN BY THE DEPARTMENT TO RECTIFY THE SAID DEFECT. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE SUPREME COURT AND OTHER COURTS CITED SUPRA, RELIED UPON BY THE LD. COUNSEL FOR THE ASSESSEE, WE HOLD THAT THE NOTICE U/S.148 OF THE AC T IS INVALID AND CONSEQUENTLY, THE ASSESSMENTS ARE ALSO INVALID. THE RELIANCE OF THE CIT (A) ON THE PROVISIONS OF SECTION 292B IS ALSO NOT SUSTAINABLE, BECAUSE THE DEFECT IS NOT A PROCEDURAL DEFECT BUT IS A JURISDICTIONAL ONE. IN THE RESULT, THE APPEALS O F BOTH THE ASSESSEES ARE ALLOWED. 7.2 THUS, THE COORDINATE BENCH OF THIS TRIBUNAL HAS HELD THAT THE NOTICE ISSUED BY THE AO BY WAY OF AFFIXTURE WITHOUT VERIFYING THE CORRECT ADDRESS OF THE ASSESSEE IS INVALID. THEREFORE, AS THE ISSUE IN DISPUTE IS MATERI ALLY IDENTICAL TO THAT OF THE SAID DECISION, R ESPECTFULLY FOLLOWING THE SAME, WE SET ASIDE THE REASSESSMENT PROCEEDINGS HOLDING IT TO BE INVALID. I.T.A. NO. 633 /HYD/1 8 SHIV KUMAR MITTAL, HYD. . 13 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST , 2019. SD/ - (A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER SD/ - ( (P. MADHAVI DEVI) JUDICIAL MEMBER HYDERABAD, DATED 30 TH AUGUST , 201 9. KV COPY FORWARDED TO: 1. SHIV KUMAR MITTAL, C/O VIKAS MODI, 110, 1 ST FLOOR, BHANU ENCLAVE, ABOVE MARUTHI SHOWROOM, ERRAGADDA, HYDERABAD 500 0 38 . 2 . ITO, WARD NO. 8(2), HYDERABAD . 3 . CIT (A) - 8 , HYDERABAD 4. PR. CIT - 2 , HYDERABAD 5. THE DR, ITAT, HYDERABAD 6. GUARD FILE S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR SR.P.S/PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER