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2015 (8) TMI 1144 - AT - Income TaxValidity of reopening of assessment - whether notice u/s 148 was not served in accordance with the provisions of section 282 of the Income Tax Act, 1961 as such the proceedings initiated are void ab-initio and deserves to be quashed? - Held that - In the present case, the department has not brought anything on record to establish that the brother of the assessee, namely Harcharan Singh, had been authorised by the assessee to accept service of notice on behalf of the assessee. Harcharan Singh, brother of the assessee, also not been shown to be an agent of the assessee, entitled to receive the notice u/s 148 of the Act. In these facts, it cannot be held that receipt of the notice u/s 148 of the Act by Harcharan Singh, brother of the assessee, amounted to service of notice on the assessee, irrespective of the fact that the assessment order passed under section 144 of the Act had been challenged in appeal by the assessee within limitation. - Decided in favour of assessee.
Issues:
1. Validity of notice u/s 148 of the Income Tax Act, 1961. 2. Whether the notice u/s 148 was served on the assessee or not. 3. Compliance with principles of natural justice during assessment. 4. Addition of long term capital gain. Issue 1: Validity of notice u/s 148: The appellant challenged the initiation of proceedings u/s 148, contending it was against the law and facts on the file. The argument was based on the notice not being served in accordance with section 282 of the Income Tax Act, 1961. The appellant also raised concerns about the violation of natural justice principles during the assessment process. The Appellate Tribunal analyzed the contentions and relevant legal precedents to determine the validity of the notice. Issue 2: Service of notice u/s 148: The primary issue revolved around whether the notice u/s 148 was effectively served on the assessee. The appellant disputed the service, claiming it was not served on the authorized person. The Tribunal examined the service provisions under section 282 of the IT Act and the applicability of the Code of Civil Procedure. It was crucial to establish proper service to validate the notice and subsequent proceedings. Issue 3: Compliance with principles of natural justice: The appellant argued that the assessment process violated the principles of natural justice by not providing an opportunity for cross-examination and failing to consider relevant evidence. The Tribunal assessed the procedural fairness in the assessment and the implications of not adhering to natural justice principles. The determination of whether the appellant was afforded a fair opportunity to present their case was essential in evaluating the assessment's validity. Issue 4: Addition of long term capital gain: One of the grounds of appeal pertained to the addition of a specific amount on account of alleged long term capital gain. The appellant contested this addition, questioning its validity and the basis for the assessment. The Tribunal reviewed the assessment order and the appellant's arguments to ascertain the correctness of the addition and whether it was justified under the provisions of the Income Tax Act. In conclusion, the Appellate Tribunal, in the judgment, delved into various critical issues concerning the validity of the notice u/s 148, service of the notice on the assessee, compliance with principles of natural justice during assessment, and the addition of long term capital gain. Through a detailed analysis of legal provisions and precedents, the Tribunal addressed each issue meticulously, ultimately allowing the appeal based on the findings related to the service of notice u/s 148. The judgment highlighted the importance of proper service and adherence to procedural fairness in income tax assessments, emphasizing the significance of upholding legal principles in such proceedings.
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