Appeal granted due to improper notice service, rendering reassessment proceedings void.

The Tribunal allowed the appeal, ruling that the initiation of reassessment proceedings was void due to improper service of notices under Section 148 to all legal heirs of the deceased assessee. This rendered the reassessment proceedings null and void, leading to the reversal of the impugned order and invalidating any further adjudication on the remaining grounds.

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Issues Involved:
1. Validity of initiation of proceedings under Section 147/148 of the Income Tax Act.
2. Proper and valid service of notice under Section 148 to all legal heirs.
3. Correctness of the calculation of the cost of acquisition of plots sold.

Issue-Wise Detailed Analysis:

1. Validity of Initiation of Proceedings under Section 147/148 of the Income Tax Act:
The appellant contended that the initiation of proceedings under Section 147/148 was unjustified and without jurisdiction, arguing that full and true disclosure of all material facts had been made and there was no adverse material to form a belief that income had escaped assessment. The Tribunal did not delve deeply into this issue as the primary focus was on the service of notice to all legal heirs.

2. Proper and Valid Service of Notice under Section 148 to All Legal Heirs:
The appellant argued that the reassessment proceedings were void ab initio due to improper and invalid service of notice under Section 148, as notices were not served to all legal heirs of the deceased assessee. The CIT(A) had dismissed this grievance, citing that one of the legal heirs, Pradeep Kapoor, had participated in the assessment proceedings voluntarily, referencing the case of CIT v. Sumantbhai C Munshaw and Maharaja of Patiala v. CIT. However, the Tribunal found that the CIT(A) misapplied these precedents.

The Tribunal emphasized that in cases involving multiple legal heirs, notices must be served to all legal heirs to ensure complete representation of the deceased's estate. The Tribunal referred to the case of Chooharmal Wadhuram v. CIT, which established that non-service of notices to all legal heirs renders the reassessment proceedings null and void. The Tribunal noted that the AO was aware of the existence of multiple legal heirs but failed to serve notices to all, thus violating the statutory requirements. The Tribunal also highlighted that the limitation period for issuing such notices had expired, further invalidating the reassessment proceedings.

3. Correctness of the Calculation of the Cost of Acquisition of Plots Sold:
The appellant contended that the CIT(A) erred in considering a lesser area of land for calculating the embedded cost of acquisition, leading to an excess computation of short-term capital gain. The Tribunal did not address this issue in detail, as the primary ground concerning the service of notice under Section 148 was found to be decisive.

Conclusion:
The Tribunal allowed the appeal, holding that the initiation of reassessment proceedings was void ab initio due to the absence of service of notices under Section 148 on all legal heirs of the deceased assessee. The Tribunal reversed the impugned order on this issue, rendering the reassessment proceedings invalid and nullifying any further adjudication on the remaining grounds.

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