Appeal Granted: Reassessment Quashed for Notice Errors

The Tribunal allowed the appeal, quashing the reassessment due to improper notice service and lack of jurisdiction by the Assessing Officer. The Tribunal found the notice was served at the wrong address and delayed, rendering the reassessment void ab-initio. The jurisdictional error in issuing the notice by an officer without authority further invalidated the reassessment. The computation of capital gains and deduction claim issues were not addressed, as the reassessment was already deemed invalid.

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Issues Involved:
1. Validity of reopening of assessment due to service of notice.
2. Jurisdiction of the Assessing Officer (AO).
3. Computation of capital gains and rejection of deduction claim under section 54F.

Detailed Analysis:

1. Validity of Reopening of Assessment Due to Service of Notice:
The assessee challenged the reopening of the assessment on multiple grounds, including the improper service of notice under section 148 of the IT Act. The notice dated 31/03/2017 was served at the wrong address and later at the correct address only on 20/07/2017. The Tribunal observed that the assessee had duly intimated the change of address to the Income Tax Department and updated the PAN Portal. Despite this, the notice was initially sent to the old address and returned unserved on 09/04/2017. The delay from 09/04/2017 to 19/07/2017 in serving the notice at the correct address was unexplained by the AO. The Tribunal concluded that there was no valid service of notice under section 148 within a reasonable period, rendering the reassessment void ab-initio.

2. Jurisdiction of the Assessing Officer (AO):
The Tribunal noted that the assessee’s jurisdiction was with ITO, Ward-13(3), Hyderabad, as evidenced by regular correspondence and returns filed for AYs 2013-14 to 2016-17. However, the notice under section 148 was issued by ITO, Ward-10(1), Hyderabad, who did not have jurisdiction over the assessee. The reassessment initiated by an officer without jurisdiction was deemed invalid. The Tribunal emphasized that the jurisdictional AO should have issued the notice, and the failure to do so invalidated the reassessment proceedings.

3. Computation of Capital Gains and Rejection of Deduction Claim Under Section 54F:
The assessee also raised grounds challenging the computation of capital gains and the rejection of the deduction claim under section 54F. However, since the Tribunal quashed the reassessment on the grounds of improper service of notice and lack of jurisdiction, these arguments were rendered academic. The Tribunal did not provide an opinion on these merits, leaving the issues open for future consideration if necessary.

Conclusion:
The Tribunal allowed the appeal of the assessee, quashing the reassessment as void ab-initio due to improper service of notice and lack of jurisdiction by the AO. The other technical arguments and merits were not adjudicated as they became academic following the quashing of the reassessment.

Pronouncement:
The judgment was pronounced in the open Court on 4th September 2020.

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