Reassessment notice service dispute failed, but capital gains taxability issue was remanded for fresh consideration.

A reassessment challenge under section 148 based on alleged non-service of notice failed because the record showed multiple addresses for the assessee, attendance through representatives, and action on section 142(1) notice, so the jurisdictional objection was rejected. On the merits, the capital gains and taxability issue was restored for fresh adjudication because the assessee produced additional evidence and an affidavit suggesting the transaction had not fully materialised and no consideration was received. The first appellate authority was directed to reconsider the factual and taxability aspects after giving the assessee an opportunity to substantiate the claim.

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Issues: (i) Whether reassessment jurisdiction under section 148 was vitiated for want of proper service of notice on the assessee. (ii) Whether the capital gains issue and related taxability of the transaction should be sent back for fresh examination.

Issue (i): Whether reassessment jurisdiction under section 148 was vitiated for want of proper service of notice on the assessee.

Analysis: The assessee challenged service of notice on the ground that the notice was affixed and sent to an incorrect address. The Tribunal noted that the record contained multiple addresses for the assessee and that the materials produced did not establish a clear and reliable single address for service. It also noted that proceedings had been attended by representatives and that notice under section 142(1) had been acted upon. In these circumstances, the plea of non-service was not accepted.

Conclusion: The challenge to reassessment jurisdiction based on alleged non-service of notice under section 148 was rejected.

Issue (ii): Whether the capital gains issue and related taxability of the transaction should be sent back for fresh examination.

Analysis: On the merits, the assessee filed additional evidence and an affidavit asserting that the transaction had not fully materialised and that she had not received the alleged consideration. The Tribunal accepted that these materials were germane to the controversy and, invoking the need to afford a fair opportunity, considered it appropriate that the factual and taxability aspects be reconsidered by the first appellate authority after allowing the assessee to place supporting evidence.

Conclusion: The merits issue was restored to the first appellate authority for fresh adjudication after giving the assessee an opportunity to substantiate her case.

Final Conclusion: The reassessment notice challenge failed, but the substantive tax dispute was reopened for reconsideration, resulting in only partial relief to the assessee.

Ratio Decidendi: Where service of notice is disputed but the record shows multiple addresses and participation in proceedings, the jurisdictional objection may fail; however, additional evidence going to the root of taxability may justify remand for fresh consideration in the interests of substantial justice.

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