Appeal partially allowed due to invalid notice under section 148. Fresh notice possible for reassessment. Order on 27.09.2023.

The Tribunal partially allowed the appeal, quashing the assessment due to the invalid notice issued under section 148. It was clarified that the Revenue could issue a fresh notice against the legal heirs for reassessment if permitted by law. The appeal was allowed on this ground, with the order pronounced on 27.09.2023.

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Issues involved:
The issues involved in this case are the validity of the notice issued u/s 148, re-assessment proceedings initiated u/s 147, jurisdiction of the National Faceless Appeal Centre (NFAC), and the legality of the assessment order.

Validity of Notice u/s 148 and Re-assessment Proceedings u/s 147:
The appeal challenged the notice issued u/s 148 and the re-assessment proceedings initiated u/s 147 as being bad in law, without jurisdiction, and barred by time limitation. The NFAC upheld these actions. The AO framed the assessment u/s 144 read with Section 147, making an addition on account of long term capital gain. The legal heir of the deceased assessee argued that the initiation of proceedings was flawed as the notice was addressed to an individual, while the assessment was made in the capacity of a legal heir. The Tribunal found the notice did not meet legal requirements, thus quashing the assessment.

Jurisdiction of NFAC and Assessment Legality:
The NFAC was criticized for dismissing the appeal in an ex-parte manner, upholding the reassessment order passed u/s 147/14A, and not deciding on all grounds of appeal. The NFAC was also faulted for not passing an order on the deceased person, not properly considering evidence, and making additions/disallowances without proper basis. The Tribunal found the re-opening of assessment to be bad in law due to discrepancies in the notice, leading to the quashing of the assessment.

Merits of Additions and Disallowances:
The assessing officer and NFAC were accused of making arbitrary additions/disallowances on long-term capital gains, fair market value, deduction under section 54F, and development expenses. The appellant argued that these decisions were unjustified and against the facts of the case. The Tribunal did not adjudicate on these grounds due to the quashing of the assessment, rendering them academic.

Conclusion:
The Tribunal partially allowed the appeal, quashing the assessment due to the invalid notice u/s 148. It clarified that the Revenue could issue a fresh notice against the legal heirs for a reassessment if permitted under the law. The appeal was allowed on this ground, and the order was pronounced on 27.09.2023.

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