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Both are appeals filed by the respective assessees for the AY.2010-11, against the order of the Commissioner of Income Tax (Appeals)-3, Hyderabad, dated 16-11-2018.
2. Brief facts of the case are that both the assessees are husband and wife. They sold Northern portion of a house property bearing Municipal No.5-1-153/3, admeasuring 93.33 Sq. Yds., situated at Jambagh, Hyderabad for a consideration of Rs.15 Lakhs on 04-07-2009, vide document No.1559/2009. They also sold the Southern portion of the house property, bearing Municipal No.5-1-153/3, admeasuring 93.33 Sq. Yds., for a consideration of Rs.15 Lakhs, vide document
No.1560/2009, dt.04-07-2009. Thus, the total sale consideration as per two sale deeds was Rs.30 Lakhs, whereas the SRD value of the property was Rs.52,92,480/-. Since the assessees did not offer the capital gains to tax for the AY.2010- 11, the assessment was re-opened by issuance of a notice u/s.148 of the Act, dt.31-03-2017 to the address mentioned in the sale deeds executed by the assessees. The envelop containing notice u/s 148 was returned by the postal authorities with an endorsement “Addressee left, return to sendor”. Thereafter, the Assessing Officer got the notice u/s.148 of the Act, served by affixture on the same address on 03-05-2017. All the subsequent letters to the said addresswere returned to the office un-served by the postal authorities. Subsequently, a show cause letter dt.18-08-2017 was prepared and proposed to be served on the assessee and then changed the address of the assessees’ was noticed. Thus, a show cause notice was served in the new address on 30-08- 2017. In response to which, the assessee filed a letter stating that the notice u/s.148 was not served on him within the period of time i.e., on or before 31-03-2017 and hence the notice was time barred and invalid. The objections of assessee were rejected on the ground that the notice u/s.148 of the Act was served by affixture in the assessee’s address as given in the registered sale deed, as the correct address was not known to the department on the date of issuance of notice u/s.148 of the Act i.e., on 31-03-2017. Thereafter, the Assessing Officer proceeded to invoke the provisions of Section 50C for both the documents and brought the difference of Rs.22,92,480/- to tax as Short Term Capital Gain in both the hands i.e., Rs.11,46,240/- in the hands of each of the assessee.
2.1. Aggrieved, assessees preferred appeals before the CIT(A), both against validity of notice u/s.148 of the Act on the ground that the same were not served on the assessees and also on merits. The CIT(A), however, dismissed both the appeals, and the assessee’s are in appeal before us by raising the following grounds of appeal. For the sake of convenience andready reference, the grounds raised in ITA No.56/Hyd/2019 are reproduced hereunder: “Pertaining to validity of Reassessment Order: tax effect: 3,47,572/-
1) That the Learned CIT(Appeals) erred in holding that the Order passed u/s 143(3) rws 144 rws 147 without serving Notice issued u/s 148 is a valid Order.
2) That the learned CIT(Appeals) erred in holding that Reassessment Order passed without service of Notice issued u/s 148 is saved by provisions of Section 292B.
3) That the provisions of Section 292B applies only to mistake, defect or omission in Notice but they cannot override the statutory obligation of service of notice issued u/s 148 and non service of Notice issued u/s148 is incurable defect and Reassessment Order passed without serving Notice u/s 148 is void.
4) That the Assessing Officer's assertion that he was not having correct address of Appellant is wrong as he was already corresponding with Appellant at the correct address and his action of sending the Notice issued u/s 148 to the incorrect address and after the Notice was returned un-served, getting the Notice affixed at the same address is illegal.
5) That the judgment of Hon'ble Supreme Court in Sky Hospitality LLP Vs ACIT relied upon by learned CIT(Appeals) was rendered on different facts and hence does not apply to the facts of Appellant's case.
6) That the learned CIT(Appeals) erred in holding that no Capital Gain was offered in Return of Income ignoring the fact that the property was sold for the same price for which it was purchased and as result no gain or loss arose.
7) That the learned CIT(Appeals) erred in confirming the action of Assessing Officer of taking value fixed by Registration Authority for Stamp Duty as full value of consideration received by Appellant on sale of property.
8) Any other Ground of Appeal that may be taken up subsequent to the filing of Appeal”.
3. Ld. Counsel for the assessee, while reiterating the submissions made before the authorities below, submitted that the assessees’ filed their returns of income for the AY.2010-11 on 15-09-2010, giving the address they were residing in at that point of time in the returns of income. He submitted that subsequently assessees’ have changed their address and had also filed their returns of income for the AY.2012-13 onwards with the new address and there was also correspondence from the department at the new address vide letters dt 01-09-2014 and 06-03-2017. Thus, it is submitted that the Assessing Officer had the knowledge of change of address and also had known the correct address, but, for the reasons best known to him, the notices were sent to the old address after the period of limitation and therefore, they were clearly not served on the assessees. He drew our attention to the provisions of Rule 127 of I.T. Rules, wherein the addresses at which, the notices can be served on an assessee are given. He submitted that even after the assessees have brought to the notice of the Assessing Officer about the change of address, there was no action taken by the department by serving of fresh notice at the new address and the department cannot