Satish Kumar Mtttal, J. - (1.) THE instant appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') is directed against the order dated 13 -4 -2007 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'A', Chandigarh (hereinafter referred to as 'the Tribunal') in ITA No. 181/Chd/2006 in case of the respondent for the assessment year 1998 -99, by raising the following substantial questions of law: (i) Whether on the facts and in the law, the Tribunal was justified in holding that reassessment has been made without mandatory requirement of service of notice under Section 148 of the Act, by ignoring the fact that notice issued on 30 -3 -2001 within the limitation under Section 149(1) of the Act was sent through registered post, which tantamounts to valid service as per Section 27 of the General Clauses Act, 1897.
(2.) IN the present case, during the course of a search operation at the business premises of M/s Damini Resorts & Builders (P) Ltd., a copy of agreement of sale of land, allegedly entered into by the assessee respondent herein, with said M/s Damini Resorts & Builders (P) Ltd., was found. According to that agreement of sale, the assessee had agreed to sell his share of land situated in village Dhandra for a sum of Rs. 16,42,522. However, subsequently the registered sale deed with regard to the said land was executed only for Rs. 5, 22, 641 by suppressing sale consideration to the tune of Rs. 11,19,920. It is the case of the revenue that the assessee did not file return of income in respect of capital gain arising from the aforesaid sale transaction. With the object to bring the said capital gain to tax, the assessing officer issued notice under Section 148 of the Act to the assessee on 30 -3 -2001. Subsequently, notices under Section 142(1) of the Act were issued, but no return of income was filed by the assessee in response to those notices. Consequently, the assessing officer completed the assessment to the best of his judgment under Section 144 of the Act and assessed the long -term capital gain at Rs. 13,70,680.
(3.) AGGRIEVED against the said order, the assessee filed an appeal before the Commissioner of Income Tax (Appeal) -I, Ludhiana (hereinafter referred to as 'the Commissioner (Appeals)'). Since nobody attended the proceedings, therefore, the said appeal was dismissed, and the order of the assessing officer was confirmed. Subsequently, the assessee filed application for recalling the said order. The application was also dismissed by the Commissioner (Appeal). Against the said order, the assessee approached the Tribunal, who vide order dated 22 -9 -2005 allowed the appeal of the assessee and directed the Commissioner (Appeals) to decide the appeal filed by the assessee on merits. Consequently, the Commissioner (Appeals) allowed the appeal of the assessee holding that the assumption of jurisdiction by the assessing officer was wrong as there was no service of notice under Section 148 of the Act.;