JAYARAMAN MUHUKUMAR,NGAPATTINAM vs. ITO, WARD 2, KUMBAKONAM, KUMBAKONAM

आदेश / O R D E R

PER MANOMOHAN DAS, J.M: This appeal by the assessee is directed against the order of the learned Commissioner of Income-Tax, National Faceless Appeal Centre (NFAC) [CIT(A)] dated 10-02-2023 and pertains to the Assessment Year [AY] 2013-14. The grounds of the assessee are as under: “1. The order of the NFAC dated 10.02.2023 vide DIN & Order No.ITBA/NFAC/S/250/2022-23/1049637768(1) for the above

ITA No.458/Chny/2023 :- 2 -: assessment year is contrary to law, facts, and in the circumstances of the case.

ITA No.458/Chny/2023 :- 3 -: Faceless Regime Appeal was not followed and ought to have appreciated that in the light of the procedural irregularities committed, the impugned order under consideration accordingly should be reckoned as bad in law. 10. The NFAC failed to appreciate that the entire re-computation of taxable total income on various facets was wrong, erroneous, incorrect, invalid, unjustified and not sustainable both on facts and in law. 11. The NFAC failed to appreciate that there was no proper opportunity before completing the re-assessment as well as before passing the impugned order and ought to have appreciated that any order passed in violation of NJP would be nullity in law. 12. The Appellant craves leave to file additional grounds/arguments at the time of hearing.”

assessee Mr. M. Jayaraman represented by his son and legal heir,

Shri J. Muthukumar, an individual, filed his return of income for the AY

2013-14 and the case was selected for scrutiny assessment by issuing

notice u/s. 148 of the Act. The assessment was completed u/s. 143(3)

r/w Section 147 of the Act on 31-03-2016 after making total addition of

Rs. 45,64,220/-. The assessee preferred an appeal before the ld.

CIT(A) on the ground that the notice under section 148 of the Act was

issued despite there was time available for issuing notice u/s 143(2) of

the Act. Meanwhile, the case was again reopened under section 147

of the Act with the ground that the cost of acquisition adopted in the

original assessment order was Rs.28,500/- as on 01-04-1981

whereas, the cost of acquisition was Rs. 12,632/-. Accordingly, case

ITA No.458/Chny/2023 :- 4 -: was completed u/s 143(3) r/w section 147 of the Act by adopting the

cost of acquisition at Rs.12,632/- and determine the total assessed

income at Rs. 46,99,416/- vide assessment order dated 20-11-2018.

Later on, the first appeal filed by the assessee against the original

assessment order passed on 31-03-2016 was disposed of by the ld.

CIT(A), Trichy, on 07-07-2020 holding that proceedings u/s 147 of the

Act cannot be initiated when the time available u/s 143(2) of the Act

has not expired. However, second reassessment order was before the

ld. CIT(A) for disposal and the same has been disposed of by the ld.

CIT(A) vide order dated 10-02-2023. The ld. CIT(A), NFAC vide this

order dismissed the appeal of the assessee. The observations made

by the ld. CIT(A), NFAC are as under:

“7.3. Further, the appellant’s contention is that the second re- assessment proceedings cannot be reopened on the basis of change of opinion. In this context, it is pertinent to note that there is no change of opinion in the findings of AO. The case laws referred by the appellant does not similar to the facts and circumstances of the instant case. The fact of the case is that while passing of first assessment order, the AO did not examine the cost of acquisition of the sold property and the appellant had claimed the higher side of cost of acquisition without any documentary evidence. The section 55 of the Act stipulates clearly that where the capital asset has become property of the assessee before 01-04-1981, then the cost of acquisition of such an asset will be the actual cost to the assessee or fair market value as on 01-04-1981 at the option of the assessee. The appellant however, did not provide any documentary evidence to claim actual fair market value of the sold property as on 01-04-1981, the purchase value was taken as cost of acquisition. Therefore, there was reason to believe that there was escapement of income and thus, the undersigned is of considered opinion that the reopening of assessment was according to the procedure of the Act”.

ITA No.458/Chny/2023 :- 5 -: Being aggrieved, the assessee filed the present appeal before the

Tribunal.

materials on record. The Ld. AR submitted that the reassessment

proceedings have been initiated by changing of opinion and the non-

acceptance of cost of acquisition at Rs. 28,500/- as was accepted vide

assessment order dated 31-03-2016 is incorrect. The Ld. AR further

submitted that the cost of acquisition of asset of the year 1974 cannot

be taken in 1981 as the cost is higher in 1981 than in 1974. On the

other hand, the Ld. DR supports the order of the ld. CIT(A), NFAC.

observe that the lower authorities have decided the matter against the

assessee on the ground that the assessee did not furnish

documentary evidence in support of his claim of cost acquisition of

property. The ld. CIT(A) referred provision of section 55 of the Act

which is where the capital asset has become the property of the

assessee before 01-04-1981, then the cost of acquisition of such an

asset will be the actual cost to the assessee or fair market value as on

01-04-1981 at the option of the assessee. This provision of section 55

of the Act clearly says about the option of the assessee. The assessee

has exercised his option by claiming the cost of acquisition of the asset

ITA No.458/Chny/2023 :- 6 -: as per provision of section 55 of the Act and that exercise of option of

the assessee cannot be interfered by the ld. AO. However, the assessee failed to produce documentary evidence in support of his claim.

view that the value of the property as on 01.04.1974 cannot be remained as same on 01.04.1981. The value of the property certainly increased during the period between 01.04.1974 to 01.04.1981. The

lower authorities did not consider this. Therefore, it is our considered opinion that Rs. 15,000/- instead of Rs. 12,632/- should be fixed as the fair market value of the property for the ends of the justice. Order

accordingly.

Order pronounced on 29th December, 2023.

Sd/- Sd/- (मंजुनाथ. जी) (मनोमोहन दास) (Manjunatha. G) (Manomohan Das) �ाियक सद�/Judicial Member लेखा लेखा सद�य लेखा लेखा सद�य सद�य /Accountant Member सद�य चे�ई/Chennai, �दनांक/Dated: 29th December, 2023. EDN/-

ITA No.458/Chny/2023 :- 7 -: आदेश क� �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ*/Appellant 2. +,थ*/Respondent 3. आयकर आयु-/CIT 4. िवभागीय +ितिनिध/DR 5. गाड( फाईल/GF