ITO 2(1), UJJAIN vs. SHRI SANTOSH AGRAWAL PROP. M/S. SANTOSH ENTERPRISES, UJJAIN

PER MADHUMITA ROY, J.M

The instant appeal filed by the Revenue is directed against the order dated 24.09.2019 passed by Ld. CIT(A, Ujjain arising out of the order dated 14.12.2017 passed by ITO-2(1), Ujjain u/s 143(3)

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of the Income Tax Act 1961(hereinafter referred to as ‘Act’) for

Assessment Year 2010-11.

that the issue has rightly been reopened by the Ld. A.O u/s 147 of

the Act on the ground of calculation of capital gain, wherein the

consideration of the sale of the property in question was taken less

than the guideline value. On the basis of such information notice

u/s 148 of the Act was issued and completed assessment upon

making addition of Rs11,01,028/- in the hands of the appellant.

He ultimately relied upon the order passed by Ld. A.O.

relied upon the order passed by Ld. CIT(A). He raised objection on

the point of maintainability of the reopening of assessment by

issuance of notice u/s 148 dated 27.03.2017 which was admittedly

issued after the expiry of 4 years from the end of assessment year

alleging less calculation of capital gain arising on the sale of

property. However, there was no mentioning of escapement of

assessment by reason of failure on the part of the assessee to

disclose fully and truly all material facts necessary for that 2

Santosh Agrawal ITA No.989/Ind/2019

assessment in the notice under section 148 of the Act as submitted

by the Ld. AR. Since the said primary condition as stipulated under

the statutory provision has not been fulfilled by the revenue while

reopening assessment, the entire proceeding is void ab-initio and

liable to be set aside as also the argument advanced by the Ld. AR.

It was further submitted by the learned AR that the

assessment proceeding under section 143(3) of the Act was

completed by disallowing the claim of Rs.7,07,009/- made under

section 54B of long-term capital gain arising out of the sale of

property at survey No.119, village: Goyala Khundra. However, the

notice under section 148 was issued to calculate the capital gain on

the sale of the said property as the sale consideration was less than

the guideline value which tantamount to change of opinion when

the transaction of sale of property and the long-term capital gain

arising thereon has already been examined and the claim of

deduction under section 54B of the Act has been disallowed in the

proceeding under Section 143(3) of the Act.

In support of his argument he has relied on the judicial

pronouncements in the following matter ; 3

Santosh Agrawal ITA No.989/Ind/2019

(i) CIT V/s Kelvinator India Ltd 320 ITR 561

(ii) ITO V/s Techspan India (P) Ltd (2018) 404 ITR 10(SC)

(iii) Asteroids Trading & Investment Pvt. Ltd V/s DCIT (2009)

(iv) CITV/s Usha International Ltd 348 ITR 484 (Delhi)

parties. We have also perused the relevant materials placed on

record including the order passed by the Ld. A.O under section 148

of the Act, Original Assessment Order under section 143(3) of the

Act and impugned appellate order before us.

reopened the case of the appellant on the ground that calculation of

the capital gain is arising out of the sale of property at Survey

No.119, Village: Goyala Khundra, Tehsil Ujjain found less since the

sale consideration was taken less than the guideline value.

Consequently notice u/s 148 of the Act was issued. The

reassessment was completed upon making addition of

Rs.11,01,028/- in the hands of the appellant. It appears that in the

original assessment order the Ld. A.O had verified and examined

Santosh Agrawal ITA No.989/Ind/2019

the facts and documents and accordingly given its opinion on the

facts. In fact the claim of exemption under section 54B of the Act

was denied by the Learned AO in the original assessment

proceeding on the premise that the new asset being the agriculture

land was purchased by the appellant on 22.03.2011 i.e. after the

date of filing of return under section 139(1) of the Act. Ultimately

the issue was resolved by the Learned CIT(A) in favour of the

assessee in the appellate proceeding. But it appears that during

the reassessment proceeding, on the similar issue, the Learned AO

had given his different findings. This clearly demonstrates that the

matter did came for due consideration before the Learned AO and

was in fact considered. When during the original assessment

proceeding upon considering all aspect of the matters and upon

proper application of mind the determination of amount of taxable

income was made and the tax paid thereon, in the absence of any

error and/or mistake being found merely for the sake of giving

different opinion the learned AO is not permissible to change the

earlier opinion. Neither any new material and/or information has

been brought by the learned AO for reopening of assessment.

Santosh Agrawal ITA No.989/Ind/2019

Learned AR particularly in the matter of CIT V/s Kelvinator India

Ltd, reported in 320 ITR 561. After going through the ratio laid

down in the said judgment we are of the considered opinion that

when reopening has been done on the same set of facts/ documents

and/or information is by the Ld. AO in the instant case the same

cannot be indulged which would amount to give premium to the

authority exercising quasi-judicial function to take benefit of its

own wrong. Apart from that while reopening no allegation was

made by the learned AO of failure on the part of the assessee to

disclose fully and truly all material facts necessary for assessment

which is the primary condition to be fulfilled for reopening of

assessment beyond 4 years from the end of the relevant assessment

year as stipulated by the statutory provisions, the reopening cannot

be said to be justified at all. The same, in our considered opinion is

merely a change of opinion and therefore bad in law, void ab initio

and without any jurisdiction and hence liable to be quashed.

The judgment relied upon by Ld. AR in the case of Lucas TVS

Limited (2001) 249 ITR 306 (supra) passed by Hon'ble Apex Court is 6

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squarely applies for the instant case which we find has been duly

taken care of by the Ld. CIT(A) while quashing the reassessment

proceedings initiated by the Ld. A.O. Thus in the absence of any

new material which can lead to reassessment proceedings by the

Ld. A.O particularly when the original assessment u/s 143(3) of the

Act was completed upon due consideration of the relevant materials

made available by the assessee for adjudication of the same issue

involved therein, we find no justification in such reassessment

initiated by Ld. A.O which has rightly been considered in its proper

perspective by Ld. CIT(A) and holding the reopening of the case

invalid is just and proper so as to warrant interference. Thus the

appeal of the revenue is found to be devoid of any merit. Hence the

order passed in affirmative i.e. in favour of the assessee and against

the revenue.

The order pronounced in the open Court on 20.05.2021

Santosh Agrawal ITA No.989/Ind/2019

Sd/- Sd/-

(MANISH BORAD) (MADHUMITA ROY) ACCOUNTANT MEMBER JUDICIAL MEMBER

�दनांक /Dated : 20th May, 2021 /Dev

Copy to: The Appellant/Respondent/CIT concerned/CIT(A) concerned/ DR, ITAT, Indore/Guard file. By Order, Asstt.Registrar, I.T.A.T., Indore