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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: HON’BLE MADHUMITA ROY, JUDICIAL
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) of the Income Tax Act 1961(hereinafter referred to as ‘Act’) for Assessment Year 2010-11.
At the time of hearing of appeal Ld. DR submitted before us 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.
On the other hand Ld. Counsel appearing for the assessee 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 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
(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)
We have heard the rival submissions made by the respective 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.
The brief facts relating to this case is that the Ld. A.O 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 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.
We have further considered the judgment relied upon by the 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 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.
In the result appeal of the revenue is dismissed.
The order pronounced in the open Court on 20.05.2021