AJAY VARMA NAGARAJU,HYDERABAD vs. INCOME TAX OFFICER, WARD-12(3), HYDERABAD

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ITA 364/HYD/2019Status: DisposedITAT Hyderabad03 May 2019AY 2009-103 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the reopening of assessment under Section 147 was bad in law as it was based on a mere change of opinion without any new tangible material. Consequently, the disallowance of the exemption claim was quashed.

What were the facts?

The assessee claimed an exemption of Rs. 7,03,441/- under Section 10 in the original assessment. The AO reopened the assessment after three years, alleging the assessee failed to furnish details for the exemption claim. The assessee contended the reopening was based on a change of opinion without new material.

What were the issues?

Whether the reopening of assessment under Section 147 was valid when based on a change of opinion without new material. Whether the AO correctly denied reasons for reopening when the assessee requested them.

Which sections of the Income-tax Act were involved?

Section 10,Section 143(3),Section 147,Section 148,Section 143(2)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, HYDERABAD BENCH ‘A, HYDERABAD

Before: SMT. P. MADHAVI DEVI & SHRI S. RIFAUR RAHMAN

For Appellant: Shri P. Murali Mohana Rao
For Respondent: Shri Phani Raju
Hearing: 24/04/2019Pronounced: 03/05/2019

PER S. RIFAUR RAHMAN, AM: This appeal filed by the assessee is directed against the order of CIT(A) – 1, Hyderabad, dated, 11/01/2019 for AY 2009-10.

2.

Brief facts of the case are, the assessment was originally completed u/s 143(3) of the Income-tax Act, 1961, in short, (‘the Act’) on a total income of Rs. 12,99,877/-, in which, the assessee claimed allowance of exemption u/s 10 to the tune of Rs. 7,03,441/-. The assessee did not furnish any details nor proof for claim of exemption u/s 10, the AO reopened the assessment u/s 147 of the Act by issue of notice u/s 148 of the Act vide notice dated 31/03/2014. AO noted that though several notices were issued to the assessee to furnish details of claim u/s 10 along with necessary proof, the assessee failed to furnish any details.

2 I.T.A. No. 364/Hyd/19 Ajay Varma Nagaraju, Hyd.

2.1 On 16/03/2015, the assessee filed a request for providing reasons for reopening of the assessment, which was denied by the AO as the assessee has not filed return of income in response to the notice u/s 148 of the Act. The AO, accordingly, disallowed the assessee’s claim, to the extent of Rs. 6,93,841/-. after allowing an amount of Rs. 9,600/- paid towards transport allowance.

3.

Aggrieved by the order of AO, the assessee preferred an appeal before the CIT(A), who confirmed the order of AO.

4.

Aggrieved by the order of CIT(A), the assessee is in appeal before us contending in the grounds of appeal, inter- alia that on the basis of mere change of opinion and without there being any new tangible material, the assessment was reopened. Further, it was contended that without issuing the statutory notice u/s 143(2) of the Act, when the assessee has informed through his letter that the return of income originally filed on 31/10/2009 may be treated as that of the return of income filed in response to the notice u/s 148. Further, it was contended that the AO erred in not communicating the reasons for reopening the assessment u/s 148 of the Act.

5.

Considered the rival submissions and perused the material on record. The assessee claimed allowance of exemption u/s 10 of the Act to the tune of Rs. 7,03,441/-, which was allowed in the original assessment passed u/s 143(3) on 03/11/2011. After a lapse of three years, the AO alleged that the assessee did not furnish the details for claiming exemption u/s 10 and hence reopened the assessment and disallowed the assessee’s claim of exemption on the ground that though several opportunities were provided to the assessee, the assessee failed to submit any details

3 I.T.A. No. 364/Hyd/19 Ajay Varma Nagaraju, Hyd.

regarding the exempt income. Even when the assessee asked to provide the reasons for reopening, the AO denied the same on the ground that the assessee has not furnished revised return of income against the issue of notice u/s 148, whereas, the assessee states that he has informed through his letter that the return of income originally filed on 31/10/2009 may be treated as that of the return of income filed in response to the notice u/s 148.

5.1 We find that the AO without bringing any new tangible material on record, reopened the assessment on the basis of mere change of opinion, therefore, the reopening of assessment u/s 147 is bad in law and the same is hereby quashed. Accordingly, the grounds raised by the assessee are allowed.

6.

In the result, appeal of the assessee is allowed.

Pronounced in the open court on 3rd May, 2019.

Sd/- Sd/- (P. MADHAVI DEVI) (S. RIFAUR RAHMAN) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, dated 3rd May, 2019. kv Copy forwarded to: 1. Shri Ajay Varma Nagaraju, C/o P. Murali & Co., CAs 6-3-655/2/3, Somajiguda, Hyderabad – 500 082 2. ITO, Ward – 12(3), Hyd. 3. CIT(A) - 1, Hyderabad 4. Pr. CIT – 1, Hyderabad 5. The DR, ITAT, Hyderabad 6. Guard File

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