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Before: Shri V. Durga Rao & Shri G. Manjunatha
आयकर अपीलीय अिधकरण, ’ए’ �ायपीठ, चे�ई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI �ी वी दुगा� राव �ाियक सद� एवं �ी जी. मंजुनाथा, लेखा सद� के सम� Before Shri V. Durga Rao, Judicial Member & Shri G. Manjunatha, Accountant Member आयकर अपील सं./I.T.A. No. 562/Chny/2020 िनधा�रण वष�/Assessment Year:2014-15 Shri Parthiban, Vs. The Income Tax Officer, Plot No. 83-A, Door No. 9, Thiruvallur Non Corporate Ward 7(2), Street, Jagadhambigai Nagar, Chennai 600 034. Chennai 600 050. [PAN:BIIPP0005R] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri G. Sitaraman, Advocate ��थ� की ओर से/Respondent by : Shri AR V Sreenivasan, Addl. CIT सुनवाई की तारीख/ Date of hearing : 23.08.2022 घोषणा की तारीख /Date of Pronouncement : 21.10.2022 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 7, Chennai, dated 17.01.2020 relevant to the assessment year 2014-15.
Facts are, in brief, that the assessee has filed his return of income for the assessment year 2014-15 on 14.07.2014 returning NIL income and agricultural income of ₹.43,00,530/-. The case was selected through CASS and the assessment was completed under
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section 143(3) of the Income Tax Act, 1961 [“Act” in short] dated 18.08.2016 accepting the income returned. Subsequently, the Assessing Officer reopened the assessment by issuing notice under section 148 of the Act dated 12.02.2019 for the following reasons: “During the period, you have an agricultural income of ₹.43,00,530/- which includes sale proceeds of Wood sales (Silver Oakes) – ₹.24,15,000/- and Fire wood – ₹.16,90,312/-. You have purchased the agricultural land along with trees. Those trees have been sold to Timber depot. Such being the case, you have not cultivated any trees. A per Sec. 2(1)(A)(b) of the Act any income derived from such land by a cultivator or receiver of rent-in-kind to render the produce raised or received by him to be taken to market. Hence the income derived from the sale of wild trees and other useful trees could not be treated as agricultural income”. After considering the submissions of the assessee, the Assessing Officer has completed the assessment under section 143(3) r.w.s. 147 of the Act dated 26.07.2019 by making addition of ₹.41,04,312/- towards sale proceeds of standing crops treated as income from other sources.
The assessee challenged the reopening of assessment before the ld. CIT(A) and the ld. CIT(A) has held that reopening is valid.
On being aggrieved the assessee carried the matter in appeal before the Tribunal. The ld. Counsel for the assessee has submitted that during the course of original assessment proceedings, the Assessing Officer issued a notice under section 142(1) of the Act dated
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11.05.2016 asking the assessee to furnish proof for agricultural income. In response to the above notice, the assessee filed details by letter dated 21.06.2016, wherein, all the detail of agricultural income including sale of Silver Oakes, fire woods, etc. were furnished before the Assessing Officer. After considering all the details, the Assessing Officer has passed the assessment order under section 143(3) of the Act dated 18.08.2016. Subsequently, the assessment was reopened on the ground that the selling of Silver Oakes, fire woods are not agricultural income and there is an escapement of income and thereby, reopened the assessment is not correct in accordance with law. In the original assessment, the Assessing Officer has examined all the details and formed an opinion and therefore, the ld. Counsel for the assessee has submitted that the reopening is not valid.
On the other hand, the ld. DR relied on the orders of authorities below.
We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, the assessee filed his return of income on 14.07.2014 by disclosing NIL income and agricultural income of ₹.43,00,530/-. The
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case was selected for scrutiny under CASS and notice under section 143(2) of the Act was issued on 04.09.2015 and served on the assessee on 08.09.2015. Subsequently, notice under section 142(1) of the Act was issued on 11.05.2016, wherein, the Assessing Officer has asked the proof for the agricultural income received. In response to the above notice, the assessee has filed letter dated 21.06.2016, wherein, he has stated clearly the details of break-up of agricultural income which includes sale proceeds of Wood sales (Silver Oakes) at ₹.24,15,000/- and Fire wood at ₹.16,90,312/-. After considering the same, the Assessing Officer has completed the assessment under section 143(3) of the Act dated 18.08.2016 by accepting the agricultural income returned by the assessee.
6.1 Subsequently, a notice under section 148 of the Act dated 11.02.2019 was issued and the assessment was reopened under section 147 of the Act on the ground that the agricultural income earned by the assessee of ₹.43,00,530/- which includes sale proceeds of Wood sales (Silver Oakes) at ₹.24,15,000/- and Fire wood at ₹.16,90,312/- are not an agricultural income and therefore, the assessment was reopened on the ground that there is an escapement of income. We find that during the course of original assessment
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proceedings, the Assessing Officer issued notice under section 142(1) of the Act to examine the details of agricultural income and the details are also filed before the Assessing Officer and after examining the very same sale proceeds and figures, accepted the agricultural income and the assessment was completed under section 143(3) of the Act. Therefore, there is no failure on the part of the assessee in disclosing true and all material facts before the Assessing Officer and the Assessing Officer after examining the same and formed an opinion that the income earned by the assessee are an agricultural income.
6.2 On the basis of very same material, the Assessing Officer has issued notice under section 148 of the Act and reopened the assessment under section 147 of the Act is clearly amounts to change of opinion, which is not permissible in the eyes of law. This issue is squarely covered by the ratio laid down by the judgement of the Hon’ble Supreme Court in the case of CIT v. Kelvinator India Limited 320 ITR 561 (SC). Under the above facts and circumstances of the case, we set aside the order of the ld. CIT(A) and quash the assessment order passed by the Assessing Officer under section 143(3) r.w.s. 147 of the Act dated 26.07.2019. Accordingly, the ground raised by the assessee is allowed.
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In the result, the appeal filed by the assessee is allowed. Order pronounced on the 21st October, 2022 in Chennai.
Sd/- Sd/- (G. MANJUNATHA) (V. DURGA RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, 21.10.2022 Vm/- आदेश की �ितिलिप अ�ेिषत/Copy to: 1. अपीलाथ�/Appellant, 2.��थ�/ Respondent, 3. आयकर आयु� (अपील)/CIT(A), 4. आयकर आयु�/CIT, 5. िवभागीय �ितिनिध/DR & 6. गाड� फाईल/GF.