K. PARAMASIVAM,KARUR vs. ITO, WARD-1,, KARUR

आयकर अपीलीय अिधकरण, ‘सी’ ायपीठ,चेई।
IN THE INCOME TAX APPELLATE TRIBUNAL‘C’ BENCH: CHENNAI
ी एबी टी. वक, ाियक सद एवं ी जगदीश, लेखा सद के सम$
BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER

ITA Nos.
Assessment year
Appellant
Respondent
1341/CHNY/2024
2012-13
Shri Nochipalayam
Kaliappan Kandasamy,
19/A1, Neelam Garden Apts.,
Chinna Kothur,
Karur – 639 002. PAN: AAHPK 7003Q
The ACIT,
Circle 2(1),
Trichy.
2584/CHNY/2024
2012-13
Shri S.Aravind,
S.F.No.146, OthaiyoorRaod,
T.ChellandiPalayam,
Karur – 639 003. PAN: AGQPA 5374B
The Income Tax
Officer,
Ward – 1,
Karur.
2585/CHNY/2024
2013-14
2586/CHNY/2024
2012-13
Shri M.Velusamy,
No.129A/404, Dev Place,
M.G.Road,
Bharathi Nagar,
Karur – 639 002. PAN: AFBPV 2442R
The Income Tax
Officer,
Ward – 1,
Karur.
2587/CHNY/2024
2013-14
2588/CHNY/2024
2012-13
Shri Palanisamy Gounder
Loganathan,
No.100A, Sellandipalayam,
Thoranakkalpatti,
Karur – 639 002. PAN: ABXPL 3145P
The Income Tax
Officer,
Ward – 1,
Karur.
2589/CHNY/2024
2013-14
2590/CHNY/2024
2012-13
Shri Ramasamy
Palanisamy,
111/B, Vaiyapuri Nagar,
2nd Cross,
Sengunthapuram Post,
Karur – 639 002. PAN: AAJPP 9838N
The Income Tax
Officer,
Ward – 1,
Karur.
2591/CHNY/2024
2013-14
2685/CHNY/2024
2013-14
Shri P.Karunanithi,
No.6, Karuppanna Nagar,
Vangapalayam,
Vengamedu Post,
Karur – 639 006. PAN: ACJPK 0267G
The Income Tax
Officer,
Ward – 1,
Karur.

ITA Nos.
Assessm year
2686/CHNY/2024
2013-1
2687/CHNY/2024
2013-1
2688/CHNY/2024
2012-1
2689/CHNY/2024
2012-1
2690/CHNY/2024
2013-1
2691/CHNY/2024
2012-1
2692/CHNY/2024
2013-1
2693/CHNY/2024
2012-1
2694/CHNY/2024
2013-1
2695/CHNY/2024
2012-1
2696/CHNY/2024
2013-1
2697/CHNY/2024
2013-1
ITA No.2587/CHN
(AYs 2
Shri M
::2 ::

ment

Appellant
14
Shri K.Kathirvel,
No.290A, Amutham Nagar,
Mahatma Gandhi Road,
Karur – 639 002. PAN: AULPK 0500E
14
Shri P.Nallusamy,
No.85/4, Sukkaliyur Post,
Karur – 639 003. PAN: ADSPN 1565E
13
Shri P. Thangarasu,
No.47A,
Chinnakulathupalayama,
Karur – 639 001. PAN: ADOPT 2298Q
13
Shri K.Sadasivam,
No.3/15, Nochipalayam,
Karur – 639 002. PAN: APFPS 1144D
14
13
Shri K.Baskar,
No.2/267-3, Sindhu Nagar,
Andan Koil East,
Karur – 639 002. PAN: AKDPB 1375N
14
13
Shri K.Paramasivam,
Covai Road,
AndankovilPudur,
Andankoil Post,
Karur – 639 002. PAN: AIMPP 8513H
14
13
Shri S.Easwaramoorthy,
S.F.No.400, Gandhi Nagar,
Sukkaliyur,
Karur – 639 002. PAN: AACPE 3504H
14
14
Shri R. Eswaramoorthy,
No.26/F, Kadhapparai Post,
Arugampalayam,
Karur – 639 0006. PAN: AAJPE 3129R

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others
Respondent
The Income Tax
Officer,
Ward – 1,
Karur.
The Income Tax
Officer,
Ward – 1,
Karur.
The Income Tax
Officer,
Ward – 1,
Karur.
The Income Tax
Officer,
Ward – 1,
Karur.
The Income Tax
Officer,
Ward – 1,
Karur.
The Income Tax
Officer,
Ward – 1,
Karur.
The Income Tax
Officer,
Ward – 1,
Karur.
The Income Tax
Officer,
Ward – 1,
Karur.

ITA Nos.
Assessm year
2765/CHNY/2024
2012-1
Shri Nochipalayam Kaliap
Kandasamy,
19/A1, Neelam Garden Apts
Chinna Kothur,
Karur – 639 002. [PAN:AAHPK 7003Q]
(
ाथक/Petitioner)

अपीलाथकीओरसे/ Appellant
'(थकीओरसे /Respondent

सुनवाईकीतारीख/Date of Hea
घोषणाकीतारीख /Date of Pronouncement

PER ABY T. VARKEY

The appeal in ITA against the order of the Chennai (hereinafter in Assessment Year (her
ITA No.2587/CHN
(AYs 2
Shri M
::3 ::

ment

Appellant
13
Shri M.Natesan,
No.47A,
Chinnakulathupalayam,
Karur – 639 001. PAN: AFEPN 9980P

S.A.No. 61/Chny/2024

[In ITA No. 1341/Chny/2024]

िनधारणवष / Assessment Year : 2012-13

ppan s., v.
The ACIT,
Circle 2(1),
Trichy.

(
यथ/Responde ts by :

Shri T. Banusekar,
Ms. Samyuktha Ba t by :
Ms. R. Anita, Addl.
aring

:

आदेश / O R D E R
Y, JM:
A No.1341/CHNY/2024 is preferred b e Learned Commissioner of Income short ‘the Ld.CIT(A)’), dated 19.0
einafter in short ‘AY’) 2012-13;

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others
Respondent
The Income Tax
Officer,
Ward – 1,
Karur.

ent)
, Advocate &
anusekhar, Advocate
.CIT by the assessee
Tax (Appeals),
03.2024 for the and all other twenty-two (22) appe assesse’s against the Income Tax (Appeals),
13 & 2013-14. 2. Since the issues were heard together. B of Shri S Aravind for A and result of which wi appeals.

eals are preferred by fourteen common order of the Learned Co
NFAC, Delhi dated 30.09.2024 for s involved in all these appeals are Both parties agree that the appeals
AYs 2012-13 & 2013-14 may be take ill be followed mutatis mutandis in als, the addition/s impugned are e h was conducted u/s 133A of the I ct’] upon the ‘Karur Kongu Charit herefore be first relevant to discuss t ue/s impugned in these appeals. Bri at, one M/s Karur Kongu Charitable way of Trust Deed dated 04.02.201
es with the purpose of operating urposes. The trustees are noted to h
9 acres out of which land of 5
for a value of Rs.4,07,000/- record

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others
(14) different ommissioner of the AYs 2012- common, they in the matters en as lead case n all the other emanating from ncome-tax Act, table Trust’ on the background efly stated, the Trust [in short
1 comprising of a polytechnic ave collectively
.02 acres was ed in the books of accounts on 01.06
construction of the poly
M/s Selvaraj & Co. Late upon the Trust on 23
materials were seized, documents regarding in 28.11.2012, ledgers, a along with undated
Simultaneously, the bui whose premises loose d also seized. The statem the Partner of the build that, the builder had a towards the said constr admitted that they ha unaccounted sources an in the FY 2012-13 relev explained to have bee
Pursuant to this admiss offered the admitted su

ITA No.2587/CHN
(AYs 2
Shri M
::5 ::

.2011. The Trust is noted to ha ytechnic college for which it had eng er on, survey u/s 133A of the Act
3.01.2013 and in the course of which are inter alia noted to com nvestment in land, purported trial an estimate for proposed construc completion certificate of equiva ilder [M/s Selvaraj & Co.] was also documents relating to construction u ments of the Managing Trustee, Site er firm was also recorded. It is inte admitted to have received Rs.2.40
ruction. To this, all the trustees are ad collectively paid Rs.2.25 crore nd agreed to proportionately pay ta vant to AY 2013-14 and that the ba n paid out of the regular sources ion, the trustees are noted to have ms in their returns of income filed fo

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others ve undertaken gaged a builder, was conducted which, several mprise of loose balance as on ction of college alent amount.
surveyed from undertaken was e Engineer and er alia observed crores in cash e noted to have es out of their ax on the same alance sum was s of the Trust.
proportionately or AY 2013-14. 4. Post the survey, t to have been taken up
143(2) of the Act dated issued notices u/s 14
explanation and other d of the admission made they had paid taxes the the assesses had produ evidences and that in found in the course assessments were com addition was made by th

the case of the trustees for AY 201
p for scrutiny by the AO by issue d 29.05.2014. Thereafter, the AO is 2(1) of the Act calling for book details. The AO is noted to have ta by the trustees in the course of s ereon. The AO is also noted to have uced their books of accounts along w light of the same, the document of survey were examined and t pleted u/s 143(3) of the Act in w he AO.
oted that, the cases of these asse ry of four years from the end o
2-13 & 2013-14 by issue of notices
019. The assesses are noted to have l return filed u/s 139 of the Act a notice u/s 148 of the Act. Upon oted to have supplied the reason ments. Drawing our attention to e AYs, the Ld. AR for the assesses s

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others
3-14 are noted e of notice u/s s noted to have s of accounts, ken cognizance survey and that observed that, with supporting s and material thereafter, the hich no further esses were re- of the relevant u/s 148 of the e requested the s the return of request of the ns recorded for the recorded showed us that, the AO after re-appra according to him, wa assessment for AY 2013
the assesses had failed on the construction of impugned reassessmen land & cost of cons disclosed/offered by the at the time of survey, t acquired by the trus computed sum of Rs.66
the books of accounts examined the purported inferred that contributio for construction was R have been incurred, as Department, was Rs.17
was held to be further apportioned between A Rs.2,94,97,054/- respe proportionately assesse construction in the han
ITA No.2587/CHN
(AYs 2
Shri M
::7 ::

aisal of the impounded survey m as already examined in the cour
3-14, changed his opinion and form d to disclose fully and truly the inve the polytechnic college. It is obse nt orders that, according to AO, bo struction of the building were e trustees. Based on the loose she the AO is noted to have held that, t stees was actually Rs.2,91,20,00
6,20,000/- which in his view was in had escaped assessment. Furthe d trial balance seized in the course ons stated to have been received fro
Rs.12.78 crores whereas the cost w s per completion certificate, as ob
7.02 crores. The differential sum of cost incurred by the trustees and AYs 2012-13 & 2013-14 at Rs.1,28
ectively. The AO is accordingly n d the aforesaid computed further c nds of all the trustees. Aggrieved b

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others material, which rse of original ed a belief that estments made erved from the oth the cost of not correctly eets impounded the cost of land
00/- and thus ncurred outside r, the AO also e of survey and om the Trustees which ought to btained by the Rs.4.24 crores the same was 8,98,946/- and noted to have ost of land and by the action of the AO, all the trustees
CIT(A) who is noted t aggrieved by the said or 6. We first take up t alia noted to have cha
147/148 of the Act. In challenging the juri ict valid, goes to the root o adjudicate the same.

are noted to have preferred appea to have confirmed the action of rder, the trustees are now in appeal the appeal of the lead assessee for 4 [ Shri S Aravind] in which the as allenged the legal validity of the our view, the legal issue raised b tion of the AO to reopen the assess of the matter, and therefore we dee pening of assessment by issue of no or the assessee submitted that, t
013 and that, the AO was in pos al basis which the reasons were as done, much prior to the expiry o
143(2) of the Act for AY 2012-13 viz e the AO was of the view that the ng which incriminated the assessee t to take up the case for scrutin efore, when the AO chose not to is NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others l before the Ld.
the AO. Being l before us.
AY 2012-13 in ssessee is inter reopening u/s y the assessee sment, if found em it fit to first otice u/s 148 of he survey was ssession of the recorded and of time limit for z., 30.09.2013. seized material e qua AY 2012- ny assessment.
ssue notice u/s 143(2) of the Act whe possession of the imp notice u/s.148 of the A valid action and hence, relied on the decision
Tanmac India v DCIT
Court decision in the c
(Del) and the decision o of Cheyur Ramakris
/2024).

n the time was available, and he pounded material, then the subse
Act based on the same seized mate reopening notice is bad in law. For t of Hon’ble Madras High Court i
[2016] 97 CCH 0189 and the Hon ase of CIT v. Orient Craft Ltd. 3
of the coordinate Bench of this Tribu hnan Rajkumar v. ITO (ITA
Ld. CIT, DR appearing for the sessee had not filed his return of e Act and therefore there was no o for scrutiny by issue of notice u/s 14
the decision of Hon’ble Madras High he assessee was distinguishable. Th e AO also did not have the occasion eized material and ascertain wheth aken up for scrutiny until the asse
2013-14 was completed u/s 143(3) on the decision of Hon’ble Suprem

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others was already in quent issue of erial was not a this, the Ld. AR in the case of n’ble Delhi High
354 ITR 0536
unal in the case
No.334/Chny
Revenue has income for AY occasion for the 43(2) of the Act h Court (supra) he Ld. CIT, DR at the material er the case for essment for the of the Act. The me Court in the cases of ACIT v Raje
500) & EssEss Kay support the AO’s actio which was completed u assessment was not occasion to form any o
2012-13 and hence sh justified.

esh Jhaveri Stock Brokers (P) L
Engg. Co. (P) Ltd. v CIT (247
on of reopening the assessment fo u/s 143(1) of the Act. According to completed u/s 143(3), the AO n opinion on the seized material for t he contended that the impugned rejoinder, pointed out that, the ass for AY 2012-13 on 16.10.2013 a wledgment of the return of income, w ok and asserted that the AO has ac ment orders of the other assessee’s s (12 assessee’s out of 25 filed in th rding to him, therefore, as per the la ered to take up the income-tax ass until six months from the end o n or before 30.09.2013, if the retur r within six months from the end rn is furnished; and placed copy o tention to relevant portion of sectio

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others
Ltd. (291 ITR
7 ITR 818) to or AY 2012-13
o her, since the never had the the relevant AY reopening was sessee had filed nd invited our which has been cknowledged in s/Trustees that he year 2012 &
aw in force, the sessment of AY of the relevant n is filed within of the financial of Finance Act- n 139 & 143 of the Act to buttress his notice that the Finance
[ITR] before the expi assessment year and th the ITR’s before the pe and the AO had time
143(2) on or before 3
present set of cases, the of the Act for AY 2012
given by the Revenue decision of Hon’ble M misplaced. He further were not relevant to the was only held that, no proceedings u/s.143(1)

afore said submission. And further e Act, 2012, permits the assessee ry of one year from the end o he assessee’s in the present case h rmissible time limit prescribed u/s.
up to 30.09.2014 [u/s 143] to is 30.09.2014. Therefore, according e AO had extended time to issue no 2-13. Thus, Ld AR submitted that e to distinguish the assessee’s re adras High Court (supra) was m argued that, the decisions cited b e plea raised by the assessee, as in opinion can be said to have been of the Act.
he rival submissions of both the pa vey action u/s 133A of the Act was urse of which several material i nce, completion certificate, estim seized by the AO. Also, stateme d by the AO at the time of surve

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others brought to our e to file return of the relevant had in fact filed
139 of the Act, ssue notice u/s to him, in the otice u/s 143(2) the reasoning eliance on the misconceived &
by the Revenue those cases, it n formed in the rties. The facts s conducted on including loose mated cost of ents of several ey. Thereafter, pursuant to post survey last of the statement o accordingly noted that t seized material, as he enquiries and thereafte
Act.

y enquiries, the AO is noted to hav of the trustees in the month of Aug the AO was indeed aware about the e had examined the same in th er examined the trustees on oath
AY 2012-13, the assessee is noted t
10.2013. Having regard to the time it is observed that, the AO was lega tax assessment of AY 2012-13 for sc f the relevant assessment year i.e.
n due-date u/s 139(1) or six month which the return is furnished. Acco note above, we find that, the AO b material found in course of surve se for AY 2012-13 for regular scrut ssessee [Arvind] had filed return on ssary to do so, since he had time til
. The AO is however noted to have find force in the Ld. AR’s submissio e survey, after examining the impou

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others ve recorded the gust 2013. It is contents of the he post survey u/s 131 of the to have filed his e limit set out in ally empowered crutiny until six
30.09.2013, if hs from the end rdingly, in light being already in ey, could have tiny u/s 143(2) n 16.10.2013, if l 30.09.2014 to refrained from on that, the AO, unded material, was not of the view tha required to be scrutinize to have changed his o
26.03.2019 beyond fou year, on the basis of th his possession, when th scrutiny u/s 143(2) of t is noted to have formed to tax had escaped ass cannot be countenance before reopening the as is as follows:-
“The assessee is Trust", located
Sengunthapuram
The trustees (32
village, near Karu was Rs. 14,40,0
Out of this, the t lakhs for constru
Year 2011-12 re started construc construction work

Meanwhile a surv above trust on 2
statements were Shri B. Sathyam
S.Selvaraj& Co) a Shri R. Palanisam in his statement the trust and with ITA No.2587/CHN
(AYs 2
Shri M
::13 ::

at the income of the assessee for A ed. Later on however, the AO’s suc opinion and issued notice u/s 148
ur years from the end of the releva e same impounded material, which e assessment for AY 2012-13 was n the Act, and basis the same stale m d his belief that income of the asses sessment. According to us, such ac ed. The relevant recorded reason ssessment for AY 2012-13 as taken s one of the trustee in "The Karur Kongu C at No.464,
Vaiyapuri
Nagar,
2nd
, Karur. The trust was established on 04
in Nos) bought 17.99 acres of land at Pu ur on 09.03.2011. The guide line value of 00/- and the market value was Rs.2,60, trust bought 5.02 acres of land at a cost o ucting a Polytechnic College. During the levant to the assessment year 2012-13, cting a Polytechnic College on the la k was continued till the financial year 2012- vey u/s 133A was conducted at the premis
23.02.2013. During the survey proceeding recorded from R. Palanisamy, the Managin moorthy, partner of Erode based builder and Shri S. Sethurajan site Engineer of the my, the managing trustee of the trust had that a сonstruction contract was executed h a builder firm called M/s S. Selvaraj & Co

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others
AY 2012-13 was ccessor is noted of the Act on ant assessment was already in not taken up for material, the AO ssee chargeable ction of the AO ns, by the AO n note of by us,
Charitable d
Cross,
4.02.2011. ngambadi f the land
,50,000/-.
of Rs.4.49
Financial the trust and. The -13. ses of the gs, sworn ng trustee, firm (M/s firm.
admitted d between o of Erode on 05.09.2011. T
Also, according
23.01.2013 Furth
Rs. 40 lakhs towa

In his stateme
R.R.Sathyamoort executed on 05.0
College. Further,
Rs.3,80,00,000/-
(except cement a engineer Shri S.
strengthened th
Financial Year 20

Consequent to th
Asst. Year 2013
scrutiny proceedi towards the purc income However, construction of th admit the invest assessment year that the trust cam had not generate only source for th no external borro

Therefore, the ab the investments construction of t believe that the and I request t initiate proceedin

The total value of the contract was Rs. 1
to him, the trust had paid Rs.8 lakh her, he had admitted, each trustee had co ards the construction cost.
ent, the partner of the builder fi hy also acknowledged the contract a 09.2011 towards the construction of the P
, he had admitted that the firm had and the total value of the contract was R and steel). Further, the statement given b
Sethurajan on the loose sheets impoun e building construction commenced du
11-12
e survey, the assessments of the 32 truste
3-14 were completed on 28.03.2016 D ngs, the trustee Shri S.Aravind admitted R chase of land (17.99 acres) from his una
, he failed to disclose the investments ma he College building Further, the trustee had tments even in the return of income file r 2012-13. In this juncture, it is pertinen me into existence only in the year 2011 and ed any income during the year of construc he construction was from the trustees as owings by the trust bove trustee had failed to disclose truly an made during the Financial Year 2011-1
the Polytechnic College. Hence, I have income chargeable to tax has escaped as he Pr.CIT Trichy-1, Trichy to accord ap gs u/s 147 for the assessment year 2012-1
bove reasons shows that, the AO ha h were recorded at the time of s hen, to infer that the assessee alue of his investments. In our opi conducted the survey, did not cho

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others
12 crores.
hs as on ontributed irm
Shei agreement olytechnic received s.7 crores by the ate nded also uring the ees for the uring the Rs.8 lakhs accounted de on the d failed to ed for the nt to note d the trust ction. The there was nd fully on 12 on the reason to ssessment pproval to 13.”
as relied on the survey and the had not fully nion, when the oose to issue a notice u/s.143(2) of th return of income of A material already in his he did not consider it ne
AO cannot be arbitrarily stale material, which w earlier, the Revenue ca limit beyond four years, material (apart from t record. In our considere
AY 2012-13 was invalid

he Act to initiate proceedings for AY 2012-13, on the basis of the possession, then the obvious concl ecessary or expedient to do so. This y changed to re-assess the income was already on record. Having m annot be permitted to avail of the e
, particularly in the absence of any n the existing survey material) bein ed view therefore, the reopening of and bad in law.
s found to be squarely supported by adras High Court in the case of Ta answering to the question as to w mstances of the case, the Appellat that the Assessing Officer is justifie ance of notice under section 148 o s unearthed justifying the re-op e High Court is noted to have held a essing officer, after issuing intimation u ot issue a notice u/s. 143(2) of the Ac r scrutiny of the return of income, t hat he does not consider it necessary o ference being that the Return of Incom

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others scrutiny of the seized survey lusion was that s opinion of the on the basis of missed this bus extended time- new or tangible ng brought on assessment for decision of the anmac India v whether on the e Tribunal was ed in reopening of the Act when pening of the as follows:
u/s. section ct to initiate the obvious or expedient me filed was in order. It is t the assessing o material, alread above fundame apparent that t case is not one make it abunda initiated on the which were ava and which ough section 143(2) scrutiny. What to have been Having missed permitted to av any new or t assessment has u/s. 148. The n an arbitrary ex impermissible in 13. The Division of CIT v. Orient taxmann.com 39
substantial quest follows;

'Was the Tribuna tangible materia requisite belief re assessment made

ITA No.2587/CHN
(AYs 2
Shri M
::16 ::

his opinion that cannot be arbitrarily officer, to re-assess income on the ba dy on record. If we thus keep in th ental requirement of section 147, it the exercise undertaken by the Reve e of re-assessment, but of review. T antly clear that the re-assessment is s e basis of the return of income and the ailable with the assessing officer since ht to have prompted him to issue a n of the Act to conduct the proceed is sought to be done by the re-assess achieved by scrutiny assessment p d the bus earlier, the Department vail of the extended time limit in the tangible material, when the time f s elapsed on 31.3.2001, prior to issu notice under section 148 dated 9.12.2
xercise of power and a review of p n law.
n Bench of the Delhi High Court i
Craft Ltd. [2013] 354 ITR 536/215 Ta
2 deals specifically with this aspect of the tion of law that was dealt with by the Hig al right in law in holding that in the abs l available with the Assessing Officer egarding escapement of income, the reop e under section 143(1) is bad in law?'
Bench notes that the Supreme Court eri stock Brokers P. Ltd. (supra) only d opinion at the time of issuance of prima fac icate anywhere that a re-assessment can b reason to believe.
Division Bench holds thus:
contrary to what the Revenue would hav carte blanche to the Assessing Officer to imation under section 143(1) at his whims eason to believe within the meaning of t n by us]

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others changed by asis of stale he mind the t would be enue in this The reasons sought to be e enclosures e 2.11.1998
notice under dings under sment ought proceedings.
cannot be absence of for scrutiny ue of notice
2002 is thus proceedings in the case axman 28/29
e matter. The h Court is as sence of any to form the pening of the in the case eals with the cie intimation be initiated in e us believe, o disturb the and caprice; the section.’”

It is incorrect opportunity as scrutinize the expedient for h resort to the p fresh material i

'Having regard to reason to believe
1948 till date, we exactly the same
The assumption believe" have to an intimation u erroneous and m for such an assu
147; it makes n
143(3) and the i not permissible to "reason to believ unable to appre somehow the sa interpretation of t assessment earlie
ITA No.2587/CHN
(AYs 2
Shri M
::17 ::

ras High Court in particular on the e Assessing Officer in issuing 143(2
hich was already on this record, is as well as the law remain identical erely by virtue of the non-action on the er in the case of the present assessee e a notice under section 143 (2) of t ets the advantage of another four initiate proceedings for re-assess neither be the proper interpretation of on of Legislature. …………………………….
……………….
t to state that the Assessing Offic s the statute grants him full opp assessment if he felt it was nec him to do so. Having chosen not to, rovisions of S.147 in the absence of ndicating escapement of income.
of the Delhi High Court in the case of occasion to consider a similar question and 46, holds as follows; o the judicial interpretation placed upon th e", and the continued use of that expressio e have to understand the meaning of the manner in which it has been understood b of the Revenue that somehow the word be understood in a liberal manner where t nder section 143(1) is sought to be isconceived. As pointed out earlier, there umption because of the language employe no distinction between an order passed u ntimation issued under section 143(1). Th o adopt different standards while interpreti e" vis-à-vis section 143(1) and section 14
eciate what permits the Revenue to a ame rigorous standards which are appli the expression when it is applied to the reo er made under section 143(3) cannot appl

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others e issue of non-
2) of the Act on s noted to have in all three e part of the e, i.e. by his the Act, the years from ment. This section 147
.
cer had no ortunity to essary and , he cannot any new or f Orient Craft d the Division he expression on right from expression in by the courts.
ds "reason to the finality of disturbed is is no warrant ed in section under section herefore, it is ng the words
43(3). We are assume that cable in the opening of an y where only an intimation was place an assessee
143(1) in a more there was a full-f matter which is w the matter. The would be tha reopening an reasons to belie return under s reopen the as distinction betw
"reason to beli earlier under se were issued ea an unintended interpretation t eschewed."
. . . . . . . . . . .
The reasons reco there was escap income" filed by t
143(1) without sc of the earlier pr
Officer, both in CIT v. Kelvinat

s issued earlier under section 143(1). It w e in whose case the return was processed u e vulnerable position than an assessee in fledged scrutiny or is accepted without de within the control of the assessee; he has other consequence, which is somew t the entire rigorous procedure i assessment and the burden of pr eve could be circumvented by first ac section 143(1) and, thereafter, issue ssessment. An interpretation which ween the meaning and content of the ieve" in cases where assessments w ection 143(3) and cases where mere rlier under section 143(1) may well l mischief. It would be discriminato that leads to absurd results or misch orded by the Assessing Officer reached th pement of income "on going through th the assessee after he accepted the return u crutiny, and nothing more. This is nothing roceedings and an abuse of power by th strongly deprecated by the Supr tor (supra).'”[Emphasis supplied]
tio laid down by the Hon’ble juri that the reopening of assessment f erefore the impugned order passed e ab initio void and is thus quashed peal in ITA No.2584/Chny/2024 for A r attention to the appeal for AY 20
. It is noted that, the income-tax ally completed u/s. 143(3) of the NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others ould in effect under section n whose case emur is not a no choice in what graver, involved in oving valid ccepting the e notices to h makes a e expression were framed intimations ead to such ory too. An hief is to be he belief that he return of under section but a review he Assessing reme
Court ictional High for AY 2012-13
u/s 147/143(3) d. The assessee
AY 2012-13. 013-14 in ITA assessment for Act. The AO is noted to have issued n several details and doc and details, in light o survey, the AO is note income offered and de addition was made. It for AY 2013-14 has bee u/s 148 of the Act date no fresh tangible mate assessment and that t available on record a assessment, which acco first proviso to Section where an assessee ha assessment was comple
147 of the Act, then in could have been issue assessment year, unles that income had escap failure to disclose truly
According to the Ld. AR and details were made
ITA No.2587/CHN
(AYs 2
Shri M
::19 ::

notices u/s 143(2) & 142(1) of the cuments. Upon examining the boo f the material impounded during ed to have accepted the additiona eclared in the return of income a is not in dispute that the income-t en reopened beyond four years by ed 28.03.2019. According to the Ld.
erial available with the AO to valid he AO had simply reviewed the m and on change of opinion, had ording to him was not permissible. R
147 of the Act, the Ld. AR further s ad filed a return of income and eted either under section 143(3) o such case, no notice under section ed beyond four years from expi ss the AO demonstrates in the rec ped assessment as a consequence and fully all facts necessary for h
R, in the present case, all the releva available at the time of original ass

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others
Act calling for oks of accounts the course of al unaccounted and no further tax assessment issue of notice
. AR, there was dly reopen the material already reopened the Referring to the submitted that, thereafter the r under section 147 of the Act iry of relevant corded reasons e of assessee's his assessment.
ant information sessment which was examined by the A it was not only a case assessee cannot be sa material facts necessary the matter, the Ld. AR reopened the assessme

O in the light of impounded materia e of change of opinion by the AO aid to have failed to disclose trul y for assessment for that year and R has contended that AO could no nt for AY 2013-14 after the expiry o d. DR has filed written submission pellant. According to the Revenu d all other details but he failed t to the Trust and therefore in ab re on assessee’s part to truly and f ourse of original assessment. The O had also overlooked the impou trial-balance and the draft complet ealed the unaccounted investments d building and therefore in his vie sessment u/s 147 of the Act.
rejoinder argued that the contentio ght with factual inaccuracies. He fi eir statement recorded at the time

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others al and therefore
O but also the y and fully all in that view of ot have validly of four years.
s rebutting the e, though the to produce the sence of these fully disclose all Ld. DR further unded material, tion certificate, s made by the ew, the AO had ons put forth by rst pointed out e of survey had furnished the details o recorded in the book contributions had been thus submitted that, unaccounted contributio reason for the assesse further invited our atte the land was acquired contributed to the Trust assessee had made una also, any adverse infere purchase of land i.e. 2
showed us that, the pur allege that the trustees incorrect figures and therefore, it was for th original assessment had showed us that, even t did not adopt the figure selectively chosen cer drawing adverse inferen recorded by the AO on ITA No.2587/CHN
(AYs 2
Shri M
::21 ::

of contributions made to the Tru ks of the Trust as well and the admitted and disclosed in the return when the assessee had already ons to tax in his return of income ee to separately furnish the deta ention to the contemporaneous fact in 2011 and thereafter portion of t. According to him, if AO was of th accounted contributions for purchas ence could have legally been drawn
011 and not the relevant FY 2012- rported trial balance being referred s had made unaccounted investme was therefore unreliable and acc his reason the AO’s predecessor w d also not relied upon the same. T the AO while framing the impugned es as mentioned in the trial balanc tain items/figures which suited h nce against the assessee. In respect the basis of the draft completion

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others ust which were e unaccounted n of income. He y declared the , there was no ils thereof. He ts to show that f the land was e view that the se of land, then n in the year of -13. He further to by the AO to ents, contained cording to him who framed the The Ld. AR also d reassessment ce but had only his purpose of t of the reasons certificate that the investments made recorded in the books o unaccounted contributio certificate which was ob estimated cost of con
Drawing our attention to that, the Trust had construction of buildi predecessor didn’t find construction, apart from been incurred. Accordi reasons recorded by constituted change of op record. He thus urged t to be held as invalid.

towards construction of building of accounts and that the trustees ha ons, he brought our attention to the btained by the Department, accordin struction ought to have been Rs o the books of accounts of the Trust incurred cost of Rs.14.19 crores ng and therefore for this rea any reason to infer that any add m what was already admitted by th ng to the Ld. AR therefore, not the AO on incorrect premise pinion on the basis of material alrea that the impugned reopening of ass he rival submissions of both the par this case, let us first look into t opening of assessments completed ears. In this regard, it is first pertin of the Act i.e., Section 147 of the A NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others was not fully ad made further e final valuation ng to which, the s.12.35 crores.
t, he showed us s towards the son the AO’s ditional cost of e trustees, had only were the but the same ady available on sessment ought rties. Before we he well settled u/s 143(3) of ent to examine
Act which reads

"147. If the Asse chargeable to tax may, subject to reassess such in which has esca subsequently in t compute the loss as the case may this section and assessment year)

Provided that w section 143 or assessment year, the expiry of f year, unless any such assessment assessee to mak issued under su disclose fully assessment, for 20. We note that the Discount Co. Ltd. v. C proviso is applicable] th having reason to believ his having reason to b from nondisclosure of m
Officer has juri iction t
The Hon'ble Supreme C
Ltd. v. ITO [1981] 6
expression “reason to b
ITA No.2587/CHN
(AYs 2
Shri M
::23 ::

essing Officer has reason to believe that x has escaped assessment for any assessm the provisions of sections 148 to 153
ncome and also any other income charg aped assessment and which comes to the course of the proceedings under this s s or the depreciation allowance or any othe y be, for the assessment year concerned in sections 148 to 153 referred to as ) :
where an assessment under sub-sec r this section has been made for , no action shall be taken under this s four years from the end of the relevant income chargeable to tax has escaped as t year by reason of the failure on the ke a return under section 139 or in respons ub-section (1) of section 142 or section and truly all material facts necessa r that assessment year:[Emphasis given e Hon'ble Supreme Court in the ca
CIT [1961] 41 ITR 191 has held [i hat, both the conditions, (i) the Inco ve that there has been under-asses believe that such under- assessmen material facts, must co-exist before t to start proceedings after the expiry
Court in the case of Ganga Saran
6 Taxman 14/131 ITR 1 further believe" occurring in Section 147 is NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others t any income ment year, he
3, assess or eable to tax o his notice ection, or re- er allowance,
(hereafter in the relevant ction (3) of the relevant section after t assessment ssessment for part of the se to a notice n 148 or to ary for his by us]"
se of Calcutta in cases, where ome-tax Officer ssment and (ii) nt has resulted the Income-tax y of four years.
n & Sons (P.) held that, the s stronger than the expression "is satis the reasons recorded b has to be kept in mind been made u/s. 143(3), action shall be taken u the end of the relevant part of the assessee to assessment for that ass

sfied" and this legal requirement ha before re-opening. The Hon'ble Cou d that if an assessment (original as , the proviso to Sec. 147 further ma nder section 147 after the expiry o t assessment year, unless there is disclose fully and truly all facts ne sessment year.
the Hon’ble Supreme Court in the c
4 ITR 566) has similarly held that, annot be reopened merely upon cha already available with the AO at the nion of the Apex Court, a regular a reopened after expiry of 4 years s escapement was resulted from as facts necessary for its assessment.
o the provisions of law governing served that, in all cases where n 143(3) or under section 147 of th s being sought to be reopened bey

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others as to be met in urt held that it ssessment) has andates that no of 4 years from s failure on the ecessary for his case of CIT Vs.
an assessment ange of opinion time of regular assessment u/s s from end of sessee’s failure g reopening of assessment is he Act and such ond four years, it is not only necessary had escaped assessme additionally he has to s consequence of assess necessary for assessm documents from the a assessee's failure to dis reasons do not refer to initiates the reassessme the relevant assessmen in his reasons recorde assessee's part to truly original assessment.

y for the AO to form reasonable bel ent as envisaged in Section 147 o how that such escapement occurred see's failure to disclose truly and ment. The AO after obtaining in ssessee cannot supplement his co sclose truly and fully material facts, such failure. In the circumstances, ent proceedings beyond four years f nt year, then the AO is duty bound ed prior to issue of notice, the and fully disclose all material facts i so by now well settled in law th ow that, the issue with reference to believe was examined or enquire original assessment then, the AO is ceedings under Section 147 of the form his reasons to believe, on rea erials already available on record opinion’. Gainful reference in this r

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others ief that income of the Act but d as a result or fully all facts nformation and onclusion about if the recorded
, where the AO from the end of to demonstrate failure on the in the course of hat, where the o which the AO ed into or was s not permitted
Act. The AO is appraisal of the d as it would regard may be made to the decision reported in CIT v. Kelv
Apex Court held as follo
“...
'2.A short questio appeals is, wh obliterated with e
147 of the Incom
1987 ?

…

of the Hon'ble Supreme Court in vinator of India Ltd (320 ITR 56
ows:
on which arises for determination in this hether the concept of "change of opin effect from 1-4-1989, i.e., after substitutio me-tax Act, 1961 by Direct Tax Laws (Ame ugh the changes, quoted above, made to s that, prior to Direct Tax Laws (Amendmen d be done under above two conditions and ns alone conferred juri iction on the Asse assessment, but in section 147 of the Act they are given a go-by and only one c hat where the Assessing Officer has reaso escaped assessment, confers juri iction to refore, post 1-4-1989, power to reopen is eeds to give a schematic interpretation t ve" failing which, we are afraid, section 14
to the Assessing Officer to re-open assess hange of opinion", which cannot be per s t also keep in mind the conceptual differe and power to re-assess. The Assessing O he has the power to reassess. But reasses filment of certain pre-condition and if th on" is removed, as contended on be n, in the garb of re-opening the assessm
. One must treat the concept of "change o o check abuse of power by the Assessing O
Assessing Officer has power to reopen, prov al" to come to the conclusion that there is assessment. Reasons must have a live belief. Our view gets support from the chan he Act, as quoted hereinabove. Under th nt) Act, 1987, Parliament not only delete e" but also inserted the word "opinion" in s er, on receipt of representations from the n of the words "reason to believe", Pa aid expression and deleted the word "opi

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others the judgment
61) wherein the batch of civil nion"
stands on of section ndment) Act, ection 147 of nt) Act, 1987, d fulfilment of essing Officer t [with effect condition has on to believe o re-open the much wider.
to the words
47 would give ments on the se reason to ence between
Officer has no ssment has to e concept of ehalf of the ment, review of opinion" as fficer. Hence, vided there is s escapement link with the nges made to he Direct Tax ed the words section 147 of e Companies arliament re- inion" on the ground that it wo quote hereinbelow
1989, which read

"7.2 Amendme the expression representation
'reason to bel
'opinion' of the of the express of court rulings section 147 w reopen past a fears, the Am reintroduce th words 'for reas
Other provision

ould vest arbitrary powers in the Assessing w the relevant portion of Circular No. 549, s as follows :
ent made by the Amending Act, 1989, to n 'reason to believe' in section 147. —A ns were received against the omission o lieve' from section 147 and their substit e Assessing Officer. It was pointed out that ion, 'reason to believe' had been explained s in the past and was well settled and its o would give arbitrary powers to the Assessi ssessments on mere change of opinion. T ending Act, 1989, has again amended se he expression 'has reason to believe' in sons to be recorded by him in writing, is of ns of the new section 147, however, remai stated reasons, we see no merit in these rtment, hence, dismissed with no order as ve, the Hon’ble juri ictional Madra dia Cements Ltd. (424 ITR 410
eld so, we need to consider as to as validly done. The Tribunal held in fa that the reassessment was bad in law. T straightaway refer to the decision
India Ltd. (supra), wherein the Hon'ble Su post 1-4-1999, the power to reopen was r, one needs to give a schematic interpre o believe", failing which, Section 147 of th wers to the Assessing Officer to reopen the f "mere change of opinion", which cannot en. It was pointed out that there is a en the power to review and power to reass r has no power to review, that he has t t reassessment has to be based on fulfilme nd if the concept "change of opinion" is re eopening the assessment, review would t e concept of "change of opinion" should b heck the abuse of power by the Assessing O

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others g Officer. We dated 31-10- o reintroduce
A number of of the words tution by the t the meaning d in a number omission from ing Officer to o allay these ection 147 to place of the f the opinion'.
n the same."
civil appeals to costs.'
s High Court in 0) has held as whether the avour of the To decide this in the case upreme Court s much wider etation to the he Act would e assessment t be, per se, a conceptual sess, that the the power to ent of certain emoved, then ake place. It be treated as Officer. Thus, it was held that reopen provided that there is an must have a live

t after 1-4-1999, the Assessing Officer h there is "tangible material" to come to th escapement of income from assessment link with the formation of the belief.
aforementioned legal principles in mind, if present case, as rightly pointed out by the ng to dividends and short term capital gai e available with the Assessing Officer ceedings, which was concluded on 15-2
f the Act. Furthermore, the Tribunal, on fa ment did not bring any material fact before he original return of income.
appeal, no such fact has been brought to o emorandum of grounds of appeal and pre hy the Revenue had raised the substant erpretation of Rule 27 of the Rules and conv the issue as to whether the reopening of of change of opinion. A reading of the r
-2004 will clearly reveal that all facts and e Assessing Officer only from the origin the assessee. There was no fresh or tang the Assessing Officer to reopen the ave no hesitation to conclude that the reop ond four years was clearly a case of chang e reasons, substantial questions of law No wered against the Revenue and consequen ng of the reassessment is bad in law an the appeal filed by the Revenue is dismis r dated 31-3-2004 is set aside. Substantial
3 are answered against the Revenue.
ntial questions of law Nos.1 to 3 against o necessity for us to answer the substantia e said question is left open. No costs.”
legal principles set out above, let u y the AO in order to reopen the as six years, which is found placed at s as under:

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others has power to he conclusion and reasons f we examine e Tribunal, all ns and other during the -1999 under cts, recorded it, which was our notice nor sumably that tial questions veniently was f assessment reassessment figures were nal return of gible material proceedings.
pening of the ge of opinion.
s. 1 to 3 are tly, it is held d is liable to ssed. The re- l questions of As we have the revenue, al question of us now examine ssessment after
Page 42 of the “The assessee is Trust", located
Sengunthapuram trustees (32 in N near Karur on Rs.14,40,000/- a the trust bought constructing a Po relevant to the as a Polytechnic Col till the financial y

Meanwhile, a sur above trust on statements were trustee, Shri R.R
(M/s S.Selvaraj&
Shri R. Palanisam his statement th trust and with a 05.09.2011. The according to him
Further, he had towards the const

In his statement, also acknowledg towards the con admitted that the of the contract w statement given sheets impound commenced durin

Consequent to th
Asst. Year 2013- proceedings, the purchase of land he failed to discl
College building.
came into existe generated any in for the construct borrowings by the ITA No.2587/CHN
(AYs 2
Shri M
::29 ::

s one of the trustee in "The Karur Kong at No.464,
Vaiyapuri
Nagar,
, Karur. The trust was established on 04.0
Nos) bought 17.99 acres of land at Pungam
09.03.2011. The guide line value of th nd the market value was Rs.2,60,50,000/- t 5.02 acres of land at a cost of Rs.4. olytechnic College. During the Financial Y ssessment year 2012-13, the trust started lege on the land. The construction work w ear 2012-13. rvey u/s 133A was conducted at the pre
23.01.2013 During the survey proceed e recorded from Shri R. Palanisamy, th
R.Sathyamoorthy, partner of Erode based
Co) and Shri S.Sethurajan, site Engineer o my, the managing trustee of the trust had at a construction contract was executed a builder firm called M/s S.Selvaraj& Co total value of the contract was Rs. 12
m, the trust had paid Ra. 5 lakhs as on admitted, each trustee had contributed truction cost.
the partner of the builder firm Shri R.R.Sa ed the contract agreement executed on struction of the Polytechnic College. Furt e firm had received Rs.3,80,00,000/- and th was Rs.7 crores (except cement and steel).
by the site engineer Shri S.Sethurajan ded also strengthened the building ng the Financial Year 2011-12. he survey, the assessments of the 32 tru
14 were completed on 28.03.2016. During trustee Shri S.Aravind admitted Rs.8 lakhs
(17.99 acres) from his unaccounted incom lose the investments made on the constr
In this juncture, it is pertinent to note t ence only in the year 2011 and the tr come during the year of construction. The tion was from the trustees as there was e trust.

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others gu Charitable
2nd
Cross,
02.2011. The mbadi village, he land was -. Out of this,
49 lakhs for Year 2011-12
d constructing was continued emises of the dings, sworn he Managing builder firm of the firm.
d admitted in between the of Erode on crores. Also,
23.01.2013. Rs. 40 lakhs athyamoorthy n 05.09.2011
ther, he had he total value
. Further, the on the loose construction stees for the g the scrutiny s towards the me. However, ruction of the that the trust rust had not e only source s no external

Therefore, the ab investments mad of the Polytechn income chargeab
Pr.CIT, Trichy-1,
147 for the asses

Since this is a s have been impo and Notice und
29.05.2014 serv

ITA No.2587/CHN
(AYs 2
Shri M
::30 ::

bove trustee had failed to disclose truly and e during the Financial Year 2012-13 on the ic College. Hence, I have reason to beli ble to tax has escaped assessment and I
Trichy to accord approval to initiate pro ssment year 2013-14.”
bove shows that the reasons recor me impounded survey material whic t the time of completion of the origi dated 28.03.2016. Upon going throu the Act, replies furnished by the had examined the books of accounts t in light of the impounded material, t u/s 143(3) of the Act, wherein he
33A was conducted in the premises of M/
le Trust, N. 111/B, Vaiyapuri Nagar
Post, Karur – 639002 on 23.01.2013. ge in the name and style of M/s Ko ge. In the trust, there are 32 trustees.
ey proceedings, it was found that he ve contributed towards corpus do
25 Crores as additional income in the n ks of accounts and documents e assessee Shri ARAVIND S, individual filed assessment year 2013-14 admitting tota survey case and books of accounts and ounded, this case has been selected er section 143(2) was issued to the a ved on 12.06.2014. NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others d fully on the e construction eve that the I request the oceedings u/s ded by the AO ch was already nal assessment ugh the notices assessee, it is s and details of , and thereafter e had inter alia
/s The Karur r, II Cross,
The trust is ongu Hi-Tech
. During the trustees of nation and name of the have been his return of al income of d documents for scrutiny assessee on In response to assessee Shri R filed the Power assessment pr provided the B supporting evid
Books of acc examined.

The trustees o additional incom contribution wa the assessee h income and paid

Also, the books time of survey has offered the the Return of completed acce above, all the d genuineness.

Assessed u/s 143
156 is attached
271(1)(c) is initia

notice issued the authorised represent
. Subramanian, Chartered Accountant, a of Attorney in his favour. During the oceedings, the representative of th
Books of accounts, bills & vouchers dences in support of Return of Incom ounts and other documents prod of the trust have offered Rs. 2.25
me in their individual capacity and the as Rs.8,00,000/-. In the Return of In as admitted the same in addition to d the taxes.
s of accounts and documents impoun were thoroughly examined. Since, th e entire amount admitted at the time o
Income fled the assessment of the epting the income returned. In addi details furnished were thoroughly ver
3(3) of the Income tax Act, 1961. Deman to this order as Annexure. Penalty pro ated separately.”[Emphasis given by us]
observations made in the origin nt that, the impounded material, re already considered while completi there was no fresh tangible materia e assessment beyond four years.
ra) shows that the AO had re-exam available in assessment records a hargeable to tax has escaped asses action of the AO amounted to ‘cha

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others tative of the ppeared and e course of he assessee s and other me filed. The uced were Crores as e assessee’s ncome filed, the regular nded at the he assessee of Survey in assessee is ition to the rified for its nd Notice u/s ceedings u/s nal assessment ferred to in the ng the original al available with . Rather, the mined the facts and formed his ssment. In our nge of opinion’

and following the dictu assessment is held to be 28. The Ld. DR how predecessor had not co available on record at t
AO had rightly reopen reliance placed by the High Court in the case to be of relevance, wher

“In the light of th failed to record chargeable to tax the assessee to d assessment. On t consider the m assessment for Therefore, the no beyond the perio cannot be sustain

um of law, as discussed above, th e invalid.
wever had strenuously contended orrectly applied his mind to the fact the time of original assessment and ed the assessment. In this regard assessee on the decision of the H of CIT v Arvind Remedies Ltd ( rein it has been held as follows:
he above, we hold that when the Assessin anywhere his satisfaction or belief that x had escaped assessment on account of disclose truly and fully all material facts n the contrary, it was the Assessing Officer, aterial placed before him at the time which the assessee cannot be found otice issued under section 147 of the Inc od of four years was wholly without jur ned.”
above decision (supra), even if th available with him prior to completi ssee cannot be faulted for not t acts in the original assessment so a ur years as the condition precede does not stand satisfied.

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others e reopening of that, the AO’s ts and material d therefore the d, we find the Hon’ble Madras
378 ITR 547) g Officer had t the income the failure of necessary for who failed to e of regular fault with.
come tax Act ri iction and he AO did not ing the original truly and fully as to reopen his ent in the first

d. AR demonstrated before us tha mpounded material and thereafter t othing further to be added/assesse e. Before us the Ld. DR referring t that, the actual cost of land decip material was Rs.2.90 crores where lacs (approx.) for the same and not correctly disclosed the contrib sessment. In this regard, we find f ction that, the land in question w not in the relevant FY 2012-13
y, could have been legally drawn o
Y 2013-14. On this aspect alone, w the AO for AY 2013-14 to be ba facts available on record.
ntion to the second portion of the re f building was not fully accounte sts incurred were recorded in the boo he trustees. It was brought to our portion as admitted by the builder

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others at, the AO had took a plausible ed to the total to the recorded hered from the eas the trustees therefore the butions towards force in the Ld.
was admittedly and therefore nly in that year e find that, the ased on wrong easons viz., the ed, the Ld. AR oks of accounts attention that, as well as the trustees had been decla their respective returns the AO in the original placed on record, it was incurred by the Trust trustees and the same brought to our notice th comparatively higher th from the Departmental find merit in the Ld. AR’
a plausible view in the adverse inference on th impugned reasons reco same set of facts whi opinion’.

ared and admitted by the latter pro of income, which was examined a assessment. Taking us through s shown that, the balance cost of co out of regular voluntary contribu was recorded in the books of acc hat, the cost recorded in the books o han the valuation certificate obtain valuer (DVO). Having regard to t
’s submission that, the AO’s predece e original assessment by not drawi his aspect. Overall therefore, accor rded by the AO were based on re-a ich amounts to impermissible ‘rev nt raised by the Ld. DR in support o ment was that, though the AO had o he had examined the impounded m pointed and specific enquiries on corded reasons and therefore, du e reopening of assessment could no NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others oportionately in nd accepted by the documents onstruction was tions from the counts. He also of accounts was ned by the AO these facts, we essor had taken ing any further rding to us, the appraisal of the view/change of of the validity of observed in the material but the n the aspects ue to his non- ot be said to be based on ‘change of op the Revenue is fundam does not and may not r round/original proceedin etc., because the aspect hold that the AO in the matter and form an op human conduct. Such matters may require e raised by the Assessing others cases, a deeper s aspects including paper the original proceedings of mind and formation when no specific quest
Assessing Officer. The a of assessment proceedi had applied his mind on would depend upon the 33. In the facts of the the survey upon the materials and recorded
ITA No.2587/CHN
(AYs 2
Shri M
::35 ::

inion’. According to us, this argume entally flawed. There may be cases raise any written query but still the ngs may have examined the subjec t or question may be too apparent a first round didn’t examine the ques pinion, would be contrary and oppo cases have to be examined indi examination of the assessment or Officer and answers given by the a scrutiny or examination may be nec rs filed and submitted with the ret s are relevant and material. Sometim of opinion can be ascertained and tion or query in writing had been aspects and questions examined du ings itself may indicate that the As n the entry, claim or deduction etc facts and circumstances of each cas e present case, the AO is noted to h
Trust pursuant to which he impo the statement/s of the managing t

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others ent put forth by s where the AO e AO in the first ct matter, claim and obvious. To stion or subject osed to normal vidually. Some rder or queries assessee but in essary. Several urn and during mes application gathered even raised by the ring the course ssessing Officer
. However, this se.
have conducted ounded several trustee and the builder. In the post sur also recorded. It is in quantified and admitted towards the constructio same in their returns o the AO was well aware material, and had applie to which he also record
August 2013. Thereafte income filed for AY 201
his observations in t assessment was framed contemporaneous facts the impounded survey was not to the liking of that he didn’t consider the original assessment

rvey enquiries, statements of other the course of post survey enquirie d to unaccounted income by way o on of college building and also pai of income for AY 2013-14. These fa e about the contents of the relev ed his mind in the post survey enqu ded statements of other trustees in er, the AO took up the scrutiny o
3-14 by issue of notice u/s 143(2) he original assessment order sh d after examining the impounded m thus suggests that the AO had app material and only because specific his successor, it can’t be reason en the impounded survey material bef
.
scussed reasons therefore and in lig hus hold that the usurpation of juris on ‘change of opinion’ upon re-ap ord, was bad in law and void ab in sh the order passed u/s 147/143(3)

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others r trustees were es, the trustees of cost incurred d taxes on the acts show that, ant impounded uiries, pursuant n the month of f the return of of the Act, and hows that the material. These lied his mind to line of enquiry, nough to allege fore completing ght of the cited iction u/s 147
ppraisal of facts nitio. Therefore,
) of the Act for AY 2013-14. According stands allowed.

Order pronounced (जगदीश)
(JAGADISH)
लेखासदय/ACCOUNTANT
चेई/Chennai,
िदनांक/Dated: 09th April, 20
आदेशकी'ितिलिपअ/ेिषत/Cop
1. अपीलाथ/Appellant,
2.'(थ/ Respondent,
3. आयकरआयु0/CIT, Madura
4. िवभागीय'ितिनिध/DR &
5. गाड3फाईल/GF.

ITA No.2587/CHN
(AYs 2
Shri M
::37 ::

gly, the appeal of the assessee fo
& circumstances across all other tc., as agreed by both parties, are ove appeals for AYs 2012-13 &
y to all the other appeals of o
Following our decision (supra) we a ssment to be invalid and hence qu of the Act in the matters of othe he appeals stand allowed.
d on 09th April, 2025 at Chennai.
MEMBER (एबी टी.
(ABY T. VA
याियकसदय/JUDICIA
025. py to:
ai

NY/2024 & 22 others
2012-13 & 2013-14)
M. Velusamy & others or AY 2013-14
cases, reasons e identical, the 2013-14 shall other assessee accordingly hold ash the orders er trustee(s) as /-
वक )
ARKEY)
AL MEMBER