MODEM ENTERPRISES,POLLACHI vs. ITO, WARD-2, , POLLACHI

This is an appeal filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-3, Coimbatore in appeal No.353/2016-17 dated 08.11.2018 for the Assessment Year 2012-2013.

It was submitted by the learned Authorized Representative that in Ground No.2 the assessee challenged the reopening of the assessment. It was a submission that the assessee is a Partnership Firm which admittedly was not doing any business. It has only rental income. It was a submission that while completing the assessment, the Assessing Officer assessed the rental income in the hands of the firm by following the decision of the Hon’ble Jurisdictional High Court in the case of Commissioner of Income Tax vs. Palaniappa Enterprises reported in [Mad] 234 ITR 635. It was a submission that there was no link between the reasons recorded and the additions made. It was a submission that the reopening was bad in law.

In reply, the learned Departmental Representative submitted that there was no Section 143(3) assessment earlier. It was a submission that in view of the Explanation 2 to Section 3 -: 147, the reopening was valid. It was a submission that the reopening was done within four years.

I have considered the rival submissions and perused the materials available on record.

The facts in the present case clearly shows that the reopening in the present case is within four years. The Assessing Officer has recorded valid reasons. For the purpose of reopening, the Assessing Officer has shown the link between the reasons recorded and the issues on which the reopening has been done. Thus, clearly the provisions of Explanation 2 to Section 147 applies in the present case. In the circumstances, I am of the view that the reopening has been validly done.

In respect of the Ground Nos.3 to 6, it was submitted by the learned Authorized Representative that the Assessing Officer has assessed the income which has been disclosed in the hands of the partners as the income of the firm. It was a submission that in view of the provisions of Section 26, the 4 -: income from the house property is liable to be assessed in the hands of the partners.

In reply, the learned Departmental Representative submitted that the issue was squarely covered by the decision of the Hon’ble Jurisdictional High Court in the case of Commissioner of Income Tax vs. vs. Palaniappa Enterprises referred to supra.

I have considered the rival submissions and perused the materials available on record.

As it is noticed that the firm does not have any other business and is having only the rental income. It is noticed that the assessee’s case is squarely covered by the decision of the Hon’ble Jurisdictional High Court in the case of the Commissioner of Income Tax vs. Palaniappa Enterprises referred to supra. This being so, on merits I have no reason to interfere in the order of the learned Commissioner of Income Tax (Appeals). Consequently, the appeal of the assessee is dismissed.

In the result, the appeal of the assessee in is dismissed.