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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI A. MOHAN ALANKAMONY
आदेश /O R D E R
PER N.R.S. GANESAN, JUDICIAL MEMBER:
This appeal of the Revenue is directed against the order of the Commissioner of Income Tax (Appeals) -18, Chennai, dated 20.12.2016 and pertains to assessment year 2007-08.
There was a delay of 2 days in filing this appeal by the Revenue. The Revenue has filed a petition for condonation of delay. We have heard the Ld. D.R. and the Ld. representative for the assessee. We find that there was sufficient cause for not filing the appeal before the stipulated time. Therefore, we condone the delay and admit the appeal.
Shri AR.V. Sreenivasan, the Ld. Departmental Representative, submitted that the assessee claimed exemption on the profit of sale of landed property. However, the Assessing Officer found that there was short term capital gain on the sale of land and assessed accordingly. On appeal by the assessee, according to the Ld. D.R., the CIT(Appeals) found that the property was situated beyond 8 KMs radius from the outer limit of Coimbatore Municipal Corporation. Accordingly, he deleted the addition holding that the land in question is not a capital asset. On further appeal by the Revenue before this Tribunal, according to the Ld. D.R., it was found that the land in question is an agricultural land.
Accordingly, the order of the CIT(Appeals) was confirmed. According to the Ld. D.R., subsequently, the Administrative Commissioner initiated proceeding under Section 263 of the Income-tax Act, 1961 (in short 'the Act') holding that the profit received on sale of agricultural land was income from business. According to the Ld. D.R., the assessee challenged the order of the Administrative Commissioner passed under Section 263 of the Act before this Tribunal. This Tribunal found that the issue taken in the proceeding by the Administrative Commissioner under Section 263 of the Act was already adjudicated by two appellate authorities including this Tribunal holding that the land in question is agricultural land and therefore, exempted from taxation. Accordingly, as
per the Ld. D.R., the order of the Administrative Commissioner was found to be bad in law.
The Ld. Departmental Representative further submitted that subsequently there was search proceeding under Section 132 of the Act in the residential premises of the assessee at Coimbatore on 27.11.2013.
During the course of search proceeding, according to the Ld. D.R., some incriminating material, including title deeds, ledger account of Shri Krishna Kumar, etc were found. On the basis of material found during the course of search operation, according to the Ld. D.R., the Assessing Officer found that dominant intention of the assessee was to make profit from real estate. Accordingly, he reopened the assessment by issuing notice under Section 148 of the Act and the profit on sale of land was assessed as income from business. According to the Ld. D.R., the assessment was reopened on the basis of the material found during the course of search operation, therefore, the CIT(Appeals) is not justified in quashing the assessment order passed by the Assessing Officer.
We heard Shri K. Raghu, the Ld. representative for the assessee also. Admittedly, the Assessing Officer initially rejected the claim of the assessee and held that the land in question is not an agricultural land and it was situated within the 8 KMs radius of Coimbatore Municipality, therefore, it is a capital asset. Accordingly, he assessed the profit on sale of land as short term capital gain. On further appeal by the assessee before the CIT(Appeals), it was found that the land in question was situated beyond 8 KMs radius from the municipal limit of Coimbatore Municipal Corporation. Accordingly, the CIT(Appeals) found that the land in question is an agricultural land. This order of the CIT(Appeals) was confirmed by this Tribunal on the appeal filed by the Revenue.
Subsequently, the Administrative Commissioner reopened the assessment holding that the profit on sale of such land was to be assessed as business profit. This order of the Administrative Commissioner was also set aside by this Tribunal holding that the Administrative Commissioner cannot revise the order of the Assessing Officer subsequent to the order passed by the Tribunal confirming the order of the CIT(Appeals).
Now, the Assessing Officer on the basis of the material said to be found during the course of search operation, again reopened the assessment under Section 147 of the Act and assessed the profit as business profit. This Tribunal is of the considered opinion that when the issue of assessment of profit on sale of land was concluded by the order of this Tribunal in two rounds of litigation, the Assessing Officer is not justified in again reopening the assessment under Section 147 of the Act.
If at all there is any material found during the course of search operation, that may be a basis for challenging the order of this Tribunal before the higher forums as per the procedure provided under the law. The Assessing Officer is not expected to take the law in his own hands and reopen the assessment by issuing notice under Section 148 of the Act after the assessment order was merged with the order of this Tribunal. This Tribunal is of the considered opinion that when the assessment order was merged with the order of this Tribunal, the Assessing Officer cannot reopen the assessment merely because there was some material found during the course of search operation in respect of the very same issue. Therefore, the CIT(Appeals) has rightly quashed the order of the Assessing Officer. This Tribunal do not find any reason to interfere with the order of the lower authority and accordingly the same is confirmed.
In the result, the appeal filed by the Revenue stands dismissed.
Order pronounced on 19th April, 2018 at Chennai.