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The Madras High Court held that a Reassessment made after 4 years for a mere change of opinion is not valid.
The appellant/Revenue, challenged the order dated 12.10.2022 passed by the Income Tax Appellate Tribunal, Bench ‘A’, Chennai, in I.T.A. No. 525 /Chny/2020, relating to the assessment year 2010-11,
The Assessee Sri. R. Rajagopal Tondaiman is a hereditary Raja of Pudukottai and he is assessed to payment of tax in the status of HUF and individual. According to the assessee, the sale proceeds derived in this transaction have been invested in purchasing an apartment at No.302, Hiranandani Palace Gardens and evidencing such a transaction, documents have been produced by the assessee.
Based on the above transaction, the assessee filed a return of income for the assessment year 2010-2011 on 28.03.2011 admitting the total income of Rs.2,07,540/-. The return filed by the assessee was scrutinised under Section 143 (1) of the Income Tax Act (the Act) and completed on 31.01.2013 assessing an income of Rs.2,82,540/-.
The revenue audit pointed out that the deduction claimed by the assessee under Section 54F of the Act is not in order as the assessee had not deposited the sale consideration in notified Capital Gain Scheme before the due date of filing the return of income under Section 139 of the Act.
The Assessing Officer re-opened the assessment under Section 147 of the Act by issuing a notice dated 07.03.2016 under Section 148 of the Act. The Assessing Officer completed the re-assessment under Section 143 read with 147 of the Act on 29.12.2016 assessing the capital gain at Rs.74,13,095/- by disallowing the claim of deduction under Section 54F of the Act.
The assessee challenged the order of re-assessment before the Tribunal by contending that the reassessment notice dated 07.03.2016 was issued under Section 148 of the Act beyond four years from the end of the assessment year under consideration. It was further contended that the assessee had fully and truly furnished all the material particulars to complete the assessment and the assessing officer did not show that there is a failure on the part of the assessee to disclose all the material particulars.
A two-judge bench comprising Justice R Mahadevan and Justice Mohammed Shaffiq observed that the reassessment proceedings initiated by the assessing officer beyond four years from the end of the relevant assessment year in question namely 2010-2011 is legally impermissible.
It was observed that since there is no justifiable reason assigned by the Assessing Officer for not initiating action to re-open the assessment before the period prescribed under the Act. The Court upheld the order of the Tribunal which allowed the appeal filed by the assessee.To Read the full text of the Order CLICK HERE
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Commissioner of Income Tax vs Sri. R. Rajagopal Tondaiman
CITATION: 2023 TAXSCAN (HC) 680
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