ITO, WARD - 1, CUDDALORE V. SMT. KRISHNAIAH RANGANAYAKI, CUDDALORE

MA 93/CHNY/2023

• Counselvise Citation: [2023] 102 COUNSELVISE.COM (IT) 0804 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 24 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 12-10-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-10-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 18-04-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Tangible material
• Section: 148; 143(3); 54F; 143(1)

Judgement Text

आयकर अपीलीय अिधकरण, ’सी’ Ɋायपीठ, चेɄई IN THE INCOME-TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI ŵी वी दुगाŊ राव Ɋाियक सद˟ एवं ŵी मंजुनाथा, जी., लेखा सद˟ के समƗ Before Shri V. Durga Rao, Judicial Member & Shri Manjunatha, G. Accountant Member M.P. No. 93/Chny/2023 [In I.T.A. No.618/Chny/2020] Assessment Year: 2011-12 The Income Tax Officer, Ward 1, Cuddalore. Vs. Smt. Krishnaiah Ranganayaki, No. 17, Seetharam Nagar, Cuddalore 607 001. [PAN: AEWPR9630P] (Petitioner) (ŮȑथŎ/Respondent) Petitioner by : Shri P. Sajit Kumar, JCIT ŮȑथŎ की ओर से/Respondent by : Shri J. Prabhakar, CA सुनवाई की तारीख/ Date of hearing : 13.10.2023 घोषणा की तारीख /Date of Pronouncement : 13.10.2023 आदेश /O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: By means of present Miscellaneous Petition, the Revenue seeks to recall the order passed by the Tribunal in I.T.A. No. 618/Chny/2020 dated 18.11.2022 relevant to the assessment year 2011-12. 2. The ld. DR relied on the petition and submitted that the appeal of the assessee has been allowed by quashing the assessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 [“Act” in short] by considering only the primary records of the M.P. No.93/Chny/23 2 Assessing Officer without considering the satisfactory note submitted to the Joint Commissioner of Income Tax seeking statutory approval, wherein, the Assessing Officer has recorded reasons for reopening of assessment and possessing tangible material evidences that there is escapement of income. Thus, there is mistake apparent from the record and prayed that the order of the Tribunal may be recalled and restored for fresh adjudication. 3. On the other hand, the ld. Counsel for the assessee has submitted that there is no mistake apparent from the record and prayed that the MP filed by the Revenue should be dismissed. 4. We have heard both the sides, perused the order passed by the Tribunal dated 18.11.2022. In this case, the Assessing Officer issued notice under section 148 of the Income Tax Act, 1961 [“Act” in short] for reopening of assessment by recording reasons to verify the correctness of claim made under section 54F of the Act. By considering the reasons recorded for reopening of assessment as well as observations of the ld. CIT(A), the Tribunal has held as under: 8. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, the return filed by the assessee was processed under section 143(1) of the Act and subsequently, the case was reopened for the following reasons: M.P. No.93/Chny/23 3 “During the F.Y. 2010-11, the assessee along with her son Sri Srikanth Venkineni had entered into a joint venture development agreement with M/s.Vinayagar Promoters and builders, Visakhapatnam to develop and construct flats in the property at No.2, MIG at Gangapur Layout, Visakapatnam. As per the development agreement, both assessee and her son Sri Srikanth Venkineni received a flat measuring 2485 sq.ft. in the second floor, two car parking, undivided share in the land to the extent of 90 sq. yards and a sum of Rs.80,00,000/- from M/s. Vinayagar promoters and builders and claimed exemption u/s.54F. In order to verify the correctness of Sec. 54F claim and to assess the escaped income chargeable to tax, I have reason to believe that income chargeable to tax has escaped for assessment and the same requires to be brought to tax by reopening assessment.” 8.1 From the above, it is very clear that the Assessing Officer has reopened the assessment to verify the correctness of claim made under section 54F of the Act. It is not the case of the Assessing Officer that the claim made by the assessee under section 54F of the Act is either wrong or wrongly allowed. It was only for the purposes of ascertaining the correctness of the claim. In our opinion, the reasons recorded by the Assessing Officer to reopen the assessment for the purpose of verification of the claim made under section 54F of the Act are not in accordance with law. While reopening the assessment, the Assessing Officer has to record his satisfaction that there is an escapement of income chargeable to tax. However, in this case, the reopening was done on the ground to verify the correctness of claim made under section 54F of the Act, which is not in accordance with law. Therefore, we hold that the reopening is invalid. 8.2 That apart, the ld. CIT(A) has recorded that the 4 years had already passed from the end of the assessment year, which means, the reopening was done after 4 years. In the reasons recorded by the Assessing Officer, this fact is not coming out. The Assessing Officer has not recorded that there is a failure on the part of the assessee to disclose fully and truly all material facts to complete the assessment. On this count also, the reopening is invalid. Accordingly, we quash the notice issued under section 148 of the Act and quash the assessment order passed under section 143(3) r.w.s. 147 of the Act. Thus, the ground raised by the assessee is allowed. 4.1 In view of the above findings of the Tribunal, we do not find any mistake apparent from the record and accordingly, the miscellaneous petition filed by the Revenue is dismissed. M.P. No.93/Chny/23 4 5. In the result, the miscellaneous petition filed by the Revenue is dismissed. Order pronounced in the open Court on 13 th October, 2023 at Chennai. Sd/- Sd/- (MANJUNATHA, G.) ACCOUNTANT MEMBER (V. DURGA RAO) JUDICIAL MEMBER Chennai, Dated, 13.10.2023 Vm/- आदेश की Ůितिलिप अŤेिषत/Copy to: 1. अपीलाथŎ/Appellant, 2.ŮȑथŎ/ Respondent, 3. आयकर आयुƅ/CIT, 4. िवभागीय Ůितिनिध/DR & 5. गाडŊ फाईल/GF.