Principal Commissioner Of Income Tax 6No v. Shri.c.r.badrinarayanan2

DATED: 27.7.2020 CORAM THE HON'BLE DR.JUSTICE VINEET KOTHARIANDTHE HON'BLE MR.JUSTICE KRISHNAN RAMASAMY T.C.A.No.828 of 2017 Principal Commissioner of Income Tax 6No.121, Nungambakkam High Road, Chennai 600 034. .... Appellant vs Shri.C.R.Badrinarayanan2/581, 1[st] Cross Street,Singaravelan Salai, Neelankarai, Chennai 600 041. PAN: ...Respondent Tax Case Appeal filed under Section 260-A of the Income TaxAct, 1961 against the order of the Income Tax AppellateTribunal, Madras ‘A’ Bench dated 11.7.2017 in inI.T.A.No.1600/Mds/2016. This Appeal filed against the Income Tax AppellateTribunal Madras 'A' Bench dated 11/07/2017 in ITANo.1600/mds/2016 Assessment Year 2006-2007 against TheCommissioner of Income Tax Appeals-15 in ITA No.149/CIT (A)-15,14-15,PAN No. Assessment Year 2006-2007 dated03/03/2016 against the Income Tax Officer, Business Ward No.III(2), Chennai-600 034 PAN No. dated 12/03/2014Assessment Year 2005-2006. For Appellant: Mr.J.Narayanasamy, Senior Standing Counsel For Respondent : No appearance. The Court was held by Video Conference, as per theResolution of the Full Court dated 3 July 2020, by Judges at https://hcservices.ecourts.gov.in/hcservices/ their respective residences and the counsel, staff of the Courtappearing from their respective residences. 2. The Revenue has filed the present Appeal under section260-A of the Income Tax Act aggrieved by the order of thelearned Tribunal dated 11[th] July 2017 in I.T.A.No.1600/Mds/2016for the Assessment Year 2006-07, by which the learned Tribunalheld that the re-assessment proceedings initiated against theAssessee under section 147/148 of the Act were not justifiedbeyond the period of four years from the date of passing of theoriginal Assessment Order as there was no failure on the part ofthe Assessee to fully and truly disclose the relevant materialsat the time of Original Assessment. 3. The relevant para 5 of the order of the Tribunal is quoted below for ready reference:-"(i) We have considered the rival submissions. It isclear from the reassessment order, as extractedsupra, that the Assessing Officer did not have anyfresh information. It appears that during thecourse of reassessment proceedings only he hasascertained from the sub-Registrar about theguideline value and proceeded to complete the re-assessment. Thus, there is merit in the submissionsof the assessee that there was no tangible materialbefore the Assessing Officer on the basis of whichthe reassessment could have been reopened. In theabsence of tangible material, what the AO has donewhile reopening the assessment is to change hisopinion which was formed earlier. The reassessmentmade after four years from the end of the assessmentyear on a change opinion can't be upheld. In thiscase, the assessee had disclosed fully and truly allmaterial facts necessary for his assessment at thetime of original assessment. The AO has notestablished the reasons for the failure on the partof the assessee and hence, the proceedings initiatedafter four years from the end of this assessmentyear is quashed.“ 4. It seems that the re-assessment proceedings wereinitiated to lower the figure of cost of acquisition fromRs.137/- per sq.ft, disclosed in the Original Assessment by theAssessee, to Rs.16/- per sq.ft, based on the guideline valuefixed by the competent Government Committee. In other words,the amount of Capital Gains would be taxable at the hands ofthe Assessee on the sale of Capital Assets in question. 5. Though the Revenue's stake involved in the present caseis merely a sum of Rs.3,00,000/- and according to the latest 4. It seems that the re-assessment proceedings wereinitiated to lower the figure of cost of acquisition fromRs.137/- per sq.ft, disclosed in the Original Assessment by theAssessee, to Rs.16/- per sq.ft, based on the guideline valuefixed by the competent Government Committee. In other words,the amount of Capital Gains would be taxable at the hands ofthe Assessee on the sale of Capital Assets in question. 5. Though the Revenue's stake involved in the present caseis merely a sum of Rs.3,00,000/- and according to the latest CBDT Circular No.17/2019 dated 8th August 2019, the Revenuecould have withdrawn the present Appeal under its litigationpolicy. However, as the case pertains to re-assessmentproceedings, in view of the exception carved out in the saidCBDT Circular, the learned Senior Standing Counsel pressed thepresent Appeal on merits. 6. Nobody has put in appearance on behalf of theRespondent/Assessee though the name of the Assessee,Mr.C.R.Badrinarayanan, after service of notice, is shown in thecause list. 7. Having heard the learned Senior Standing Counselappearing for the Appellant/Revenue, we are of the clear opinionthat there is no error in the order of the learned Tribunal andthe learned Tribunal has rightly held that the re-assessmentproceedings were initiated merely on a change of opinion by theAssessing Authority, which is impermissible in law. 8. There is no dispute that the relevant evidence and factsabout the cost of acquisition were very much available beforethe Assessing Authority at the time of passing of the OriginalAssessment Order and therefore, just to increase the quantum ofCapital Gains on the basis of alleged Guideline Value to betreated as cost of acquisition in the hands of the Assessee, theAssessing Authority took the recourse to re-assessmentproceedings under section 147 of the Act. 9. We are of the clear opinion that the assumed value orGuideline Value of the capital asset could not override the realcost of acquisition established by the Assessee on the basis ofrelevant evidence during the course of Original Assessmentproceedings. 10. Therefore, we do not find any substantial question oflaw to be arising in the present Appeal filed by the Revenuefrom the order of the learned Tribunal. The Appeal is, thus,found to be devoid of any merit and is liable to be dismissed.The same is, accordingly, dismissed. No order as to costs.Copy of this order may be sent to the Respondent/Assessee at theaddress given. Sd/- Assistant Registrar(CS III) //True Copy// Sub Assistant Registrar To 1.The Income Tax Appellate Tribunal, Madras, 'A, Bench. Madras, 'A, Bench. 2.The Commissioner of Income Tax (Appeals-15), 121, Mahatma Gandhi Road, Nungambakkam, Chennai-600 034. 121, Mahatma Gandhi Road, Nungambakkam, Chennai-600 034. 3.The Income Tax Officer, Business Ward-III(2), Chennai-600 034. Business Ward-III(2), Chennai-600 034. T.C.A.No.828 of 2017 vsn II[co]srg 04/11/2020