The Commissioner Of Income Tax, Erode v. Shri K.k. Palanisamy

Date:- 06.10.2009 Coram The Honourable Mr. Justice F.M. IBRAHIM KALIFULLA and The Honourable Mrs. Justice R. BANUMATHI T.C. (A) No.913 of 2009 The Commissioner ofIncome Tax,Erode. ... Appellant ..vs.. Shri K.K. Palanisamy ... Respondent Tax Case Appeal filed against the order dated 11.1.2008 passed by the Income Tax AppellateTribunal, "D" Bench, Chennai passed in ITA No.1165/Mds/2004. For Appellant : Mr. T. Ravikumar JUDGMENT (Judgment was delivered by F.M. IBRAHIM KALIFULLA, J.) The Revenue has come forward with this appeal raising the following substantial question of law:- " Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holdingthat the re-opening of assessment under section 147 was not proper and denial of exemption underSection 54 was bad for the assessment year 1995-96?" 2. As it is seen from the order of the assessing Authority passed under Section 143(3) read with 147of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the assessee's return for theassessment year 1995-96 was originally processed under Section 143(1)(a) of the Act on 23.9.1996.Subsequently, it was taken up for scrutiny under Section 143(3) of the Act. At that point of time, thesale of house property by the assessee for a consideration of Rs.18,00,000/- was very much known tothe assessing Authority. The assessee admitted the capital gain of Rs.6,07,035/-. 3. The assessment was concluded under Section 143(3) of the Act and was completed on 27.2.1997,which determined the capital gain of Rs.1,00,000/- as against "nil" capital gain determined earlierunder Section 143(1)(a) of the Act. The deduction claimed by the assessee under Section 54 of theAct to the extent of Rs.12,50,000/- was allowed at that point of time. It is only thereafter the presentreassessment proceedings came to be initiated by issuing notice under Section 148 of the Act. Thealleged escapement of capital gain taxed on the sum of Rs.1,37,788/-, which was earlier allowed 4. The Assessing Authority, having determined the tax liability by an order dated 27.2.1997, thematter went before the Commissioner of Income-tax (Appeals), who took the view that it was notreally a case of escaped assessment, but was one of change of opinion by the assessing Authority. Inthe order of the Commissioner of Income-tax (Appeals), in paragraph 4.4, the Commissioner ofIncome Tax(Appeals) noted that the claim of the assessee for deduction under Section 54(1) of theAct to the extent of Rs.12,50,000/- was considered by the assessing Authority while passing ordersunder Section 143(3) of the Act. Under the circumstances, the present attempt of the assessingAuthority in reopening the case under Section 147 of the Act cannot be permitted. The Tribunal alsoconfirmed the view of the Commissioner of Income-tax (Appeals), taking note of all the abovefactors. 5. In this context, in the decision of the Honourable Supreme Court reported in (2003) 264 ITR 566(COMMISSIONER OF INCOME TAX v. FORAMER FRANCE, the Supreme Court made it clear thatwhen the reassessment notices were issued and when admittedly there is no failure on the part ofthe assessee, who disclosed fully and truly all the material facts for assessment, it can only beconstrued as change of opinion and that it will not come under the category of escapement ofassessment. 6. Having regard to the above legal position, we do not find any scope to entertain this appealinasmuch as there is no question of law much less substantial question of law for consideration. Theappeal fails and the same is dismissed. (F.M.I.K.J.) (R.B.I.J.)06.10.2009Index:- Yes. Internet:- Yes. ssa. To The Commissioner ofIncome Tax,Erode. F.M. IBRAHIM KALIFULLA,J.&R. BANUMATHI, J. ssa. T.C. (A) No.913 of 2009