High Court Of Madras
CIT vs. K.K. Palanisamy
Section 54, 143, 147
Asst. Year 1995-96
F.M. Ibrahim Kalifulla & Mrs. R. Banumathi, JJ.
Tax Case (Appeal) No. 913 of 2009
6th October, 2009
Counsel Appeared :
T. Ravikumar, for the Appellant
JUDGMENT
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 holding that the reopening of assessment under s. 147 was not proper and denial of exemption under s. 54 was bad for the asst. yr. 1995-96 ?” As it is seen from the order of the assessing authority passed under s. 143(3) r/w 147 of the IT Act, 1961 (hereinafter referred to as “the Act”), the assessee’s return for the asst. yr. 1995-96 was originally processed under s. 143(1)(a) of the Act on 23rd Sept., 1996. Subsequently, it was taken up for scrutiny under s. 143(3) of the Act. At that point of time, the sale of house property by the assessee for a consideration of Rs. 18,00,000 was very much known to the assessing authority. The assessee admitted the capital gain of Rs. 6,07,035. The assessment was concluded under s. 143(3) of the Act and was completed on 27th Feb., 1997, which determined the capital gain of Rs. 1,00,000 as against “nil” capital gain determined earlier under s. 143(1)(a) of the Act. The deduction claimed by the assessee under s. 54 of the Act to the extent of Rs. 12,50,000 was allowed at that point of time. It is only thereafter the present reassessment proceedings came to be initiated by issuing notice under s. 148 of the Act. The alleged escapement of capital gain taxed on the sum of Rs. 1,37,788, which was earlier allowed under s. 54 in the proceedings dt. 27th Feb., 1997.
The assessing authority, having determined the tax liability by an order dt. 27th Feb., 1997, the matter went before the CIT(A), who took the view that it was not really a case of escaped assessment, but was one of change of opinion by the assessing authority. In the order of the CIT (A), in para 4.4, the CIT(A) noted that the claim of the assessee for deduction under s. 54(1) of the Act to the extent of Rs. 12,50,000 was considered by the assessing authority while passing orders under s. 143(3) of the Act. Under the circumstances, the present attempt of the assessing authority in reopening the case under s. 147 of the Act cannot be permitted. The Tribunal also confirmed the view of the CIT(A), taking note of all the above factors. In this context, in the decision of the Hon’ble Supreme Court in CIT vs. Foramer France (2003) 185 CTR (SC) 512 : (2003) 264 ITR 566 (SC), the Supreme Court made it clear that when the reassessment notices were issued and when admittedly there is no failure on the part of the assessee, who disclosed fully and truly all the material facts for assessment, it can only be construed as change of opinion and that it will not come under the category of escapement of assessment. Having regard to the above legal position, we do not find any scope to entertain this appeal inasmuch as there is no question of law, much less substantial question of law for consideration. The appeal fails and the same is dismissed.
[Citation : 321 ITR 474]
