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2012 (12) TMI 6 - AT - Income TaxReassessment u/s 147 - Notice u/s 148 on the basis of the information provided by the assessee during the course of appellate proceedings that investment relates to HUF and not to the individual. - Tax effect - held that - There is uncontroverted fact that the tax effect in the present appeal is below prescribed monetary limit. - the appeal of the Revenue is dismissed being not maintainable. Even on merit, ld. CIT(A) has rightly quashed the order of the AO as the ITAT, Indore - Since the above direction has been quashed by the ITAT, the AO was not right in framing reassessment proceedings against the assessee. - Decided in favor of assessee.
Issues Involved:
1. Quashing of reassessment proceedings. 2. Taxability of investment in the hands of HUF or individual. 3. Maintainability of the Revenue's appeal based on the monetary limit. Detailed Analysis: 1. Quashing of Reassessment Proceedings: The Revenue contended that the CIT(A) erred in quashing the reassessment proceedings initiated by the AO under Section 148. The AO had initiated these proceedings based on information provided by the assessee during appellate proceedings, indicating that the investment related to HUF and not to the individual. The AO treated this as information rather than a direction, and independently initiated reassessment proceedings. However, the CIT(A) quashed the reassessment order. The Tribunal upheld the CIT(A)'s decision, noting that the ITAT, Indore, in its order dated 4.2.2005, had already quashed the directions of the CIT(A)-I, Indore, which directed that the HUF was assessable for the income as the investments were owned by the HUF. Consequently, the AO's reassessment proceedings were not justified. 2. Taxability of Investment: The Revenue argued that income should be taxed either in the hands of the individual or the HUF, and both should not be allowed to escape taxation. The assessee had admitted that the investments related to the HUF, and thus, it should be taxed in the hands of the HUF. However, the Tribunal found that since the direction by the CIT(A) to assess the HUF was quashed by the ITAT, the reassessment proceedings against the HUF were not valid. The CIT(A)'s decision to quash the reassessment order was upheld. 3. Maintainability of the Revenue's Appeal: The assessee's counsel raised a preliminary objection regarding the maintainability of the Revenue's appeal due to the low tax effect, which was only Rs. 8,832/-. The Tribunal noted that the tax effect in the present appeal was below the prescribed monetary limit as per the CBDT's circulars, including Instruction No. 3/2011 dated 9.2.2011, which set the monetary limit for filing appeals. The Tribunal cited multiple precedents, including decisions from the jurisdictional High Court and other benches, which supported dismissing appeals with tax effects below the prescribed monetary limits. Consequently, the appeal was dismissed based on the low tax effect. Conclusion: The Tribunal dismissed the Revenue's appeal on the grounds of low tax effect and upheld the CIT(A)'s order quashing the reassessment proceedings. The Tribunal confirmed that the AO could not initiate reassessment proceedings based on the quashed directions of the CIT(A) and that the taxability of the investment should not be reassessed in the hands of the HUF or the individual under the circumstances presented. The appeal was dismissed, and the CIT(A)'s order was confirmed.
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