2015 (5) TMI 901 - AT - Income Tax

Reopening of assessment - denial of deduction u/s 54/54F in respect on new residential property bought against sale of commercial property as alleged by the Learned Assessing Officer - Held that - It is clear that the ld. CIT(A) justified the reopening for only on this basis that the notice issued u/s 148 of the Act was within the time limit laid down u/s 149 of the Act and that the AO recorded the reason on the basis of information received from the Directorate of Investigation, Gurgaon, however, he neither discussed the submissions of the assessee nor gave the reasons for rejecting the same. In our opinion the order of the ld. CIT(A) while rejecting the ground raised by the assessee against reopening of assessment u/s 147 of the Act is a non-speaking order particularly when he has not discussed the submissions of the assessee and also did not give the reason in support of his conclusion. As regards to the issue relating to the admission of the legal grounds, it is noticed that the ld. CIT(A) without considering this fact that those grounds raised were purely legal in nature and go to the root of the matter, dismissed the same by stating that there was no reasonable cause for adding the additional grounds of appeal at stage of Appellate Proceedings. In our opinion the ld. CIT(A) ought to have admitted the additional grounds and thereafter he should have decided the same by considering the submissions of the assessee. We, therefore, considering the totality of the facts of the present case, deem it appropriate to set aside this case back to the file of the ld. CIT(A) to be adjudicated afresh in accordance with law after providing due and reasonable opportunity of being heard to the assessee. He should pass a speaking order on the additional grounds raised before him as well as the grounds agitated for reopening u/s 147 of the Act. - Decided in favour of assesse.

Summary

Issues:
1. Reopening of assessment proceedings under section 147/148 of the Income Tax Act.
2. Denial of deduction claimed under sections 54/54F for the purchase of a new residential property.
3. Admission of additional legal grounds by the Commissioner of Income Tax (Appeals).
4. Justification of reopening assessment proceedings by the Assessing Officer.
5. Non-speaking order passed by the Commissioner of Income Tax (Appeals) in rejecting grounds against reopening of assessment.
6. Consideration of legal issues raised by the assessee.

Reopening of Assessment Proceedings:
The appellant contested the reopening of assessment proceedings under section 147/148 of the Income Tax Act, arguing that there was no evidence of income escaping assessment. The Assessing Officer justified the reopening based on information from the Directorate of Investigation, Gurgaon. The Commissioner of Income Tax (Appeals) upheld the reopening, citing compliance with statutory conditions and the issuance of notice within the prescribed time limit. However, the Appellate Tribunal found the Commissioner's order non-speaking, lacking a discussion of the appellant's submissions. The Tribunal remanded the case for fresh adjudication, emphasizing the need for a reasoned decision.

Denial of Deduction under Sections 54/54F:
The appellant's claim for deduction under sections 54/54F for the purchase of a new residential property was denied by the Assessing Officer as the capital asset sold was an industrial building, not a residential house. The denial was upheld by the Commissioner of Income Tax (Appeals), leading to the appellant's appeal. The Appellate Tribunal did not address this issue specifically in its judgment.

Admission of Additional Legal Grounds:
The appellant raised additional legal grounds before the Commissioner of Income Tax (Appeals), arguing that they were purely legal in nature and should be admitted. The Commissioner rejected these grounds, citing various judicial pronouncements and lack of new information justifying their inclusion. The Appellate Tribunal found the Commissioner's refusal unjustified, emphasizing that legal grounds can be raised at any time. The Tribunal directed the Commissioner to reconsider the additional grounds and provide a speaking order.

Non-Speaking Order and Legal Issues:
The Appellate Tribunal criticized the Commissioner of Income Tax (Appeals) for passing a non-speaking order in rejecting the grounds against the reopening of assessment proceedings and the admission of legal issues. The Tribunal highlighted the importance of considering legal grounds raised by the appellant and providing a reasoned decision. The Tribunal remanded the case for fresh adjudication, stressing the need for a thorough examination of all legal issues raised.

This comprehensive analysis of the legal judgment addresses all the issues involved, providing a detailed overview of the arguments, decisions, and directions given by the Appellate Tribunal.