2022 (2) TMI 594 - HC - Income Tax

Reopening of assessment u/s 147 - assessee sold immovable property for an aggregate value of ₹ 52 L akh and the same was not offered for tax in the return of income - HELD THAT - We find merit in the contention raised that the reasons assigned by the Assessing Officer for reopening of the assessment for the relevant year are factually incorrect. In column No.8 of the same, we find reference of ₹ 52 Lakh towards full value of consideration. Although Mr. Bhatt tried to say something as regards the cost of acquisition with indexation, yet we are of the view that factually there is no foundation for the Revenue to reopen the assessment on the ground as alleged in the reasons assigned to the writ applicant assessee. Writ application succeeds and is hereby allowed

Summary

Issues:
Challenge to notice issued under Section 148 of the Income Tax Act, 1961 for reopening assessment for A.Y. 2016-17 due to alleged failure to offer an amount for taxation while filing return of income.

Analysis:
The writ application challenged a notice issued under Section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for A.Y. 2016-17. The notice was based on the ground that the assessee failed to offer an amount of ?52 Lakh for taxation while filing the return of income for that year. The Revenue claimed that this amount was received by the assessee in connection with the sale of a property. The objections raised by the assessee regarding the factual correctness of the reasons for reopening were disposed of by the Assessing Officer, who maintained that the assessee had not offered the ?52 Lakh for taxation. The court heard arguments from both parties and found merit in the contention raised by the counsel for the assessee that the reasons assigned by the Assessing Officer were factually incorrect. The court noted that the return of income filed by the assessee clearly referenced the ?52 Lakh towards the full value of consideration, contradicting the Revenue's claim. Despite attempts by the Revenue's counsel to argue about the cost of acquisition with indexation, the court concluded that there was no factual basis for the Revenue to reopen the assessment. Consequently, the court allowed the writ application, quashing and setting aside the impugned notice dated 31st March 2021 for A.Y. 2016-17.

This detailed analysis of the judgment highlights the key issues involved, the arguments presented by both parties, and the court's reasoning leading to the decision to quash the notice.