2023 (8) TMI 444 - AT - Income Tax

Deduction u/s. 54B - Denial of deduction holding that the assessee being HUF is not entitled to claim - reference to the amendment came into effect from 01-04-2013 - HELD THAT - We note that the benefit of deduction u/s. 54B of the Act is available to HUF prior to the amendment by Finance Act, 2012 w.e.f. 01-04-2013, the assessment being A.Y. 2006-07 under consideration before us, the amendment w.e.f. 01-04-2013 is not applicable. Therefore, we find no infirmity in the order of CIT(A) allowing deduction u/s. 54B of the Act in favour of the assessee - Decided against revenue. Reopening of assessment u/s 147 - CIT(A) held the AO rightly formed an opinion that there was no detailed examination of the issue u/s. 54B of the Act in the intimation proceedings - HELD THAT - Assessee challenged the issuance of notice u/s. 147 of the Act before the Hon ble High Court of Bombay at Nagpur Bench 2014 (3) TMI 1212 - BOMBAY HIGH COURT wherein, as emanating from the record that the Hon ble High Court of Bombay at Nagpur Bench was pleased to allow the AO to complete the reassessment proceedings. CIT(A) also examined the reasons recorded by the AO as well as objections raised by the assessee regarding the reasons recorded and held that the AO is right in reopening the assessment made u/s. 143(a)(1) of the Act as it demonstrate that there was no occasion to AO to examine the claim made by the assessee in the intimation proceedings. Therefore, we find no infirmity in the reasons recorded by the CIT(A) of the impugned order in holding the reassessment is valid under law. Thus, grounds raised by the assessee fails and are dismissed.

Summary

Issues:
The judgment involves cross appeals by the Revenue and assessee against the common order passed by the Commissioner of Income Tax (Appeals) for assessment year 2006-07.

Revenue's Appeal - Issue:
The Revenue raised grounds concerning the deduction u/s. 54B of the Act for the assessee, who is an HUF. The AO disallowed the deduction, stating that HUF is not entitled to claim it. However, the CIT(A) allowed the deduction, citing that the amendment from 01-04-2013 is not applicable to the assessment year 2006-07. The Tribunal agreed with the CIT(A) and dismissed the Revenue's appeal.

Assessee's Appeal - Issue:
The assessee challenged the validity of reassessment proceedings u/s. 147 of the Act. The AO issued a notice for reassessment based on the claim made by the assessee regarding deduction u/s. 54B. The CIT(A) upheld the validity of the reassessment, stating that there was no detailed examination of the issue during the intimation proceedings. The High Court also allowed the reassessment proceedings. The Tribunal found no infirmity in the CIT(A)'s decision and dismissed the assessee's appeal.

In conclusion, both the appeals of the Revenue and assessee were dismissed by the Tribunal.