2000 (6) TMI 116 - AT - Income Tax

Summary

Issues:
1. Challenge to reopening of assessment proceedings under s. 59 of the ED Act.
2. Dispute regarding exemption under s. 33(1)(n) of the ED Act.

Analysis:

Issue 1:
The accountable person challenged the reopening of assessment proceedings under s. 59 of the ED Act after completion of assessment under s. 58(3) of the ED Act. The original assessment was reopened due to a discrepancy in the exemption allowed under s. 33(1)(n) of the ED Act for a residential house in Agra. The ACED upheld the reopening, considering two distinct municipal numbers for the houses and suspecting an attempt to avoid estate duty. The accountable person argued that the reopening based on audit information was invalid, citing legal precedents. The tribunal referred to relevant case laws, including the Supreme Court's decision in Indian & Eastern Newspaper Society, and held that the reopening was justified as the audit information constituted factual information, not an interpretation of law. Therefore, the reassessment by Asstt. CED was deemed valid.

Issue 2:
The accountable person further contested the reassessment order concerning the exemption under s. 33(1)(n) of the ED Act. The argument centered on whether two houses with separate municipal numbers could be considered a single residential unit for exemption purposes. Legal counsel relied on precedents like Shiv Narain Chaudhan's case to support the claim that the two units should be treated as one house. The tribunal acknowledged that both units were within the same boundary and had been combined into a single residential unit by the deceased. Citing the decision of the jurisdictional High Court in Shiv Narain Chaudhan's case, the tribunal ruled in favor of the accountable person, directing the Asstt. CED to allow exemption under s. 33(1)(n) for both units as they constituted one house. The appeal was partly allowed in favor of the accountable person.