2012 (7) TMI 368 - AT - Income Tax

Challenging the re-opening of the closed assessment u/s 147 - disallowing of the assessee s claim of exemption u/s 54F - Held that - Originally the A.O. had opted proceeding u/s 154 and when that proceeding became final, he has taken proceeding under section 147 - The assessment must be one single assessment and not piecemeal assessment. If the I.T.O. has assessed only the part of the income of sale income making the assessment and deferred the other part of income for consideration at later stage under section 147 could not be invoked for the purpose of completing the deferred assessment. Claim of exemption u/s 54F- Held that - Reinvestment of sale consideration for availing benefit u/s 54F should be in the name of the assessee is a debatable issue as there are decisions available on the both the sides, on applying rule as laid down in the case of Mysore Minerals Limited vs. CIT, 1999 (9) TMI 1 (SC) that in case there are two possible views, a view favorable to the assessee should be adopted - decided in favour of assessee.

Summary

Issues:
1. Reopening of assessment under section 147 of the Income Tax Act.
2. Disallowance of claim of exemption under section 54F of the Income Tax Act.

Analysis:
1. Reopening of Assessment under Section 147:
The appellant challenged the reopening of the closed assessment under section 147 of the Income Tax Act, arguing that the provisions were not applicable in their case. The Assessing Officer disallowed the claim of exemption under section 54F, stating that the investment was made in the name of the appellant's son. The CIT(A) upheld the reopening of the assessment and disallowance of the exemption. However, the Tribunal noted that the original assessment was finalized after an order under section 154 of the Act, which became final after an ITAT order. Citing legal precedents, the Tribunal held that the Assessing Officer's action was not in accordance with the law. The Tribunal also emphasized that the case did not meet the conditions for reopening under section 147, as there was no escapement of income.

2. Disallowance of Exemption under Section 54F:
The Tribunal considered the conflicting views on whether the reinvestment for availing benefit under section 54F should be in the name of the assessee. Various High Courts and the Apex Court had different opinions on this issue. The Tribunal applied the rule that in case of two possible views, the one favorable to the assessee should be adopted. Therefore, the Tribunal allowed the claim of the assessee under section 54F. The Tribunal's decision was based on legal principles and precedents, ensuring a fair interpretation of the law.

In conclusion, the Appellate Tribunal ITAT, Agra allowed the appeal of the assessee, emphasizing that the Assessing Officer's actions were not in line with the law and that the claim of exemption under section 54F should be allowed based on a favorable view to the assessee. The judgment provided a detailed analysis of the legal issues involved, citing relevant legal precedents and statutory provisions to support its decision.