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2024 (2) TMI 149 - AT - Income TaxValidity of reopening of assessment u/s 147 - change of opinion - eligibility of claim of exemption u/s 54 - DR submitted that the AO has rightly invoked Section 147 of the Act as the HUF has not purchased the property and deduction the deduction cannot be claimed by HUF when the name of property is that of individual and not in the name of HUF - HELD THAT - It is pertinent to note that in the first round of assessment u/s 143(3) of the Act, the very issue of claim of exemption under Section 54 of the Act was taken into account and all the aspects of the said issue was considered at that threshold which was thereafter contested by the CIT(A) and the CIT(A) has also passed order dated 03.08.2015 which remain uncontested. Reopening is on the very same issue and, therefore, this is a clear case of change of opinion which cannot be allowed as per ratio laid down in case of CIT vs. Kelvinator of India Limited 2010 (1) TMI 11 - SUPREME COURT - Decided in favour of assessee.
Issues involved:
The appeal against the order dated 21.06.2023 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2011-12. Grounds of appeal: 1. The Assessment Order dated 23.12.2016 under Section 143(3) read with Section 147 for A.Y. 2011-12 passed by Assessing Officer II is challenged. 2. Dispute regarding reopening of assessment under Section 148 based on alleged escapement of income. 3. Validity and maintainability of Notice under Section 148 and Assessment Order dated 23.12.2016 under Section 143(3) read with Section 147. 4. Claim for deduction under Section 54 of the Act for investment in new residential house. Details of the Judgment: The assessee initially declared total income at Rs. 2,657/- for Assessment Year 2011-12, with the assessment completed on 25.02.2014 disallowing the claim of exemption under Section 54 of the Act. The Assessing Officer observed that the assessee, HUF, had not fulfilled the condition for claiming deduction under Section 54 as the new property was purchased in the name of an individual, not the HUF. Subsequently, a notice under Section 148 was issued on 30.03.2016, leading to a disallowance of Rs. 18,11,020/- under Section 54 of the Act. The assessee appealed the Assessment Order before the CIT(A), who upheld the disallowance. The assessee argued that the reopening of the case was a change of opinion, as the matter had already been addressed in the original assessment and CIT(A) proceedings. The property was purchased in the name of an individual due to bank loan restrictions, and previous orders were not challenged by either party. The reopening on the same issue was deemed unjustified, citing legal precedents. The Assessing Officer's invocation of Section 147 was supported by the Revenue, emphasizing that the property was not purchased in the name of the HUF, making the claim for exemption invalid. However, the Tribunal noted that the issue had been thoroughly examined in the initial assessment and CIT(A) proceedings, rendering the reopening as a clear case of change of opinion, which is impermissible as per legal precedents. In conclusion, the Tribunal allowed grounds 1 to 3 of the assessee's appeal, finding the reopening unjustified due to being a change of opinion. The without prejudice ground did not require adjudication at that stage, resulting in the partial allowance of the assessee's appeal. The appeal filed by the assessee was partly allowed, with the order pronounced on 31st January, 2024.
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