2024 (11) TMI 1379 - HC - Income Tax

Validity of reopening of assessment - Ropening as based on the purported guideline value of the property at Rs. 16,000/- Per. Sq. Ft. - difference between the value adopted for the computation of the stamp duty and the guideline value is to be taxed - HELD THAT - The Court is of the view that the impugned order in over-ruling the objection of the petitioner, on the ground of difference, between the purported guideline value of the property at Rs. 16,000/- Per. Sq. Ft. is not available as it is inspired due to change of opinion. That apart, the records that have been filed before this Court is Rs. 16,000/- Per. Sq. Ft. is for the commercial property and not for residential property. The SRO s letter dated 04.10.2022 confirms that value that was adopted only Rs. 12,000/- Per. Sq. Ft. That apart Section 47 A of the Indian Stamps Act, 1899, it is the Jurisdictional Registering Officer, who is the competent authority under the Indian Stamps Act, 1899 to come to a conclusion, whether there was any under valuation or not. If there is under valuation, the property would not have been registered at Rs. 12,000/- Per. Sq. Ft. Prima-facie , it is clear that the reopening of the assessment is only inspired from change of opinion, as all the materials available for completing the assessment. Impugned order is liable to be set aside in the light of the decision of Kelvinator of India Ltd., 2010 (1) TMI 11 - SUPREME COURT Hon ble Supreme Court has made it clear that the power that is to be exercised under Sections 148 cannot be used for change of opinion as there is no power to review completed assessment.

Summary

Issues:
Challenge to notice under Section 148 of the Income Tax Act, 1961 and consequential speaking order based on alleged under-valuation of property.

Analysis:
The petitioner challenged a notice issued under Section 148 of the Income Tax Act, 1961, and a subsequent speaking order based on the alleged under-valuation of a property transaction. The petitioner sold a property and purchased another on the same day. The return of income was filed, assessed, and accepted by the assessing officer. However, the assessment was reopened based on the difference between the purchase price and the guideline value of the property. The respondent overruled the petitioner's objection, stating that there was a failure to disclose the correct value during the assessment proceedings.

The petitioner argued that the reassessment under Section 148 was beyond the limitation period and that there was no failure to disclose income. The respondent justified the reassessment citing the TOLA Ordinance, 2020 and TOLA Act, 2020, extending the limitation period due to the Covid-19 pandemic. The respondent contended that the assessment order was silent on the guideline value and the difference needed to be taxed. The petitioner relied on legal provisions and previous court decisions to challenge the reassessment.

The court considered both parties' arguments and held that the reassessment was inspired by a change of opinion and not based on new material. The court noted that the guideline value was for commercial property, not residential, and the registering officer's confirmation supported the lower value used in the assessment. Citing the decision in CIT Vs. Kelvinator of India Ltd., the court emphasized that the power under Section 148 cannot be used for a mere change of opinion. Consequently, the court set aside the impugned order and disposed of the writ petition without costs.