Case Law Details
Ramamirtham Mangaladhevi Vs ITO (ITAT Chennai)
ITAT Chennai held that reopening of assessment in absence of any failure on the part of the assessee to disclose material facts necessary for the assessment and without any new tangible material is untenable in law.
Facts- The original return of income filed by the assessee was scrutinized u/s 143(3) on 19.03.2015. However, the case was reopened beyond 4 years from end of relevant assessment year and notice u/s 148 was issued on 26.03.2018. In the recorded reasons, as placed on page nos. 17 of the paper-book, Ld. AO alleged that Long Term Capital Gains (LTCG) to the tune of Rs1 1.42 Lacs was omitted to be offered by the assessee. Secondly, rental income of Rs.7.20 Lacs from Kanathur Property was to be treated as assessee’s income. Lastly, medical expenses of Rs.0.97 Lacs were not allowable u/s 37(1). The assessee objected to the reopening vide its letter dated 26.07.2018 and furnished working of capital gains.
The Ld. CIT(A) rejected legal grounds by observing that Ld. AO had picked up the information from the assessment of other co-owner which formed the basis for reopening of the assessment proceedings.
Conclusion- It was a case wherein there was no failure on the part of the assessee to disclose material facts necessary for her assessment. Therefore, applying the ratio of cited decision of Hon’ble Apex Court in CIT vs Foramer France (129 Taxman 72), it was to be held that notice issued u/s 148 was barred by limitation and consequential assessment framed by Ld. AO would be nullity.
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