| The Tax Publishers2020 TaxPub(DT) 3113 (Mum-Trib) INCOME TAX ACT, 1961
Section 147
Where return of income filed by assessee was initially processed under section 143(1) and was not subject to scrutiny and AO on the basis of information received subsequently had come to know that a particular item of income had escaped assessment, he was well within his power to re-open assessment.
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Reassessment - Validity - Original assessment framed under section 143(1) - Reopening on the basis of outcome of assessment for another year
Assessee, company, engaged in construction business. filed its return of income on 13-10-2010. Initially, the return was processed under section 143(1) of the Act accepting the loss returned. Subsequently, AO noticed that the assessee had received compensation from M/s. NTCL vide a decree passed by Court while completing assessment for assessment year 2012-13, AO had brought such compensation to tax as income under the head 'Income from house property' and same was not contested by assessee. Whereas, in concerned assessment year, assessee had not offered such compensation to tax under the head 'Income from house property'. Therefore, alleging escapement of income, AO re-opened assessment under section 147 and made addition. Assessee challenged validity of re-opening of assessment contending that merely relying upon assessment order passed for the assessment year 2012-13. AO re-opened assessment based on borrowed satisfaction. Held: Admittedly, return of income filed by assessee was initially processed under section 143(1) and was not subject to scrutiny. Therefore, AO never had occasion to verify various claims made by assessee in return of income. When in course of assessment proceedings for assessment year 2012-13, AO was informed about receipt of compensation from NTCL, he verified all the relevant facts and thereafter concluded that compensation received by assessee was assessable under the head 'Income from house property'. When AO on the basis of information received subsequently had come to know that a particular item of income had escaped assessment, he was well within his power to re-open assessment. Further, in assessment years 2013-14 and 2014-15 also, assessee offered compensation received under the head income from house property by revising its return of income filed earlier. Thus, such conduct of assessee clearly showed that in three subsequent assessment years assessee had accepted rental income as income from house property. That being the case, rule of consistency would clearly apply insofar as treatment of compensation received in concerned assessment year as well. Therefore, compensation received by assessee was correctly assessed as income from house property.
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 2010-11
APPELLATE TRIBUNAL RULES, 1963
Rule 34(5)
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