ARUNACHALAM M V Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee seeks a direction in this reference petition to the Tribunal to refer the following question for a decision of this court, as arising from the order of the Tribunal I

(2.) THE assessee claimed and obtained exemption from capital gains tax under Section 54 of the I.T. Act, for the assessment year 1972-73, in the income-tax assessment made under Section 143(3) of the said Act on July 23, 1974. Subsequently on the ground that there was information from the audit party that the exemption was not available to a HUF, the assessment was reopened by ITO under Section 147(b). In the reassessment made on January 11, 1978, the ITO took the view that the exemption granted under Section 54 in respect of the sale of the 20% share in the property known as "Chamundeswari Bagh" at No. 9, Santhome High Road, has been wrongly allowed in the original assessment. He, therefore, withdrew the exemption granted in the original assessment.

(3.) IT is no doubt true that the Supreme Court in Indian and Eastern Newspaper Society's case , has taken the view that the opinion given by the audit party on a question of law cannot be used as the basis for invoking Section 147(b) of the Act for reopening the assessment. If the Tribunal has given a decision on the question of jurisdiction of the ITO to reopen an assessment under Section 147(b) of the Act and if the said decision of the Tribunal is contrary to the decision rendered by the Supreme Court in Indian and Eastern Newspaper Society's case , then it is possible to say that there is a mistake apparent from the record of the order of the Tribunal. But, as already stated, in this case, though the assessee in his appeal before the AAC questioned the validity of reassessment proceedings both on the question of jurisdiction and also on merits, when the AAC upheld the jurisdiction of the ITO to reopen the assessment, but decided the case on merits in favour of the petitioner, he did not agitate the question of jurisdiction further. As a matter of the fact, he did not file an appeal against the view taken by the AAC on the question of jurisdiction before the Tribunal. Even in the appeal filed by the Revenue against the decision of the AAC on merits, he did not raise any cross-objection questioning the jurisdiction of the ITO to reopen the assessment under Section 147(b) of the Act, on the basis of the audit report. Therefore, there was no occasion for the Tribunal to go into the question of jurisdiction. When the Tribunal has not given a decision on the point, we do not see how a mistake apparent from the record could arise from the order of the Tribunal on the question of jurisdiction, merely from the fact that subsequently a decision has been rendered by the Supreme Court on the question of jurisdiction.