COMMISSIONER OF INCOME TAX Vs. K RAJAPANDIAN

JUDGEMENT

(1.) THIS appeal is filed under Section 260a of the Income tax Act, 1961 by the Revenue, against the order of the income Tax Appellate Tribunal, Chennai 'd' Bench, Chennai in i. T. A. No. 2145/mds/2003 dated 13. 04. 2007, raising the following substantial question of law:

(2.) THE facts leading to the above substantial question of law are as under: the assessee is an individual. The relevant assessment year is 1993-94 and the corresponding accounting year ended on 31. 03. 1993. The assessee filed Return of income on 08. 12. 1996 admitting income at Rs. 55,530/- from maligai business and Rs. 20,000/- from agriculture. The assessee has constructed a shopping space cum Kalyana Mandapam during the previous years relevant to the assessment years 1991-92 to 1994-95. The cost of construction as per the Approved valuer's Report was Rs. 18,50,000/- whereas the assessee had admitted the cost at Rs. 16,70,000/ -. The difference in the cost of construction works out to Rs. 1,80,000/ -. The c. I. T. (A) in his earlier order dated 01. 01. 1997 in I. T. A. Nos. 321 and 322/94-95/try, relating to the assessee's own case for the assessment years 1991-92 and 1992-93, had given a direction that the difference between the total cost fixed and the total cost disclosed by the assessee, should be brought to tax for the assessment years 1991-92 to 1994-95. In view of the same, the Assessing Officer issued notice under Section 148 of the Income-tax Act ("act" in short) to the assessee. By letter dated 30. 05. 2001, the assessee has stated that the original Return filed may be treated as return filed in response to notice under Section 148 of the act. The assessment was completed under Section 143 (3) r/w section 147 of the Act. While completing the assessment, the Assessing Officer made an addition of Rs. 84,073/ -. Aggrieved by the order, the assessee filed an appeal to the commissioner of Income-tax (Appeals ). The C. I. T. (A)dismissed the appeal and confirmed the order of reassessment. Aggrieved, the assessee filed an appeal to the Income-tax Appellate Tribunal ("tribunal" in short ). The Tribunal allowed the appeal filed by the assessee on the ground that reopening of the assessment is bad in law and also relied on this Court judgment in the case of commissioner of Income-tax Vs. V. T. Rajendran, [2007] 288 ITR 312 (Mad ). Hence the present tax case by the Revenue.

(3.) LEARNED Senior Standing Counsel appearing for the revenue submitted that the Assessing Officer has reopened and completed the assessment in view of the direction given by the earlier C. I. T. (A)'s order, stated supra and hence the reopening of the assessment is valid in law. Therefore, the order passed by the Tribunal holding that reopening is bad in law is wrong, illegal, without basis and justification.