COMMISSIONER OF INCOME TAX Vs. K K PALANISAMY

JUDGEMENT

(1.) THE Revenue has come forward with this appeal raising the following substantial question of law:- "Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the re-opening of assessment under section 147 was not proper and denial of exemption under Section 54 was bad for the assessment year 1995-96?"

(2.) AS it is seen from the order of the assessing Authority passed under Section 143(3) read with 147 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the assessee's return for the assessment year 1995-96 was originally processed under Section 143(1)(a) of the Act on 23.9.1996. Subsequently, it was taken up for scrutiny under Section 143(3) of the Act. At that point of time, the sale of house property by the assessee for a consideration of Rs.18,00,000/- was very much known to the assessing Authority. The assessee admitted the capital gain of Rs.6,07,035/-.

(3.) IN this context, in the decision of the Honourable Supreme Court reported in (2003) 264 ITR 566 (Commissioner of INcome Tax v. Foramer France, the Supreme Court made it clear that when the reassessment notices were issued and when admittedly there is no failure on the part of the assessee, who disclosed fully and truly all the material facts for assessment, it can only be construed as change of opinion and that it will not come under the category of escapement of assessment.