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2013 (3) TMI 562 - HC - Income TaxReopening of assessment - rent receipt from leasing of property - Till A.Y. 2007-08, the rental income was declared by the assessee under the head of business income but from A.Y. 2008-09 the rental income was declared as income from house property - AO was of opinion that the same view needs to be taken for A.Ys. 2006-07 and 2007-08 as taken in A.Y. 2008-09 since the facts of the case for the subsequent years and the two years in question are the same - notice issued to the assessee u/s 142(1) calling upon the assessee to clarify - Held that:- The failure of the assessee to issue a clarification before the AO and to explain how the facts for A.Ys. 2006-07 and 2007-08 were different from those of A.Y. 2008-09 and subsequent years was a circumstance which led the AO to believe that the rental income has been wrongly assessed under the head of income from business rather than as income from house property. Before the AO it was contended that the assessee had followed the judgment of this Court for A.Ys. 2006-07 and 2007-08. However, as the AO noted, the returns for those two years were filed on 29 November 2006 and 27 October 2007 whereas the decision of this Court had been pronounced much later on 12 January 2012. Thus AO was justified in purporting to reopen the assessments for A.Ys. 2006-07 and 2007-08. Sufficient opportunity was given to the assessee during the course of the assessment for A.Y. 2009-10 to explain to the satisfaction of the Assessing Officer how the facts for A.Ys. 2006-07 and 2007-08 were different. In this view of the matter, the formation of opinion by the AO that income has escaped assessment cannot be regarded as a mere subjective satisfaction & reopening of assessments cannot be held to be contrary to law - against assessee.
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