TMI Blog2011 (1) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... . The return of income was filed on 26-7-2002 disclosing NIL income, and claiming that income is to be assessed in the hands of the respective co-owners of the building as share of each co-owner is predetermined. The return of income was processed under section 143(1) and accepted as such. However, subsequently, the Assessing Officer came to know that the assessee has not paid municipal taxes for the financial years 2000-01 to 2005-06, even as the assessee has claimed deductions, in computation of house property, in respect of the same. It was for this reason that the assessment of the assessee was reopened. In appeal also, the reassessment proceedings, though challenged for different reasons that the reasons before me, were upheld. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive was questioned on this argument, she could not demonstrate as to how quantification of income in the hands of the AOP will have any legal bearing on the assessment of income, in terms of the provisions of section 26, in the hands of the co-owners. She, however, as some other defence for the impugned reassessment. She contends that, as held by Hon'ble Supreme Court in the case of CIT v. Sun Engg. Works (P.) Ltd. [1992] 198 ITR 297/84 Taxman 442 a claim which has not been raised in the original assessment cannot be made in the reassessment proceedings either. Since the assessee did not take up this plea of non-taxability while filing the original return, as also when filing return in response to reassessment notice, she cannot take u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inary objection of the learned Departmental representative. No doubt the plea that no income has escaped assessment, for the reason that the house property income could not be taxed as an AOP income anyway, has been taken up for the first time before me, but then it is a purely legal issue, which does not require any further investigation of facts, in support of assessee's grievance and there is no bar on my dealing with any legal plea, as long as it does not warrant examination of new facts and as long as I have heard the other party on the same. None of these conditions are violated on the facts of the present case. 6. Section 26 of the Income-tax Act, which I would like to reproduce at this stage, provides as follows : 26. Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o the relief provided in that sub-section . So far as income from house property is concerned, the scheme of the Act does not envisage that annual value of the co-owned property, upon being determined in the assessment of the AOP, is to be divided amongst the co-owners in the pre-determined ratio. In other words, quantification of annual value of the co-owned property in the course of assessment of AOP consisting of co-owners is not a condition precedent for taxability of individual share of such income in the hands of the co-owners. No doubt, as noted by Hon'ble Delhi High Court in Shyam Sunder's case (supra), the computation of income from house property in the hands of the co-owner involves two steps first, that annual value of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by any authority in any proceeding under this Act by way of appeal, reference or revision or by a Court in any proceeding under any other law . Section 150 does not enable or require an appellate authority to give any directions for reopening of assessment, but it deals with a situation in which a reassessment is to be initiated to give effect to findings or directions of the appellate authority or the court. That is a call to be taken by the Assessing Officer and not by me. Having said that, let me also add that in terms of Hon'ble Supreme Court's judgment in the case of Rajinder Nath v. CIT [1979] 120 ITR 14/ 2 Taxman 204 , an appellate authority's powers to give findings or directions are not unfettered so as to give any such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty income in the cases of co-owners, that first house property income for determined in the hands of the AOP and then the same is apportioned to the co-owners in predetermined ratio. Despite my specific requisition to point out legal provisions which support this approach, learned Departmental Representative could not point out anything in the statute. In my considered opinion, therefore, the very exercise of ascertainment of co-owned house property income with predetermined shares, in the hands of the AOP, is wholly academic and infructuous in the face of the specific provisions of section 26 of the Act. No income can be said to have escaped in the course of such an academic and infructuous exercise. Escapement of income may, at best, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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