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TMI Blog2020 (6) TMI 372X X X X Extracts X X X X X X X X Extracts X X X X ..... ication. 3. Ground No.2 is the addition made by the Assessing Officer (AO) stated to be outside the scope of reassessment provisions, since no addition was resulted on the reasons recorded. 4. Brief facts of the case are that, the assessee filed the return of income declaring total income of Rs. 30,37,440/- on 06.02.2012. The assessment was completed u/s 143(1), subsequently, the AO reopened the assessment in respect of rents received from M/s NRI Academy and M/s Reliance Infra Ltd., totaling to Rs. 19,37,640/- and issued the notice u/s 148 after duly recording the reasons. In response to notice issued u/s 148, the assessee filed a letter stating that the return of income already filed on 06.02.2012 may be treated as return in response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essee following the decision of Hon'ble Karnataka High Court in the case of M/s Mookambika Developers, Bangalore (ITA No.374/2014 dated 27.07.2015. 5. Against which the assessee filed the appeal before the Tribunal. During the appeal hearing, the Ld.AR submitted that the AO reopened the assessment for non admission of rental receipts from M/s NRI Academy and M/s Reliance Infra Limited of Rs. 19,37,640/-. The said rental receipts were related to the HUF and assessed separately in HUF status. The rents received from both the tenants were duly admitted in the return of income filed in HUF status, therefore, issuing notice u/s 148 in the hands of the assessee is bad in law. The Ld.AR further submitted that the above facts were brought to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 148 and allow the appeal of the assessee. 6. On the other hand, the Ld.DR submitted that as per Form 26AS, the assessee was paid the rental income of Rs. 19,05,900/- from M/s NRI Academy and Rs. 31,740/- from M/s Reliance Infra Ltd. which was not admitted in the return of income filed by the assessee. Therefore, the notice u/s 148 was issued since the assessee did not admit the rental income in his hands. Therefore, argued that reopening of assessment is perfectly in order. The Ld.DR further submitted that enquiry was caused with M/s NRI Academy on 19.11.2013 by issue of letter u/s 133(6), wherein NRI Academy clarified that the land and ACC sheds were leased for the purpose of running intermediate classes from the assessee on a rent of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on the decision of Hon'ble Punjab & Haryana High Court in the case of Commissioner of Income Tax Vs. Mehak Finvest (P.) Ltd. [2014] 52 taxmann.com 51 (Punjab & Haryana) and also the decision of Hon'ble High Court of Delhi in the case of Principal Commissioner of Income Tax (Central)-3 Vs. Jakhotia Plastics (P.) Ltd. [2018] 94 taxmann.com 89 (Delhi) and requested to uphold the order of the AO and dismiss the appeal of the assessee. 7. We have heard both the parties and perused the material placed on record. In the instant case, the assessee filed the return of income on 06.02.2012 and subsequently reopened the assessment for escapement of income with regard to rental receipts stated to be received from M/s NRI Academy and M/s Reliance In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er after considering the explanation of the assessee, the AO did not make any addition representing the rental income, but proceeded to make the addition in respect of other issues i.e. capital gains. The Ld.AR relied on the decision of Hon'ble Jurisdictional High Court in the case of Swarna Andhra IJMII Integrated Township Development Pvt. Ltd., wherein, the Hon'ble Jurisdictional High Court held that Explanation 3 will be applicable to section 147 in case where live issue, which was subsisting at the time of original assessment and if such issue has escaped the assessment of AO, can be a ground for reopening. Any new issue that has cropped up subsequently on new set of facts has no application. For the sake of clarity and convenience we e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed earlier without deciding The issue subsisting at the time of original assessment. This Explanation has held to be reopened in those cases." 7.1. In the instant case, the reopening of assessment was made on the belief that rental income had escaped assessment. Whereas the rental income does not belong to the assessee and belonged to the HUF of the assessee. Though the PAN number of the assessee is mentioned in the 26AS, the assessee has not claimed the TDS in the return. These issues clearly show that the AO reopened the assessment without proper appreciation of facts. Therefore, we hold that the reopening of assessment is bad in law, accordingly we quash the notice issued u/s 148. The assessee's case is squarely covered by the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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