INCOME TAX ACT, 1961

--Reassessment--ValidityAdit objection vis-a-vis original intimation under section 143(1)(a)--The assessee herein is a company stated to have been incorporated with the object of carrying on business in real estate developing landed properties, promoting and setting up of a market thereon. The assessee claimed that the income derived from letting out of the properties was business income” and was not to be taxed as income from house property”. While passing the assessment order under section 143(1)(a) originally, the assessing officer accepted the claim of the assessee that the income thereon from letting out the property was business income”. However, proceedings under section 147 of the Income Tax Act, 1961, was invoked on the basis of the decision of this court in the case of CIT v. Indian Metal and Metallurgical Corporation reported in (1995) 215 ITR 424 (Mad) : 1995 TaxPub(DT) 0716 (Mad-HC) , wherein, this court held that income received from letting out of property is to be assessed only as income from house property”. In respect of the above said assessments, the assessee reiterated its contentions as taken before the AO. By a common order, the CIT(A) considered the question as to whether there was mere change of opinion by the officer for reopening the assessment and ultimately the CIT(A) came to the conclusion that the reopening of the assessment was the result of the audit objection. Thus, accepting the contention of the assessee, based on the decision of this court in CIT v. Indian Metal and Metallurgical Corporation (1995) 215 ITR 424 (Mad) : 1995 TaxPub(DT) 716 (Mad-HC)  and the decision of the Supreme Court, the CIT(A) held that the assessing authority wrongly applied the law to the facts herein. The Tribunal accepted the contention of the assessee that the reopening of the assessment was made based on the change of opinion and there were no fresh information available. Thus holding, it rejected the Revenue's appeal. Held: Thus, with the amendment brought to section 147 of the Act, on and from 1-4-1989, and the elucidation on the scope of the authority and jurisdiction of the officer under section 147 of the Act as given in the above referred decision of the Apex Court, we have no hesitation in holding that the Tribunal committed a serious error in holding that there was no material to justify the resort to section 147 proceedings. Court does think that any worthwhile exercise could be carried on by the AO to consider the question as to whether assessment could be reopened, on the basis of the objection of the audit party, which contention has no relevance for the purpose of considering the assessment under section 147 having regard to the order under section 143(1) (a).