JUDGMENT :

K.R. Shriram, J.

1. Petitioner is an individual assessed to tax. For the Assessment Year 2016-2017 petitioner, on 10th April 2017, filed a return of income declaring an income of Rs.2,57,34,990/-. In the return of income, petitioner has offered income under the heads “income from house property”, “income from capital gains” and “income from other sources” after claiming an exemption under Section 54 of the Income Tax Act, 1961 (the Act) amounting to Rs.51,57,29,543/-. The return was selected for scrutiny assessment under CASS. The reason for selection of the said return for scrutiny assessment was to examine the claim of exemption from long term capital gains. Petitioner received a notice dated 1st September 2018 under Section 142(1) of the Act seeking statement of capital gains and exemption claimed alongwith evidences supporting the claim of exemption. Petitioner replied and uploaded on 10th September 2018 their forwarding letter, ITR statements and accounts, sale agreements and details regarding one Rishi Gagan Trust. Physical copies were submitted on 11th September 2018. Thereafter, on 27th November 2018, petitioner once again submitted various documents including capital gain and loss computation statement and also explained how petitioner was entitled to the allowance under Section 54 of the Act. Once again various documents were submitted. On or about 5th December 2018, respondent once again issued a notice under Section 142(1) of the Act calling upon petitioner for list of immovable properties owned by petitioner. This was provided on 7th December 2018.

2. Thereafter, an assessment order dated 15th December 2018 under Section 143(3) of the Act was passed accepting the return of income of petitioner at Rs.2,57,34,490/-. In the assessment order, the Assessing Officer has stated “the issue has been identified for complete scrutiny under CASS for examination are whether the assessee has claimed the benefit of substantial deduction/exemption u/s. 11(1A), other than Section 11(1A), 54, 54B, 54D, 54EC, 54EE, 54F, 54G, 54GA, 54GB, 115F etc”. It is also mentioned in the assessment order that during the year under consideration the assessee has earned income under the head income from house property, income from capital gains and income from other sources and in response to the notices issued, the assessee has furnished relevant details online. The details are verified and placed on record.

3. Thereafter, petitioner received a notice dated 11th March 2021 for Assessment Year 2016-2017 under Section 148 of the Act stating that Revenue has reasons to believe that petitioner’s income chargeable to tax for Assessment Year 2016-2017 has escaped assessment within the meaning of Section 147 of the Act. Petitioner was provided the reasons for reopening by a communication dated 29th June 2021. As it appears from the reasons for reopening, petitioner had sold a residential property at Gulistan, Napeansea Road and purchased a residential property being “Villa Orb” for a consideration of Rs.56,18,30,000/-. Against the long term capital gains of Rs.53,25,95,542/-, petitioner claimed deduction under Section 54 of the Act. But from the documents relating to the acquisition of new property being “Villa Orb”, it related to six residential flats on the 9th Floor admeasuring 7,500 sq. ft. According to the Assessing Officer, since the residential property at 9th Floor, Villa Orb consisted of six residential flats and under Section 54 of the Act, if the assessee purchases more than one residential house from the capital gain accrued from sale of original asset, the exemption under Section 54 of the Act is not allowable.

4. Since the reopening proposed is within four years after expiry of the relevant assessment year, what is required to be seen is whether there is any tangible material made out for reopening the assessment. Since the assessment under Section 143(3) of the Act has been completed, the assessment cannot be permitted to be reopene