आदेश / O R D E R PER MANU KUMAR GIRI, JM:

The present appeal has been preferred by the assessee against the order passed by the ld.CIT(A) on 03.12.2024, whereby the reassessment order dated 13.12.2019, passed u/s. 143(3) read with section 147 of the Income Tax Act, 1961 [‘ACT’ in short], for the Assessment Year 2014-15, was confirmed.

2. Briefly stated, the assessee is an individual who filed his Return of Income for the relevant assessment year on 19.02.2015. During the year under consideration, the assessee sold certain immovable properties and derived Long Term Capital Gains amounting to Rs.82,46,084/-. The assessee had earlier claimed exemption in respect of capital gains arising from the sale of vacant land on 14.09.2012 in his return for A.Y. 2013-14. As the newly acquired property was sold within a period of three years, the exemption earlier claimed amounting to Rs.20,08,500/- was offered to tax. Consequently, the total Long Term Capital Gains for the year aggregated to Rs.1,02,54,584/-. Against this, the assessee claimed exemption u/s. 54F of the Act in respect of the property proposed to be constructed. The computation of Long Term Capital Gains for AY

2014-15 has been placed at page 7 of the paper book.

3. The return was selected for limited scrutiny u/s. 143(2) of the Act, inter alia, to verify the issue of “large deduction claimed u/s.s 54B, 54C, 54D, 54G, and 54GA.” A scrutiny assessment order was subsequently passed on 28.11.2016, assessing the total income at Rs.61,77,060/- after disallowing the cost of improvement of Rs.15,00,000/- claimed by the assessee while computing ‘Short Term Capital Gains’.

4. Thereafter, the assessment was reopened for the first time through issuance of a notice u/s. 148 of the Act dated 27.03.2018.

The reasons recorded for reopening the assessment are placed at page 15 of the paper book (as provided by the letter dated

08.05.2918) and are reproduced hereunder:

It is seen from the return of income filed for the assessment year 2014- 15, that there is a claim of exemption u/s.54F of the Income-tax Act, 1961 amounting to Rs.1,02,54,584/- under the head 'Income from Long Term Capital Gain'. It is also seen that rental income under the head 'income from house property' in respect of 3 properties other than a self-

occupied property is offered in the return of income. As per the conditions laid down in section 54F of the Act, the claim of exemption u/s.54F of the Act in respect of the property sold during the financial year 2013-14, is not proper, as the assessee owns more than one residential property on the date of transfer. As there is incorrect allowance of exemption to the extent of Rs. 102.54 lakh which has resulted in short levy or tax demand of Rs.23.24 lakh excluding interest, the same needs to be disallowed in relation to A.Y.2013-14.

5. A reassessment order was passed on 12.12.2018, wherein the total income was once again assessed at Rs.61,77,060/-, being the same income as determined earlier under the scrutiny assessment order dated 28.11.2016.

6. Subsequently, within a month, the assessment was reopened for the second time through issuance of a notice u/s. 148 of the Act dated 11.01.2019. The reasons recorded for this reopening are placed at page 25 of the paper book, and the observations of the AO in paragraph 5, as well as the basis for forming the “reasons to believe” in paragraph 6 thereof, are reproduced hereunder:

4. Enquiries made by the AO as sequel to information collected/received: Enquriries are not necessary since the escapement could be established based on the materials available on record.

5. Findings of the AO: It is observed from the records that the property situated at Old no.22. New no.694/1, Block-RA. Puram on which deduction u/s.54F was claimed during the A.Y.2013-14 was sold on 19.06.2013. Further the property situated at old No. 167, New No.28, Old Perungalathur, S.No.443/3, Plot No.485 on which capital gains come accrued during the year was also sold on 19.06.20