Reassessment proceedings under Section 147 of the Income-tax Act, 1961, cannot be validly initiated based on a mere change of opinion on the same material already available and scrutinized during original assessment proceedings, in the absence of any fresh tangible material indicating escapement of income.

आदेश / O R D E R

PER S. R. RAGHUNATHA, AM :

This appeal by the assessee is filed against the order of the Learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC), Delhi [‘ld. CIT(A)’] dated 11.12.2023 for the assessment year 2015-16.

2. The assessee has challenged the legality and validity of the assessment order passed u/s.143(3) r.w.s 147 of the Income-tax Act, 1961(hereinafter referred to as “the Act”) dated 24.09.2021, as well as the denial of the deduction claimed under section 54F of the Act, on the following grounds:

“1. The NFAC violated the core principles of reassessment by no disposing the objections to reopening of assessment.

2. The NFAC erred in re-opening the assessment based on mere change of opinion. The NFAC re-opened assessment based on the information already at their disposal (i.e. Submission made during original assessment proceedings) and no new information had come to their notice based on which assessment was sought to be re-opened.

3. The NFAC erred in not understanding that the Appellant did not “own” more than one residential house other than the new asset on the date of transfer of the original asset.

4. The NFAC erred in not appreciating that villa to be constructed on the land retained by owners is not owned by the Appellant rather it is owned by other co-owners of the land.

5. The NFAC erred in not appreciating that the construction agreement only seeks to demarcate access rights of common passage between residential complex owners and the land retained by Appellant and other owners.

6. The NFAC erred in not applying the cited judicial precedents appropriately which squarely covers the facts of the instant case.

7. The NFAC erred in not disposing Appellant’s alternative contention as to the fact that provisio to section 54F is not violated since the construction of villa was completed after a period of 3 years.

8. The NFAC erred in contradicting itself by stating that Appellant cannot segregate the assets in two parts of the land and then disallowing deduction under section 54F on the basis that Appellant owned more than one asset while claiming deduction under section 54F of the Act.

9. The NFAC erred in initiating penalty proceedings under section 271(1) (c) of the Act.

The Appellant craves leave to add, alter, vary, omit, amend or delete one or more of the above grounds of appeal at any time before, or at the time of, hearing of the appeal.

3. The assessee is an individual and during the impugned year was engaged in the business of providing finance and earning interest income. The return of income for the year under consideration was filed on 27.03.2016 declaring a total income of Rs.99,75,750/-. The case was selected for scrutiny and accordingly assessment u/s.143(3) of the Act was completed on 18.12.2017 assessing the total income of the assessee at Rs.1,04,33,030/-. Subsequently, a letter dated 03.03.2020 was issued by the Learned Principal Commissioner of Income Tax - 9 (ld. PCIT) seeking to revise the aforementioned assessment order u/s.263 of the Act. Subsequently, ld. PCIT passed an order u/s.263 dated 23.03.2020 by setting aside the order dated 18.12.2027 and remitting the file back to the file of the AO with a direction to pass fresh assessment in accordance with law.

4. Thereafter, within the lapse of 4 years from the end of the AY 2015-16, reassessment proceedings were initiated u/s.147 of the Act after recording the reasons, by issue of notice u/s.148 of the Act on 23.03.2020. In response, the assessee filed his return of income on 30.01.2021. Thereafter, he filed his objections to the re-opening of assessment on 09.07.2021 & also