Order dt 27.7.2020 in TCA 828 of 2017 PCIT v . C.R.Badrinarayanan IN HIGH COURT OF JUDICATURE AT MADRAS DATED: 27.7.2020 CORAM HON'BLE DR.JUSTICE VINEET KOTHARI AND HON'BLE MR.JUSTICE KRISHNAN RAMASAMY T.C.A.No.828 of 2017 Principal Commissioner of Income Tax 6 No.121, Nungambakkam High Road, Chennai 600 034. Appellant vs Shri.C.R.Badrinarayanan 2/581, 1st Cross Street, Singaravelan Salai, Neelankarai, Chennai 600041. PAN: AFVPB7105B Respondent Tax Case Appeal filed under Section 260-A of Income Tax Act, 1961 against order of Income Tax Appellate Tribunal, Madras Bench dated 11.7.2017 in in I.T.A.No.1600/Mds/2016. For Appellant : Mr.J.Narayanasamy, Senior Standing Counsel For Respondent : No appearance. ORDER (Made by Dr.Vineet Kothari,J) Court was held by Video Conference, as per Resolution of Full Court dated 3 July 2020, by Judges at their respective residences and counsel, staff of Court appearing from their http://www.judis.nic.in Order dt 27.7.2020 in TCA 828 of 2017 PCIT v . C.R.Badrinarayanan respective residences. 2. Revenue has filed present Appeal under section 260-A of Income Tax Act aggrieved by order of learned Tribunal dated 11th July 2017 in I.T.A.No.1600/Mds/2016 for Assessment Year 2006-07, by which learned Tribunal held that re- assessment proceedings initiated against Assessee under section 147/148 of Act were not justified beyond period of four years from date of passing of original Assessment Order as there was no failure on part of Assessee to fully and truly disclose relevant materials at time of Original Assessment. 3. relevant para 5 of order of Tribunal is quoted below for ready reference:- "(i) We have considered rival submissions. It is clear from reassessment order, as extracted supra, that Assessing Officer did not have any fresh information. It appears that during course of reassessment proceedings only he has ascertained from sub-Registrar about guideline value and proceeded to complete re-assessment. Thus, there is merit in submissions of assessee that there was no tangible material before Assessing Officer on basis of which reassessment could have been http://www.judis.nic.in Order dt 27.7.2020 in TCA 828 of 2017 PCIT v . C.R.Badrinarayanan reopened. In absence of tangible material, what AO has done while reopening assessment is to change his opinion which was formed earlier. reassessment made after four years from end of assessment year on change opinion can't be upheld. In this case, assessee had disclosed fully and truly all material facts necessary for his assessment at time of original assessment. AO has not established reasons for failure on part of assessee and hence, proceedings initiated after four years from end of this assessment year is quashed. 4. It seems that re-assessment proceedings were initiated to lower figure of cost of acquisition from Rs.137/- per sq.ft, disclosed in Original Assessment by Assessee, to Rs.16/- per sq.ft, based on guideline value fixed by competent Government Committee. In other words, amount of Capital Gains would be taxable at hands of Assessee on sale of Capital Assets in question. 5. Though Revenue's stake involved in present case is merely sum of Rs.3,00,000/- and according to latest CBDT Circular No.17/2019 dated 8th August 2019, Revenue could have http://www.judis.nic.in Order dt 27.7.2020 in TCA 828 of 2017 PCIT v . C.R.Badrinarayanan withdrawn present Appeal under its litigation policy. However, as case pertains to re-assessment proceedings, in view of exception carved out in said CBDT Circular, learned Senior Standing Counsel pressed present Appeal on merits. 6. Nobody has put in appearance on behalf of Respondent/Assessee though name of Assessee, Mr.C.R.Badrinarayanan, after service of notice, is shown in cause list. 7. Having heard learned Senior Standing Counsel appearing for Appellant/Revenue, we are of clear opinion that there is no error in order of learned Tribunal and learned Tribunal has rightly held that re-assessment proceedings were initiated merely on change of opinion by Assessing Authority, which is impermissible in law. 8. There is no dispute that relevant evidence and facts about cost of acquisition were very much available before Assessing Authority at time of passing of Original Assessment Order and therefore, just to increase quantum of Capital Gains on basis of alleged Guideline Value to be treated as cost of acquisition in hands of Assessee, Assessing Authority took recourse to re-assessment proceedings under section 147 of Act. 9. We are of clear opinion that assumed value or http://www.judis.nic.in Order dt 27.7.2020 in TCA 828 of 2017 PCIT v . C.R.Badrinarayanan Guideline Value of capital asset could not override real cost of acquisition established by Assessee on basis of relevant evidence during course of Original Assessment proceedings. 10. Therefore, we do not find any substantial question of law to be arising in present Appeal filed by Revenue from order of learned Tribunal. Appeal is, thus, found to be devoid of any merit and is liable to be dismissed. same is, accordingly, dismissed. No order as to costs. Copy of this order may be sent to Respondent/Assessee at address given. (V.K.J.) (K.R.,J.) 27.7.2020 Ssk/kpl Index:Yes/No Internet:Yes/No http://www.judis.nic.in Order dt 27.7.2020 in TCA 828 of 2017 PCIT v . C.R.Badrinarayanan Dr.VINEET KOTHARI, J. and KRISHNAN RAMASAMY, J. ssk. T.C.A.No.828 of 2017 27.7.2020 http://www.judis.nic.in Principal Commissioner of Income-tax 6, Chennai v. C.R.Badrinarayanan