- (1.) This appeal is at the instance of the Assessee abovenamed against the judgment and order of the learned Income-tax Appellate Tribunal (hereinafter referred to as the said Tribunal'), Kolkata on the following substantial questions of law: Whether the Tribunal was justified in law in not considering and deciding whether the proceedings under Section 147 r/w Section 148 of the Act are legally sustainable in law before deciding the case on the merits of the contention of the Assessee ? Whether on the facts and in the circumstances of the case when the Assessee had disclosed its return and its claim for allowable expenses for a sum of Rs. 3,50,000 at the time of assessment of proceeding can be reopened under Section 147 on a mere change of opinion ? Whether on the facts and in the circumstances of the case, the learned Tribunal committed a jurisdictional error in reversing the order of the CIT(A) and restoring the order of the AO who reassessed the entire income, even though the recorded reasons under Section 148(2) were limited to alleged escapement of income of Rs. 3,50,000 on account of commission and brokerage ?
(2.) The fact of the case as it appears from the records and also submitted in the written notes of argument is as follows.
(3.) The Assessee/Appellant is a company carrying on real estate business including construction of the building, letting out the same as well as providing maintenance and other services. The Appellant duly filed return of income for the asst. yr. 2003-04 with audited accounts, tax audit report under Section 44AB, computation sheet, and other documents were filed on 29th Nov., 2004 declaring gross total income at Rs. 26,889 after setting off business loss of Rs. 10,13,614 against income under the head house property of Rs. 10,40,503. The return was duly processed under . Thereafter AO initiated proceeding under Section 147 of the Act and issued notice under Section 148 dt. 2nd July, 2005. On receipt of the said notice the Appellant through his learned lawyer duly protested questioning validity and jurisdiction, and also asked for reason. The Appellant without prejudice and with protest called upon to treat earlier return filed under Section 139 as return in response to the said notice, if reassessment is required to be done at all. The AO disallowed deduction claimed on account of brokerage and commission of a sum of Rs. 3,50,000. The Assessee though had challenged notices under Section 148 of the said Act before the AO, however he did not deal with the said contention. The matter was taken to the CIT(A) pointing out that even in the asst. yr. 1998-99, 50 per cent of the additional expenses which had been incurred in carrying on its real estate business had been allowed but the balance 50 per cent was disallowed as it related to house property. The said decision made in the asst. yr. 1998-99 had been followed in the subsequent year also. Following the said decision the CIT(A) in this assessment year has allowed 50 per cent of the administrative expenses relatable to real estate business but the balance amount had been disallowed as it related to house property income. Thus the appeal was allowed.;