CRYSTAL CERAMIC INDUSTRIES PRIVATE LIMITED V. THE ASSISTANT COMMISSIONER OF INCOME TAX

SCA/20716/2019

AI Insights

The case involves Crystal Ceramic Industries Private Limited challenging a notice issued by the Assistant Commissioner of Income Tax under section 148 of the Income Tax Act, 1961, which sought to reopen the assessment for the Assessment Year 2014-2015. The reopening was based on allegations that the company had engaged in accommodation entries with a dummy concern, Mihir Consultancy and Trading Company, which was purportedly involved in providing fake billing entries. The petitioner argued that the reopening was unjustified as it was based on incorrect facts and a mere change of opinion. The respondent defended the reopening, citing information from the Investigation Wing about the company's involvement in accommodation entries. The court, after examining the arguments and evidence, ruled in favor of the petitioner, stating that the reopening was not justified as it was based on a change of opinion rather than new tangible material.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 747069 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 05-09-2022
• Assessment Year: misc
• Other Referred Cases: ITO V/s. Purshottamdas Bangur, Peass Industrial Engineers Pvt. Ltd. V/s. DCIT, GKN Driveshaft (India) Ltd. V/s. ITO, Commissioner of Income tax v. Kelvinator of India Ltd.
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MANISH BHATT; KARAN SANGHANI; MUNJAAL BHATT
• Assessee Lawyers: TUSHAR HEMANI; VAIBHAVI PARIKH
• Keywords: Accommodation entry; Assessment Year 2014-2015; Income Tax; Reopening of assessment; Fake billing
• Section: 147; 148; 143(3); 151

Judgement Text

"C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 20716 of 2019 FOR APPROVAL AND SIGNATURE: HONOURABLE MR. JUSTICE N.V.ANJARIA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA ========================================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ? ========================================================== CRYSTAL CERAMIC INDUSTRIES PRIVATE LIMITED Versus THE ASSISTANT COMMISSIONER OF INCOME TAX ========================================================== Appearance: MR TUSHAR HEMANI SENIOR ADVOCATE WITH MS VAIBHAVI K PARIKH(3238) for the Petitioner(s) No. 1 MR MANISH BHATT SENIOR ADVOCATE WITH MR KARAN SANGHANI AND MUNJAAL BHATT FOR M R BHATT & CO.(5953) for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MR. JUSTICE N.V.ANJARIA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 05/09/2022 ORAL JUDGMENT Page 1 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1.Heard learned Senior Advocate Mr. Tushar Hemani assisted by learned advocate Ms. Vaibhavi Parikh for the petitioner and learned Senior Advocate Mr. Manish Bhatt with learned advocate Mr. Karan Sanghani and learned advocate Mr. Munjaal Bhatt for the respondent. 2.Having regard to the controversy involved in this petition, with the consent of the learned advocates for the respective parties, the petition is taken up for final hearing. 3.Rule returnable forthwith. Learned advocate Mr. Karan Sanghani waives service of notice of rule for the respondent. 4.The petitioner has preferred this petition under Article 226 of the Constitution of Page 2 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 India challenging the impugned notice dated 22.03.2019 issued under section 148 of the Income Tax Act, 1961 (For short “the Act”) proposing to reopen the assessment for the Assessment Year 2014-2015. 5.Brief facts of the case are that the petitioner is a Company incorporated under the Companies Act, 1956 and is engaged in the business of manufacturing ceramic tiles. It is the case of the petitioner that during the Financial Year 2013-2014, relevant to Assessment Year 2014-2015 i.e. the year under consideration, the petitioner received loan of Rs. 10,00,000/- from Mihir Consultancy and Trading Company through banking channel and such sum stood outstanding at the end of the year under consideration. 5.1) The petitioner filed return of income for the year under consideration Page 3 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 declaring total loss at Rs.(-)17,21,227/- on 28.11.2014. 5.2) The case of the petitioner for the year under consideration was selected for scrutiny assessment. It is the case of the petitioner that various details were called for by the then Assessing Officer and the same were duly furnished by the petitioner from time to time and the then Assessing Officer, thereafter, framed assessment under section 143(3) of the Act vide order dated 05.12.2016 determining total income of the petitioner for the year under consideration at Rs.(-)15,40,439/- 5.3) It is the case of the petitioner that after a period of almost six years from the end of the Assessment Year in question, the respondent issued the impugned notice dated 22.03.2019 under section 148 of the Act Page 4 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 seeking to reopen the assessment of the petitioner for the year under consideration. 5.4) The petitioner therefore, filed return of income in response to the impugned notice on 04.04.2019 and requested the respondent to supply copy of reasons recorded for reopening the assessment. 5.5) The respondent, vide letter dated 09.05.2019 supplied the copy of reasons recorded for reopening the assessment. The reasons recorded by the Assessing Officer for reopening the assessment under section 147 of the Act read as under : “1. Brief details of the assessee: The assessee filed his return of income on 28.11.2014, declaring total loss of Rs. (-) 17,21,227/- for AY 2014-15. Scrutiny assessment u/s 143(3) of the I.T. Act was finalized on 05.12.2016 at assessed total loss of Rs. (1) 15,40,439/-. The assessee is engagement in manufacturing of Ceramics Tiles. Page 5 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 2. Brief details of information collected/ received by the AO: In this case, information has been received from Dy. DIT (Investigation), Unit-2(2), Ahmedabad vide no. DDIT(Inv.)/Unit- 2(2)/fake Billing/2016-17 dated 22.03.2017, received in this office on 27.03.2017. In the said letter it was intimated that during the course of investigation in respect of Fake Billing it is found that, the assessee is indulged in accommodation entry amounting to Rs. 10,00,000/- from M/s. Mihir Consultancy and Trading Company, Ahmedabad which was found to be a dummy concern whose accounts were operated with an intention of providing accommodation entries only. Further, as per the information received it has been found that summons issued to the stated proprietors of the accommodation entry provider were either returned as un-served or not complied with. It is also seen in the information received that, on specific physical verification about the whereabouts of the accommodation entry provider, no person by the name of the proprietors were found to be residing at such address. The name of the assessee appears in the list of beneficiaries. The assessee has been found to be indulged in an accommodation entry amounting to Rs. 10,00,000/- from the accommodation Page 6 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 entry provider namely, M/s. Mihir Consultancy and Trading company. 3. Analysis of information collected/ received: In this case, information has been received from Dy. DIT(Investigation), Unit-2(2), Ahmedabad vide no. DDIT(Inv.)/Unit- 2(2)/fake Billing/2016-17 dated 22.03.2017. In the said letter it was intimated that during the course of investigation in the case of Fake Billing, it is found that the assessee is engaged in accommodation entry amounting to Rs. 10,00,000/- from M/s. Mihir Consultancy and Trading Company, Ahmedabad. On further investigation by the Investigation Wing, the address of M/s. Mihir Consultancy and Trading Company, Ahmedabad was found to be correct, however, there was no such person either Sh. Parth Panchal and/ or Panchal Lilaben Balkishan are residing at the stated address. Further, the summon issued by the Investigation Wing was also returned back un-served. Thus, it can safely concluded that the payment of Rs. 10,00,000/- made by the assessee to M/s. Mihir Consultancy and Trading Company, Ahmedabad is nothing other than an accommodation entry provided by the aforesaid proprietorship concern in lieu of commission. 4. Enquiries made by the AO as sequel to information collected/ received: The facts as enumerated above have been found to be self explanatory. Therefore, no further Page 7 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 enquiry is required in this case. On the basis of the same there are reasons to believe that the income chargeable to tax has escaped assessment. 5. Finding of the AO: In this case, information has been received from Dy. DIT (Investigation), Unit-212), Ahmedabad vide no. DDIT (Inv.1/Unit- 2(2)/fake Billing/2016-17 dated 22.03.2017, received in this office on 27.03.2017. In the letter it is informed that on detailed enquiry, it is found that 11 concerns as mentioned in the letter are involved in the business of providing accommodation entry in lieu of commission. Further, it is also stated that on analyzing the bank statement and inward/outward RTGS details of the aforesaid 11 concerns, 125 beneficiaries/parties has been identified, who are indulged in accommodation entries amounting to Rs. 49,63,70,335/-. Thereafter, summons was issued to various banks of these 11 proprietorship concerns for KYC details. On the basis of the KYC details, Income tax return details summons were also issued to the concerned person of the aforesaid 11 concerns. However, in most of the cases summons were returned un- served with a remark either as wrong address or assessee not traceable. Moreover, in those cases where summons were served however, no reply or details received from them. Only one proprietor out of the 11 Page 8 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 concerns appeared before the investigation wing and in his statement dated 23.12.2015 he has deposed on oath that neither he was having any proprietorship concern in his name nor he knows any such proprietorship concern. Thereafter, field enquiry was also carried out to trace out the whereabouts of these 11 concerns. However, on field visit it was found that most of the addresses are either found to be closed or not traceable or no business activity is being carried out there. Moreover, on verification of the ITD systems, it was found that most of the concerns are non- filers or filed ROI in meager amount so as to create camouflage of the genuineness of the concern. In cases where return has been filed, it is noticed that in such cases refund has been claimed. In this regard, it is pertinent to mention here that it is the modus operandi of most of the entry operator that they have filed ROI to color the transaction genuine but in real sense no tax been paid to government. Subsequently, it was also noticed that in most of the cases ROI were filed in 2-3 years only when the accommodation entry were provided to various beneficiaries. On perusal of the ROI of the said 11 concerns, it was established that these concerns are neither having any business activities nor having any means for business and hence are only working for providing accommodation entries to various third parties. Page 9 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 In view of the facts as narrated above, it can be concluded that aforesaid 11 dummy concerns are proprietorship concern having incorporated with the intention of providing accommodation entries to various beneficiaries/ service receivers. The list of beneficiaries also includes the name of M/s. Crystal Ceramics Industries Pvt. Ltd. On perusal of the aforesaid information, it is noticed that M/s. Crystal Ceramics Industries Pvt. Ltd. is indulged in an accommodation entry from M/s. Mihir Consultancy & Trading Company, Ahmedabad, which is found to be a dummy concern created to provide accommodation entry in lieu of commission. The proprietor as mentioned in the ITR and KYC details of the said concern are not found at the given address nor did they came forward during the course of proceeding initiated by the Investigation Wing. The bank account no. out of which the transaction was carried out by the assessee pertains to assessee's account held with State Bank of India, Highway Road Branch, Mehsana is found to be correct as it is evident from the assessment records. It is therefore clear, that the transaction between the assessee and M/s. Mihir Consultancy & Trading Company, Ahmedabad for an amount aggregating to Rs. 10,00,000/- is nothing but accommodation entry facilitated by Page 10 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 M/s. Mihir Consultancy & Trading Company to the assessee in lieu of commission. On analysis of the information, it is found that the assessee has made payment of Rs. 10,00,000/-, to M/s. Mihir Consultancy & Trading Company, Ahmedabad (which is found to be a dummy concern created to provide accommodation entry In lieu of commission). 6. Basis of forming reason to believe and details of escapement of Income: The facts as enumerated herein above are self explanatory. Further from the information forwarded by the Investigation Wing, it is clearly stated that at the given address of the said concerned the proprietors were not found. The return of Income of the said concerns were analysed which also establish that there is no business activities nor having means for business and hence are only working for providing accommodation entries to various third parties. The details of return of Income from AY 2010-11 to AY 2016-17 as forwarded by the Investigation Wing are tabulated herein below for ready reference: Name of the propriet orship concern Name of the Propriet or or AY Propriet or’s Fund Unsecure d loan Investme nts Turnover Total income Refund Mihir Consult Panchal Lilaben 2010-11 Return of income not filed 2011-12 Return of income not filed Page 11 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 ancy and Trading Company Balkish an 2012-13 Return of income not filed 2013-14 0 0 0 0 3,66,000/- 26,158/- 2014-15 9,92,491/- 61,10,000/- 0 25,47,200/- 4,63,662/- 1,70,882/- 2015-16 Return of income not filed 2016-17 Return of income not filed Furthermore, as per information of Investigation Wing, M/s. Mihir Consultancy & Trading Company Is assessed to tax vide PAN: BQEPP5529G. The PAN was verified from the ITD Module and it was found that the said PAN: BQEPP55296 was allotted on 28.06.2011 in the name of Lilaben Blakrushan Panchal. Further from the details as tabulated herein above, it can be seen that only two return of income pertaining to AY 2013-14 and AY 2014-15 are filed by the proprietor(s) of Mihir Consultancy & Trading Company and turnover of Rs. 25,47,200/-only Is shown in AY 2014- 15. Thus, the amount of Rs. 10,00,000/- for which payment made by the assessee is nothing other than an accommodation entry provided by the aforesaid proprietorship concern in lieu of commission. The same is required to be added back to the total income. This has resulted into escapement of taxable income of Rs 10,00,000/-. Therefore, in this case income chargeable to tax has been under assessed by an amount of Rs. 10,00,000/- on this issue. Page 12 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 7. Paragraph will include escapement of Income chargeable to tax in relation to any assets (including financial interest in any entity) located outside India: NA 8. Applicability of the provisions of section 147/151 to the facts of the case: In this case a return of Income was filed for the year under consideration and regular assessment u/s 143(3) of the Act on 05.12.2016. Since, 4 years from the end of the relevant year has not expired in this case, the only requirement to initiate proceedings u/s 147 is reason to believe which has been recorded above (refer paragraph 6). It is pertinent to mention here that in this case an assessment was made as stipulated u/s. 2(40) of the I.T. Act. However, as discussed in reason to believe in this case: Income chargeable to tax has been under-assessed by an amount of Rs. 10,00,000/- In view of the above facts, the provisions of clause (c) of explanation 2 to Section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where Income chargeable to tax has escaped assessment. Page 13 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 This case is within four years from the end of the assessment year under consideration. Hence necessary sanction to issue the notice u/s. 148 is being requested from Addl. Commissioner of Income tax as per the provisions of section 151 of the Act.” 5.6) The petitioner, vide letter dated 21.05.2019 raised objections against reopening the assessment. 5.7) The respondent vide order dated 25.09.2019 disposed of such objections raised by the petitioner holding that the action of reopening is justified in the eye of law. 5.8) Being aggrieved by the impugned order passed by the respondent, the petitioner has preferred the present petition. 6.Learned Senior Advocate Mr. Tushar Hemani submitted that the reasons for reopening lacked validity and therefore, reopening is Page 14 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 not justified in the eye of law. 6.1) It was submitted that during the year under consideration, the petitioner has received loan of Rs. 10,00,000/- from Mihir Consultancy and Trading Company whereas the respondent has reopened the case of the petitioner on the premise that the petitioner has paid Rs.10,00,000/- to Mihir Consultancy and Trading Company during the year under consideration. It was submitted that the respondent has failed to appreciate the transaction entered into between the petitioner and Mihir Consultancy and Trading Company inasmuch as the petitioner has not made any payment to Mihir Consultancy and Trading Company during the year under consideration, as alleged in the reasons for reopening and therefore, the reasons for reopening lacked validity. Page 15 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 6.2) It was submitted that assuming without admitting that any payment as alleged in the reasons for reopening has been made during the year under consideration, then also payment made to any party would not result into escapement of any income chargeable to tax. 6.3) It was submitted that there is no rational or sound base for reaching a conclusion that Mihir Consultancy and Trading Company is an entry provider and if such an approach is entertained, then the Department will treat any company as an entry provider without any rational basis for reaching such a conclusion and consequently, large number of cases will be reopened by the Department. 6.4) Learned Senior Advocate Mr. Hemani submitted that the respondent has acted illegally and without jurisdiction in issuing Page 16 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 the impugned notice under section 148 of the Act. It was submitted that statutory notice under section 148 of the Act can be issued if and only if an Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment. It implies that an Assessing Officer himself must be satisfied that some income chargeable to tax has escaped assessment. In the present case, no such satisfaction has been recorded by the respondent himself and in fact, the respondent has merely relied upon the information received from the DDIT (Inv.), Unit 2(2), Ahmedabad for the purpose of reopening the assessment. In absence of any such exercise at the end of the respondent, it becomes clear that the assessment has been reopened merely based on borrowed satisfaction as against the statutory requirement of independent satisfaction. Page 17 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 7.On the other hand, learned Senior Advocate Mr. Manish Bhatt for the respondent at the outset submitted that the petition is filed at a pre-mature stage inasmuch as only a notice under section 148 read with section 147 of the Act has been issued and in the event, the petitioner is aggrieved by the reassessment, alternative efficacious remedy is available by way of an appeal before the CIT(Appeals) and thereafter before the Tribunal. 7.1) It was submitted that this Court vide order dated 25.11.2019 issued notice on misrepresentation of facts of the petition by the petitioner inasmuch as the petitioner has not made any payment to M/s. Mihir Constancy and Trading Company. 7.2) It was submitted that the notice under section 148 of the Act has been issued Page 18 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 to the assessee after following the due procedure of law mandated in the Act and all the statutory requirements as per the Act have been followed prior to the issuance of notice. The Assessing Officer has recorded his reason in writing after due application of mind and formed an independent opinion. 7.3) It was submitted that notice under section 148 was issued after recording reasons as per provisions of sub-section (2) of section 148 read with section 151 of the Act and necessary approvals of the competent authority were also taken before such reopening proceedings. 7.4) It was submitted that in the present case the information was received from the DDIT (Inv.) Unit-2(2), Ahmedabad of fake billing and after inquiry, 125 beneficiaries /parties and 11 dummy concerns Page 19 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 were identified who were engaged in providing bogus entries. 7.5) It was further submitted that it came to the notice of the department that the assessee company was one of those beneficiaries who has obtained accommodation entry from Mihir Consultancy and trading Co. in lieu of commission. 7.6) It was further submitted that the Bank account out of which the transaction was carried out by the assessee with Mihir Consultancy and trading Co. was also examined and found that the same was pertaining to assessee's account held with State Bank of India, Highway Road Branch, Mehsana. Thus, the Assessing Officer based on new tangible material available with the office being report of investigation wing after due application of mind has formed an independent Page 20 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 opinion. 7.7) Relying upon the judgment of the Hon’ble Supreme Court in case of ITO V/s. Purshottamdas Bangur reported in 224 ITR 362 (SC) and judgment of this Court in case of Peass Industrial Engineers Pvt. Ltd. V/s. DCIT reported in (2016) 73 taxmann.com 185 it was submitted that the information received by DDIT (Inv.) constitutes an information and accordingly reassessment proceeding was justified. 7.8) It was submitted that the petitioner assessee has failed to disclose fully and truly all material facts necessary for assessment for the relevant assessment year. Referring to Explanation 1 to section 147 of the Act, it was submitted that if from the production of account books or other evidence before the Assessing Officer, material Page 21 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 evidence with due diligence could have been discovered by the Assessing Officer, that will not necessarily amount to disclosure within the meaning of the foregoing proviso and therefore, the case can be legally reopened till expiry of six years from end of relevant assessment year i.e. till 31.03.2019 and accordingly, notice under section 148 was issued well within time envisaged under section 149 of the Act. 7.9) It was submitted that the order dated 25.09.2019 disposing of the objections has been passed in accordance with the guidelines laid down by the Hon'ble Apex Court in the case of GKN Driveshaft (India) Ltd. V/s. ITO reported in [2003] 259 ITR 19 (SC) and guidelines laid down by the this Court in case of Sahkari Khand Udyog Mandal Ltd Vs. ACIT in the Special Civil Application No. 3955 of 2014. Page 22 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 7.10) It was submitted that the contention raised by the assessee that they have only received loan from Mihir consultancy and Trading Company could be clear only once the assessment takes place and thus, the contentions of the petitioner could be verified only at the assessment stage. It was further submitted that the contention of the petitioner that payment made to any party would not result into escapement of income chargeable to tax cannot be agreed to, as whether any amount received or paid with a non-existent entity should not find its way into the books of the assessee. 8.From the facts narrated above, it is apparent that the impugned notice is issued on the basis of information received from Deputy Director, Investigation as per report dated 22.03.2017 on the ground that the petitioner Page 23 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 had indulged in accommodation entry amounting to Rs. 10 lakhs in respect of fake billing from M/s. Mihir Consultancy & Trading company, Ahmedabad which was found to be a dummy concern whose accounts were operated with an intention to provide accommodation entries only. In fact, the assessee has taken a loan of Rs. 10 lakhs from M/s. Mihir Consultancy & Trading company and not raised any fake bill or made any payment to said M/s. Mihir Consultancy & Trading company. Therefore, the reasons recorded are contrary to the facts as there is no payment of Rs. 10 lakhs made by the assessee to M/s. Mihir Consultancy & Trading company as alleged in the impugned notice. 9.Moreover, during the course of regular assessment under section 143(3) of the Act, thorough verification of the depositors was duly made and accepted by the Assessing Page 24 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 Officer. The petitioner has also shown the amount of Rs. 10 lakh received from M/s. Mihir Consultancy & Trading company as unsecured loan at the end of financial year. It is also the fact that such amount was repaid in the year 2015-2016 as reflected in the bank account. Thus, the reasons recorded by the Assessing Officer to reopen the assessment are contrary to the record as the assessee has never made payment of Rs. 10 lakhs to M/s. Mihir Consultancy & Trading company in lieu of commission. 10. The assessee has disclosed truly and fully all material facts during the course of regular assessment and therefore, the impugned notice under section 148 of the Act issued beyond a period of four years after completion of the assessment is not tenable in view of proviso to section 147 of the Act. Page 25 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 11. We are of the opinion that to confer jurisdiction to the Assessing Officer to reopen the assessment under section 147 of the Act beyond four years from the end of relevant assessment year, the two conditions must be satisfied namely, that the Assessing Officer must have reason to believe that the income chargeable to tax has escaped assessment and that the same was occasioned on account of either failure on part of the assessee to make a return of his income for that assessment year or to disclose fully and truly all material facts necessary for that assessment year. In the present case, the entire material was available with the Assessing Officer during the original assessment and therefore, there was no failure on part of the assessee to disclose truly and fully all material facts necessary for assessment and based upon such material supplied by the petitioner, the Assessing Page 26 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 Officer passed the regular assessment order under section 143(3) of the Act. Further, it appears that the notice for reopening is based upon the investigation report and there is nothing on record to suggest that such reopening is made on account of new tangible material available on record. It is, therefore, apparent that there is change of opinion by the Assessing Officer to reopen the assessment for the Assessment Year 2014- 2015, more particularly, when the issue raised in the reopening assessment is already considered during the original assessment proceedings. The Assessing Officer cannot have any jurisdiction to issue the notice under section 148 of the Act, 1961 for reopening the assessment for the year under consideration more particularly, when the assessment is sought to be reopened beyond a period of four years as held by the Supreme Court in case of Commissioner of Income tax Page 27 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 v. Kelvinator of India Ltd. reported in (2010) 320 ITR 561(SC) as under: “2. A short question which arises for determination in this batch of civil appeals is, whether the concept of \"change of opinion\" stands obliterated with effect from 1st April, 1989, i.e., after substitution of Section 147 of the Income Tax Act, 1961 by Direct Tax Laws (Amendment) Act, 1987? xxxx 6. …………prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re- open the assessment. Therefore, post- 1st April, 1989, power to re-open is much wider, However, one needs to give a schematic interpretation to the words \"reason to believe\" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of \"mere change of opinion\", which cannot be per se reason to re- open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to Page 28 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 review; he has the power to re-assess. But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of \"change of opinion\" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of \"change of opinion\" as an in-built test to check abuse of power by the Assessing Officer…..” 12. The Assessing Officer issued notice under section 148 of the Act only to make a roving inquiry into the facts which were already considered by the Assessing Officer at the time of framing the rgularl assessment under section 143(3) of the Act. It appears that the Assessing Officer now wants to re- verify the facts which is not permissible to be an acceptable ground for exercising powers to reopen the assessment. 13. For the foregoing reasons, the impugned notice dated 22.03.2019 issued under section 148 of the Act by the respondent exercising the powers to reopen the assessment for the Page 29 of 30 C/SCA/20716/2019 JUDGMENT DATED: 05/09/2022 Assessment Year 2014-2015 is illegal and liable to be set aside. Accordingly, impugned notice dated 22.03.2019 is hereby set aside. 14. The petition succeeds and is allowed. Rule is made absolute to the aforesaid extent. No order as to costs. (N.V.ANJARIA, J) (BHARGAV D. KARIA, J) RAGHUNATH R NAIR Page 30 of 30 "