DISTRIBUTORS INDIA C AND F THRU. ITS PARTNER V. UNION OF INDIA THRU. ITS SECY. FINANCE, MINISTRY OF FINANCE AND 3 OTHERS

/47/2022

AI Insights

The case revolves around a writ petition filed by Distributors India C And F against the Union of India, challenging a notice issued under Section 148 of the Income Tax Act, 1961, by the Income Tax Officer, Lucknow. The notice was issued following discrepancies between the income reported in the petitioner's Profit and Loss account and the income reflected in the Form 26AS for the assessment year 2013-14. The petitioner argued that the reassessment was based on a change of opinion and lacked new tangible material, while the respondents contended that the reassessment was justified due to non-disclosure of material facts by the petitioner. The court examined the legal provisions under Sections 147 and 148 of the Income Tax Act, relevant judicial precedents, and the specifics of the case, ultimately dismissing the petitioner's writ and upholding the reassessment notice.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 724136 (HC-LUCKNOW)
• Appeal Type: Others
• Pronouncement Date: 20-04-2022
• Assessment Year: misc
• Other Referred Cases: Raymond Woolen Mills Ltd. Versus I.T.O., Aventis Pharma Ltd. Versus ACIT, Arun Gupta versus Union of India, Phool Chand Bajrang Lal v. ITO, Srikrishna (P) Ltd. v. ITO, CIT v. Techspan India (P) Ltd.
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: MANISH MISHRA
• Assessee Lawyers: SHAILESH VERMA; SWATI UPADHYAY
• Keywords: Audit objection; Change of opinion; Income Tax; Reassessment; TDS
• Section: 147; 148; 143(3); 142(1); 151

Judgement Text

"1 Judgment reserved on 29.03.2022 Judgment delivered on 20.04.2022 Case :WRIT TAX No. - 47 of 2022 Petitioner : Distributors India C And F Thru its Partner Respondent : Union of India Thru Its Secy. Finance, Ministry of Finance, and 3 Others Counsel for Petitioner : Shailesh Verma, Swati Upadhyay Counsel for Respondent : A.S.G.I., Manish Mishra Hon'ble Devendra Kumar Upadhyaya, J. Hon'ble Subhash Vidyarthi, J. (Per Hon’ble Subhash Vidyarthi J.) 1. Heard Shri Desh Deepak Chopra, Senior Advocate assisted by Sri. Shailesh Verma, Advocate, the learned counsel for the petitioner and Shri Manish Misra, Advocate, the learned counsel for the respondents. 2. By means of this writ petition filed under Article 226 of the Constitution of India, the petitioner has challenged the validity of a notice dated 26.03.2021 issued by the Income Tax Officer, 5 (1), Lucknow – New, under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'), proposing to assess/reassess the petitioner’s income/loss for the assessment year 2013-14. 3. During the assessment year 2013-14 the petitioner had shown the total receipt of Rs.2,61,28,435/- in its Profit and Loss (P&L) Account, which comprised of commission income of Rs.2,50,58,983/- and interest income of Rs.10,69,452/-. The amount of TDS as per the statement in Form 26 AS was Rs.36,13,755/-. The Petitioner had filed Income tax return for a total income of Rs.9,62,130/-. The petitioner’s case was selected for scrutiny under CASS. During scrutiny, the Assessing Officer asked the Petitioner to reconcile 26 AS with gross receipts as per P&L Account. During the hearing of the assessment proceedings held on 12.02.2015, the A.O. raised a specific query with regard to reconciliation of gross receipts 2 as per 26AS and P&L Account. The petitioner submitted replies on 12-02-2015 and 20-02-2015 stating that it is working as C&F agent for a number of companies, which outsource their logistics and distribution operations to it. As part of the services, the petitioner incurs several expenses on behalf of the companies. The agreements are in the nature of a contract and hence TDS should be deducted @2%. However, the nomenclature used for the payments made to the petitioner is Commission and following the nomenclature, some companies deduct TDS @10% under Section 194 H instead of 2% under Section 194 C. After taking into account all the expenses, the net margin of profit of the petitioner is lower than the tax deducted at source and, therefore, the petitioner is given refund of TDS. During the year under consideration, the petitioner could not obtain the certificate for lower deduction of TDS and, therefore, the ratio of tax refundable is much higher. 4. On 25-03-2015, the A.O. passed an Assessment Order assessing the petitioner’s total income at Rs.10,79,084/-, after adding Rs.1,16,954/- towards part of expenses disallowed, to the returned income of Rs. 9,62,130/-. 5. On 26-03-2021, the A.O. issued a notice under Section 148 of the Act for the Assessment Year 2013-14, stating that he had reason to believe that the petitioner’s income chargeable to tax has escaped assessment within the meaning of Section 147 of the Act. 6. In response to the aforesaid notice under Section 148 of the Act, the petitioner sent a letter dated 09.09.2021 requesting the A.O. to provide a copy of the reasons recorded alongwith all the material which had lead to the formation of the “reason to believe”. It also raised an objection regarding maintainability of the notice under Section 148 of the Act as according to the petitioner, reassessment proceedings were initiated on the basis of a change of opinion, which is not permissible in law. 3 7. Without providing a copy of the “reasons recorded”, the National Faceless Assessment Centre issued a notice dated 15-11- 2021 under Section 142 (1) of the Act, requiring the petitioner to furnish documents, books of accounts and other details by 29-11- 2021. 8. On 29.11.2021, the National Faceless Assessment Center supplied a copy of the ‘reasons recorded’ alongwith the approval granted under Section 151 of the Act for reopening the proceedings under Section 147 of the Act. It was stated in the reasons that as per 26 AS, the petitioner’s total receipt under Sections 194 A, 194 C, 194 H, 194 I and 194 J is Rs.5,23,84,738/-. However, in the P&L account, it has shown the total receipt at Rs.2,61,28,435/-, which is short by Rs.2,62,56,303/-. This gives rise to a reason to believe that the aforesaid income of Rs.2,62,56,303/- has escaped assessment. 9. On 16-12-2021, the petitioner submitted its objections against the ‘reason to believe’ mainly on the following grounds: - i. The case was re-opened on the basis of the audit objection whereas earlier the A.O. had himself refused to accept the audit objection by means of his letter dated 20-10-2020 addressed to the Additional CIT.The notice under Section 148 was issued in contravention of CBDT Instruction no. 07 of 2017 dated 21-07-2017, through which the CBDT has strictly prohibited the remedial action if audit objection has not been accepted; ii. the reasons recorded are merely based on a change of opinion and no new material has been brought on record.; and iii. the case cannot be reopened for the matters already discussed. 10. On 02.03.2022, the National Faceless Assessment Centre passed an order on the petitioner's objection stating that the petitioner had filed its return of income at Rs.9,62,130/- whereas in the P&L account it had shown a commission income of Rs.2,50,58,983/- and interest at Rs.10,69,452/-, thus a total receipt of Rs.2,61,28,435/- was there pertaining to TDS of Rs.36,13,775/-. However, as per 26 AS the total receipts under Sections 194 A, 194 C, 194 H, 194 I and 194 J is 4 Rs.5,23,84,738/-. Hence there is a difference of Rs.2,62,56,303/- in the receipts shown by the petitioner. This difference in receipts was not explained by the petitioner with documentary evidence and consequently the case was re-opened under Section 147 of the Act. 11. The order further states that the reply to the Audit Objection sent by the A.O. was not accepted by the CIT and thereafter, the objections of the Revenue audit and the submissions of the petitioner were re-looked by the A.O. and the A.O. formed the opinion that the income of the petitioner has escaped assessment. On the issue of change of opinion and there being no new material, the order states that although the petitioner might have submitted the documents in respect of the audit objection before the A.O., there is nothing on record to indicate that the A.O. had formed an opinion that no income had escaped assessment as he did not either accept or reject the petitioner’s submissions at the time of assessment under Section 143 (3). Therefore, it is not a case of change of opinion. 12. The petitioner has filed the instant writ petition challenging the notice dated 26.03.2021 issued under Section 148 of the Act and the proceedings initiated in furtherance of the notice, mainly on the grounds that the notice has been issued in contravention of C.B.D.T. Instruction No. 07 of 2017; the case has been reopened as a consequence of the audit objection while earlier the A.O. had not accepted the audit objection as per his letter dated 20.10.2020 addressed to the Additional CIT; the assessee is responsible only to disclose all primary facts and nothing beyond that. Once he has disclosed all primary facts, it is for the A.O. to draw proper conclusions from those facts and if he draws an erroneous conclusion, he cannot reopen the assessment merely upon a change of opinion. In the present case, the reasons for reopening the case are merely based on a change of opinion and no new material has been brought on record. 13. Before proceeding to examine the rival contentions advanced on behalf the parties, it would be appropriate to have a look at the 5 relevant provisions of the Act and refer to some pronouncements of the Hon’ble Supreme Court explaining the scope of interference under Article 226 of the Constitution of India while examining the validity of a notice issued under Section 148 of the Income Tax Act. 14. The relevant provisions of Sections 147 and 148 of the Act, as those stood at the relevant time, are being reproduced below: - “147. Income escaping assessment.— If the Assessing Officer, has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in Sections 148 to 153 referred to as the relevant assessment year): ………… Explanation 1.—Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso.” “148. Issue of notice where income has escaped assessment.— (1) Before making the assessment, reassessment or recomputation under Section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under Section 139: Provided that …………….. (2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so.” (Emphasis supplied) 15. Thus after giving a notice under Section 148 of the Act containing reasons for doing so, the Assessing Officer can pass an order for reassessment, if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. 6 The Hon’ble Supreme Court has explained the scope of judicial review while examining the validity of a notice under Section 148 of the Act in Raymond Woolen Mills Ltd. Versus I.T.O., (1999) 236 ITR 36 (SC), in which it has been held that at the stage of the notice for reopening of the assessment, the Court has only to see whether there is prima facie some material, on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. 16. Again, in Raymond Woollen Mills Ltd. v. ITO, (2008) 14 SCC 218, the Hon’ble Supreme Court reiterated that while examining the validity of a notice issued under Section 148 of the Income Tax Act, “we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have to see only whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage.” 17. In light of the aforesaid pronouncements of the Hon’ble Supreme Court, without going into the sufficiency or correctness of the material, we proceed to examine the rival submissions advanced on behalf of the parties so for to ascertaining as to whether there was prima facie some material on the basis of which the Department could reopen the case. 18. Mr. Desh Deepak Chopra, the learned Senior Advocate appearing for the petitioner, has submitted that in the present case there was a discrepancy in 26 AS and Profit & Loss account due to TDS having been deducted on the expenses paid to the petitioner, who is a Carrying and Forwarding agent. The Revenue Audit team had informed that some income had escaped assessment, but the A.O. had rejected the audit objection. However, the Commissioner of Income Tax has ordered reassessment solely on the basis of an audit objection raised by the revenue auditor and there was no other reason for ordering reassessment. He has drawn attention of the Court 7 towards the order dated 12-02-2015 passed by the A.O. during assessment proceedings in which it is recorded that the petitioner’s representatives had submitted a reply regarding low income in comparison to large receipts. They were required to file reconciliation of gross receipt as per 26 AS and as per the Profit and Loss account and on 20-02-2015, a reply was submitted stating that the discrepancy in 26 AS and P&L account was because the net margin of profit of the petitioner after taking into account all the expenses, is lower than the tax deducted at source and, therefore, the petitioner is given refund of TDS. During the year under consideration, the petitioner could not obtain the certificate for lower deduction of TDS and, therefore, the ratio of tax refundable is much higher. 19. Sri. Manish Mishra, the learned Counsel for the Income Tax department, has produced the original record of the department, which contains the reasons recorded for initiation of the reassessment proceedings. The reasons recorded state that the petitioner had filed its return of income on 23-09-2013 at Rs.9,62,130/-. In the P&L account, the petitioner had showed commission income of Rs.2,50,58,983/- and interest income of Rs.10,69,452/-, thus it has shown total receipts of Rs.2,61,28,435/-. However, as per 26 AS the total receipt under Sections 194 A, 194 C, 194 H, 194 I and 194 J is Rs.5,23,84,738/-. Hence there is a difference of Rs.2,62,56,303/- in the receipts shown by the petitioner, which income has escaped assessment. During the assessment proceedings, the assessee was asked to explain the discrepancy and although it stated that at the time of reimbursing the expenses, some of its principals are deducting TDS under Section 194 C as contractor and a few are deducting under Section 194 H (brokerage and commission) and, therefore, these receipts are not reflecting in its income. However, the petitioner has received payments under Sections 194 I and 194 J also, but it did not show the above receipts and gave no explanation for the same. The petitioner did not show the amount claimed by it towards reimbursement of expenses and the actual amount reimbursed to it. Further, the details of expenses incurred by it on behalf of the 8 principals were also not submitted for verification during the assessment proceedings. The petitioner did not produce any ledger, bills and vouchers of expenses incurred by it on behalf of the principal companies. Thus the petitioner has not truly and fully disclosed all material facts necessary for the assessment, thereby necessitating reassessment under Section 147 of the Act. 20. It is also evident from the original record produced before the Court that on the basis of the abovementioned reasons recorded by the A.O. proposing issuance of a notice under Section 148 of the Act, the Additional CIT, Range 3, Lucknow made a recommendation for issuance of a notice under Section 148 of the Act and the Principal Commissioner of Income Tax – 1, Lucknow granted his approval by recording his satisfaction with the reasons recorded. 21. In reply to the first submission made on behalf of the petitioner, that the A.O. had rejected the audit objection by means of his letter dated 07-02-2020, Sri. Manish Misra has submitted that Clause 5.2 of the CBDT Instructions 07 of 2017 dated 21-07-2017 provides that the PCIT shall, after calling for the report from the A.O. and the Range Head, if needed, take a decision as to whether or not the objection is acceptable. Thus the authority to accept or reject the Revenue audit objection vests in the Commissioner of Income Tax. By means of the letter dated 07-02-2020 the A.O. had merely sent a report to the CIT (Audit) and he did not have the authority to take a decision regarding the audit objection. Therefore, the ground taken by the learned Counsel for the petitioner that the A.O. had not accepted the audit objection in his letter dated 07-02-2020 cannot be accepted. 22. Sri. Misra has submitted that a perusal of the reasons recorded by the A.O. for initiating the reassessment proceedings establishes that the reassessment has not been ordered on the basis of the audit objection, but it has been ordered for numerous reasons, including that there is a difference of Rs.2,62,56,303/- in the receipts shown by the petitioner in P&L account and that reflected in 26 AS, which income has escaped assessment. During the assessment proceedings, 9 the petitioner was asked to explain the discrepancy, but it did not show the payments received under Sections 194 I and 194 J. It did not show the details of expenses and it did not produce any ledger, bills and vouchers of expenses incurred by it on behalf of the principal companies. Thus the petitioner has not truly and fully disclosed all material facts necessary for the assessment thereby necessitating reassessment under Section 147 of the Act. 23. Sri. Chopra has next submitted that the proceedings under Section 147 have been initiated without bringing any fresh tangible material on record, by merely relying upon the documents that were already placed before the A.O. at the time of the original assessment proceedings. Relying upon another decision of the Bombay High Court in Aventis Pharma Ltd. Versus ACIT, (2010) 323 ITR 570 (Bom) he has submitted that it is a settled position of law that re- opening of assessment on the very same issue due to change of opinion in the absence of any fresh material is held to be invalid and bad in law. 24. Relying upon the judgment in Arun Gupta versus Union of India, (2015) 371 ITR 394 (All), the learned Counsel for the petitioner has submitted that even if new facts are discovered from the records already available before the A.O., it would amount to a change of opinion, since there is no fresh tangible material from which the authority to reopen the assessment has emerged. 25. The reasons recorded by the A.O. for initiating the process of re-assessment state that on examination of the documents on record and 26 AS, it was noticed that in the P&L account, the petitioner had showed total receipts of Rs.2,61,28,435/-, including commission income of Rs.2,50,58,983/-, and interest income of Rs.10,69,452/-. However, as per 26 AS its total receipt under Sections 194 A, 194 C, 194 H, 194 I and 194 J is Rs.5,23,84,738/-. Hence there is a difference of Rs.2,62,56,303/- in the receipts shown by the petitioner, which income has escaped assessment. During the assessment proceedings, the petitioner was asked to explain the discrepancy and 10 it stated that at the time of reimbursing the expenses, some of its principals are deducting TDS under Section 194 C and some are deducting it under Section 194 H and, therefore, these receipts are not reflecting in its income. However, the petitioner has received payments under Sections 194 I and 194 J also, but it did not show the above receipts and gave no explanation for the same. It did not produce any ledger, bills and vouchers of expenses incurred by it on behalf of the principal companies. Thus the petitioner has not truly and fully disclosed all material facts necessary for the assessment thereby necessitating reassessment under Section 147 of the Act. 26. From the reasons recorded by the A.O. for initiating the process of re-assessment, we find that the A.O. has recorded his reason to believe that the petitioner had received payments under Sections 194 I and 194 J also, but it had not shown the said receipts in his P&L account and had not given any explanation for the same. The petitioner had not disclosed the amount of reimbursement of expenses claimed by it and the actual amount received by it towards reimbursement. It had not submitted the details of expenses incurred by it for verification during the assessment proceedings. It did not produce any ledger, bills and vouchers of expenses incurred on behalf of the Principal Companies. Thus the petitioner did not make a “full and true” disclosure of all the material facts which resulted in an income of Rs. 2,62,56,303/- having escaped assessment. 27. In Phool Chand Bajrang Lal v. ITO, (1993) 4 SCC 77, the Hon’ble Supreme Court held that: - “25. From a combined review of the judgments of this Court, it follows that an Income Tax Officer acquires jurisdiction to reopen assessment under Section 147(a) read with Section 148 of the Income Tax Act, 1961 only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons which he must record, to believe that by reason of omission or failure on the part of the assessee to make a true and full disclosure of all material facts necessary for his assessment during the concluded assessment proceedings, any part of his income, profit or gains chargeable to income tax has escaped assessment. He may start reassessment proceedings either because some fresh facts come to light which were not previously disclosed or some information with regard to the facts previously disclosed comes into 11 his possession which tends to expose the untruthfulness of those facts. In such situations, it is not a case of mere change of opinion or the drawing of a different inference from the same facts as were earlier available but acting on fresh information. Since, the belief is that of the Income Tax Officer, the sufficiency of reasons for forming the belief, is not for the Court to judge but it is open to an assessee to establish that there in fact existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. To that limited extent, the Court may look into the conclusion arrived at by the Income Tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income Tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief. It would be immaterial whether the Income Tax Officer at the time of making the original assessment could or, could not have found by further enquiry or investigation, whether the transaction was genuine or not, if on the basis of subsequent information, the Income Tax Officer arrives at a conclusion, after satisfying the twin conditions prescribed in Section 147(a) of the Act, that the assessee had not made a full and true disclosure of the material facts at the time of original assessment and therefore income chargeable to tax had escaped assessment.” 28. In Srikrishna (P) Ltd. v. ITO,(1996) 9 SCC 534, the Hon’ble Supreme Court held that: - “Now, what needs to be emphasised is that the obligation on the assessee to disclose the material facts — or what are called, primary facts — is not a mere disclosure but a disclosure which is full and true. A false disclosure is not a true disclosure. The disclosure must not only be true but must be full — “fully and truly”. A false assertion, or statement, of material fact, therefore, attracts the jurisdiction of the Income Tax Officer under Sections 34/147. Take this very case: the Income Tax Officer says that on the basis of investigations and enquiries made during the assessment proceedings relating to the subsequent assessment year, he has come into possession of material, on the basis of which, he has reasons to believe that the assessee had put forward certain bogus and false unsecured hundi loans said to have been taken by him from non-existent persons or his dummies, as the case may be, and that on that account income chargeable to tax has escaped assessment. According to him, this was a false assertion to the knowledge of the assessee. The Income Tax Officer says that during the assessment relating to subsequent assessment year, similar loans (from some of these very persons) were found to be bogus. On that basis, he seeks to reopen the assessment. It is necessary to remember that we are at the stage of reopening only. The question is whether, in the above circumstances, the assessee can say, with any justification, that he had fully and truly disclosed the material facts necessary for his assessment for that year. Having created and recorded bogus entries of loans, with what face can the assessee say that he had truly and fully disclosed all material facts necessary for his assessment for that year? True it is that Income Tax Officer could have investigated the truth of the said assertion — which he 12 actually did in the subsequent assessment year — but that does not relieve the assessee of his obligation, placed upon him by the statute, to disclose fully and truly all material facts. Indubitably, whether a loan, alleged to have been taken by the assessee, is true or false, is a material fact — and not an inference, factual or legal, to be drawn from given facts. In this case, it is shown to us that ten persons (who are alleged to have advanced loans to the assessee in a total sum of Rs 3,80,000 out of the total hundi loans of Rs 8,53,298) were established to be bogus persons or mere name- lenders in the assessment proceedings relating to the subsequent assessment year. Does it not furnish a reasonable ground for the Income Tax Officer to believe that on account of the failure — indeed not a mere failure but a positive design to mislead — of the assessee to disclose all material facts, fully and truly, necessary for his assessment for that year, income has escaped assessment? We are of the firm opinion that it does. It is necessary to reiterate that we are now at the stage of the validity of the notice under Sections 148/147. The enquiry at this stage is only to see whether there are reasonable grounds for the Income Tax Officer to believe and not whether the omission/failure and the escapement of income is established. It is necessary to keep this distinction in mind. A recent decision of this Court in Phool Chand Bajrang Lal v. ITO, we are gratified to note, adopts an identical view of law and we are in respectful agreement with it. The decision rightly emphasises the obligation of the assessee to disclose all material facts necessary for making his assessment fully and truly. A false disclosure, it is held, does not satisfy the said requirement. We are also in respectful agreement with the following holding in the said decision” (Emphasis supplied) 29. As all material facts relevant for the assessment on the issues under consideration were not produced during the assessment proceedings, the A.O. could not examine the issues and could not form an opinion regarding the same during the original assessment proceedings. 30. The meaning of the expression “change of opinion” has been explained by the Hon’ble Supreme Court in CIT v. Techspan India (P) Ltd., (2018) 6 SCC 685, in the following words: - “16. To check whether it is a case of change of opinion or not one has to see its meaning in literal as well as legal terms. The words “change of opinion” imply formulation of opinion and then a change thereof. In terms of assessment proceedings, it means formulation of belief by an assessing officer resulting from what he thinks on a particular question. It is a result of understanding, experience and reflection. 17. It is well settled and held by this Court in a catena of judgments and it would be sufficient to refer to CIT v. Kelvinator of India Ltd. wherein this Court has held as under: (SCC p. 725, para 5-7) 13 “5. … where the assessing officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1-4-1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words “reason to believe”…. Section 147 would give arbitrary powers to the assessing officer to reopen assessments on the basis of “mere change of opinion”, which cannot be per se reason to reopen. 6. We must also keep in mind the conceptual difference between power to review and power to reassess. The assessing officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of certain precondition and if the concept of “change of opinion” is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. 7. One must treat the concept of “change of opinion” as an in-built test to check abuse of power by the assessing officer. Hence, after 1-4-1989, assessing officer has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief.” 18.Before interfering with the proposed reopening of the assessment on the ground that the same is based only on a change in opinion, the court ought to verify whether the assessment earlier made has either expressly or by necessary implication expressed an opinion on a matter which is the basis of the alleged escapement of income that was taxable. If the assessment order is non-speaking, cryptic or perfunctory in nature, it may be difficult to attribute to the assessing officer any opinion on the questions that are raised in the proposed reassessment proceedings. Every attempt to bring to tax, income that has escaped assessment, cannot be absorbed by judicial intervention on an assumed change of opinion even in cases where the order of assessment does not address itself to a given aspect sought to be examined in the reassessment proceedings.” (Emphasis supplied) 31. In the present case, at the time of making the assessment originally, the Assessing Officer had not formed any opinion regarding the reasons on which the notice under Section 148 of the Act has been issued. To say it more particularly, the A.O. had not formed any opinion regarding (1) receipt of payments by the petitioner under Sections 194 I and 194 J, which had not been shown in its P&L account, (2) non-disclosure of the amount of reimbursement of expenses claimed by it, (3) non-submission of the details of expenses incurred by it for verification during the assessment proceedings and (4) non-production of any ledgers, bills 14 and vouchers of expenses incurred on behalf of the Principal Companies etc. Therefore, it is not a case of “change of opinion” and challenge to the notice under Section 148 of the Act on the ground that it seeks to initiate reassessment on the ground of change of opinion, cannot be accepted. 32. Relying upon a decision of Delhi High Court in United Electrical Co. Ltd. Versus Commissioner of Income Tax, (2002) 258 ITR 317, the learned Counsel for the petitioner has submitted that the Commissioner is required to apply his mind to the proposal put up before him for approval in the light of the material relied upon by the A.O., but in the present case the approval was casually given merely relying upon the reasons to believe as provided by the A.O., without going through the previous records. 33. Section 151 of the Act, which contains the provision for grant of approval to a proposal for issuance of a notice under Section 148 of the Act, is as follows: - “151. Sanction for issue of notice.— (1) In a case where an assessment under sub-section (3) of Section 143 or Section 147 has been made for the relevant assessment year, no notice shall be issued under Section 148 by an Assessing Officer, who is below the rank of Assistant Commissioner or Deputy Commissioner, unless the Joint Commissioner is satisfied on the reasons recorded by such Assessing Officer that it is a fit case for the issue of such notice: Provided that, after the expiry of four years from the end of the relevant assessment year, no such notice shall be issued unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satisfied, on the reasons recorded by the Assessing Officer aforesaid, that it is a fit case for the issue of such notice.” 34. The order dated 23-03-2021 passed by the approving authority under Section 151 of the Act has been placed on record by the Department and the detailed reasons recorded by the A.O. have been annexed to, and made a part of the order. The approving authority – the PCIT, has stated that he agrees with the comments of the A.O., which were annexed with the order, and has recorded his satisfaction that it was a fit case for issuance of the notice under Section 148 of 15 the Act. The aforesaid order does not indicate non-application of mind by the PCIT to the proposal made by the A.O. and we are not able to accept the submission that the PCIT has granted approval without application of mind to the proposal put up by the A.O. 35. Keeping in view the scope of judicial review while scrutinizing a notice issued under Section 148 of the Act as explained in Raymond woolen Mills Ltd. (1) and (2) and Phool Chand Bajarang Lal and Srikrishna (Supra), we do not have to give a final decision as to whether there is suppression of material facts by the petitioner or not, as the sufficiency or correctness of the material is not required to be considered at this stage. In the instant case, the notice under Section 148 of the Act has been issued by the assessing officer after conducting an investigation and going through the income tax return and other related documents of the petitioner and after recording a reason to believe that the petitioner did not truly and fully disclose all the material facts, because of which income amounting to Rs. 2,62,56,303/- has escaped assessment. We are satisfied that there was prima facie material available on record before the assessing officer for issuing a notice under Section 148 of the Act. The notice dated 26-03-2021 issued under Section 148 of the Act as well as all the proceedings undertaken in consequence of the notice, including the order dated 18-02-2022 passed by the National Faceless Assessment Centre rejecting the petitioner’s objections against the notice, does not suffer from any such illegality as to warrant interference by this Court in exercise of its Writ Jurisdiction, 36. The Writ Petition lacks merits and is, accordingly, dismissed. 37. No order as to costs. Order Date : 20-04-2022 Jaswant Digitally signed by JASWANT KUMAR Date: 2022.04.20 19:19:36 IST Reason: Location: High Court of Judicature at Allahabad, Lucknow Bench "