DCIT, Hyderabad V. M/s Lee Pharma Pvt Limited, Hyderabad

ITA 1236/HYD/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61905 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 23-05-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 20-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M S RAO
• Assessee Lawyers: A V RAGHURAM
• Keywords: Audit objection; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Revenue expenditure; Reassessment proceedings; Capital expenditure
• Section: 143(3); 80HHC; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 1236/HYD/2010 ASSESSMENT YEAR : 2004-05 DY. COMMISSIONER OF INCOME-TAX, APPELLANT CIRCLE 16(1), HYDERABAD VS. LEE PHARMA PVT. LTD., RESPONDENT HYDERABAD. APPELLANT BY : MR. M.S. RAO RESPONDENT BY : MR. A.V. RAGHURAM DATE OF HEARING : 12/04/2012 DATE OF PRONOUNCEMENT : 08/ 06/2012 ORDER PER ASHA VIJAYARAGHAVAN, J.M.: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE CIT(A)-V, HYDERABAD, DATED 06/07/2010 FOR THE ASSESSMENT YEAR 2004-05. 2. THE ASSESSEE COMPANY ENGAGED IN MANUFACTURING OF BULK DRUGS AND INTERMEDIATES, FILED ITS RETURN OF I NCOME FOR AY 2004-05 ON 28/10/2004 DECLARING TOTAL TAXABLE IN COME OF RS. 82,29,600/- AFTER CLAIMING DEDUCTION U/S 80 HHC AT RS. 18,40,275/-. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT, ON 05/02/2005. 2 ITA NO. 1236/HYD/2010 LEE PHARMA P. LTD. 3. THE CASE WAS SELECTED FOR SCRUTINY AND ORDER U/S 143(3) DATED 22/12/2006 HAD BEEN PASSED AND THE INC OME WAS ASSESSED AT RS. 83,59,320/- AFTER ALLOWING DEDU CTION U/S 80HHC AT RS. 18,40,275/-. HOWEVER, IT WAS OBSER VED SUBSEQUENTLY THAT THE ASSESSEE HAD ADOPTED INCORREC T ADJUSTED EXPORT TURNOVER AND ADJUSTED TOTAL TURNOVE R AND ALSO THE ELIGIBLE PROFITS FOR WORKING OUT DEDUCTION U/S 80HHC. THE ASSESSEE ADOPTED ELIGIBLE PROFITS WITH OUT REDUCING 90% OF OTHER INCOME ADMITTED AS CONVERSIO N CHARGES AND TECHNICAL CONSULTANCY CHARGES AMOUNT ING TO RS. 21,87,459/- AS REQUIRED UNDER EXPLANATION (BAA) TO SECTION 80HHC. THUS RESULTED IN EXCESS CLAIM OF DED UCTION U/S 8OHHC. 4. THE AO NOTED THAT THE ASSESSEE HAD NOT REDUCED 9 0% OF THE COMMISSION ON EXPORTS RECEIVED OF RS. 67,9 8,563/- FROM THE PROFITS OF THE BUSINESS WHILE WORKING OUT THE DEDUCTION. IT WAS DECIDED IN THE CASE OF CIT VS. PR ABHAKAR, 276 ITR 176 THAT BROKERAGE AND COMMISSION BEING INC OME FOR PROCURING EXPORT CONTRACT CANNOT BE TREATED AS PART OF ELIGIBLE PROFITS OF THE BUSINESS. 5. IN VIEW OF THE ABOVE, THE AO WORKED OUT THE ADMI SSIBLE DEDUCTION U/S 80HHC AT RS. 3,44,690/-, AS UNDER:- (RS.) PROFITS OF THE BUSINESS : 1,00,69,870 LESS 90% OF CONVERSION & CONSULTANCY, COMMISSION RECEIVED : 80,87,420 LESS BALANCE 90% OF INTEREST AND EXPORT INCENTIVES : : 21,12,175 4,81,121 BALANCE ELIGIBLE PROFIT : 16,31,054 3 ITA NO. 1236/HYD/2010 LEE PHARMA P. LTD. ELIGIBLE DEDUCTION = 30% OF RS. 16,31,054 X 14,01,42,707 + RS.3,97,058 X 14,01,42,707 24,73,74,183 24,73,74,183 = 30% OF (RS. 9,24,027 + RS. 2,24,942) = RS. 3,44,6 90/-. ON THE BASIS OF THE ABOVE THE ASSESSING OFFICER RE- DETERMINED THE DEDUCTION U/S 80HHC AT RS. 3,44,690/ - AS AGAINST RS. 18,40,275/- CLAIMED BY THE ASSESSEE. 6. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE C ARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 7. BEFORE THE CIT(A), THE ASSESSEE CONTENDED THAT T HE ACTION OF THE AO AMOUNTED TO ONLY A CHANGE OF OPINI ON ON ACCOUNT OF AN AUDIT OBJECTION. HE, THEREFORE, SUBMI TTED THAT THE REASSESSMENT WAS NOT VALID AS PER LAW, ON THE F OLLOWING REASONS:- IT RECEIVED TWO SEPARATE LETTERS FROM THE TEN AO BO TH BEARING NO. DCIT 16(1)/L-65/2004-05 DT. 12/02/2008, IN THE MONTH OF FEBRUARY, 2008 I.E. ABOUT 14 MONTHS AFTER COMPLETION OF ORIGINAL ASSESSMENT, WHEREIN CERTAIN CLARIFICATIONS/OBJECTIONS WERE SOUGHT, BASE D ON AN OBJECTION RAISED BY THE REVENUE AUDIT PARTY, IN RESPECT OF THE CLAIMS OF DEFERRED REVENUE EXPENDITU RE AND DEDUCTION U/S 80 HHC. CONSEQUENTLY, THE APPELLA NT SUBMITTED TWO SEPARATE LETTERS DT. 12/03/2008 AND 13/03/2008, REITERATING ITS EXPLANATIONS/CLARIFICAT IONS, FURNISHED DURING THE ORIGINAL ASSESSMENT PROCEEDING S. SUBSEQUENTLY, NO ACTION WAS TAKEN BY THE THEN AO OBVIOUSLY FOR THE REASON THAT HE WAS SATISFIED WITH THE EXPLANATIONS FILED ON THE ISSUES INVOLVED, BASED ON WHICH A REPLY MIGHT HAVE BEEN SENT TO AUDIT. SUDDENLY, AFTER A LAPSE OF ONE FULL YEAR FROM THE D ATE OF FILING THE ABOVE EXPLANATIONS BY THE APPELLANT, THE 4 ITA NO. 1236/HYD/2010 LEE PHARMA P. LTD. PRESENT AO DECIDED TO ISSUE A NOTICE U/S 148 ON 26/03/2009, ON THE SAME ISSUES, CLEARLY AT THE INSISTENCE OF THE REVENUE AUDIT. THE ABOVE FACTS AMPLY DEMONSTRATE THAT RE-ASSESSMEN T WAS PROMPTED BY MERE CHANGE OF OPINION, THAT TOO UNDER THE INFLUENCE OF THE OPINION OF THE AUDIT PAR TY. IT IS A SETTLED LAW THAT SUCH CHANGE OF OPINION CANNOT FORM THE BASIS FOR INITIATION OF PROCEEDINGS U/S 14 7 AND ANY ATTEMPT TO MAKE A RE-ASSESSMENT BASED ON A CHANGE OF OPINION AMOUNTS TO REVIEW OF EARLIER ORDE R WHICH IS NOT PERMISSIBLE IN LAW. HENCE, THE APPELLA NT PRAYS THE CIT(A) TO DECLARE THE REASSESSMENT ORDER PASSED, CONSEQUENT ON SUCH INVALID PROCEEDINGS, AS NULL AND VOID. 8. THE CIT(A) RELIED ON THE DECISION OF THE DELHI H IGH COURT (FB) IN THE CASE CIT V KELVINATOR OF INDIA ( 256 ITR 1) WHEREIN IT HAS BEEN HELD AS UNDER: THE SCOPE AND EFFECT OF SECTION 147 AS SUBSTITUTED WITH EFFECT FROM APRIL 1, 1989, BY THE DIRECT TAX L AWS (AMENDMENT) ACT, 1987, AND SUBSEQUENTLY AMENDED BY THE DIRECTOR TAX LAWS (AMENDMENT) ACT, 1989, WITH EFFECT FROM APRIL 1, 1989 AS ALSO OF SECTION 148 TO 152 HAVE BEEN ELABORATED IN CIRCULAR NO. 549, DATED OCTOBER 31, 1989. A PERUSAL OF CLAUSE 7.2 OF THE SA ID CIRCULAR MAKES IT CLEAR THAT THE AMENDMENTS HAD BEE N CARRIED OUT ONLY WITH A VIEW TO ALLAY FEARS THAT TH E OMISSION OF THE EXPRESSION REASON TO BELIEVE FROM SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE AO T O REOPEN PAST ASSESSMENTS ON A MERE CHANGE OF OPINION . IT IS, THEREFORE, EVIDENT THAT EVEN ACCORDING TO TH E CENTRAL BOARD OF DIRECT TAXES A MERE CHANGE OF OPIN ION CANNOT FORM THE BASIS FOR REOPENING A COMPLETED ASSESSMENT. AN ORDER OF ASSESSMENT CAN BE PASSED EITHER IN TERM S OF SUB-SECTION (1) OF SECTION 143 OR SUB-SECTION ( 3) OF SECTION 143. WHEN A REGULAR ORDER OF ASSESSMENT IS PASSED IN TERMS OF THE SUB-SECTION (3) OF SECTION 1 43 PRESUMPTION CAN BE RAISED THAT SUCH AN ORDER HAS PASSED ON APPLICATION OF MIND. IT IS WELL KNOWN THA T A PRESUMPTION CAN ALSO BE RAISED TO THE EFFECT THAT I N TERMS OF CLAUSE (E) OF SECTION 114 OF THE INDIAN EVIDENCE ACT, 1872, JUDICIAL AND OFFICIAL ACTS HAVE BEEN 5 ITA NO. 1236/HYD/2010 LEE PHARMA P. LTD. REGULARLY PERFORMED. IF IT BE HELD THAT AN ORDER WH ICH HAS BEEN PASSED PURPORTEDLY WITHOUT APPLICATION OF MIND WOULD ITSELF CONFER JURISDICTION UPON THE AO T O REOPEN THE PROCEEDING WITHOUT ANY FURTHER, THE SAME WOULD AMOUNT TO GIVING A PREMIUM TO AN AUTHORITY EXERCISING QUASI-JUDICIAL FUNCTION TO TAKE BENEFIT OF ITS OWN WRONG. HENCE, IT IS CLEAR THAT SECTION 147 OF T HE ACT DOES NOT POSTULATE CONFERMENT OF POWER UPON THE AO TO INITIATE REASSESSMENT PROCEEDINGS UPON A MERE CHANGE. THE SAID DECISION WAS CONFIRMED BY THE APEX COURT I N 320 ITR 561 . 9. THE CIT(A) HELD THAT THE REOPENING WAS INVALID OBSERVING AS UNDER: 4.7 GIVEN THE ABOVE RATIOS, THE FACTS IN THE PRESE T CASE ARE EXAMINED. FIRSTLY, THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(W) OF THE ACT ON 22/12/2006 AND DEDUCTION U/S 8OHHC WAS ALLOWED AT RS. 18,40,275/- AFTER EXAMINING ALL THE RELEVANT FACTS. IT IS NOTEW ORTHY THAT SPECIFIC DETAILS REGARDING DEDUCTION U/S 80HHC , DETAILS OF TURNOVER, DETAILS OF CONVERSION CHARGES AS WELL AS NATURE OF DEFERRED REVENUE EXPENDITURE WAS CALLED FOR VIDE VARIOUS LETTERS OF THE AO DURING ASSESSMENT PROCEEDINGS. THESE DETAILS WERE DULY PROVIDED. IN THIS REGARD, THE FOLLOWING EXTRACT FRO M WRITTEN SUBMISSIONS OF THE APPELLANT IS NOTWORTHY: THE APPELLANT SUBMITS THAT THE ACTION OF THE AO LACKS BOTH LEGAL AND FACTUAL STRENGTH. BOTH THE ABOVE DEDUCTION/EXPENSES WERE ALLOWED BY THE AO IN THE ORIGINAL ASSESSMENT ONLY AFTER THOROUGHLY EXAMINING THE ALLOWABILITY OR OTHERWISE OF SUCH DEDUCTION/EXPENSES. ALL THE RELEVANT INFORMATION WAS SPECIFICALLY REQUIRED TO BE FURNISHED DURING ORIGINAL ASSESSMENT PROCEEDINGS BY THE THEN AO. THE RELEVANT DETAILS CALLED FOR BY THE AO DURING ORIGINAL ASSESSMENT PROCEEDINGS ARE AS UNDER:- (A) ACIT 16(1)LR. L-056 DT. 15/09/2005 .(IV) DETAILS OF TURNOVER.ETC .(VIII) DETAILS OF EXPENDITURE EXCEEDING RS. 1 LAKHS UNDER EACH HEAD ALONG WITH VOUCHERS. 6 ITA NO. 1236/HYD/2010 LEE PHARMA P. LTD. (B) ACIT 16(1)/L-56/2004-05 DT. 08/09/2006 .(5) EXTRACTS OF BANK ACCOUNTS WHEREIN FOREIGN EXCHANGE REMITTANCES WERE RECEIVED FOR TOTAL EXPORT TURNOVER OF RS. 14,69,41,270/-. .(7) NATURE OF CONVERSION CHARGES RECEIVED. (C) DCIT 16(1)/L-56/2004-05 DT. 04/10/2006 ..(2) PLEASE FILE NATURE OF DEFERRED REVENUE EXPENDITURE AND ITS ALLOWABILITY. (6) PLEASE FILE WORKING SHEET FOR CLAIMING DEDUCTION U/S 80HHC. 4.8 BASED ON ALL THE ABOVE INFORMATION, THE AO APPLIED HIS MIND AND COMPLETED THE ASSESSMENT U/S 143(3) OF THE ACT BY ALLOWING DEDUCTION U/S 80HHC, ETC. IN OTHER WORDS, ALL THE DETAILS WERE INVESTIGA TED INTO AND THERE WAS A CLEAR APPLICATION OF MIND. 4.9 HOWEVER, ON EXACTLY THE SAME FACTS AND SAME INFORMATION, NOTICE U/S 148 OF THE ACT WAS ISSUED B ASED ON AN AUDIT OBJECTION. AS PER REASONS RECORDED, THE AO WANTED TO RECOMPUTE THE DEDUCTION U/S 80 HHC AND ALSO TREAT THE SUM OF RS. 21,45,679/- ORIGINALLY AL LOWED AS CURRENT REPAIRS, NOW AS CAPITAL EXPENDITURE. THI S IS EVIDENT FROM THE FOLLOWING REASONS RECORDED: 2. IT IS OBSERVED THAT THE ASSESSEE ADOPTED INCORRECT ADJUSTED EXPORT TURNOVER AND ADJUSTED TOTAL TURNOVER AND ALSO THE ELIGIBLE PROFITS. THE ASSESSEE ADOPTED ELIGIBLE PROFITS WITHOUT REDUCING 900/0 OF OTHER INCOME ADMITTED AS CONVERSION CHARGES AND TECHNICAL CONSULTANCY CHARGES AMOUNTING TO RS. 21,87,459/- AS REQUIRED UNDER EXPLANATION (BAA) TO SECTION 80HHC. THIS RESULTED IN EXCESS CLAIM OF DEDUCTION U/S 80 HHC. 3. SIMILARLY, THE ASSESSEE HAD NOT REDUCED 90% OF THE COMMISSION ON EXPORTS RECEIVED OF RS. 67,98,563/- FROM THE PROFITS OF THE BUSINESS WHILE WORKING OUT THE DEDUCTION. IT WAS DECIDED IN THE CASE OF CIT VS. PRABHAKAR, 276 ITR 176 THAT BROKERAGE AND COMMISSION BEING INCOME FOR PROCURING EXPORT CONTRACT CANNOT BE TREATED AS PART OF ELIGIBLE PROFITS OF THE BUSINESS. 6.QTHE ASSESSEE HAS INCURRED A SUM OF RS. 21,45,679/- TOWARDS RENOVATION OF THE NEWLY 7 ITA NO. 1236/HYD/2010 LEE PHARMA P. LTD. TAKEN LEASED PREMISES FOR THE PURPOSES OF STARTING PRODUCTION OF SOME PHARMACEUTICAL PRODUCTS. THE ASSESSEE CLAIMED IT AS CURRENT REPAIRS WHEREAS THE EXPENDITURE IS CAPITAL IN NATURE AND CANNOT BE ALLOWED DEDUCTION. 7. IN VIEW OF THE ABOVE FACTS I HAVE REASON TO BELIEVE THAT INCOME HAS ESCAPED FOR THE AY 2004- 05. 4.10 FROM THE ABOVE FACTS AND CIRCUMSTANCES, IT IS CLEAR THAT NO NEW INFORMATION HAD COME BEFORE THE A O AND HE MERELY WANTED TO REVIEW HIS EARLIER ORDER BA SED ON AN AUDIT OBJECTION AND HIS CHANGE OF OPINION. THEREFORE, THE AFOREMENTIONED RATIOS ARE CLEARLY APPLICABLE IN THE PRESENT CASE. ACCORDINGLY, IT IS HELD THAT THE ACT OF ISSUING NOTICE U/S 148 AND ASSUMING JURISDICTION OF SECTION 147 OF THE ACT WAS NOT VALI D AS PER LAW. THESE GROUNDS OF APPEAL ARE THUS DECIDED I N FAVOUR OF THE APPELLANT AND THE ASSESSMENT IS TREAT ED AS NULL AND VOID. ACCORDINGLY THE OTHER GROUNDS OF APPEAL NEED NOT BE ADJUDICATED UPON. 10. AGGRIEVED THE REVENUE IS IN APPEAL BEFORE US. 11. WE HAVE HEARD THE ARGUMENTS OF BOTH THE PARTIES AND PERUSED THE RECORD AS WELL AS THE ORDERS OF THE AUT HORITIES BELOW. NO DOUBT THAT THE REOPENING IS WITHIN 4 YEAR S FROM THE END OF THE ASSESSMENT YEAR AND HENCE THE ASSESS EE CANNOT ENJOY THE BENEFIT OF PROVISO TO SEC 147(1), WHICH REQUIRES THE ASSESSING OFFICER TO SHOW IN WHAT NEW MATERIAL HAS COME TO HIS NOTICE AND IN WHAT MANNER THE ASSES SEE HAS OMITTED TO PROVIDE FULL PARTICULARS, BEFORE HE CAN REOPEN THE ASSESSMENT. BUT STILL THE COURTS HAVE HELD THAT THE ASSESSING OFFICER HAS POWER TO REASSESS ESCAPED INCOME AND HA S NO POWER TO REVIEW HIS OWN ORDER. 8 ITA NO. 1236/HYD/2010 LEE PHARMA P. LTD. 12. IN THIS CASE AS FOUND BY THE CIT(A) THE ASSESSI NG OFFICER IN THE COURSE OF THE ASSESSMENT PROCEEDINGS HAD CALLED FOR THE PARTICULARS REGARDING VARIOUS ITEMS OF INCOME GOING INTO THE COMPUTATION DEDUCTION U/S 80HHC, FOR WHICH THE ASSESSEE HAD GIVEN THE REQUISITE DETAILS AND PA RTICULARS. NOW THE ASSESSING OFFICER HAS REOPENED THE ASSESSME NT TO HOLD THAT THE VERY SAME ITEMS OF RECEIPT HAS TO BE EXCLUDED IN COMPUTING RELIEF U/S 80HHC. IN 0THER WORDS, THE ASSESSING OFFICER ON A REAPPRAISAL OF THE VERY SAME DETAILS, WHICH WAS CALLED FOR BY HIM AND FURNISHED BY THE AS SESSEE, HE WOULD LIKE TO COME TO A DIFFERENT CONCLUSION. TH IS CLEARLY TANTAMOUNTS TO REOPENING IS MERELY ON CHANGE OF OPI NION. 13. THE FULL BENCH OF THE DELHI HIGH COURT IN THE C ASE OF KELVINATOR OF INDIA LTD HAS HELD AT PAGE 19 AS UNDE R: IN THE EVENT IT IS HELD THAT BY REASON OF SECTION 1 47 OF THE ITO EXERCISES HIS JURISDICTION FOR INITIATING A PROCEEDING FOR REASSESSMENT ONLY UPON A MERE CHANGE OF OPINION, THE SAME MAY BE HELD TO BE UNCONSTITUTIONAL. WE ARE THEREFORE OF THE OPINION THAT SECTION 147 OF THE ACT DOES NOT POSTULATE CONFERMEN T OF POWER UPON THE ASSESSING OFFICER TO INITIATE REASSESSMENT PROCEEDING UPON HIS MERE CHANGE OF OPINION. WE, HOWEVER, MAY HASTEN TO ADD THAT IF REASON TO BELIEVE OF THE ASSESSING OFFICER IS FOUNDED ON AN INFORMATION WHICH MIGHT HAVE BEEN RECEIVED BY THE ASSESSING OFFICER AFTER THE COMPLETION OF ASSESSMEN T, IT MAY BE A SOUND FOUNDATION FOR EXERCISING THE POWER U/S 147 READ WITH SECTION 148 OF THE ACT. WE ARE UNABLE TO AGREE WITH THE SUBMISSION OF MR. J OLLY TO THE EFFECT THAT THE IMPUGNED ORDER OF REASSESSME NT CANNOT BE FAULTED AS THE SAME WAS BASED ON INFORMATION DERIVED FROM THE TAX AUDIT REPORT. THE TAX AUDIT REPORT HAD ALREADY BEEN SUBMITTED BY THE ASSESSEE. IT IS ONE THING TO SAY THAT THE ASSESSING OFFICER HAD RECEIVED INFORMATION FROM AN AUDIT REPO RT 9 ITA NO. 1236/HYD/2010 LEE PHARMA P. LTD. WHICH WAS NOT BEFORE THE ITO, BUT IT IS ANOTHER THI NG TO SAY THAT SUCH INFORMATION CAN BE DERIVED BY THE MATERIAL WHICH HAD BEEN SUPPLIED BY THE ASSESSEE HIMSELF. WE ALSO CANNOT ACCEPT THE SUBMISSION OF MR. JOLLY T O JTHE EFFECT THAT ONLY BECAUSE IN THE ASSESSMENT ORD ER, DETAILED REASONS HAVE NOT BEEN RECORDED AN ANALYSIS OF THE MATERIALS ON THE RECORD BY ITSELF MAY JUSTIFY T HE ASSESSING OFFICER TO INITIATE A PROCEEDING U/S 147 OF THE ACT. THE SAID SUB-SECTION IS FALLACIOUS. AN ORD ER OF ASSESSMENT CAN BE PASSED EITHER IN TERMS OF SUB- SECTION (1) OF SECTION 143 OR SUB-SECTION (3) OF SE CTION 143. WHEN A REGULAR ORDER OF ASSESSMENT IS PASSED I N TERMS OF THE SAID SUB-SECTION (3) OF SECTION 143 A PRESUMPTION CAN BE RAISED THAT SUCH AN ORDER HAS BE EN PASSED ON APPLICATION OF MIND. IT IS WELL KNOWN THA T A PRESUMPTION CAN ALSO BE RAISED TO THE EFFECT THAT I N TERMS OF CLAUSE (E) OF SECTION 114 OF THE INDIAN EVIDENCE ACT JUDICIAL AND OFFICIAL ACTS HAVE BEEN REGULARLY PERFORMED. IT IF BE HELD THAT AN ORDER WH ICH HAS BEEN PASSED PURPORTEDLY WITHOUT APPLICATION OF MIND WOULD ITSELF CONFER JURISDICTION UPON THE ASSE SSING OFFICER TO REOPEN THE PROCEEDING WITHOUT ANY THING FURTHER, THE SAME WOULD AMOUNT TO GIVING A PREMIUM TO AN AUTHORITY EXERCISING QUASI-JUDICIAL FUNCTION TO TAKE BENEFIT OF ITS OWN WRONG. THE APEX COURT CONFIRMED THE ORDER OF THE DELHI HI GH COURT DECISION IN THIS CASE IN CIT V KELVINATOR IND IA LTD (320 ITR 561). 14. THUS IN OUR OPINION THE REOPENING IS MERELY CHA NGE OF OPINION OF THE ASSESSING OFFICER AND HE SHOULD HAVE TANGIBLE MATERIAL FOR FORMING AN OPINION THAT THERE HAS BEEN AN ESCAPEMENT OF INCOME. `REASON TO BELIEVE WILL NOT INCLUDE MERE CHANGE OF OPINION. RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF KELVINATOR INDIA LTD. (SUPRA), WE UPHOLD THE ORDER OF THE 10 ITA NO. 1236/HYD/2010 LEE PHARMA P. LTD. CIT(A) IN TREATING THE REASSESSMENT MADE BY THE AO U/S 148 IS NULL AND VOID. 15. FURTHER, AN AUDIT OPINION IN REGARD TO THE APPL ICATION OR INTERPRETATION OF LAW CANNOT BE TREATED AS INFORMAT ION FOR REOPENING THE ASSESSMENT U/S 147(B) OF THE ACT, AS HELD BY THE HONBLE SUPREME COURT IN THE CASE OF INDIAN & E ASTERN NEWSPAPER SOCIETY VS. CIT, 119 ITR 996(SC). IN THE CASE OF CIT VS. LUCAS TVS LTD., 249 ITR 306(SC), THE HONBL E SUPREME COURT HELD THAT INFORMATION WITH THE MEANIN G OF SECTION 147(B) INCLUDES INFORMATION AS TO TRUE AND CORRECT STATE OF LAW AS WELL WHICH SHOULD COME FROM A COMPE TENT LEGISLATURE OR JUDICIAL ORDER OR JUDICIAL AUTHORITY . HENCE, WE DISMISS THE GROUNDS RAISED BY THE REVENUE IN THIS R EGARD. 16. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. PRONOUNCED IN THE OPEN COURT ON 8 TH JUNE, 2012. SD/- SD/- (CHANDRA POOJARI) (ASHA VIJAYARAGHAVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER HYDERABAD, DATED: 8 TH JUNE, 2012 KV COPY TO:- 1) DCIT, CIRCLE 16(1), HYDERABAD 2) LEE PHARMA P. LTD., SY. NO. 257, 285/1, D.NO. 11-6/56,C-BLOCK, OPP. IDPL FACTORY, MOOSAPET, BALANAGAR, HYDERABAD 3) CIT(A)-V, HYDERABAD 4) THE CIT-IV, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A .T., HYDERABAD 11 ITA NO. 1236/HYD/2010 LEE PHARMA P. LTD. S.NO. DESCRIPTION DATE INTLS 1. DRAFT DICTATED ON 04/06/12 SR.P.S./P.S 2. DRAFT PLACED BEFORE AUTHOR 06/06/12 SR.P.S/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.P.S./PS SR.P.S./P.S 6. KEPT FOR PRONOUNCEMENT ON SR. P.S./P.S. 7. FILE SENT TO THE BENCH CLERK SR.P.S./P.S 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER