Alpha Foam Ltd., Pune V. Deputy Commissioner of Income-tax,

ITA 1350/PUN/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1907 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 10 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2003-2004
• Appeal Filed On: 25-06-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HITENDRA NINAWE
• Keywords: Reopening of assessment; Business income; Depreciation; Tangible material; Wrong claim; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 80IB; 194C; 147; 148; 139

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE . . , ! , # $ BEFORE SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM . / ITA NO.1350/PN/2014 #& & / ASSESSMENT YEAR : 2003-04 ALPHA FOAM LTD., J-172, MIDC, BHOSARI, PUNE 411028 PAN NO.AACCA4196J . / APPELLANT V/S DCIT, CIRCLE-8, PUNE . / RESPONDENT / ASSESSEE BY : SHRI NIKHIL PATHAK / REVENUE BY : SHRI HITENDRA NINAWE / ORDER PER R.K.PANDA, AM : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 07-05-2014 OF THE CIT(A)-V, PUNE RELATING TO ASSESSMENT YEAR 2003-04. 2. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESSEE IS A COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURE OF PU FOA M, AUTOMOBILE SEAT ASSEMBLY ETC. IT FILED ITS RETURN OF INCOME ON 29- 11-2003 DECLARING TOTAL INCOME OF RS.7,22,636/-. ORIGINAL ASSESSMENT U/S.143(3) IN THIS CASE WAS COMPLETED ON / DATE OF HEARING :28.04.2016 / DATE OF PRONOUNCEMENT:29.04.2016 2 ITA NO.1350/PN/2014 30-03-2006. SUBSEQUENTLY THE AO REOPENED THE ASSESSM ENT U/S.147 OF THE ACT AND A NOTICE U/S.148 OF THE ACT WAS IS SUED ON 26-03-2010 AFTER RECORDING THE FOLLOWING REASONS FOR REOPE NING OF THE CASE : ANNEXURE-A REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT I N THE CASE OF M/S ALFA FOAM LTD. (PAN AACCA4196J) FOR A.Y. 2003-04 WITHIN THE MEANING OF SECTION 147 OF THE INCOME TAX ACT, 1961. --------------------------------------------------- --------------------- THE ASSESSEE FILED ITS RETURN OF INCOME FOR A.Y. 2003-04 ON 29/11/2003 DECLARING TOTAL INCOME OF RS.7,22,636/-. THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE INCOME TAX ACT , 1961 ON 30/03/2006 DETERMINING TOTAL INCOME OF RS. 8,32,6 40/-. ON VERIFICATION OF THE CASE RECORD FROM THE STATEMENT NO.II OF CLAUSE OF TAX AUDIT REPORT, IT IS SEEN THAT THERE HAS B EEN DELAY IN THE PAYMENT OF P.F. CONTRIBUTION AS UNDER : MONTH AMOUNT DUE DATE DATE OF PAYMENT JUNE 2002 36,370 15/07/2002 26/07/2002 AUGUST 2002 38,960 15/09/2002 24/09/2002 NOVEMBER 38,622 15/12/2002 20/12/2002 TOTAL 1,13,952 THE PAYMENTS WERE MADE BEYOND DUE DATES, THEREFORE, T HE AMOUNT OF RS.1,13,952/- WAS REQUIRED TO BE DISALLOWED WHICH WAS NOT DONE WHICH RESULTED IN UNDER ASSESSMENT OF INCOME O F RS.1,13,952/-. LEADING TO SHORT LEVY OF TAX OF RS.41,8 77/- INCLUDING SURCHARGED. FURTHER, IT IS SEEN ALSO SEEN THAT THE ASSESSEE HAS CLAIMED AND DISALLOWED DEDUCTION OF RS.3,04,867/- U/S.80IB OF THE INCOME TAX ACT, 1961. THE SAME DEDUCTION WAS ALLOWED ONLY ON TH E BASIS OF DECLARATION CERTIFICATE AS PER FORM NO.10CCB. FULL CERTIFICATE IN FORM 10CCB WAS NOT FURNISHED WITH THE RETURN OF INCOM E AS REQUIRED UNDER RULE. IN ABSENCE OF THE FULL CERTIFI CATE CONTAINING THE DETAILS OF ENTIRE CLAIM OF DEDUCTION U/S.80IB AT RS.3, 04,867/- SHOULD HAVE BEEN DISALLOWED WHICH WAS NOT DONE, WHICH RESULT ED INTO UNDER ASSESSMENT OF INCOME AND SHORT LEVY OF TAX OF RS.1, 12,038/-. ON THE ABOVE FACT, I HAVE REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SEC.147 OF T HE INCOME TAX ACT, THEREFORE, THIS IS FIT CASE FOR ISSUE OF NOTICE U/S.148 OF THE INCOME TAX ACT, 1961. SD/- (S.J. KOLI) DY. COMMISSIONER OF INCOME TAX. 3 ITA NO.1350/PN/2014 3. THEREAFTER, THE AO COMPLETED THE ASSESSMENT U/S.143(3 ) R.W.S.147 BY DETERMINING THE TOTAL INCOME OF RS.12,51,460/- B Y DISALLOWING THE LATE PAYMENT OF PF OF RS.1,13,952/- AND DISALLOWING THE DEDUCTION U/S.80IB AT RS.3,08,867/-. 4. BEFORE CIT(A) THE ASSESSEE CHALLENGED THE VALIDITY OF T HE REOPENING AS WELL AS THE TWO ADDITIONS MADE BY THE AO. HOWEVER, THE CIT(A) WAS NOT SATISFIED WITH THE ARGUMENTS ADVANCED BY THE ASSESSEE AND DISMISSED THE APPEAL FILED BY THE ASSESSEE. 5. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE ASSESSEE IS IN APPEAL BEFORE US WITH THE FOLLOWING GROUNDS : THE FOLLOWING GROUNDS ARE TAKEN WITHOUT PREJUDICE T O EACH OTHER - ON FACTS AND IN LAW, 1] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE RE ASST. U/S 147 R.W.S. 143(3) WAS VALID WITHOUT APPRECIATING THAT THE REOPENING WAS MADE AFTER A PERIOD OF FOUR YEARS FROM THE END OF TH E RELEVANT ASST. YEAR AND AS THE ASSESSEE HAD DULY DISCLOSED ALL THE MATERI AL FACTS, THE REOPENING WAS INVALID IN LAW AND ACCORDINGLY, THE RE ASST. BE DECLARED NULL AND VOID. 2] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT IN THE REASONS RECORDED FOR REOPENING, THERE WAS NO ASSERTION ON THE PART OF THE A.O. THAT THE ESCAPEMENT OF INCOME WAS DUE TO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ANY MATERIAL FACTS AND HENCE, THE REOPENING U/S 148 AFTER THE PERIOD OF FOUR YEARS WAS NOT JUSTIFIE D IN LAW. 3] THE LEARNED CIT(A) ERRED IN SUPPLEMENTING THE RE ASONS SUPPLIED BY THE A . O . WHICH IS NOT JUSTIFIED AND ACCORDINGLY, THE REASST. U/S 147 R.W.S. 143(3) MAY BE DECLARED AS VOID I N LAW. 4] THE LEARNED CIT(A) ERRED IN HOLDING THAT THE ASSE SSEE HAD NOT FURNISHED THE COMPLETE COPY OF THE AUDIT REPORT IN F ORM NO. 10CCB AT THE TIME OF FILING THE RETURN OF INCOME AND AS PE R THE SAID AUDIT REPORT, THE VALUE OF PLANT AND MACHINERY WAS IN EXCE SS OF THE LIMIT OF RS.3 CRS. ALLOWABLE TO CLAIM THE DEDUCTION U/S 80IB(3) AND THUS, THE ASSESSEE HAD NOT DISCLOSED FULLY AND TRULY THE MATERIAL F ACTS FOR THE PURPOSES OF CLAIMING THE DEDUCTION U/S 80IB(10) AND HE NCE, THE REOPENING U/S 148 WAS JUSTIFIED. 5] THE LEARNED CIT(A) OUGHT TO HAVE APPRECIATED TH AT THE REOPENING AFTER A PERIOD OF FOUR YEARS WAS NOT JUSTIFI ED FOR THE FOLLOWING REASONS 4 ITA NO.1350/PN/2014 A. THE ASSESSEE HAD DULY SUBMITTED THE COMPLETE COPY OF THE AUDIT REPORT IN FORM 10CCB AT THE TIME OF FILING TH E RETURN OF INCOME AND HENCE, THE REOPENING U/S 148 ON THE GROUND THAT THE SAID REPORT WAS NOT FILED AT THE TIME OF FILING THE RETURN OF IN COME IS NOT JUSTIFIED. B. EVEN ASSUMING THAT THE COMPLETE COPY OF THE AUDIT REPORT IN FORM 10CCB WAS NOT FILED ALONG WITH THE RETURN OF IN COME, THE FACT THAT THE VALUE OF PLANT AND MACHINERY EXCEEDED THE MAXIMUM LIMIT FOR CLAIMING THE DEDUCTION ULS 80IB(3) WAS EVIDENT FR OM THE BALANCE SHEET FILED ALONG WITH THE RETURN OF INCOME AND THER EFORE, THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ANY M ATERIAL FACTS AND HENCE, THE REOPENING U/S 148 WAS JUSTIFIED. WITHOUT PREJUDICE TO THE ABOVE GROUNDS, THE ASSESSEE SUBM ITS THAT- 6] THE LEARNED CIT(A) ERRED IN CONFIRMING THE DISAL LOWANCE OF RS.1 , 13,952/- MADE IN RESPECT OF THE EMPLOYEES' CONTRIBUTION TO PF ON THE GROUND THAT THE SAID AMOUNT WAS PAID AFTER THE DUE DATE OF PAYMENT SPECIFIED UNDER THE PF ACT AND HENCE, THE SA ME WAS DISALLOWABLE U/S 36(1)(VA) OF THE INCOME TAX ACT . 6 . 1] THE LEARNED CIT(A) FAILED TO APPRECIATE THAT TH E SAID AMOUNT WAS PAID BEFORE THE DUE DATE OF FILING RETURN U/S 139(1) AND HENCE , THE DISALLOWANCE MADE U/S 36(1)(VA) WAS NOT JUSTIFIED IN LAW. 7] THE LEARNED CIT(A) ERRED IN DENYING THE DEDUCTI ON U/S 80IB(3) OF RS.3,04 , 687/- WITHOUT APPRECIATING THAT THE ASSESSEE HAD DULY COMPLIED W ITH THE CONDITIONS LAID DOWN U/S 80IB AND HENCE, THE ASSESSEE WAS ELIGIBLE TO CLAIM THE SAID DEDUCTION. 8] THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL . 6. THE LD. COUNSEL FOR THE ASSESSEE AT THE OUTSET CHA LLENGED THE VALIDITY OF THE REOPENING OF THE ASSESSMENT U/S.147 OF THE I.T. ACT, 1961. HE SUBMITTED THAT THE ORIGINAL ASSESSMENT ORD ER WAS PASSED ON 30-03-2006 U/S.143(3) AND THE ASSESSMENT YEA R INVOLVED IS A.Y. 2003-04. REFERRING TO THE COPY OF THE ASSE SSMENT ORDER PASSED U/S.143(3) ON 30-03-2006, A COPY OF WHICH IS PLACED AT PAGES 8 TO 11 OF THE PAPER BOOK, HE DREW THE ATTENTION OF THE BENCH TO THE LAST PAGE OF THE ASSESSMENT ORDER WHERE THE AO HAS ALLOWED THE CLAIM OF DEDUCTION U/S.80IB AT RS.3,04,867 /- . REFERRING TO THE COPY OF THE REASONS FOR REOPENING U/S .148, WHICH IS PLACED AT PAGE 3 OF THE PAPER BOOK, HE SUBMITTED THAT THE AO HAS REOPENED THE ASSESSMENT ON TWO COUNTS, I.E . (A) 5 ITA NO.1350/PN/2014 DELAYED PAYMENT OF PF CONTRIBUTION AND (B) CLAIM OF DEDUCTIO N U/S.80IB AT RS.3,04,867/- WITHOUT FURNISHING THE FULL CERTIFICA TE IN FORM 10CCB ALONG WITH THE RETURN OF INCOME. 7. SO FAR AS THE FIRST ISSUE IS CONCERNED HE SUBMITTED TH AT THE AO HAS REOPENED THE ASSESSMENT ON THE BASIS OF THE AU DIT REPORT FILED BY THE ASSESSEE WHERE ALL THE PARTICULARS ARE GIVEN. SO FAR AS THE 80IB DEDUCTION IS CONCERNED HE SUBMITTED THAT THE ASSESSEE HAS FILED FORM 10CCB AND ON THE BASIS OF THE CERTIFICATE EN CLOSED ALONG WITH THE RETURN OF INCOME THE AO IN THE ORIGINAL ASSESSMENT HAS ALLOWED THE CLAIM OF DEDUCTION U/S.80IB. 7.1 HE SUBMITTED THAT THE AO HAS ISSUED THE NOTICE U/S.1 48 ON 26-03-2010 WHICH IS BEYOND A PERIOD OF 4 YEARS FROM TH E END OF THE RELEVANT ASSESSMENT YEAR. REFERRING TO THE SECOND PROVISO TO SECTION 147 HE SUBMITTED THAT AS PER THE SAID PROVISION WHERE AN ASSESSMENT U/S.143(3) HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR NO ACTION SHALL BE TAKEN UNDER THIS SEC TION AFTER THE EXPIRY OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEA R UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESS MENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISC LOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR AN ASSESSMENT IN THAT ASSESSMENT YEAR. 8. REFERRING TO THE SAID NOTICE HE SUBMITTED THAT IN THE NOTICE ISSUED U/S.148 BY THE AO THERE IS NO MENTION OF ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE PURPOSE OF COMPLETION OF THE ASS ESSMENT. REFERRING TO THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 HE SUBMITTED THAT UNDER IDENTICAL CIRCUMSTANC ES 6 ITA NO.1350/PN/2014 FOR NON ALLEGATION BY THE AO IN THE NOTICE ISSUED U/S.148 REGARDING FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE PURPOSE OF COMP LETION OF ASSESSMENT THE TRIBUNAL HAS QUASHED THE NOTICE U/S.148 . HE ACCORDINGLY SUBMITTED THAT THIS BEING A COVERED MATTER IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSE ES OWN CASE, WHICH INTURN HAS FOLLOWED VARIOUS DECISIONS OF THE HON BLE BOMBAY HIGH COURT, THEREFORE, THE REOPENING SHOULD HE HEL D AS VOID AB-INITIO. 9. THE LD. DEPARTMENTAL REPRESENTATIVE ON THE OTHER HA ND HEAVILY RELIED ON THE ORDER OF THE AO AND THE CIT(A). HE SUBMITTED THAT THE AO HAS RECORDED REASONS BEFORE REO PENING OF THE ASSESSMENT. THEREFORE, SUCH REOPENING IS LEGALLY VALID. 10. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOT H THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE P APER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDER ED THE VARIOUS DECISIONS CITED BY THE LD. COUNSEL FOR THE ASSESSE E INCLUDING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CAS E. WE FIND THE ORIGINAL ASSESSMENT U/S.143(3) WAS COMPLETED ON 30- 03- 2006 DETERMINING THE TOTAL INCOME AT RS.8,32,640/- AFTER ALLOWING DEDUCTION U/S.80IB AT RS.3,04,867/-. WE FIND THE AO ISSUED NOTICE U/S.148 ON 26-03-2010 AFTER RECORDING THE REASONS FOR REOPENING WHICH IS BEYOND A PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THE REASONS RECORDED FO R SUCH REOPENING U/S.147 ARE ALREADY REPRODUCED IN THE PARA 2 OF THIS ORDER. FROM THE REASONS RECORDED, WE FIND THE AO HAS R EOPENED THE ASSESSMENT ON TWO COUNTS, (A) DELAYED PAYMENT OF PF AND (B) 7 ITA NO.1350/PN/2014 CLAIM OF DEDUCTION U/S.80IB WITHOUT FURNISHING THE FULL CERTIFICA TE OF FORM 10CCB ALONG WITH RETURN OF INCOME. 11. SO FAR AS THE FIRST ISSUE IS CONCERNED, I.E. DELAYED PAYM ENT OF PF, WE FIND THE AO REOPENED THE ASSESSMENT ON THE BA SIS OF THE ENCLOSURES/SCHEDULES FILED ALONG WITH THE TAX AUDIT REP ORT WHICH WAS FURNISHED ALONG WITH THE RETURN OF INCOME. SO FAR AS THE SECOND ISSUE IS CONCERNED, I.E. CLAIM OF DEDUCTION U/S.80I B WE FIND THE AO IN THE ORIGINAL ASSESSMENT HAS ALLOWED THE C LAIM OF DEDUCTION WHILE COMPUTING THE TOTAL INCOME. A PERUSAL O F THE NOTICE ISSUED U/S.148 NOWHERE SAYS THAT THERE IS ANY FAILU RE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL M ATERIAL FACTS NECESSARY FOR COMPLETION OF THE ASSESSMENT. UNDER THESE CIRCUMSTANCES, WE HAVE TO DECIDE THE VALIDITY OF THE NOTIC E ISSUED U/S.148 BEYOND A PERIOD OF 4 YEARS FROM THE END OF THE R ELEVANT ASSESSMENT YEAR WHEN THERE IS NO ALLEGATION BY THE AO IN THE REASONS RECORDED THAT THERE IS ANY FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR COMPLETION OF THE ASSESSMENT. 12. WE FIND AN IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBU NAL IN ASSESSEES OWN CASE IN A.Y. 2005-06. THE TRIBUNAL AFTER CONSIDERING VARIOUS DECISION OF THE HONBLE BOMBAY HIG H COURT HELD WHEN THAT THERE IS NO ALLEGATION BY THE AO TH AT THERE IS ANY FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND T RULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR COMPLETION OF THE ASSESSMENT AND THE NOTICE ISSUED U/S.148 IS BEYOND A PER IOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, THE N SUCH NOTICE IS VOID AB-INITIO. THE RELEVANT OBSERVATION OF THE TR IBUNAL FROM PARA NOS.18 TO 23 READ AS UNDER : 8 ITA NO.1350/PN/2014 18. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AO AND CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE HAVE ALSO CONSIDERE D THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSEE IN THE IN STANT CASE HAS FILED HIS RETURN OF INCOME U/S.139(1) ON 03-10-200 5 AND THE AO COMPLETED THE ASSESSMENT U/S.143(3) ON 24-12-2007. THE NOTICE ISSUED U/S.148 ON 19-01-2011 IS ADMITTEDLY BEYOND A PER IOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR SINCE THE PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR ENDS ON 31- 03-2010. IT IS THE CASE OF THE LD. COUNSEL FOR THE ASSE SSEE THAT SINCE THERE IS NO MENTION IN THE NOTICE ISSUED U/S.148 THAT T HERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AN D TRULY ALL MATERIAL FACTS NECESSARY FOR COMPLETION OF THE ASSESSMENT, THEREFORE, THE REOPENING OF THE ASSESSMENT AFTER A PERI OD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, WHERE THE ASSESSMENT EARLIER WAS COMPLETED U/S.143(3), IS INVALID. IT IS AN ADMITTED FACT THAT THE AO IN THE ORIGINAL ASSESSMENT OR DER AFTER DISCUSSING THE ALLOWABILITY OF DEDUCTION U/S.80IB(3) HA S ALLOWED DEDUCTION OF RS.33,03,374/- AS AGAINST RS.10,09,019/- C LAIMED BY THE ASSESSEE. HE HAS ALLOWED THE DEDUCTION OF RS.33,03,3 74/- @ 30% OF THE TOTAL BUSINESS INCOME DETERMINED BY HIM BY MAKING VARIOUS ADDITIONS TO THE NET PROFIT DECLARED BY THE A SSESSEE. 19. IT IS ALSO AN ADMITTED FACT THAT THE AUDITORS IN THE AUDIT REPORT IN FORM 10CCB HAS CALCULATED THE VALUE OF PLA NT AND MACHINERY AT RS.1,32,95,656/- WHICH IS THE NET BLOCK AS AGAINST THE GROSS BLOCK OF MORE THAN RS.5 CRORES. THUS, THE CLAIM M ADE BY THE ASSESSEE U/S.80IB(3) WAS NOT CORRECT. AT THE SAME TIME A PERUSAL OF THE NOTICE ISSUED U/S.148 SHOWS THAT THERE IS NO MENTION BY THE AO REGARDING ANY FAILURE ON THE PART OF THE ASSESSEE TO D ISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR COMPLETION OF THE ASSESSMENT. UNDER THESE CIRCUMSTANCES WE HAVE TO SEE AS TO WHETHER THE NOTICE ISSUED U/S.148 IS A VALID ONE OR NOT ? 20. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF HINDUSTAN LEVER LTD. (SUPRA) WHILE DECIDING THE ISSUE OF NOTICE AFTER EXPIRY OF 4 YEARS WHERE THE AO HAD NOWHERE STA TED IN THE NOTICE THAT THERE WAS FAILURE ON THE PART OF THE ASSESSE E TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR COMP LETION OF THE ASSESSMENT HAS HELD THE REASSESSMENT PROCEEDINGS TO BE INVALI D. THE RELEVANT OBSERVATION OF THE HONBLE HIGH COURT A T PARA 17 TO 21 OF THE ORDER READ AS UNDER : 17. HAVING HEARD THE PARTIES AT LENGTH, WE ARE OF T HE OPINION THAT THE PETITION CAN BE DISPOSED OF ON THE F IRST CONTENTION RAISED BY THE PETITIONER, WHEREIN THE PET ITIONER HAS CONTENDED THAT THE NOTICE ISSUED UNDER SECTION 148 IS WITHOUT JURISDICTION BEING HIT BY THE PROVISO TO SECTI ON 147 OF THE ACT AS SUCH NOT WITHIN THE PRESCRIBED PERIOD PROVI DED UNDER THE PROVISO TO SECTION 147 OF THE ACT. IN THE CIRCUMSTANCES, IT WOULD BE NECESSARY TO TURN TO SECTION 147 OF THE ACT, WHICH READS AS UNDER : 147. INCOME ESCAPING ASSESSMENT.- IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO T AX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT 9 ITA NO.1350/PN/2014 TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSES S SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO T AX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THI S SECTION, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALL OWANCE 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) : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) O F SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEV ANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTI ON AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETUR N UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB - SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR. 18. READING OF THE PROVISO TO SECTION 147 MAKES IT CLE AR THAT 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 SECTI ONS 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 SECTION 147, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR A NY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE CONCERNE D ASSESSMENT YEAR. HOWEVER, WHERE AN ASSESSMENT UNDER SUB- SECTION (3) OF SECTION 143 HAS BEEN MADE FOR THE RELEV ANT ASSESSMENT YEAR, NO ACTION CAN BE TAKEN UNDER SECTION 14 7 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL M ATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. 19. IN THE CASE IN HAND IT IS NOT IN DISPUTE THAT THE ASSESSMENT YEAR INVOLVED IS 1996-97. THE LAST DATE OF THE SAID ASSESSMENT YEAR WAS MARCH 31, 1997, AND FROM THAT DA TE IF FOUR YEARS ARE COUNTED, THE PERIOD OF FOUR YEARS E XPIRED ON MARCH 31, 2001. THE NOTICE ISSUED IS DATED NOVEMBER 5, 2002, AND RECEIVED BY THE ASSESSEE ON NOVEMBER 7, 2002. UNDER THESE CIRCUMSTANCES, THE NOTICE IS CLEARLY BEYOND THE PERIOD OF FOUR YEARS. 20. THE REASONS RECORDED BY THE ASSESSING OFFICER NOWHERE STATE THAT THERE WAS FAILURE ON THE PART OF T HE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT OF THAT ASSESSMENT YEAR. IT IS NEEDLESS TO MENTION THAT THE REASONS ARE REQUIRED TO BE READ AS THEY WERE RECORDED BY THE ASSESSING OFFICER. NO 10 ITA NO.1350/PN/2014 SUBSTITUTION OR DELETION IS PERMISSIBLE. NO ADDITIONS CAN BE MADE TO THOSE REASONS. NO INFERENCE CAN BE ALLOWED TO BE DRAWN BASED ON REASONS NOT RECORDED. IT IS FOR THE ASSES SING OFFICER TO DISCLOSE AND OPEN HIS MIND THROUGH REASONS RECORDED BY HIM. HE HAS TO SPEAK THROUGH HIS REASONS. IT IS FOR THE ASSESSING OFFICER TO REACH THE CONCLUSION AS TO WHETHER THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FO R HIS ASSESSMENT FOR THE CONCERNED ASSESSMENT YEAR. IT IS FOR THE ASSESSING OFFICER TO FORM HIS OPINION. IT IS FOR HIM TO P UT HIS OPINION ON RECORD IN BLACK AND WHITE. THE REASONS REC ORDED SHOULD BE CLEAR AND UNAMBIGUOUS AND SHOULD NOT SUFFER F ROM ANY VAGUENESS. THE REASONS RECORDED MUST DISCLOSE HIS MIND . THE REASONS ARE THE MANIFESTATION OF THE MIND OF THE A SSES- SING OFFICER. THE REASONS RECORDED SHOULD BE SELF-EXPLA NATORY AND SHOULD NOT KEEP THE ASSESSEE GUESSING FOR THE REASONS. REASONS PROVIDE THE LINK BETWEEN CONCLUSION AND EVIDEN CE. THE REASONS RECORDED MUST BE BASED ON EVIDENCE. THE ASSESSING OFFICER, IN THE EVENT OF CHALLENGE TO THE REA SONS, MUST BE ABLE TO JUSTIFY THE SAME BASED ON MATERIAL AVAI LABLE ON RECORD. HE MUST DISCLOSE IN THE REASONS AS TO WHICH FA CT OR MATERIAL WAS NOT DISCLOSED BY THE ASSESSEE FULLY AND TRULY NECESSARY FOR ASSESSMENT OF THAT ASSESSMENT YEAR, SO AS TO ESTABLISH THE VITAL LINK BETWEEN THE REASONS AND EVIDEN CE. THAT VITAL LINK IS THE SAFE-GUARD AGAINST ARBITRARY R EOPENING OF THE CONCLUDED ASSESSMENT. THE REASONS RECORDED BY THE ASSESSING OFFICER CANNOT BE SUPPLEMENTED BY FILING AN AFFIDAVIT OR MAKING AN ORAL SUBMISSION, OTHERWISE, THE REASONS WHICH WERE LACKING IN THE MATERIAL PARTICULAR S WOULD GET SUPPLEMENTED, BY THE TIME THE MATTER REACHES THE COURT, ON THE STRENGTH OF THE AFFIDAVIT OR ORAL SUBMISSIONS AD VANCED. 21. HAVING RECORDED OUR FINDING THAT THE IMPUGNED N OTICE ITSELF IS BEYOND THE PERIOD OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR 1996-97 AND DOES NOT COMPLY WITH THE REQUIREMENTS OF THE PROVISO TO SECTION 147 OF THE ACT, THE ASSESSING OFFICER HAD NO JURISDICTION TO REOPEN THE ASSESSMENT PROCEEDINGS WHICH WERE CONCLUDED ON THE BASIS OF ASSESSMENT UNDER SECTION 143(3) OF THE ACT. ON THIS SH ORT COUNT ALONE THE IMPUGNED NOTICE IS LIABLE TO BE QUASH ED AND SET ASIDE. 21. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF NDT SYSTEMS (SUPRA) FOLLOWING THE ABOVE DECISION HAS OBSERVE D AS UNDER : 6) WE HAVE CONSIDERED THE SUBMISSIONS. WE FIND THAT NOTICE DATED 20/3/2012 UNDER SECTION 148 OF THE ACT HAS BEEN ISSUED WITHIN A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR I.E. 2007-08. IN SUCH CIRCUMSTAN CES, THE PROVISO TO SECTION 147 OF THE ACT IS CLEARLY NOT APPLICABLE. THEREFORE, IT IS NOT NECESSARY FOR THE REVENUE TO PRIM A FACIE ESTABLISH THAT THERE HAS BEEN A 'FAILURE ON THE PART O F THE PETITIONER TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR ASSESSMENT, WHILE ISSUING A NOTICE REOPENING A COMPLETED ASSESSMENT. HOWEVER, EVEN IN CASE OF REOPENIN G 11 ITA NO.1350/PN/2014 OF ASSESSMENT WITHIN A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR THE ASSESSING OFFICER HAS TO HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT ON THE BASIS OF TANGIBLE MATERIAL. THE WORD 'REASON TO BELIEVE' HAS BEEN CONSTRUED BY THE SUPREME COURT IN THE MATTER OF CIT VS. KELVINATOR IN DIA LIMITED REPORTED IN320 ITR PAGE 561 WHEREIN THE COU RT HAS OBSERVED AS UNDER: 'HOWEVER ONE NEEDS TO GIVE SCHEMATIC INTERPRETATION T O THE WORDS 'REASON TO BELIEVE' FAILING WHICH WE ARE AFRAI D SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO REOPEN ASSESSMENT ON THE BASIS OF 'MERE CHANGE OF OPINION ' WHICH CANNOT BE PER SE REASON TO REOPEN. WE MUST KEE P IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWER TO REV IEW AND POWER TO REASSESS. THE ASSESSING OFFICER HAS NO POWER TO REVIEW; HE HAS POWER TO REASSESS. BUT REASSESSMENT IS T O BE BASED OF FULFILLMENT OF CERTAIN PRECONDITIONS AND IF THE CONCEPT OF 'CHANGE OF OPINION' IS REMOVED AS CONTEND ED BY THE DEPARTMENT THEN IN THE GARB OF REOPENING OF ASSESSM ENT REVIEW WOULD TAKE PLACE'. THE AFORESAID OBSERVATION OF THE APEX COURT MAKE IT C LEAR THAT SANCTITY MUST BE ATTACHED TO THE ASSESSMENT ORDERS A ND IT CANNOT BE DISTURBED MERELY ON ACCOUNT OF CHANGE O F OPINION. THIS SANCTITY TO ASSESSMENT ORDERS IS NOT BASED ON THE BASIS OF THE TIME THAT HAS LAPSED FROM THE ASSESSMENT ORDER PASSED IN THE REGULAR PROCEEDINGS TO THE ISSUE OF NOTICE FOR REOPENING AN ASSESSMENT. 7) THEREFORE, WHERE ALL MATERIAL FACTS NECESSARY FOR DETERMINATION OF THE INCOME HAVE BEEN DISCLOSED BY TH E ASSESSEE AND THE ASSESSING OFFICER HAS TAKEN A PARTICULAR VIEW ON THOSE DISCLOSED FACTS AS REFLECTED IN THE ASSESSMENT ORDER PASSED IN REGULAR PROCEEDINGS, THEN WITHOUT ANYT HING MORE, IT WOULD NOT BE OPEN TO REOPEN THOSE ASSESSMENT PROCEEDINGS. FOR IN SUCH A CASE IT IS A CLEAR CASE OF CH ANGE OF OPINION. IN THE PRESENT FACTS IT IS VERY CLEAR THAT DU RING THE ASSESSMENT PROCEEDINGS LEADING TO THE ASSESSMENT ORDER DATED 11/11/2009 THE PETITIONER HAD DISCLOSED ALL FAC TS WITH REGARD TO DEDUCTION BEING CLAIMED ON ACCOUNT OF LAB OUR CHARGES AND RADIOGRAPHY CHARGES. IN FACT, THE ASSESSMENT ORDER DATED 11/12/2009 RECORDS THE FACT THAT A NOTI CE WAS ISSUED TO THE PETITIONER TO EXPLAIN WHY EXPENSES ON AC COUNT OF LABOUR AND RADIOGRAPHY CHARGES SHOULD NOT BE DISALL OWED UNDER SECTION 40(A)(IA) OF THE ACT. THE PETITIONER EXPLAINED ITS VIEW POINT AND THE ASSESSING OFFICER ON CONSIDERATION OF THOSE FACTS IN HIS ORDER OF ASSESSMENT DATED 11/12/2009 CONCLUDED THAT THESE PAYMENTS ON ACCOUNT OF RADIOGRAP HY CHARGES AND LABOUR CHARGES ARE TAX DEDUCTIBLE AT SOURC E IN TERMS OF SECTION 194C OF THE ACT. FURTHER, THE OBLIG ATION ON THE PART OF THE ASSESSEE IS ONLY TO MAKE A FULL DISCLOSURE OF PRIMARY FACTS AND THE INFERENCES TO BE DRAWN THERE FR OM AND THE APPLICATION OF LAW THEREON IS THE JOB OF THE ASSES SING OFFICER. THE PETITIONER HAS DISCLOSED ALL PRIMARY FACT S AND ON CONSIDERATION OF THOSE FACTS AS REFLECTED IN THE ASSESSMENT 12 ITA NO.1350/PN/2014 ORDER DATED 11/12/2003 THE AMOUNT OF INCOME HAS BEEN COMPUTED AFTER HOLDING THAT TDS HAS TO BE DEDUCTED U NDER SECTION 194C OF THE ACT. 8) THEREFORE, THE IMPUGNED NOTICE AND THE REASONS I N SUPPORT THEREOF CLEARLY INDICATES THAT IT HAS BEEN ISS UED MERELY ON THE BASIS OF CHANGE OF OPINION AND WOULD AM OUNT TO A REVIEW OF THE ASSESSMENT ORDER DATED 11/12/2003. FURTHER, THE REASONS FOR REOPENING AS COMMUNICATED BY THE PETITIONER IS NOT ON THE BASIS OF ANY TANGIBLE MATER IAL BUT MERELY ON VERIFICATION OF THE MATERIAL AND PRIMARY FACTS ALREADY ON RECORD THAT THE ASSESSING OFFICER HAS DULY CONSIDERED WHILE PASSING THE ORDER DATED 11/12/2003 FO R ASSESSMENT YEAR 2007-08 . THERE IS NO FRESH TANGIBLE MATERIAL WHICH WOULD WARRANT TAKING A VIEW DIFFEREN T FROM THE ONE TAKEN DURING THE REGULAR ASSESSMENT PROCEEDINGS . IN FACT EVEN THE ORDER DATED 15/10/2012 DISPOSING OF THE OBJECTIONS CLEARLY RECORDS THAT RADIOGRAPHY CHARGES AN D LABOR CHARGES WERE MADE TO VARIOUS PERSONS LIKE SENIOR TECHNICIANS, SENIOR RADIOGRAPHER AND JR. TECHNICIANS ETC. FROM THE CHART SUBMITTED IN THE REGULAR ASSESSMENT PROCEEDING LEADING TO ORDER DATED 11/12/2009. THERE FORE, IT IS VERY CLEAR THAT IMPUGNED NOTICE FOR REASSESSING THE ASSESSMENT YEAR 2007-08 HAS BEEN ISSUED MERELY ON CHANGE OF OPINION AND IN FACT SEEKS TO REVIEW THE ASSESSMENT WH ICH IS ALREADY COMPLETED. 9) ONE MORE ASPECT OF THE MATTER MUST BE ADVERTED TO AND THAT IS IN THE ORDER DATED 15/10/2012 REJECTING THE OBJECTIONS FILED BY THE PETITIONER WITH REGARD TO REASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2007-08 A COMPLETELY NEW GROUND HAS BEEN ADDED. IN ITS ORDER DA TED 15/10/2012 THE ADDITIONAL GROUND TO REOPEN ASSESSMENT I S THE LACK OF CORRELATION BETWEEN THE PAYMENT RECEIVE D BY THE PETITIONER AND THE TDS CERTIFICATE ISSUED BY THE PERS ONS MAKING PAYMENT TO IT DURING THE ASSESSMENT YEAR 2007-08 . THIS ACCORDING TO ORDER DATED 15/10/2012 RESULTED IN UNDER ASSESSMENT OF INCOME TO THE EXTENT OF RS.21.61 LACS. THE AFORESAID ISSUE WAS NOT ONE OF THE GROUNDS SPECIFIED IN T HE REASONS COMMUNICATED TO THE PETITIONER ON 23/7/2012 F OR THE PURPOSE OF REOPENING THE ASSESSMENT FOR ASSESSMENT YEAR 2007-08. OUR COURT IN THE MATTER OF HINDUSTAN L EVER LTD. V. R.B. WADKAR, ASSISTANT COMMISSIONER OF INCOME TA X AND OTHERS REPORTED IN (2004) 268 ITR PAGE 332 HAS HELD THAT FOR THE PURPOSE OF EXAMINING THE JURISDICTION TO REOPEN A COMPLETED ASSESSMENT ONE IS ONLY CONCERNED WITH THE REASONS RECORDED AT THE TIME OF ISSUING NOTICE UNDER S ECTION 148 OF THE ACT. THESE REASONS CANNOT BE SUPPLEMENTED/ IMPROVED UPON LATER. THEREFORE, THE ORDER DATED 15/10/2012 DISPOSING OF THE OBJECTION ALSO CANNOT BE SUSTAINED. SO FAR AS THE GROUND URGED BY MS. KHAN THAT REOPENING OF ASSESSMENT HAS BEEN DONE ON THE BASIS OF AUD IT OBJECTION, THE SAME IS NOT BEING EXAMINED. THIS IS FOR THE REASON THAT EVEN OTHERWISE, THE IMPUGNED NOTICE IS NO T SUSTAINABLE. 22. WE FIND THE HONBLE BOMBAY HIGH COURT IN THE CA SE OF 13 ITA NO.1350/PN/2014 TITANOR COMPONENTS LTD.(SUPRA) HAS ALSO TAKEN SIMILAR V IEW AND HAS OBSERVED AS UNDER : ACCORDING TO THE LEARNED COUNSEL, THE REVENUE IS ENT ITLED TO ISSUE SUCH A NOTICE IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE (A) TO MAKE A RETURN UNDER SECTION 139, OR (B) IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECT ION 142 OR SECTION 148, OR (C) TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THAT ASSESSMENT YEAR. SINCE T HE FIRST TWO CONDITIONS ARE NOT PLEADED BY THE RESPONDENT S, IT IS THE SUBMISSION OF THE PETITIONER THAT THE NOTICE IS WHO LLY UNWARRANTED AND INVALID SINCE THERE IS NO ALLEGATION WHATSOEVER THAT THE PETITIONER HAS FAILED TO DISCLOSE A LL MATERIAL FACTS NECESSARY FOR ASSESSMENT. THIS SUBMISSION CAN BE CONSIDERED ONLY WITH REFERENCE TO THE REASONS PUT FORTH BY THE RESPONDENTS FOR ISSUING THE NOTICE. THE LETTER D ATED JANUARY 27, 2005, INTER ALIA, STATES THAT THE ASSESSING OFFICER HAS REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT BECAUSE THE PETITIONER HAS WRONGLY CLAIMED DEDUCTION UNDER SECTION 80- IA IN RESPECT OF INCOME WHICH WAS NOT DERI VED FROM THE INCOME OF THE PETITIONERS UNIT OF KUNDAIM. FURTHER, THAT LONG-TERM CAPITAL GAINS HAVE BEEN WRONGLY CLAIM ED BY THE ASSESSEE WHICH HAVE BEEN WRONGLY CONSIDERED FOR THE SET OFF OF THE UNIT OF KUNDAIM WHICH HAS RESULTED IN ESCAP EMENT OF INCOME. NOWHERE HAS THE ASSESSING OFFICER STATED THAT THERE IS ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCL OSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMEN T. .... HAVING REGARD TO THE PURPOSE OF THE SECTION, WE ARE O F THE VIEW THAT THE POWER CONFERRED BY SECTION 147 DOES NOT PROVIDE A FRESH OPPORTUNITY TO THE ASSESSING OFFICER TO CORRECT AN INCORRECT ASSESSMENT MADE EARLIER UNLESS THE MISTAKE IN THE ASSESSMENT SO MADE IS THE RESULT OF A FAILU RE OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. INDEED, WHERE THE ASSESSEE HAS FULLY DISCLOSED ALL THE MATERIAL FACTS, IT IS NOT OPEN FOR THE ASSESSING OFFICER TO REOPEN THE ASSESSMENT ON THE GROUND THAT THERE IS A MISTAKE IN ASSESSMENT. MOREOVER, IT IS NECESSARY FOR THE ASSESSING OFFICER TO FIRST OBSERVE WHETHE R THERE IS A FAILURE TO DISCLOSE FULLY AND TRULY ALL MA TERIAL FACTS NECESSARY FOR ASSESSMENT AND HAVING OBSERVED THAT THERE IS SUCH A FAILURE TO PROCEED UNDER SECTION 147. IT MUST F OLLOW THAT WHERE THE ASSESSING OFFICER DOES NOT RECORD SUCH A FAILURE HE WOULD NOT BE ENTITLED TO PROCEED UNDER SE CTION 147. AS OBSERVED EARLIER,' THE ASSESSING OFFICER HAS NOT RECORDED THE FAILURE ON THE PART OF THE PETITIONER TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR THE ASSESSME NT YEAR 1997-98. WHAT IS RECORDED IS THAT THE PETITIONE R HAS WRONGLY CLAIMED CERTAIN DEDUCTIONS WHICH HE WAS NOT ENTITLED TO. THERE IS A WELL KNOWN DIFFERENCE BETWE EN A WRONG CLAIM MADE BY AN ASSESSEE AFTER DISCLOSING ALL THE TRUE AND MATERIAL FACTS AND A WRONG CLAIM MADE BY THE ASSES SEE BY WITHHOLDING THE MATERIAL FACTS FULLY AND TRULY. I T IS ONLY IN THE LATTER CASE THAT THE ASSESSING OFFICER WOULD BE ENTI TLED TO PROCEED UNDER SECTION 147. WE ARE SUPPORTED IN THIS VI EW BY A DECISION OF A DIVISION BENCH OF THIS COURT IN HINDUSTAN 14 ITA NO.1350/PN/2014 LEVER LTD. V. R. B. WADKAR, ASST. CIT (NO. 1) [2004] 268 ITR 332 (BOM) WHERE IN A SIMILAR CASE THE DIVISION BENCH H ELD THAT REASON THAT THERE WAS A FAILURE TO DISCLOSE FULLY AND TRULY THAT ALL MATERIAL FACTS MUST BE READ AS RECORDED BY T HE ASSESSING OFFICER AND IT WOULD NOT BE PERMISSIBLE TO DELE TE OR ADD TO THOSE REASONS AND THAT THE ASSESSING OFFICER MUS T BE ABLE TO JUSTIFY THE SAME BASED ON MATERIAL RECORD. THE DIVISION BENCH OBSERVED AS FOLLOWS (PAGE 338) : 'HE MUST DISCLOSE IN THE REASONS AS TO WHICH FACT OR MAT ERIAL WAS NOT DISCLOSED BY THE ASSESSEE FULLY AND TRULY NECESSAR Y FOR ASSESSMENT OF THAT ASSESSMENT YEAR, SO AS TO ESTABLISH THE VITAL LINK BETWEEN THE REASONS AND EVIDENCE.' WE FIND IN THE CIRCUMSTANCES THAT THE IMPUGNED NOTICE IS NOT SUSTAINABLE AND IS LIABLE TO BE QUASHED AND SET ASIDE. ACCORDINGLY, THE WRIT PETITION IS ALLOWED IN TERMS OF PRAYER CLAUSES (A) AND (C).' RULE MADE ABSOLUTE IN TERMS OF PRAYER CLAUSES (A) AND (C) WHICH READ AS FOLLOWS: (A) THAT THIS HON'BLE COURT MAY BE PLEASED TO ISSUE A W RIT OF CERTIORARI OR A WRIT IN THE NATURE OF CERTIORARI OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, CALLING FOR THE RECORDS OF ITS CASE IN SO FAR AS THEY RELATE TO THE IMPUGNED NOTICE DATED MARC H 18, 2004, THE IMPUGNED SATISFACTION OF RESPONDENT NO.2 UN DER SECTION 151 OF THE ACT, IF ANY, AND THE IMPUGNED ASSESSM ENT PROCEEDINGS OF THE PETITIONER FOR THE ASSESSMENT YEAR 19 97- 98 AND AFTER GOING THROUGH THE SAME AND EXAMINING TH E LEGALITY AND VALIDITY THEREOF, TO QUASH AND CANCEL T HE SAME. (C) THAT THIS HON'BLE COURT MAY BE PLEASED TO ISSUE A W RIT OF PROHIBITION OR A WRIT IN THE NATURE OF PROHIBITION OR ANY OTHER APPROPRIATE WRIT, ORDER OR DIRECTION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PERMANENTLY RESTRAINING AND PROHIBITING RESPONDENT NO.1 FROM TAKING ANY ACTION I N FURTHERANCE, OR IN PURSUANCE OF OR IN IMPLEMENTATIO N OF THE IMPUGNED NOTICE DATED MARCH 18, 2004, AND PERMANENT LY PROHIBITING AND RESTRAINING RESPONDENT NO. 1 FROM REASSESSING THE INCOME OF THE PETITIONER FOR THE ASSESSMENT YEAR 1997-98. FOLLOWING THE ABOVE DECISIONS SIMILAR VIEW HAS BEEN TAK EN BY THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF ALFA LAVAL INDIA LTD. (SUPRA) AND THE JALNA DISTRICT CENTRAL COOPERATIVE B ANK LTD. (SUPRA). 23. SINCE THE ASSESSMENT U/S.143(3) WAS COMPLETED IN THE INSTANT CASE ON 24-12-2007 FOR THE A.Y. 2005-06 AND SI NCE NOWHERE IN THE NOTICE ISSUED U/S.148 ON 19-01-2011 THE AO MAKE S AN ALLEGATION THAT THERE IS ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FO R COMPLETION OF 15 ITA NO.1350/PN/2014 THE ASSESSMENT, THEREFORE, RESPECTFULLY FOLLOWING THE AB OVE DECISIONS CITED (SUPRA) WE HOLD THAT THE NOTICE ISSUED U/S.148 WHICH IS BEYOND A PERIOD OF 4 YEARS FROM THE END OF T HE RELEVANT ASSESSMENT ORDER IS VOID AB-INITIO. THE GROUNDS RAISED BY THE ASSESSEE ON THE ISSUE OF VALIDITY OF NOTICE U/S.148 IS THUS DECIDED IN FAVOUR OF THE ASSESSEE. THE APPEAL FILED THE ASSESSEE IS A CCORDINGLY ALLOWED. 13. SINCE ADMITTEDLY IN THE INSTANT CASE THE NOTICE U/S.1 48 HAS BEEN ISSUED BEYOND A PERIOD OF 4 YEARS FROM THE END OF T HE RELEVANT ASSESSMENT YEAR AND THERE IS NO ALLEGATION BY T HE AO IN THE REASONS RECORDED FOR SUCH REOPENING THAT THERE IS ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR COMPLETION OF THE ASSESSMENT, THEREFOR E, FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 WE HOLD THAT THE NOTICE ISSUED BY THE AO U /S.148 IN THE INSTANT CASE IS VOID AB-INITIO. THE GROUNDS RAISED BY THE ASSESSEE ON THE ISSUE OF VALIDITY OF REOPENING IS THUS DECID ED IN FAVOUR OF THE ASSESSEE. 14. SINCE THE ASSESSEE SUCCEEDS ON THIS LEGAL GROUND, TH E ALTERNATE GROUNDS BY THE ASSESSEE BEING ACADEMIC IN NAT URE ARE NOT DECIDED. 15. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 29-04-2016. SD/- SD/- ( VIKAS AWASTHY ) ( R.K. PANDA ) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE ; DATED : 29 TH APRIL, 2016. 16 ITA NO.1350/PN/2014 ) *#,! -! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. THE CIT(A) - V, PUNE 4. 5. 6. THE CIT-V, PUNE $ ''(, (, / DR, ITAT, B PUNE; - / GUARD FILE. / BY ORDER , // TRUE COPY // // TRUE COPY // // $ ' //TRUE /0 ' ( / SR. PRIVATE SECRETARY (, / ITAT, PUNE