A/Dy. C.I.T.Central Circle, Agra V. Smt. Kalyani Chaturvedi, Agra

ITA 154/AGR/2013

• Counselvise Citation: 15420314 RSA 2013
• Duration Of Justice: 9 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 24-02-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 09-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: WASEEM ARSHAD
• Assessee Lawyers: DEEPENDRA MOHAN
• Keywords: Reopening of assessment; Unexplained investment; Unexplained expenditure; Depreciation; Search and seizure; Document seized; Tangible material; Difference of opinion; Assessment record; Onus to prove; Reason to believe; Documents seized; Change of opinion; Reassessment proceedings
• Section: 147; 148; 263; 69C; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI PRAMOD KUMAR, ACCOUNTANT MEMB ER ITA NO. 154/AGRA/2013 ASST. YEAR : 2005-06 A.C.I.T., CENTRAL CIRCLE, VS. SMT. KALYANI CHA TURVEDI, AGRA. 505, VIBHAV EXOTICA, SURYA NAGAR, AGRA. (PAN: ACUPC 6044 Q) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI WASEEM ARSHAD, SR. DR RESPONDENT BY` : SHRI DEEPENDRA MOHAN, C.A. DATE OF HEARING : 24.02.2014 DATE OF PRONOUNCEMENT : 28.02.2014 ORDER PER BHAVNESH SAINI, J.M.: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A)-I, AGRA DATED 26.11.2012 FOR THE ASSESSMENT YEAR 2005- 06, CHALLENGING THE ORDER OF LD. CIT(A) IN QUASHING/ANNULLING RE-ASSESSMENT ORDE R U/S. 147/143(3) DATED 10.12.2010. 2. IN THIS CASE ASSESSMENT PROCEEDING WAS REOPENED U/S.147 AFTER THE ORIGINAL ASSESSMENT WAS COMPLETED U/S.143(3) OF THE INCOME-T AX ACT, 1961 VIDE ORDER DATED 29.12.2006 ON ACCOUNT OF A SEARCH & SEIZURE OPERATI ON CONDUCTED AT THE PREMISES ITA NO. 154/AGRA/2013 2 OF THE ASSESSEE(APPELLANT) ON 16.09.2004. IN THE O RIGINAL ASSESSMENT ORDER PASSED U/S.143(3) VIDE ORDER DATED 29.12.2006, CERTAIN ADD ITIONS WERE MADE ON THE BASIS OF SEIZED PAPER ANNEXURE A-1 IN WHICH ON PAGE NO.8, 21 , 22, 30 AND 31, CERTAIN DETAILS OF PURCHASE OF PROPERTY WAS RECORDED AND ON THE BASIS OF THESE SEIZED DOCUMENTS, THE AO HAS ESTIMATED INCOME OF THE ASSES SEE (APPELLANT) FROM PROPERTY BUSINESS AT RS.13,11,200 AND UNEXPLAINED INVESTMENT IN PROPERTY AT RS.15,00,000 TOTALING TO RS.28,11,200/-. BUT THE THEN LD. CIT(A ) DELETED THIS ADDITION IN HIS ORDER DATED 20.05.2009 AND THIS DECISION OF THE THE N LD. CIT(A)-I HAS BEEN FURTHER CONFIRMED BY THE HONBLE ITAT AGRA VIDE ITS ORDER D ATED 21 ST APRIL, 2011. MEANWHILE, THE ASSESSMENT PROCEEDING OF THE ASSESSE E (APPELLANT) HAS BEEN REOPENED U/S.147 AFTER RECORDING REASON TO BELIEVE ON 10.09.2009 AND THE SAME IS REPRODUCED AS UNDER: A SEARCH WAS CONDUCTED AT THE PREMISES OF THE ASSE SSEE ON 16.09.2004 IN WHICH SEVERAL BOOKS OF ACCOUNT, DOCUMENTS ETC. W AS SEIZED INCLUDING ANNEXURE A-1. ANNEXURE A-1 IS A BINDED LEDGER WHICH CONTAINS DETAILS OF EXPENDITURE MADE BY THE ASSESSEE IN VARIOUS PROP ERTIES. IN THIS BOOK, PROPERTY WISE LEDGER ACCOUNT HAS BEEN MAINTAINED AN D AMOUNT AND DATES OF MAKING PAYMENTS IN RESPECT OF EACH PROPERT Y IS CLEARLY MENTIONED. SUCH DETAILS CONTAIN PAYMENT MADE TOWAR DS PURCHASE OF LAND, STAMP, DALALI EXPENSES, REGISTRATION EXPENSES AND CONSTRUCTION EXPENSES. THE DETAILS OF EXPENDITURE MADE AS PER E NTRIES IN THIS LEDGER ARE AS UNDER: PAYMENT/EXPENDITURE MADE DURING F.Y. 2003-04 (A.Y. 2004-05) PAGE NO. OF ANNEXURE A-1 DESCRIPTION OF PROPERTY AMOUNT PAID ON DIFFERENT DATES PERIOD OF PAYMENTS 22 JAI RAM BAGH LAND RS.10,00,000 01.08.2003 ITA NO. 154/AGRA/2013 3 CONSTRUCTION CONSTN.- RS.9,00,000 21 ADVANCE FOR JAI RAM BAGH RS.13,42,600 22.01.2004 TO 05.02.2004 30 ADVANCE FOR RAHUL VIHAR CASH RS.5,50,000 24.03.2004 TOTAL RS.37,92,600 PAYMENT/EXPENDITURE MADE DURING F.Y. 2004-05 (A.Y. 2005-06) PAGE NO. OF ANNEXURE A-1 DESCRIPTION OF PROPERTY AMOUNT PAID ON DIFFERENT DATES PERIOD OF PAYMENTS 8 BAYU VIHAR PATHOLI RS.14,84,000 20.07.2004 TO 20.10.2004 30 ADVANCE FOR RAHUL VIHAR CASH RS.8,61,000 06.04.2004 TO 05.08.2004 31 LAND AT VAIBHAV KUNJ, DAYALBAGH, AGRA RS.34,80,000 10.04.2004 TO 27.04.2004 TOTAL RS.58,25,000 THE PHOTOCOPIES OF RELEVANT PAGES OF ANNEXURE A-1 A RE ENCLOSED FOR READY REFERENCE. NO SUCH PAYMENTS/EXPENDITURE AS MENTIONED ABOVE ARE SHOWN BY ASSESSEE IN HER RETURNS FOR RELEVANT YEARS. THUS, THE QUANTUM OF UNDISCLOSED EXPENDITURE RELATING TO A.Y. 2004-05 CO MES TO RS.37,92,600/- AND RELATING TO A.Y. 2005-06 COMES T O RS.58,25,000/-, BOTH AGGREGATING TO RS.96,17,600/-. THE ASSESSMENTS FOR RELEVANT A.YS. WERE MADE U/S.15 3A & 143(3) RESPECTIVELY. DURING COURSE OF ASSESSMENT PROCEEDI NGS, THE ASSESSEE WAS ASKED TO PROVE THE SOURCE OF EXPENDITURE AS MEN TIONED IN ANNEXURE A-1. BUT NO SPECIFIC REPLY WAS GIVEN BY HER NOR SOU RCE OF EXPENDITURE WAS OTHERWISE EXPLAINED. HOWEVER, THE ASSESSMENTS FOR THE A.Y. 2004- 05 & 2005-06 IN THE CASE OF THE ASSESSEE WERE MADE ON 29.12.2006 AT INCOME OF RS.5,10,630/- & RS.33,05,640/- RESPECTIVE LY. IN THE A.Y. 2004-05, NO ADDITION ON A/C OF UNEXPLAINED EXPENDIT URE IN PROPERTIES ITA NO. 154/AGRA/2013 4 WAS MADE NEITHER ANY FINDING WAS GIVEN TO SUGGEST T HAT EXPENDITURE WAS EXPLAINED BY ASSESSEE OR OTHERWISE FOUND TO BE EXPL AINED. HOWEVER, IN A.Y. 2005-06 ADDITION OF RS.13,11,000/- WAS MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE / INVESTMENT IN PROPERTY AND ADDITION OF RS.15,00,000/- ON ACCOUNT OF EXTRA PROF IT FROM CONTRACT BUSINESS. IN THE ASSESSMENT ORDER ALSO, NO SPECIFI C FINDING HAS BEEN GIVEN THAT THE EXPENDITURE OF RS.96,17,600/- WAS EX PLAINED OR ANY EXPLANATION IN THIS REGARD WAS FILED BY ASSESSEE. ANY EVIDENCE OF TAKING LOANS BY THE ASSESSEE IS ALSO NOT THERE ON RECORD N OR FROM PERUSAL OF REPLY OF ASSESSEE THE SAME APPEARS TO BE FURNISHED. ON THE CONTRARY, IT HAS BEEN OBSERVED THAT IN THE ASST. ORDER ITSELF TH AT THE BOOKS OF A/C PRODUCED BY ASSESSEE, DID NOT GIVE CORRECT PICTURE TO EXPLAIN INVESTS MADE IN ABOVE PROPERTIES. PRECISELY, ON EXAMINATIO N OF RECORDS INCLUDING SEIZED MATERIAL, NO EVIDENCE OR EXPLANATI ON TO JUSTIFY THE SOURCE OF EXPENDITURE OF RS.96,17,600/- IS FOUND. THUS AT THE MOST ADDITION OF RS.13,11,000/- ONLY WA S MADE ON A/C OF UNEXPLAINED EXPENDITURE AS AGAINST TOTAL UNEXPLAINE D EXPENDITURE OF RS.96,17,600/- MADE DURING A.Y. 2004-05 & 2005-06 I N ABOVE PROPERTIES. IN VIEW OF THE ABOVE DISCUSSION, IT IS CLEAR THAT A MOUNT OF AT LEAST RS.37,92,600/- FOR A.Y. 2004-05 & RS.45,14,000/- FO R A.Y. 2005-06 BEING UNEXPLAINED EXPENDITURE IN PROPERTIES AS MENT IONED ABOVE, HAVE ESCAPED FROM ASSESSMENT AND SUCH UNEXPLAINED EXPEND ITURE IS INCOME OF ASSESSEE UNDER THE PROVISIONS OF SEC.69C OF THE I.T. ACT. IN VIEW OF ABOVE FACTS AND CIRCUMSTANCES OF THE CAS E, I HAVE REASON TO BELIEVE THAT ON ACCOUNT OF FAILURE ON THE PART OF T HE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS RELATING TO ASSE SSMENTS, INCOME OF RS.37,92,600/- FOR A.Y. 2004-05 AND RS.45,14,000/- FOR A.Y. 2005-06 HAVE ESCAPED FROM ASSESSMENT. THEREFORE, I AM SATI SFIED THAT IT IS A FIT CASE FOR ISSUE OF NOTICE U/S.148 FOR A.Y. 2004-05 A ND 2005-06 TO REASSESS THE ABOVE INCOME. 2.1 IN THE ABOVE REASON, THE AO HAS MAINLY GIVEN H IS SATISFACTION ABOUT NON TAXATION OF UNEXPLAINED EXPENDITURE FOUND RECORDED IN THE SEIZED DOCUMENT A-1 PAGE NO.8, 20, 21, 30 & 31 OF ANNEXURE A-1 BY THE A O IN THE ORIGINAL ASSESSMENT ORDER, EVEN AFTER CONSIDERING THIS SEIZED DOCUMENT AND INSTEAD OF MAKING THE ITA NO. 154/AGRA/2013 5 ADDITION FOR UNEXPLAINED EXPENDITURE FOR INVESTMENT IN PROPERTIES, THE ADDITION OF RS.15,00,000/- WAS MADE ON ACCOUNT OF UNEXPLAINED E XPENDITURE / INVESTMENT IN PROPERTY AND ADDITION OF RS.13,11,000/- ON ACCOUNT OF EXTRA PROFIT FROM CONTRACT BUSINESS. IN THE OPINION OF THE AO WHO HAS REOPENE D THIS ASSESSMENT PROCEEDING UNDER APPEAL, IN THE ORIGINAL ASSESSMENT ORDER, NO SPECIFIC FINDING HAS BEEN GIVEN THAT THE EXPENDITURE OF RS.96,17,600/- WAS EXPLAINE D OR ANY EXPLANATION IN THIS REGARD WAS FILED BY THE ASSESSEE. HE HAS FURTHER DI SCUSSED IN THE REASONS RECORDED THAT ANY EVIDENCE OF TAKING LOANS BY THE ASSESSEE I S ALSO NOT THERE ON RECORD, NOR FROM PERUSAL OF REPLY OF THE ASSESSEE, THE SAME APP EARS TO BE FURNISHED. HE HAS ALSO DISCUSSED THAT ON EXAMINATION OF RECORD INCLUD ING SEIZED MATERIAL, NO EVIDENCE OR EXPLANATION TO JUSTIFY THE SOURCE OF EXPENDITURE OF RS.96,17,600/- IS FOUND AND THUS, IN HIS VIEW, AT THE MOST, ADDITION OF RS.13,1 1,000/- WAS ONLY MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE AS AGAINST TOTAL EXPENDI TURE OF RS.96,17,600/- MADE DURING A.Y. 2004-05 AND A.Y. 2005-06 IN THE ABOVE P ROPERTIES AND THEREFORE, HE RECORDED HIS SATISFACTION THAT THE INCOME TO THE EX TENT OF RS.45,14,000/- FOR THE IMPUGNED ASSESSMENT YEAR HAS ESCAPED ASSESSMENT ON ACCOUNT OF UNEXPLAINED EXPENDITURE IN PROPERTIES AND SUCH UNEXPLAINED EXPE NDITURE IS INCOME OF THE ASSESSEE UNDER THE PROVISION OF SECTION 69C OF THE I.T. ACT, 1961. AFTER RECORDING THE ABOVE REASONS TO BELIEVE FOR REOPENING OF THE A SSESSMENT PROCEEDING FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, A NOTICE U/S.1 48 WAS ISSUED TO THE ASSESSEE ON ITA NO. 154/AGRA/2013 6 30.03.2010 AND THE SAME WAS SENT BY POST ON 31.03.2 010. THEREAFTER, AFTER EXAMINATION OF ALL THE FACTS AND TAKING INTO ACCOUN T THE RECORDINGS MADE IN THE SEIZED DOCUMENT, THE AO HAS MADE ADDITION OF RS.30, 13,800/- ON THE BASIS OF THE SEIZED DOCUMENT ANNEXURE A-1(PAGES 8, 20, 21, 30 & 31) AND FINDING OF THE AO AS DISCUSSED IN THE ASSESSMENT ORDER IS GIVEN AS UNDER : IN THIS BOOK, PROPERTY WISE LEDGER ACCOUNT HAS BEE N MAINTAINED AND AMOUNT AND DATES OF MAKING PAYMENTS IN RESPECT OF E ACH PROPERTY IS CLEARLY MENTIONED. SUCH DETAILS CONTAIN PAYMENT MA DE TOWARDS PURCHASE OF LAND, STAMP, DALALI EXPENSES, REGISTRAT ION EXPENSES AND CONSTRUCTION EXPENSES. THE DETAILS OF EXPENDITURE MADE AS PER ENTRIES IN THIS LEDGER ARE AS UNDER: PAYMENT/EXPENDITURE MADE DURING F.Y. 2004-05 (A.Y. 2005-06) PAGE NO. OF ANNEXURE A-1 DESCRIPTION OF PROPERTY AMOUNT PAID ON DIFFERENT DATES PERIOD OF PAYMENTS 8 BAYU VIHAR PATHOLI RS.14,84,000 20.07.2004 TO 20.10.2004 30 ADVANCE FOR RAHUL VIHAR CASH RS.8,61,000 06.04.2004 TO 05.08.2004 31 LAND AT VAIBHAV KUNJ, DAYALBAGH, AGRA RS.34,80,000 10.04.2004 TO 27.04.2004 TOTAL RS.58,25,000 AS PER LEDGER ANNEXURE A-1 PAGE 8,30 & 31 AN INVEST MENT OF RS.58,25,000/- WAS MADE DURING A.Y. 2005-06. IN THIS CONNECTION, ASSESSEE FILED A LETTER DATED 0 7.12.2010 THE RELEVANT PORTION OF THE LETTER IS AS UNDER: THAT RE-ASSESSMENT PROCEEDING HAVE BEEN INITIATED IN THIS CASE AND NOTICE U/S.148 OF THE ACT, 1961 DATED 30.03.2010 HA S BEEN ISSUED TO THE ASSESSEE. A PERUSAL OF THE REASONS RECORDED BY YOU R HONOUR DATED 10.09.2009 REVEALS THAT THE RE-ASSESSMENT PROCEEDIN GS HAVE BEEN INITIATED AGAIN ON SIMILAR ISSUES. THE FACTS AND C IRCUMSTANCES OF THE ITA NO. 154/AGRA/2013 7 CASE ARE TOTALLY IDENTICAL. THE INVESTMENTS MADE B Y THE ASSESSEE HAVE BEEN ALREADY CONSIDERED IN THE ORIGINAL ASSESSMENT PROCEEDINGS. DURING THE COURSE OF SEARCH & SEIZURE OPERATION FOL LOWING DOCUMENTS REGARDING UNDISCLOSED INVESTMENT IN VARIOUS PROPERT IES WAS SEIZED FROM THE PREMISES OF ASSESSEE ON THE BASIS OF WHICH THE QUANTUM OF UNDISCLOSED INVESTMENT COMES TO RS.96,17,600/- ANNEXURE A-1 / PAGE NO.8 PAGE NO.21 & 22 RS.14,81,000 RS.13,42,600 RS.19,00,000 PAGE NO.30 & 31 RS.14,11,000 RS.34,80,000 TOTAL RS.96,17,500 NO SUCH PAYMENTS / EXPENDITURE AS MENTIONED ABOVE I S SHOWN BY ASSESSEE IN HER RETURNS FOR RELEVANT YEARS. THUS, THE QUANTUM OF UNDISCLOSED EXPENDITURE RELATING TO A.Y. 2004-05 CO MES TO RS.37,92,600/- ARE RELATING TO A.Y. 2005-06 COMES T O RS.58,25,000/-, BOTH AGGREGATING TO RS.96,17,600/-. THE ASSESSMENT FOR RELEVANT A.Y. WAS MADE U/S.143(3 ) OF THE I.T. ACT, 1961. DURING COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PROVE THE SOURCE OF EXPENDITURE AS MENTION ED IN ANNEXURE A-1. BUT NO SPECIFIC REPLY WAS GIVEN BY HER NOR WAS SOUR CE OF EXPENDITURE OTHERWISE EXPLAINED. HOWEVER, THE ASSESSMENT FOR T HE A.Y. 2005-06 IN THE CASE OF ASSESSEE WAS MADE ON 29.12.2006 AT INCO ME OF RS.33,05,640/-. HOWEVER, IN A.Y. 2005-06 ADDITION OF RS.13,11,200/- WAS MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE / IN VESTMENT IN PROPERTY AND ADDITION OF RS.15,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT. IN THE ASSESSMENT ORDER ALSO, NO SPECI FIC FINDING HAS BEEN GIVEN THAT THE EXPENDITURE OF RS.58,25,000/- WAS EX PLAINED OR ANY EXPLANATION IN THIS REGARD WAS FILED BY ASSESSEE. ANY EVIDENCE OF TAKING LOANS BY THE ASSESSEE IS ALSO NOT THERE ON RECORD N OR FROM PERUSAL OF REPLY OF ASSESSEE THE SAME APPEARS TO BE FURNISHED. ON THE CONTRARY IT HAS BEEN OBSERVED THAT IN THE ASSESSMENT ORDER ITSE LF THAT THE BOOKS OF A/CS PRODUCED BY ASSESSEE, DID NOT GIVE CORRECT PIC TURE TO EXPLAIN INVESTMENTS MADE IN ABOVE PROPERTIES. PRECISELY, ON EXAMINATION OF RECORDS INCLUDING SEIZED MATERIAL, NO EVIDENCE OR E XPLANATION TO JUSTIFY THE SOURCE OF EXPENDITURE OF RS.8,25,000/- IS FOUND . THUS, AT THE MOST ADDITION OF RS.28,11,000 (15,00,0 00 + 13,11,200) WAS MADE ON A/C OF UNEXPLAINED EXPENDITURE / INVESTMENT AS AGAINST TOTAL ITA NO. 154/AGRA/2013 8 UNEXPLAINED EXPENDITURE / INVESTMENT OF RS.58,25,00 0/- MADE DURING A.Y. 2005-06 IN ABOVE PROPERTIES. IN VIEW OF THE ABOVE DISCUSSION, IT IS CLEAR THAT A MOUNT OF AT LEAST RS.30,13,800/- [58,25,000 (-) 28,11,200 ALREADY CON SIDERED VIDE ORDER DATED 29.12.2006] FOR A.Y. 2005-06 BEING UNEXPLAINE D EXPENDITURE / INVESTMENT IN PROPERTIES AS MENTIONED ABOVE, HAVE E SCAPED FROM ASSESSMENT AND SUCH UNEXPLAINED EXPENDITURE IS INCO ME OF ASSESSEE UNDER THE PROVISIONS OF SEC.69C OF THE IT ACT, 1961 AND ADDED BACK TO THE INCOME OF THE ASSESSEE. 2.2 AS PER THE ABOVE DISCUSSION MADE IN THE ASSESS MENT ORDER, THE AO HAS MADE ADDITION OF RS.30,13,800 AFTER TAKING INTO ACCOUNT THE ADDITIONS OF RS.15 LAC AND RS.13,11,200/- TOTALING TO RS.28,11,200/- ALREADY M ADE IN THE ORIGINAL ASSESSMENT ORDER AND THIS AMOUNT HAS BEEN DEDUCTED OUT OF THE TOTAL AMOUNT OF INVESTMENT OF RS.58,25,000/- FOUND RECORDED IN THE SEIZED DOCUMEN T PERTAINING TO THE YEAR UNDER CONSIDERATION. THE AO HAS FURTHER ADDED RS.1 LAC I N THE IMPUGNED ASSESSMENT ORDER MENTIONING THAT VIDE ORDER DATED 29.12.2006, IN PARA NO.4, THE AO HAS TREATED UNDISCLOSED INVESTMENT IN JEWELLERY OF RS.1 LAC AND ADDED BACK TO THE INCOME OF THE ASSESSEE BUT IN COMPUTATION OF INCOME, HE HAS I NADVERTENTLY LEFT TO ADD BACK RS.1 LAC IN ASSESSEES TOTAL INCOME AND, THEREFORE, IN THIS ASSESSMENT ORDER, HE MADE THE REQUISITE ADDITION OF RS.1 LAC IN THE INCO ME OF THE ASSESSEE(APPELLANT) AS UNDISCLOSED INVESTMENT IN JEWELLERY. 2.3 THE ASSESSEE CHALLENGED THE REOPENING OF ASSESS MENT AND ADDITIONS BEFORE THE LD. CIT(A). THE WRITTEN SUBMISSIONS OF THE ASSE SSEE ARE REPRODUCED IN THE ITA NO. 154/AGRA/2013 9 APPELLATE ORDER IN WHICH THE ASSESSEE BRIEFLY EXPLA INED THAT THE SEARCH WAS CONDUCTED ON THE ASSESSEE ON 16.09.2004. THE ASSESS EE FILED RETURN OF INCOME SHOWING AN INCOME OF RS.4,30,737/-. SUBSEQUENTLY, T HE ASSESSMENT WAS COMPLETED U/S. 143(3) VIDE ORDER DATED 29.12.2006. THE AO AT PAGE NO. 2, PARA 3 OF THE ORIGINAL ASSESSMENT ORDER HAS DISCUSSED AND ANALYZE D ABOUT THE INVESTMENTS MADE BY THE ASSESSEE ON THE BASIS OF PAPERS/MATERIAL FOU ND AT THE TIME OF SEARCH. THE AO WHILE FRAMING THE ORIGINAL ASSESSMENT ORDER ASKED T HE ASSESSEE TO EXPLAIN THE SOURCE OF INVESTMENT PERTAINING TO THE YEAR UNDER C ONSIDERATION ON THE BASIS OF PAGES OF ANNEXURE A1 REGARDING PROPERTIES AT BAYU V IHAR, PATHOLI (RS.14,84,000/-), ADVANCE FOR RAHUL VIHAR (RS.8,61, 000/-) AND LAND AT VAIBHAV KUNJ, DAYALBAGH, AGRA (RS.34,80,000/-). THE ASSESSE E ALSO FILED EXPLANATIONS REGARDING THE INVESTMENTS MADE TOGETHER WITH SOURCE THEREOF. THE ASSESSEE FILED LEDGER ACCOUNTS TO EXPLAIN THE ISSUE. IT IS, THEREF ORE, ABUNDANTLY CLEAR THAT THE ORIGINAL ASSESSMENT WAS FRAMED AFTER CAREFUL CONSID ERATION OF THE SEIZED MATERIAL AND EXPLANATIONS AND RECORDS OF THE ASSESSEE. ASSES SMENT WAS COMPLETED ON THE BASIS OF COMPLETE RECORDS BEFORE THE AO. THE AO, HO WEVER, DID NOT ACCEPT PART OF THE SOURCE OF INVESTMENT AND MADE ADDITION OF RS.15 ,00,000/- ON ACCOUNT OF UNEXPLAINED INVESTMENT IN THE ABOVE PROPERTIES. THU S, THE TOTAL ADDITION OF RS.28,11,200/- WAS MADE AND FURTHER ADDITION OF RS. 1,00,000/- WAS MADE ON ACCOUNT OF UNEXPLAINED INVESTMENT IN JEWELLERY. THE ASSESSEE PREFERRED APPEAL ITA NO. 154/AGRA/2013 10 AGAINST THE ORIGINAL ASSESSMENT ORDER DATED 29.12.2 006 BEFORE THE LD. CIT(A) AND THE LD. CIT(A)-II, AGRA WAS PLEASED TO ALLOW THE AP PEAL OF THE ASSESSEE VIDE ORDER DATED 20.05.2009. THE DEPARTMENT PREFERRED APPEAL B EFORE THE ITAT, AGRA BENCH AGAINST THIS ORDER OF THE LD. CIT(A) AND THE TRIBUN AL DISMISSED THE DEPARTMENTAL APPEAL VIDE ORDER DATED 21.04.2011. IT WAS, THEREFO RE, EXPLAINED THAT RE-ASSESSMENT PROCEEDINGS HAVE BEEN INITIATED AGAIN ON THE SIMILA R ISSUE AND ON IDENTICAL FACTS WHICH HAVE ALREADY BEEN CONSIDERED IN THE ORIGINAL ASSESSMENT PROCEEDINGS. IT IS A CLEAR CASE OF CHANGE OF OPINION AND NO NEW MATERIAL HAS BEEN BROUGHT ON RECORD TO JUSTIFY THE ADDITIONS. THE FACTS WERE ALL WITHIN TH E KNOWLEDGE OF THE AO. THE ASSESSEE RELIED UPON CERTAIN DECISIONS IN SUPPORT O F HER CONTENTION. THE REMAND REPORT FROM THE AO WAS CALLED FOR WHICH IS REPRODUC ED IN THE APPELLATE ORDER. REJOINDER WAS ALSO FILED BY THE ASSESSEE. THE LD. C IT(A), CONSIDERING THE FACTS OF THE CASE IN THE LIGHT OF ALL THE MATERIAL AND EVIDE NCES ON RECORD, ANNULLED THE RE- ASSESSMENT PROCEEDINGS BECAUSE THE SAME WERE INVALI D AND HAVE BEEN DONE ON MERE CHANGE OF OPINION CONSIDERING THE SAME FACTS A ND THE SEIZED MATERIAL. THE APPEAL OF THE ASSESSEE WAS ACCORDINGLY ALLOWED. THE FINDINGS OF THE LD. CIT(A) IN PARA 10 TO 14 IN THE APPELLATE ORDER ARE REPRODUCED AS UNDER : 10. I HAVE CONSIDERED ALL THE FACTS AND CIRCUMSTAN CES OF THE CASE AS DISCUSSED SO FAR AND IN THE LIGHT OF THESE FACTS AND CIRCUMSTANCES, I HAVE EXAMINED THE VALIDITY OF REOP ENING OF ASSESSMENT PROCEEDING U/S.147 AS PER VARIOUS JUDICI AL PRONOUNCEMENTS OF HONBLE SUPREME COURT AND HIGH CO URTS. IT IS SETTLED LAW NOW THAT RE-ASSESSMENT PROCEEDING U/S.1 47 CANNOT BE ITA NO. 154/AGRA/2013 11 INITIATED MERELY ON THE BASIS OF CHANGE OF OPINION. IN CASE OF CIT VS. KELVINATOR INDIA (SUPRA), THE HONBLE SUPREME COURT HAS HELD AS UNDER: ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MADE T O SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO DIRECT TAX LAWS (AM ENDMENT) ACT, 1987 , RE- OPENING COULD BE DONE UNDER ABOVE TWO CONDITION S AND FULFILMENT OF THE SAID CONDITIONS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BUT IN SECTION 1 47 OF THE ACT [WITH EFFECT FROM 1-4-1989], THEY ARE GIVEN A GO-BY AND O NLY ONE CONDITION HAS REMAINED, VIZ., THAT WHERE THE ASSESSING OFFICE R HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDICTION TO RE- OPEN THE ASSESSMENT. THEREFORE, POST 1-4-1989 , POW ER TO REOPEN 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 OFFICE R TO RE-OPEN ASSESSMENTS ON THE BASIS OF 'MERE CHANGE OF OPINION ', WHICH CANNOT BE PER SE REASON TO REOPEN . 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 REVIEW; HE HAS TH E POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON FULFILMENT OF C ERTAIN PRE-CONDITION AND IF THE CONCEPT OF 'CHANGE OF OPINION' IS REMOVE D, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF RE-O PENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' AS AN IN-BUILT TEST TO CHECK AB USE 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. OUR VIEW GETS SUPPORT FROM THE CHANGES MADE TO SECTION 147 O F THE ACT, AS QUOTED HEREINABOVE. UNDER THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987 , PARLIAMENT NOT ONLY DELETED THE WORDS 'REASON TO BE LIEVE' BUT ALSO INSERTED THE WORD 'OPINION' IN SECTION 147 OF THE A CT. HOWEVER, ON RECEIPT OF REPRESENTATIONS FROM THE COMPANIES AGAIN ST OMISSION OF THE WORDS 'REASON TO BELIEVE', PARLIAMENT RE-INTRODUCED THE SAID EXPRESSION AND DELETED THE WORD 'OPINION' ON THE GR OUND THAT IT WOULD VEST ARBITRARY POWERS IN THE ASSESSING OFFICER. WE QUOTE HEREINBELOW THE RELEVANT PORTION OF CIRCULAR NO. 549 , DATED 31 -10-1989, WHICH READS AS FOLLOWS : ITA NO. 154/AGRA/2013 12 '7.2 AMENDMENT MADE BY THE AMENDING ACT, 1989, TO R EINTRODUCE THE EXPRESSION REASON TO BELIEVE IN SECTION 147. A N UMBER OF REPRESENTATIONS WERE RECEIVED AGAINST THE OMISSION OF THE WORDS REASON TO BELIEVE FROM SECTION 147 AND THEIR SUBS TITUTION BY THE OPINION OF THE ASSESSING OFFICER. IT WAS POINTED OUT THAT THE MEANING OF THE EXPRESSION, REASON TO BELIEVE HAD BEEN EXP LAINED IN A NUMBER OF COURT RULINGS IN THE PAST AND WAS WELL SETTLED AND ITS OMISSION FROM SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSE SSING OFFICER TO REOPEN PAST ASSESSMENTS ON MERE CHANGE OF OPINION. TO ALLAY THESE FEARS, THE AMENDING ACT, 1989 , HAS AGAIN AMENDED S ECTION 147 TO REINTRODUCE THE EXPRESSION HAS REASON TO BELIEVE IN PLACE OF THE WORDS FOR REASONS TO BE RECORDED BY HIM IN WRITING, IS O F THE OPINION. OTHER PROVISIONS OF THE NEW SECTION 147, HOWEVER, REMAIN THE SAME.' [EMPHASIS SUPPLIED] THE AO IN HIS REMAND REPORT HAS RELIED ON THE JUDGE MENT OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS. USHA IN TERNATIONAL LTD. (2012) 25 TAXMAN.COM 200 (DEL.) IN WHICH, DECISION OF HONBLE SUPREME COURT IN CASE OF CIT VS. KELVINATOR INDIA ( SUPRA) HAS BEEN DISTINGUISHED ONLY IN RESPECT OF THE CASES WHERE TH E AO DOES NOT AND MAY NOT RAISE ANY WRITTEN QUERY AND DID NOT EXAMINE A PARTICULAR ISSUE AND IN THIS RESPECT, IT HAS BEEN HELD THAT IT CAN BE APPARENT AND OBVIOUS TO HOLD THAT THE AO WOULD NOT HAVE GONE INT O THE SAID QUESTION OR APPLIED HIS MIND, HOWEVER, IT HAS BEEN CLARIFIED THAT THIS WOULD DEPEND ON FACTS AND CIRCUMSTANCES OF EACH CAS E. FOR THE SAKE OF CLARITY, I AM REPRODUCING THE RELEVANT PORTION O F THE DECISION OF HONBLE DELHI HIGH COURT HAVING MAJORITY VIEW OF FU LL BENCH IN THE ABOVE REFERRED CASE OF USHA INTERNATIONAL LTD.: CONDITIONS FOR REOPENING ASSESSMENT FOR REOPENING AN ASSESSMENT MADE UNDER SECTION 143 (3), THE FOLLOWING CONDITIONS ARE REQUIRED TO BE SATISFIED:- THE ASSESSING OFFICER MUST FORM A TENTATIVE OR PRI MA FACIE OPINION ON THE BASIS OF MATERIAL THAT THERE IS UNDER-ASSESSMEN T OR ESCAPEMENT OF INCOME; HE MUST RECORD THE PRIMA FACIE OPINION INTO WRITIN G; THE OPINION FORMED IS SUBJECTIVE BUT THE REASONS R ECORDED OR THE INFORMATION AVAILABLE ON RECORD MUST SHOW THAT THE OPINION IS NOT A MERE SUSPICION. ITA NO. 154/AGRA/2013 13 REASONS RECORDED AND/OR THE DOCUMENTS AVAILABLE ON RECORD MUST SHOW A NEXUS OR THAT IN FACT THEY ARE GERMANE AND R ELEVANT TO THE SUBJECTIVE OPINION FORMED BY THE ASSESSING OFFICER REGARDING ESCAPEMENT OF INCOME. IN CASES WHERE THE FIRST PROVISO APPLIES, THERE IS AN ADDITIONAL REQUIREMENT THAT THERE SHOULD BE FAILURE OR OMISSIO N ON THE PART OF THE ASSESSEE IN DISCLOSING FULL AND TRUE MATERIAL FACTS . EXPLANATION TO SECTION STIPULATES THAT MERE PRODUCTION OF BOOKS OF ACCOUNT OR OTHER DOCUMENTS FROM WHICH THE ASSESSING OFFICER COULD HA VE, WITH DUE DILIGENCE, INFERRED MATERIAL FACTS, DOES NOT AMOUNT TO FULL AND TRUE DISCLOSURE OF MATERIAL FACTS. [PARA 5] EXPRESSION 'CHANGE OF OPINION' THE EXPRESSION 'CHANGE OF OPINION' POSTULATES FOR MATION OF OPINION AND THEN A CHANGE THEREOF. IN THE CONTEXT OF SECTIO N 147 IT IMPLIES THAT THE ASSESSING OFFICER SHOULD HAVE FORMED AN OPINION AT THE FIRST INSTANCE, I.E., IN THE PROCEEDINGS UNDER SECTION 14 3(3) AND NOW BY INITIATION OF THE REASSESSMENT PROCEEDING, THE ASSE SSING OFFICER PROPOSES OR WANTS TO TAKE A DIFFERENT VIEW. [PARA 6 ] THE WORD 'OPINION' IS DERIVED FROM THE LATIN WORD 'OPINARI' WHICH MEANS 'TO BELIEVE', 'TO THINK'. THE WORD 'OPINION' AS PER THE BLACKS LAW DICTIONARY MEANS A STATEMENT BY A JUDGE OR A COURT OF A DECISION REACHED BY HIM INCORPORATING CAUSE TRIED OR ARGUED BEFORE THEM, EXPOUNDING THE LAW AS APPLIED TO THE CASE AND, DETA ILING THE REASONS UPON WHICH THE JUDGMENT IS BASED. ADVANCED LAW LEXI CON BY P. RAMANATHA AIYAR (3RD EDITION) EXPLAINS THE TERM 'OP INION' TO MEAN 'SOMETHING MORE THAN MERE RETAINING OF GOSSIP OR HE ARSAY; IT MEANS JUDGMENT OR BELIEF, THAT IS, A BELIEF OR A CONVICTI ON RESULTING FROM WHAT ONE THINKS ON A PARTICULAR QUESTION .. AN OPINION IS A CONVICTION BASED ON TESTIMONY.. THEY ARE AS A RESULT OF READI NG, EXPERIENCE AND REFLECTION'. [PARA 7] IN THE CONTEXT OF ASSESSMENT PROCEEDINGS, IT MEAN S FORMATION OF BELIEF BY AN ASSESSING OFFICER RESULTING FROM WHAT HE THIN KS ON A PARTICULAR QUESTION. IT IS A RESULT OF UNDERSTANDING, EXPERIEN CE AND REFLECTION TO USE THE WORDS IN LAW LEXICON BY P. RAMANATHA AIYAR. QUESTION OF CHANGE OF OPINION ARISE WHEN AN ASSESSING OFFICER F ORMS AN OPINION AND DECIDES NOT TO MAKE AN ADDITION OR HOLDS THAT T HE ASSESSEE IS CORRECT AND ACCEPTS HIS POSITION OR STAND. [PARA 8] CRUX OF THE ISSUE: ITA NO. 154/AGRA/2013 14 IT IS CLEAR THAT : REASSESSMENT PROCEEDINGS CAN BE VALIDLY INITIATED IN CASE RETURN OF INCOME IS PROCESSED UNDER SECTION 143(1) AND NO SCR UTINY ASSESSMENT IS UNDERTAKEN. IN SUCH CASES THERE IS NO CHANGE OF OPI NION? REASSESSMENT PROCEEDINGS WILL BE INVALID IN CASE T HE ASSESSMENT ORDER ITSELF RECORDS THAT THE ISSUE WAS RAISED AND IS DECIDED IN FAVOUR OF THE ASSESSEE. REASSESSMENT PROCEEDINGS IN THE SAID CASES WILL BE HIT BY PRINCIPLE OF 'CHANGE OF OPINION'. REASSESSMENT PROCEEDINGS WILL BE INVALID IN CASE A N ISSUE OR QUERY IS RAISED AND ANSWERED BY THE ASSESSEE IN ORIGINAL ASS ESSMENT PROCEEDINGS BUT THEREAFTER THE ASSESSING OFFICER DO ES NOT MAKE ANY ADDITION IN THE ASSESSMENT ORDER. IN SUCH SITUATION S IT SHOULD BE ACCEPTED THAT THE ISSUE WAS EXAMINED BUT THE ASSESS ING OFFICER DID NOT FIND ANY GROUND OR REASON TO MAKE ADDITION OR REJEC T THE STAND OF THE ASSESSEE. HE FORMS AN OPINION. THE REASSESSMENT WIL L BE INVALID BECAUSE THE ASSESSING OFFICER HAD FORMED AN OPINION IN THE ORIGINAL ASSESSMENT, THOUGH HE HAD NOT RECORDED HIS REASONS. [PARA 13] IN THE SECOND AND THIRD SITUATION, THE REVENUE IS NOT WITHOUT REMEDY. IN CASE THE ASSESSMENT ORDER IS ERRONEOUS AND PREJU DICIAL TO THE INTEREST OF THE REVENUE, THEY ARE ENTITLED TO AND CAN INVOKE POWER UNDER SECTION 263. [PARA 14] THUS, WHERE AN ASSESSING OFFICER INCORRECTLY OR E RRONEOUSLY APPLIES LAW OR COMES TO A WRONG CONCLUSION AND INCOME CHARG EABLE TO TAX HAS ESCAPED ASSESSMENT, RESORT TO SECTION 263 IS AVAILA BLE AND SHOULD BE RESORTED TO. BUT INITIATION OF REASSESSMENT PROCEED INGS WILL BE INVALID ON THE GROUND OF CHANGE OF OPINION. [PARA 15] ERRONEOUS APPLICATION/INTERPRETATION UNDERSTANDING OF LAW A DISTINCTION IS DRAWN BETWEEN ERRONEOUS APPLICATION/INTERPRETATION/UNDERSTANDING OF LAW AND CASES WHERE FRESH OR NEW FACTUAL INFORMATION COMES TO THE KNOWLEDGE O F THE ASSESSING OFFICER SUBSEQUENT TO THE PASSING OF THE ASSESSMENT ORDER. IF NEW FACTS, MATERIAL OR INFORMATION COMES TO THE KNOWLEDGE OF T HE ASSESSING OFFICER, WHICH WAS NOT ON RECORD AND AVAILABLE AT T HE TIME OF THE ASSESSMENT ORDER, THE PRINCIPLE OF 'CHANGE OF OPINI ON' WILL NOT APPLY. THE REASON IS THAT 'OPINION' IS FORMED ON FACTS. 'O PINION' FORMED OR BASED ON WRONG AND INCORRECT FACTS OR WHICH ARE BEL IED AND UNTRUE DO NOT GET PROTECTION AND COVER UNDER THE PRINCIPLE OF 'CHANGE OF OPINION'. FACTUAL INFORMATION OR MATERIAL WHICH WAS INCORRECT OR WAS NOT ITA NO. 154/AGRA/2013 15 AVAILABLE WITH THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMENT WOULD JUSTIFY INITIATION OF REASSESSMENT PROCEEDING S. THE REQUIREMENT IN SUCH CASES IS THAT THE INFORMATION OR MATERIAL AVAI LABLE SHOULD RELATE TO MATERIAL FACTS. THE EXPRESSION 'MATERIAL FACTS' MEA NS THOSE FACTS WHICH IF TAKEN INTO ACCOUNT WOULD HAVE AN ADVERSE AFFECT ON THE ASSESSEE BY A HIGHER ASSESSMENT OF INCOME THAN THE ONE ACTUALLY M ADE. THEY SHOULD BE PROXIMATE AND NOT HAVE REMOTE BEARING ON THE ASS ESSMENT. THE OMISSION TO DISCLOSE MAY BE DELIBERATE OR INADVERTE NT. THE QUESTION OF CONCEALMENT IS NOT RELEVANT AND IS NOT A PRECONDITI ON WHICH CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. [PARA 16] CORRECT MATERIAL FACTS CAN BE ASCERTAINED FROM TH E ASSESSMENT RECORDS ALSO AND IT IS NOT NECESSARY THAT THE SAME MAY COME FROM A THIRD PERSON OR SOURCE, I.E., FROM SOURCE OTHER THAN THE ASSESSM ENT RECORDS. HOWEVER, IN SUCH CASES, THE ONUS WILL BE ON THE REV ENUE TO SHOW THAT THE ASSESSEE HAD STATED INCORRECT AND WRONG MATERIA L FACTS RESULTING IN THE ASSESSING OFFICER PROCEEDING ON THE BASIS OF FA CTS, WHICH ARE INCORRECT AND WRONG. THE REASONS RECORDED AND THE D OCUMENTS ON RECORD ARE OF PARAMOUNT IMPORTANCE AND WILL HAVE TO BE EXAMINED TO DETERMINE WHETHER THE STAND OF THE REVENUE IS CORRE CT. [PARA 17] REASONS MUST BE RELEVANT TO SUBJECTIVE OPINION AS RECORDED ABOVE, THE REASONS RECORDED OR THE DO CUMENTS AVAILABLE MUST SHOW NEXUS THAT IN FACT THEY ARE GERMANE AND R ELEVANT TO THE SUBJECTIVE OPINION FORMED BY THE ASSESSING OFFICER REGARDING ESCAPEMENT OF INCOME. AT THE SAME TIME, IT IS NOT T HE REQUIREMENT THAT THE ASSESSING OFFICER SHOULD HAVE FINALLY ASCERTAIN ED ESCAPEMENT OF INCOME BY RECORDING CONCLUSIVE FINDINGS. THE FINAL ASCERTAINMENT TAKES PLACE WHEN THE FINAL OR REASSESSMENT ORDER IS PASSE D. IT IS ENOUGH IF THE ASSESSING OFFICER CAN SHOW TENTATIVELY OR PRIMA FAC IE ON THE BASIS OF THE REASONS RECORDED AND WITH REFERENCE TO THE DOCUMENT S AVAILABLE ON RECORD THAT INCOME HAS ESCAPED ASSESSMENT. [PARA 19 ] DEEMED FORMATION OF OPINION EVEN IF THE ASSESSING OFFICER DID NOT EXAMINE A P ARTICULAR SUBJECT MATTER, ENTRY OR CLAIM/DEDUCTION AND THEREFORE HAD NOT FORMED ANY OPINION, IT MUST NOT BE PRESUMED THAT HE MUST HAVE FORMED AN OPINION. THIS IS NOT WHAT WAS ARGUED BY THE ASSESSEE OR HELD AND DECIDED. THERE CANNOT BE DEEMED FORMATION OF OPINION EVEN WHEN THE PARTICULAR SUBJECT MATTER, ENTRY OR CLAIM/DEDUCTION IS NOT EXA MINED. [PARA 23] DISTINCTION BETWEEN DISCLOSURE ON FACTS AND EFFECTS THEREOF ITA NO. 154/AGRA/2013 16 DISTINCTION BETWEEN DISCLOSURE/DECLARATION OF MAT ERIAL FACTS MADE BY THE ASSESSEE AND THE EFFECT THEREOF AND THE PRINCIP LE OF CHANGE OF OPINION IS APPARENT AND RECOGNIZED. FAILURE TO MAKE FULL AND TRUE DISCLOSURE OF MATERIAL FACTS IS A PRECONDITION WHIC H SHOULD BE SATISFIED IF THE REOPENING IS AFTER FOUR YEARS OF THE END OF THE ASSESSMENT YEAR. THE EXPLANATION STIPULATES THAT MERE PRODUCTION OF BOOKS OF ACCOUNT AND OTHER DOCUMENTS, FROM WHICH THE ASSESSING OFFIC ER COULD HAVE WITH DUE DILIGENCE INFERRED FACTS DOES NOT AMOUNT TO FUL L AND TRUE DISCLOSURE. THUS IN CASES OF REOPENING AFTER 4 YEARS AS PER THE PROVISO, CONDUCT OF THE ASSESSEE AND DISCLOSURES MADE BY HIM ARE RELEVA NT. HOWEVER, WHEN THE PROVISO IS NOT APPLICABLE, THE SAID PRECONDITIO N IS NOT APPLICABLE. THIS ADDITIONAL REQUIREMENT IS NOT TO BE SATISFIED WHEN RE-ASSESSMENT PROCEEDINGS ARE INITIATED WITHIN FOUR YEARS OF THE END OF THE ASSESSMENT YEAR. THE SEQUITOR IS THAT WHEN THE PROVISO DOES NO T APPLY, THE RE- ASSESSMENT PROCEEDINGS CANNOT BE DECLARED INVALID O N THE GROUND THAT THE FULL AND TRUE DISCLOSURE OF MATERIAL FACTS WAS MADE. IN SUCH CASES, RE-ASSESSMENT PROCEEDINGS CAN BE DECLARED INVALID W HEN THERE IS A CHANGE OF OPINION. AS A MATTER OF ABUNDANT CAUTION IT IS CLARIFIED THAT FAILURE TO STATE TRUE AND CORRECT FACTS CAN VITIATE AND MAKE THE PRINCIPLE OF CHANGE OF OPINION INAPPLICABLE. THIS DOES NOT RE QUIRE REFERENCE TO AND THE PROVISO IS NOT INVOKED. THE DIFFERENCE IS T HIS; WHEN PROVISO APPLIES THE CONDITION STATED THEREIN MUST BE SATISF IED AND IN OTHER CASES IT IS NOT A PREREQUISITE OR CONDITION PRECEDENT BUT THE DEFENCE/PLEA OF CHANGE OF OPINION SHALL NOT BE AVAILABLE AND WILL B E REJECTED. [PARA 24] THUS IF A SUBJECT MATTER, ENTRY OR CLAIM/DEDUCTIO N IS NOT EXAMINED BY AN ASSESSING OFFICER, IT CANNOT BE PRESUMED THAT HE MUST HAVE EXAMINED THE CLAIM/DEDUCTION OR THE ENTRY, AND THEREFORE, IT IS THE CASE OF 'CHANGE OF OPINION'. WHEN AT THE FIRST INSTANCE, IN THE ORI GINAL ASSESSMENT PROCEEDINGS, NO OPINION IS FORMED, PRINCIPLE OF 'CH ANGE OF OPINION' CANNOT AND DOES NOT APPLY. THERE IS A DIFFERENCE BE TWEEN CHANGE OF OPINION AND FAILURE OR OMISSION OF THE ASSESSING OF FICER TO FORM AN OPINION ON A SUBJECT MATTER, ENTRY, CLAIM, DEDUCTIO N. WHEN THE ASSESSING OFFICER FAILS TO EXAMINE A SUBJECT MATTER , ENTRY, CLAIM OR DEDUCTION, HE FORMS NO OPINION. IT IS A CASE OF NO OPINION. [PARA 25] THE AFORESAID HAVE NOT TO BE READ IN ISOLATION BU T ARE TO BE READ WITH CAVEAT SET OUT ABOVE. WHETHER OR NOT THE ASSESSING OFFICER HAD APPLIED HIS MIND AND EXAMINED THE SUBJECT MATTER, CLAIM, ET C. DEPENDS UPON FACTUAL MATRIX OF EACH CASE. THE ASSESSING OFFICER CAN EXAMINE A CLAIM OR SUBJECT MATTER EVEN WITHOUT RAISING A WRITTEN QU ERY. THERE CAN BE ITA NO. 154/AGRA/2013 17 CASES WHERE AN ASPECT OR QUESTION IS TOO APPARENT O R OBVIOUS TO HOLD THAT THE ASSESSING OFFICER DID NOT EXAMINE A PARTIC ULAR SUBJECT MATTER, CLAIM ETC. THE STAND AND STANCE OF THE ASSESSEE AND THE ASSESSING OFFICER IN SUCH CASES ARE RELEVANT. [PARA 27] GENERAL PROVISION SECTION 114 OF THE INDIAN EVIDENCE ACT IS A GENER AL PROVISION DEALING WITH PRESUMPTION OF FACTS, INFERENCES DRAWN FROM FA CTS, PATTERNS DRAWN FROM EXPERIENCE AND OBSERVATIONS BASED UPON HABITS OF THE SOCIETY, HUMAN ACTION, USAGES AND ORDINARY COURSE OF HUMAN A FFAIRS AND CONDUCT. THE PRESUMPTION IS NO EVIDENCE OR PROOF. I T ONLY SHOWS ON WHOM THE BURDEN OF PROOF LIES. SECTION 114 IS PERMI SSIVE AND NOT A MANDATORY PROVISION. NINE SITUATIONS BY WAY OF ILLU STRATIONS ARE STATED. THESE ARE BY WAY OF EXAMPLE OR GUIDELINES. AS A PER MISSIVE PROVISION IT ENABLES THE JUDGE TO SUPPORT HIS JUDGMENT BUT THERE IS NO SCOPE OF PRESUMPTION WHEN FACTS ARE KNOWN. [PARA 29] THE ASSESSEE HAD SUBMITTED THAT THE REFERENCE SHO ULD BE DECLINED AND NOT ANSWERED IN VIEW OF DOCTRINE OF MERGER AS THE D ECISION OF THE FULL BENCH OF THIS COURT IN THE CASE OF CIT V. KELVINATO R OF INDIA LTD. [2012] 256 ITR 1 / 123 TAXMAN 433 HAS MERGED AND WAS APPRO VED BY THE SUPREME COURT. THE SUPREME COURT IN THEIR DECISION IN CIT V. KEL VINATOR OF INDIA LTD. [2010] 187 TAXMAN 312 HAD EXAMINED THE QUESTION WHE THER 'CHANGE OF OPINION' CAN JUSTIFY REOPENING OF ASSESSING. THE SU PREME COURT HAS NOT STATED OR MADE ANY OBSERVATION WITH REFERENCE TO SE CTION 114 OF THE EVIDENCE ACT. THE DOCTRINE OF MERGER, IF APPLIED, W OULD REQUIRE THAT ONE WILL ACCEPT AND APPLY THE REASONING AND RATIO GIVEN BY THE SUPREME COURT. BY APPLYING THE 'DOCTRINE OF MERGER' IT CANN OT BE HELD THAT THE REASONING OR THE RATIO GIVEN BY THE SUPREME COURT I S THE REASONING GIVEN BY THE HIGH COURT. THE SUPREME COURT IN THE P RESENT CASE HAS GIVEN DETAILED REASONS AND RATIO WHY 'CHANGE OF OPI NION' CANNOT BE A GROUND TO REOPEN ASSESSMENT. THE SAID REASONING OR RATIO ARE THE BINDING PRECEDENT. [PARA 31] IF A PARTICULAR SUBJECT MATTER, ITEM, DEDUCTION O R CLAIM IS NOT EXAMINED BY THE ASSESSING OFFICER, IT WILL NEVERTHE LESS BE A CASE OF CHANGE OF OPINION AND THE REASSESSMENT PROCEEDINGS WILL BE BARRED. [PARA 36] ITA NO. 154/AGRA/2013 18 WHAT IS IMPORTANT AND RELEVANT IS THAT THE PRINCI PLE OF 'CHANGE OF OPINION' WAS EQUALLY APPLICABLE UNDER THE UNAMENDED PROVISIONS. [PARA 37] THERE MAY BE CASES WHERE THE ASSESSING OFFICER DO ES NOT AND MAY NOT RAISE ANY WRITTEN QUERY BUT STILL THE ASSESSING OFF ICER IN THE FIRST ROUND/ ORIGINAL PROCEEDINGS MAY HAVE EXAMINED THE SUBJECT MATTER, CLAIM ETC., BECAUSE THE ASPECT OR QUESTION MAY BE TOO APPARENT AND OBVIOUS. TO HOLD THAT THE ASSESSING OFFICER IN THE FIRST ROUND DID NOT EXAMINE THE QUESTION OR SUBJECT MATTER AND FORM AN OPINION, WOU LD BE CONTRARY AND OPPOSED TO NORMAL HUMAN CONDUCT. SUCH CASES HAVE TO BE EXAMINED INDIVIDUALLY. SOME MATTERS MAY REQUIRE EXAMINATION OF THE ASSESSMENT ORDER OR QUERIES RAISED BY THE ASSESSING OFFICER AN D ANSWERS GIVEN BY THE ASSESSEE BUT IN OTHERS CASES, A DEEPER SCRUTINY OR EXAMINATION MAY BE NECESSARY. THE STAND OF THE REVENUE AND THE ASSE SSEE WOULD BE RELEVANT. SEVERAL ASPECTS INCLUDING PAPERS FILED AN D SUBMITTED WITH THE RETURN AND DURING THE ORIGINAL PROCEEDINGS ARE RELE VANT AND MATERIAL. SOMETIMES APPLICATION OF MIND AND FORMATION OF OPIN ION CAN BE ASCERTAINED AND GATHERED EVEN WHEN NO SPECIFIC QUES TION OR QUERY IN WRITING HAD BEEN RAISED BY THE ASSESSING OFFICER. T HE ASPECTS AND QUESTIONS EXAMINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF MAY INDICATE THAT THE ASSESSING OFFICER MUST HAVE A PPLIED HIS MIND ON THE ENTRY, CLAIM OR DEDUCTION ETC. IT MAY BE APPARE NT AND OBVIOUS TO HOLD THAT THE ASSESSING OFFICER WOULD NOT HAVE GONE INTO THE SAID QUESTION OR APPLIED HIS MIND. HOWEVER, THIS WOULD D EPEND UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE. [PARA 39] 11. IN THE ABOVE DECISION, IT CAN BE SEEN THAT UNDE R THE HEADING CRUX OF THE ISSUE, IT HAS BEEN HELD BY THE FULL B ENCH THAT RE- ASSESSMENT PROCEEDING WILL BE INVALID IN CASE, THE ASSESSMENT ORDER ITSELF RECORDS THAT THE ISSUE WAS RAISED AND IT IS DECIDED IN FAVOUR OF THE ASSESSEE AND RE-ASSESSMENT PROCEEDING IN THE SA ID CASES WILL BE HIT BY THE PRINCIPLE OF CHANGE OF OPINION. UNDER THE SAME HEADING OF THE JUDGEMENT, IT HAS ALSO BEEN HELD THAT RE-ASS ESSMENT PROCEEDING WILL BE INVALID IN CASE, AN ISSUE OR QUERY IS RAISE D AND ANSWERED BY THE ASSESSEE IN ORIGINAL ASSESSMENT PROCEEDING BUT THEREAFTER, THE AO DOES NOT MAKE ANY ADDITION IN THE ASSESSMENT ORDER AND IN SUCH SITUATION, IT SHOULD BE ACCEPTED THAT THE ISSUE WAS EXAMINED BUT THE AO DID NOT FOUND ANY GROUND OR REASON TO MAKE ADDIT ION OR REJECT THE STAND OF THE ASSESSEE AND, THEREFORE, HE FORMED AN OPINION AND THE RE- ITA NO. 154/AGRA/2013 19 ASSESSMENT WILL BE INVALID BECAUSE THE AO HAS FORM AN OPINION IN THE ORIGINAL ASSESSMENT, THOUGH HE HAD NOT RECORDED HIS REASONS. THE HONBLE COURT HAS FURTHER CLARIFIED THAT IN THESE T WO SITUATIONS, THE REVENUE IS NOT WITHOUT REMEDY AND IN CASE, THE ASSE SSMENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENU E, THEY ARE ENTITLED TO AND CAN INVOKE THE POWER U/S.263. THEREFORE, IN VIEW OF THE ABOVE TWO DECISIONS, ONE BY HONBLE SUPREME COURT IN CASE OF CIT VS. KELVINATOR INDIA (SUPRA)(RELIED UPON BY THE LD. AR) AND ANOTHER DECISION OF HONBLE DELHI HIGH COURT IN CASE OF USHA INTERNATIONAL LTD.(SUPRA)(RELIED UPON BY THE AO) , IT WOULD DEPEND ON THE FACTS OF EACH CASE WHETHER, THERE IS CHANGE OF OPINION WHILE REOPENING OF THE ASSESSMENT PROCEEDING OR NOT. HOWEVER, IN BOTH THE DECISIONS, IT IS VERY CLEAR THAT RE-ASSESSMENT PROCEEDING INITIATED MERELY ON THE BASIS OF CHANGE OF OPINION IS INVALID. IN THE DECISION O F CIT VS. USHA INTERNATIONAL LTD. (SUPRA) , THE HONBLE DELHI HIGH COURT HAS DISCUSSED ABOUT THE EXPRESSION CHANGE OF OPINION AND IT HAS BEEN HELD THAT QUESTION OF CHANGE OF OPINION ARISES WHEN THE AO FORMS AN OPINION AND DECIDE NOT TO MAKE ADDITION OR HOLDS TH AT THE ASSESSEE IS CORRECT AND ACCEPT HIS POSITION OR STAND. IN ORDER TO EXAMINE, WHETHER IN THE INSTANT CASE, THE REOPENING OF ASSES SMENT PROCEEDING IS MERELY ON THE BASIS OF CHANGE OF OPINION OR OTHERWI SE, THE DISCUSSION MADE BY THE AO IN THE ORIGINAL ASSESSMENT ORDER DAT ED 29.12.2006 WITH RESPECT TO EXAMINATION OF ANNEXURE A-1 PAGE 8, 20, 21, 30 & 31 IS REPRODUCED AS UNDER:- 3- LPZ DH DK;ZOKGH DS NKSJKU FU/KKZFJRH DS /KJ LS I ZKIR VUSDLJ ,&1] DS IST 8 IJ OK;Q FOGKJ IFKKSYH ESSA :-14]84]000 DH IZKIVHZ DKS [KJHNUS DK GOKYK FN;K X;K GSA MLH IZDKJ IST 21 O 22 IJ T;JKE CKX ESA IZKIVHZ :-13]42] 600 O :-19]00]000 ESS [KJHNUS DK GOKYK FN;K GQVK GS RFKK IST 30 O 31 IJ :-14]11]000 O :-34]80]000 DK HKQXRKU JKGQY FOGKJ VKXJK DH IZKIVHZ O OSHKO DQT N;KY CKX V KXJK ESA IZKIVHZ [KJHNUS DS LACA/K ESA HKQXRKU DK GOKYK FN;K X;K GSA FU/KKZFJRH U CRK; K FD OG VIUS O;OLK; LS LACAF/KR YS[KK IQLRDSA UGHA CUKRH GS FQJ HKH CSAD [KKRK O LW PUK DS VK/KKJ IJ FU/KKZFJRH DH DQN YS[KK IQLRDSA CUK;H GS FTUDH DEI;WVJHD`R DKWIH TSLS YSTJ ,DKMUV BR;KFN IZLRQR FD;KA FU/KKZFJRH US TKS [KKRS IZLRQR FD;S MLESAS F OFHKUU TEHUKSA DKS [KJHNUS LS LACAF/KR HKQXRKU BR;KFN FN[KK;S X;S GSAA FU/KKZFJRH US ;G HK H CRK;K FD MLUS MIUS IFJOKJ DS LNL;KSA LS LE; LE; IJ YKSU FY;S FKSA DSL DS LELR RF ;KSA DKS /;KU ESA J[KRS GQ, ;G EKUK TKRK GS FD FU/KKZFJRH US VIUS O;OLK; LS LACAF/ KR TKS HKH DKXTKR IZLRQR FD;S GSA MULS TEHUKSA DH [KJHN FCDZH O MLDH IZKFIR;KA DH IW. KZ TKUDKJ UGHA GKSRH GSA ;FN ;G EKU HKH FY;K TK;S FD FU/KKZFJRH US MIJKSDR IZKIVHZT DKS [KJHNUS ESA VIUS O;OLK; LS FUOSK FD;K FKK IJURQW O;OLK; DH IZKFIR;KA DKS NS[K RS GQ, FU/KKZFJRH DK DFKU LOHDKJ UGHA FD;K TK LDRK A BU RF;KSA DS VK/KKJ IJ FU/KKZFJ RH DH XK;=H DULVZDKU LS DQY IZKFIR;KA :-2]00]00]000 VUQEKFUR DH TKRH GSA FTL IJ 8 IZFRKR DH NJ LS KQ+} YKHK ITA NO. 154/AGRA/2013 20 :-16]00]000 FUDKYK TKRK GSA BLESA LS FU/KKZFJRH US :-2]88]800 DH VK; FN[KK J[KH GS KSK :-13]11]200 FU/KKZFJRH DH V?KKSFKR VK; EKUH TKRH GSA FU/KKZFJRH US VIUS O;OLK; O VIUS O;OLK; DH VK; LS MIJKSDR IZKIVHZ DKS [KJHNUS ESA FUOSK FD;K GKSXKA IJURQ [KJHNH X;H IZKIVHZ DS EWY; DKS NS[KRS GQ, ;G EKUK T KRK GS FD FU/KKZFJRH US MIJSKDR IZKIVHZ DS FY, :-15]00]000 DK FUOSK V?KKSFKR VK; LS FD;K GSA BL IZDKJ FU/KKZFJRH DH VK; ESAS :-28]11]200 ( 13]11]200 + 15]00]000 ) ,MHKU FD;K TKRK GSA LKFK GH VK; DS XYR RF;KSA DKS IZLRQR DJUS DS FY, /KKJK 271 ( 1 )( LH ) DS V/KHU ISUKYVH DK;ZOKGH VYX LS IZKJEHK DH TKRH GSA 12. ON EXAMINATION OF THE ABOVE DISCUSSION IN THE O RIGINAL ASSESSMENT ORDER, IT IS VERY CLEAR THAT THE AO HAS EXAMINED ANNEXURE A-1, PAGE 8 IN WHICH, INVESTMENT IN VAYU VIHAR, PAT HOLI OF RS.14,84,000/-, INVESTMENT IN JAIRAM BAGH PROPERTY OF RS.13,42,600/- AND RS.19,00,000/- RECORDED ON PAGE NO.21 AND 22 OF THIS ANNEXURE AND INVESTMENT IN RAHUL VIHAR PROPERTY OF RS.14,11, 000/- AND RS.34,80,000/- RECORDED IN PAGE NO.30 & 31 WAS EXAM INED. AFTER EXAMINING OF THESE INVESTMENTS IN PROPERTIES AND TA KING INTO ACCOUNT THE EXPLANATION GIVEN BY THE ASSESSEE(APPELLANT) AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDING THAT SHE DOES NOT KE EP/PREPARE BOOKS OF ACCOUNT RELATING TO HER BUSINESS / PROFESSION AN D COMPUTERIZED COPY OF LEDGER ACCOUNT HAS BEEN MADE ON THE BASIS O F TRANSACTION RECORDED IN BANK STATEMENT AND ALSO TAKING INTO ACC OUNT THE DETAILS OF PAYMENTS BEING MADE FOR PURCHASE OF VARIOUS LANDS A ND TAKING OF LOANS FROM TIME TO TIME FROM FAMILY MEMBERS FOR PUR CHASE OF THESE LANDS, THE AO HAS HELD THAT ON THE BASIS OF THESE I NFORMATION GIVEN BY THE ASSESSEE DURING ORIGINAL ASSESSMENT PROCEEDING, THE FULL DETAILS ABOUT THE RECEIPTS ON SALE OF THESE LANDS RELATING TO THE BUSINESS OF THE ASSESSEE ARE NOT AVAILABLE AND, THEREFORE, HE HAS F URTHER HELD THAT EVEN IF IT IS ASSUMED THAT THE ASSESSEE HAS MADE IN VESTMENT FOR PURCHASE OF PROPERTIES OUT OF HER BUSINESS, HE HAS ESTIMATED THE TOTAL RECEIPT FROM CONSTRUCTION BUSINESS AT RS.2 CRORE ON WHICH, HE HAS APPLIED 8% OF PROFIT RATE AND COMPUTED A NET PROFIT OF RS.16 LAC. AFTER COMPUTING THE NET PROFIT AT RS.16 LAC, HE HAS FURTH ER GIVEN DEDUCTION OF RS.2,88,800/- ON ACCOUNT OF INCOME, ALREADY DISC LOSED IN THE RETURN OF ASSESSEE (APPELLANT) AND COMPUTED THE UNDISCLOSE D INCOME OF THE ASSESSEE AT RS.13,11,200/-. HE HAS FURTHER ADDED R S.15 LAC AFTER TAKING INTO ACCOUNT THE VALUE OF THE PURCHASE OF PR OPERTIES AS FOUND IN THE SEIZED DOCUMENT AND, THEREFORE, THE TOTAL ADDIT ION OF RS.28,11,200/- WAS MADE AS AGAINST THE INVESTMENT O F PROPERTIES SHOWN IN THE SEIZED DOCUMENT. DURING THE COURSE OF REOPENING OF THE ITA NO. 154/AGRA/2013 21 ASSESSMENT PROCEEDING, THE AO COMPUTED THE TOTAL IN VESTMENT IN PROPERTY AT RS.58,25,000/- AND OUT OF THAT AMOUNT, HE HAS MADE ADDITION OF RS.30,13,800/- AFTER DEDUCTING THE ABOV E MENTIONED ESTIMATED ADDITION OF RS.28,11,200/- MADE IN THE OR IGINAL ASSESSMENT ORDER. AFTER EXAMINING THE DECISION OF THE AO IN THE ORIGI NAL ASSESSMENT ORDER AS WELL AS IN THE RE-ASSESSMENT OR DER PASSED U/S.147 READ WITH SECTION 143(3), IT IS VERY CLEAR THAT THE FIRST AO HAS APPLIED HIS MIND WHILE COMPLETING THE ORIGINAL ASSESSMENT A ND AFTER EXAMINATION OF THE SEIZED DOCUMENTS IN WHICH INVEST MENT IN PROPERTY WAS RECORDED, HE ARRIVED TO THE CONCLUSION FOR MAKI NG ADDITION OF ONLY RS.28,11,200/- INSTEAD OF THE TOTAL AMOUNT OF INVESTMENT RECORDED IN THE SEIZED DOCUMENT AND, THEREFORE, THE SECOND A O IN THE RE- ASSESSMENT ORDER, HAS MADE ADDITION, ONLY ON ACCOUN T OF BALANCE AMOUNT. THEREFORE, IT CAN BE SAID THAT THE FIRST A O IN THE ORIGINAL ASSESSMENT HAS FORMED HIS OPINION ABOUT MAKING THE ADDITION OF ONLY RS.28,11,200/- AFTER COMPUTING THE PROFIT EARNED BY THE ASSESSEE(APPELLANT) ON UNDISCLOSED RECEIPTS AND ALS O MAKING AN ADDITION OF RS.15 LAC TO COVER THE VALUE OF PROPERT IES SHOWN AS BEING INVESTED AND RECORDED IN THE SEIZED DOCUMENTS. UND ER SUCH CIRCUMSTANCES, IF IT HAS BEEN FELT BY THE SECOND AO THAT THE ADDITION MADE BY THE EARLIER AO WHO MADE THE ORIGINAL ASSESS MENT WAS NOT CORRECT AND HE SHOULD HAVE MADE THE ADDITION FOR TH E TOTAL AMOUNT OF INVESTMENT MADE IN PROPERTIES, IT IS NOTHING BUT TH E MERE CHANGE OF OPINION BECAUSE THE EARLIER AO HAS FORMED HIS OPINI ON ABOUT MAKING ADDITION OF ONLY RS.28,11,200/- ON THE BASIS OF SEI ZED DOCUMENTS AND IT CANNOT BE SAID THAT HE HAS NOT EXAMINED THE SEIZED DOCUMENTS AS IT IS VERY CLEAR FROM THE DISCUSSION MADE IN PARA 3 OF TH E ORIGINAL ASSESSMENT ORDER THAT HE MADE DETAILED EXAMINATION OF SEIZED DOCUMENT. AS PER THE DECISION OF HONBLE DELHI HIG H COURT IN CASE OF CIT VS. USHA INTERNATIONAL LTD. (SUPRA), UNDER SUCH SITUATION, THE REMEDY LIES TO MAKE NECESSARY CORRECTION IN THE ORI GINAL ASSESSMENT ORDER BY INVOKING THE POWER OF SECTION 263, IF IT H AS BEEN FELT THAT THE AO IN THE ORIGINAL ASSESSMENT ORDER HAS NOT MADE TH E ADDITION ON THE BASIS OF SEIZED DOCUMENT CORRECTLY RESULTING INTO A N ERRONEOUS ASSESSMENT ORDER WHICH WAS PREJUDICIAL TO THE INTER EST OF REVENUE ALSO. ITA NO. 154/AGRA/2013 22 UNDER THE FACTS AND CIRCUMSTANCES OF THE CASE, AS D ISCOVERED BY ME FROM THE ASSESSMENT RECORD AS WELL AS AFTER GOIN G THROUGH THE ORIGINAL ASSESSMENT ORDER AND ASSESSMENT ORDER UNDE R APPEAL BEFORE ME THAT WAS PASSED AFTER REOPENING THE PROCEEDING U /S.147, IT IS VERY EVIDENT THAT THE EARLIER AO WHO HAS PASSED ORIGINAL ASSESSMENT ORDER DATED 29.12.2006 HAS FORMED HIS OPINION OF MAKING T HE ADDITION OF RS.28,11,200/- AFTER EXAMINATION OF THE SEIZED DOCU MENT AND IF ANY RE- ASSESSMENT PROCEEDING IS INITIATED ON THE BASIS OF THE SAME SEIZED DOCUMENT BY ANOTHER AO TAKING THE VIEW THAT THE ADD ITION MADE BY THE EARLIER AO DID NOT COVER THE FULL AMOUNT OF INVESTM ENT RECORDED IN THE SEIZED DOCUMENT, IT WOULD AMOUNT TO NOTHING BUT CHA NGE OF OPINION AND SUCH CHANGE OF OPINION FOR REOPENING OF ASSESSM ENT PROCEEDING U/S.147 IS NOT PERMITTED AS PER THE DECISION OF HON BLE SUPREME COURT IN CASE OF KELVINATOR INDIA LTD. VS. CIT (SUPRA) AS WELL AS THE DECISION OF HONBLE DELHI HIGH COURT IN CASE OF CIT VS. USHA INTERNATIONAL LTD (SUPRA). THEREFORE, I AGREE WITH THE LD. AR AS CONTENDED BY HIM IN THE WRITTEN SUBMISSION THAT THE IMPUGNED ASSESSM ENT ORDER PASSED AFTER REOPENING OF THE ASSESSMENT PROCEEDING U/S.147 IS A CLEAR CASE OF CHANGE OF OPINION AS NO NEW MATERIAL HAS COME ON RECORD AND NO FRESH INFORMATION HAS BEEN RECEIVED B Y THE AO BECAUSE THE REOPENING WAS DONE ON THE BASIS OF A SE IZED DOCUMENT ANNEXURE A-1 WHICH HAS ALREADY BEEN CONSIDERED BY T HE AO IN THE ORIGINAL ASSESSMENT ORDER VIDE ORDER DATED 29.12.20 06 AND HENCE, SUCH REOPENING U/S.147 IS INVALID. AS THE REOPENIN G OF ASSESSMENT PROCEEDING FOR PASSING THE IMPUGNED ORDER PASSED U/ S.147 READ WITH SECTION 143(3) HAS ITSELF BEEN FOUND TO BE INVALID, CONSEQUENT NOTICE ISSUED U/S.148 IS ALSO INVALID AND THE SUBSEQUENT A SSESSMENT ORDER PASSED U/S.143(3) IS VOID AB INITIO AND DESERVES TO BE QUASHED. THEREFORE, THE IMPUGNED ASSESSMENT ORDER PASSED U/S .147 / 143(3) DATED 10.12.2010 IS ANNULLED. 13. AS THE REOPENING OF ASSESSMENT PROCEEDING U/S.147 H AS BEEN FOUND TO BE INVALID AND THE CONSEQUENT ASSESSMENT O RDER PASSED U/S.147 READ WITH SECTION 143(3) HAS BEEN ANNULLED, I HAVE NOT DECIDED THE GROUNDS TAKEN ON THE MERIT OF ADDITION BECAUSE THE ADJUDICATION ON THE MERIT OF ADDITION WOULD BE ONLY ON ACADEMIC NATURE. 14. IN THE RESULT, APPEAL IS ALLOWED. ITA NO. 154/AGRA/2013 23 3. THE LD. DR RELIED UPON THE ORDER OF THE AO AND S UBMITTED THAT THE INVESTMENT IN THE PROPERTIES WERE NOT PROPERLY CONS IDERED AT THE ORIGINAL ASSESSMENT STAGE, THEREFORE, IT IS NOT A CASE OF CH ANGE OF OPINION AND RELIED UPON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CAS E OF CONSOLIDATED PHOTO & FINEST LTD. VS. ACIT, 281 ITR 394, IN WHICH THE WRI T PETITION WAS DISMISSED FOR FAILURE TO DISCLOSE FULLY OR TRULY ALL MATERIAL FAC TS. 4. ON THE OTHER HAND, THE LD. COUNSEL FOR THE ASSES SEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND SUBMITTED THA T THE SAME SEIZED MATERIAL, ANNEXURE A1 WAS CONSIDERED AT THE ORIGINAL ASSESSME NT STAGE, ON WHICH PART ADDITION WAS MADE WHICH HAS BEEN DELETED BY THE LD. CIT(A) AND CONFIRMED BY THE TRIBUNAL AND, THEREFORE, ON IDENTICAL FACTS AND SAM E MATERIAL ON RECORD, THE SUBSEQUENT AO ON MERE CHANGE OF OPINION SHOULD NOT HAVE REOPENED THE ASSESSMENT. HE HAS RELIED UPON THE DECISION OF FULL BENCH OF DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD., 256 I TR 01, ORDER OF ITAT, MUMBAI BENCH IN THE CASE OF CHIKA OVERSEAS (P) LTD. VS. IT O, 131 ITD 471 AND ORDER OF ITAT, AGRA BENCH IN THE CASE OF ITO VS. SHRI HARESH CHAND AGARWAL HUF IN ITA NO. 282/AGRA/2013 DATED 20.12.2013. ITA NO. 154/AGRA/2013 24 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND MATERIA L AVAILABLE ON RECORD. HONBLE FULL BENCH OF DELHI HIGH COURT IN THE CASE OF KELVINATOR OF INDIA LTD. 256 ITR 01 BY FOLLOWING CIRCULAR NO.549 OF CBDT HELD TH AT ON MERE CHANGE OF OPINION OF AO CANNOT BE A GROUND FOR RE-ASSESSMENT AND THAT AMENDMENT OF SEC. 147 W.E.F. 1.4.89 HAS NOT ALTERED THE POSITION. HONBLE GUJRAT HIGH COURT IN THE CASE OF GARDEN SILK MILLS P. LTD., 237 ITR 668 HELD THAT H OWEVER WIDE THE SCOPE OF TAKING ACTION U/S 148 OF IT ACT, IT DOES NOT CONFIR M JURISDICTION ON CHANGE OF THE INTERPRETATION OF A PARTICULAR PROVISION EARLIER AD OPTED BY THE ASSESSING AUTHORITY. FOR COMING TO THE CONCLUSION THAT THERE HAS BEEN EX CESSIVE LOSS OR DEPRECIATION ALLOWANCE OR THAT THERE HAS BEEN UNDER ASSESSMENT O R ASSESSMENT AT A LOWER RATE OR FOR APPLYING OTHER PROVISIONS OF EXPLANATION 2 TO S EC. 147, IT MUST BE ON MATERIAL AND IT SHOULD HAVE NEXUS FOR HOLDING SUCH OPINION C ONTRARY TO WHAT HAS BEEN EXPRESSED EARLIER. EVEN AFTER THE AMENDMENT OF SEC. 147, MERE CHANGE OF OPINION DOES NOT CONFIRM JURISDICTION ON THE ITO TO INITIAT E PROCEEDING FOR REASSESSMENT MERELY BY RESORTING TO EXPLANATION 1 TO SEC. 147. HONBLE CALCUTTA HIGH COURT IN THE CASE OF BERGER PAINTS INDIA LTD., 245 ITR 648 H ELD WHEN ANY PARTICULAR ISSUE HAS BEEN CONSIDERED BY THE ITO AND CIT(A) AND WHEN THERE IS NO FAILURE TO DISCLOSE THE FACTS, THE REASSESSMENT PROCEEDINGS AR E NOT VALID. HON'BLE SUPREME COURT IN THE CASE OF CIT VS. FORANER FRANCE, 264 IT R 566 HELD REASSESSMENT NOT ON BASIS OF MERE CHANGE OF OPINION LAW SAME BEFOR E AND AFTER AMENDMENT BY ITA NO. 154/AGRA/2013 25 DIRECT TAX LAWS. HON'BLE SUPREME COURT IN THE CASE OF INDIAN OIL CORPORATION, 159 ITR 956 HELD THAT NO CASE U/S 148 IS MADE OUT WHEN THE FACTS WERE KNOWN ALL ALONG WITH TO THE REVENUE WHILE MAKING THE ORIGINAL ASSES SMENT. HON'BLE SUPREME COURT IN THE CASE OF ASSOCIATED STONE INDUSTRY LTD., 224 ITR 560 HELD THAT THE ASSESSEE SHALL HAVE TO DISCLOSE ONLY THE PRIMARY FACTS. CONS IDERING THE ABOVE LEGAL PROPOSITIONS DECIDED IN THE ABOVE CASES, IT IS CLEA R THAT AO IS NOT JUSTIFIED IN REOPENING THE ASSESSMENT ON MERE CHANGE OF OPINION. IT IS ADMITTED FACT THAT ANNEXURE A1 WAS CONSIDERED AT THE ORIGINAL ASSESSME NT STAGE AND ON THAT BASIS, THE AO MADE ADDITION ON ACCOUNT OF UNEXPLAINED INVESTME NT IN PROPERTY IN A SUM OF RS.15,00,000/- (TOTAL ADDITION RS.28,11,200/-). THE AO HAS REFERRED TO THE SAME PROPERTIES IN THE ORIGINAL ASSESSMENT ORDER, WHICH ARE REFERRED TO NOW IN THE REASONS FOR REOPENING OF ASSESSMENT FOR THE YEAR UN DER CONSIDERATION. THE ASSESSEE FILED EXPLANATION AND EVIDENCES BEFORE THE AO AT OR IGINAL ASSESSMENT STAGE EXPLAINING THE INVESTMENT IN THE PROPERTIES. THEREF ORE, THE SAME SEIZED MATERIAL, WHICH IS BASIS OF REOPENING OF ASSESSMENT WAS CONSI DERED AT THE ORIGINAL ASSESSMENT STAGE IN THE LIGHT OF THE EXPLANATION OF THE ASSESSEE SUPPORTED BY EVIDENCES. WHATEVER ADDITION WAS MADE BY THE AO AT ORIGINAL STAGE ON THE IDENTICAL FACTS HAVE BEEN DELETED BY THE LD. CIT(A) AS WELL AS CONFIRMED BY THE TRIBUNAL. THE PROPRIETY, THEREFORE, DEMANDS THAT TH E AO SHOULD NOT HAVE RESORTED TO PROCEEDINGS TO REOPEN ASSESSMENT ON IDENTICAL FA CTS. ALL FACTS WERE ALL ALONG ITA NO. 154/AGRA/2013 26 WERE WITHIN THE KNOWLEDGE OF THE AO AT ORIGINAL ASS ESSMENT STAGE, THEREFORE, RE- APPRECIATION OF EVIDENCE AT SUBSEQUENT RE-ASSESSMEN T PROCEEDINGS IS NOT PERMITTED ON MERE CHANGE OF OPINION BY SUBSEQUENT AO. THE RE- ASSESSMENT PROCEEDINGS HAVE BEEN INITIATED AGAIN ON SIMILAR ISSUE AND TOTA LLY ON IDENTICAL FACTS REGARDING INVESTMENT IN PROPERTY WHICH HAVE ALREADY BEEN CONS IDERED IN THE ORIGINAL ASSESSMENT PROCEEDINGS. IT IS, THEREFORE, A CASE OF CHANGE OF OPINION AND SUCH A CHANGE OF OPINION FOR REOPENING OF SECTION 147 IS N OT PERMITTED UNDER LAW. THE AO IN THE RE-ASSESSMENT ORDER HIMSELF HAS MENTIONED TH AT ADDITION IS MADE ON ACCOUNT OF UNEXPLAINED EXPENDITURE/INVESTMENT IN THE PROPER TIES IN THE ORIGINAL ASSESSMENT ORDER. SUCH FACTS RECORDED BY THE AO IN THE REASSES SMENT ORDER CLEARLY STRENGTHEN THE STAND OF THE ASSESSEE FOR QUASHING OF REASSESSM ENT PROCEEDINGS. NO NEW MATERIAL OR FRESH INFORMATION HAVE BEEN RECEIVED AT THE RE-ASSESSMENT STAGE. THEREFORE, IT IS MERELY A FRESH APPLICATION OF MIND BY THE SUBSEQUENT AO ON THE SAME SET OF FACTS. THE CONTENTION OF THE LD. DR IS, THEREFORE, LIABLE TO BE REJECTED THAT INVESTMENT IN PROPERTY WAS NOT CONSIDERED AT T HE ORIGINAL ASSESSMENT STAGE. FURTHER, THE SAME SEIZED MATERIAL, I.E., ANNEXURE A 1, WHICH WAS THE BASIS OF MAKING SOME ADDITIONS AT ORIGINAL ASSESSMENT STAGE, IS THE DOCUMENT OF THE DEPARTMENT FOUND DURING THE COURSE OF SEARCH AND ON CE THE SAME HAS BEEN APPRECIATED AND CONSIDERED BY THE AO, THERE IS NO Q UESTION ON THE PART OF THE ASSESSEE NOT TO DISCLOSE FULLY AND TRULY ALL MATERI AL FACTS NECESSARY FOR HIS ITA NO. 154/AGRA/2013 27 ASSESSMENT. THE RE-APPRECIATION OF SEIZED MATERIAL IN SUBSEQUENT PROCEEDINGS BY THE AO IS, THUS, WHOLLY UNJUSTIFIED PARTICULARLY WH EN SUCH A SEIZED MATERIAL WAS NOT CONSIDERED WORTHY BY THE LD. CIT(A) IN THE ORIG INAL APPELLATE PROCEEDINGS DELETING THE ADDITION ON THE SAME SEIZED MATERIAL. THEREFORE, THERE IS NO QUESTION OF RE-APPRECIATING THE SAME FACTS WHICH HAVE BEEN DULY CONSIDERED BY THE FIRST APPELLATE AUTHORITY PRIOR TO REOPENING OF ASSESSMEN T. THE LD. CIT(A), THEREFORE, ON PROPER APPRECIATION OF FACTS AND MATERIAL ON RECORD , RIGHTLY QUASHED THE REASSESSMENT PROCEEDINGS. WE, THEREFORE, DO NOT FIN D ANY INFIRMITY IN THE ORDER OF THE LD. CIT(A) IN QUASHING AND ANNULLING THE REASSE SSMENT ORDER. THE DEPARTMENTAL APPEAL THUS FAILS AND IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, THE DEPARTMENTAL APPEAL IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PRAMOD KUMAR) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER *AKS/- COPY OF THE ORDER FORWARDED TO : 1. APPELLANT 2. RESPONDENT 3. CIT(A), CONCERNED BY ORDER 4. CIT, CONCERNED 5. DR, ITAT, AGRA 6. GUARD FILE SR. PRIVATE SECRETARY TRUE COPY