Ananda Paul, Kolkata V. ACIT, Circle-50, Kolkata, Kolkata

ITA 165/KOL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 6555 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 09-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S DASAGUPTA
• Assessee Lawyers: S K TULSIYAN
• Keywords: Reopening of assessment; Unexplained expenditure; Gift; Depreciation; Rectification of order; Audit objection; Earning of tax free income; Source of fund; Retrospective amendment; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 142(1); 14A; 115JB; 147; 69; 148; 154

Judgement Text

, B , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI N.V.VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 165 / KOL / 20 15 ASSESSMENT YEAR :2007-08 ANANDA PAUL CF-125, SALT LAKE CITY, KOLKATA-64 [ PAN NO.AFKPP 2201 D ] V/S . ACIT, CIRCLE-50, MANICKTALA CIVIC CENTRE, UTTARPAN COMPLEX, DS- 2&3, KOLKATA-54 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI S.K. TULSIYAN, ADVOCATE /BY RESPONDENT SHRI S. DASAGUPTA, ADDL. CIT-DR /DATE OF HEARING 12-02-2018 /DATE OF PRONOUNCEMENT 20-04-2018 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-XXXII, KOLKATA DATED 05.11.2014. ASSESSMENT WAS FRAMED BY ACIT, CIRCLE-50 KOLKATA U/ S 147/143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT) VIDE HIS ORDER DATED 30.12.2011 FOR ASSESSMENT YEAR 2007-08. SHRI, S.K. TULSIYAN, LD. ADVOCATE APPEARED ON BEHAL F OF ASSESSEE AND SHRI S. DASGUPTA, LD. DEPARTMENTAL REPRESENTATIVE APPEARED ON BEHALF OF REVENUE. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1) THAT ON THE FATS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) ERRED IN NOT TREATING THE RE-ASSESSMENT PROCEEDING U/S 14 3(3)/147 OF THE IT ACT, 1961 AS INVALID, BAD IN LAW, UNJUST AND CONTRARY TO THE FACTS AND LAW. 2) THAT ON THE FACTS AND IN RESPECT TO THE CIRCUMST ANCES OF THEE CASE, THE LD. CIT(A) ERRED IN CONFIRMING THE ASSESSMENT ORDER PAS SED U/S. 143(3)/147 OF THE IT ACT, 1961 BY THE LD. AO AS PROPER AND VALID WITHOUT CONSIDERING THE ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 2 FACTS OF THE CASE AS WELL AS THE LAW, WITHOUT CONSI DERING THE SUBMISSIONS MADE BY THE APPELLANT. 3) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) FAILED TO APPRECIATE AND CONSIDER THE FACTS OF THE CASE AN D ERRED IN NOT ANNULLING THE AM ORDER PASSED BY THE AO U/S 143(3)/147. 4) THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE, THE LD. CIT(A) ERRED IN SUSTAINING THE ADDITION OF RS.18,38,241/- ON ACC OUNT OF CAPITAL GAINS. 5) THAT ON THE FACTS AND IN RESPECT TO HE CIRCUMSTA NCES OF THE CASE, THE LD. CIT(A) ERRED IN NOT ALLOWING THE ENTIRE ADDITION OF RS.18,38,241/- AS EXEMPTED U/S. 19(38) ON ACCOUNT OF LONG TERM CAPITAL GAINS. 6) LEAVE TO URGE SUCH OTHER GROUND OR GROUNDS BEFOR E OR AT THE TIME OF HEARING OF APPEAL. 2.1 THE ASSESSEE VIDE LETTER DATED NIL HAS FILED AD DITIONAL GROUNDS OF APPEAL AS DETAILED BELOW:- 7. THAT THE LD. CIT(A)-XXXIII, KOLKATA IN UPHOLDING THE ORD4RE PASSED BY THE LD. AO U/S 147/143(3) OF THE INCOME TAX ACT, 1961 D ISALLOWING THE APPELLANTS CLAIM OF EXEMPT LTCG OF RS.18,38,241/- FAILED TO AP PRECIATE THE FACT THAT ALL THE ENQUIRIES RELATING TO CLAIM OF EXEMPT LTCG U/S. 10(38) OF THE INCOME TAX ACT, 1961 WERE CONDUCTED BY THE AO DURING THE COURS E OF ORIGINAL ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 AND HENCE A SSESSMENT U/S. 147/143(3) OF THE INCOME TAX ACT, 1961 IS A PURE CA SE OF MERE CHANGE OF OPINION. 8. THAT THE LD. CIT(A)-XXXII, KOLKATA N UPHOLDING THE ORDER PASSED BY THE LD. AO U/S 147/143(3) OF THE INCOME TAX ACT, 1961 F AILED TO APPRECIATE THAT THE REOPENING WAS INITIATED BY THE LD. AO ON THE BA SIS OF REVENUE AUDIT OBSERVATION AS PER AO'S OBSERVATION IN THE REMAND R EPORT. THE AFORESAID GROUNDS ARISE OUT OF THE APPELLATE OR DER PASSED BY THE LD. CIT(A)-S ORDER PASSED U/S. 147/143(3) OF THE INCOM E TAX ACT, 1961 DISALLOWING THE APPELLANTS CLAIM OF EXEMPT LTCG TO THE TUNE OF RS.18,38,241/-, EVEN AFTER THE ISSUE WAS EXAMINED D URING THE ORIGINAL ASSESSMENT U/S. 143(3) OF THE INCOME TAX ACT, 1961 LEADING TO THE IMPUGNED REOPENING BEING ON A CHANGE OF OPINION AND ON THE B ASIS OF A REVENUE AUDIT OBJECTION AND SINCE THE FIRST GROUND OF APPEAL ALSO ARISES OUT OF THE ORDER PASSED BY THE LD. CIT(A)-XXXII, KOLKATA ON 905/11/2 014 AND THE WHOLE FACT LEADING TO THE AFORESAID GROUNDS BEING ON RECORD WH ICH DOES NOT REQUIRE ANY INVESTIGATION OF FACT, THE ABOVE GROUNDS BEING THE QUESTIONS OF LAW ARISING OUT OF THE IMPUGNED APPELLATE ORDER MAY BE ADMITTED. THE LD AR BEFORE US SUBMITTED THAT THE ISSUE RAISED BY ASSESSEE IN ADDITIONAL GROUNDS OF APPEAL IS LEGAL IN NATURE AND THE SAME C AN BE RAISED AT ANY STAGE OF PROCEEDINGS AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF NTPC VS. CIT REPORTED IN 229 ITR 383 (SC). THE LD. DR RAISED NO OBJECTION ON THE ADMISSION OF ADDITIONAL GROUND OF APPEAL. ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 3 3. WE HAVE HEARD THE RIVAL CONTENTIONS OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE ADMIT THE LEGAL IS SUE RAISED BY ASSESSEE AT THE TIME OF HEARING AFTER HAVING RELIANCE ON THE PR INCIPLE LAID DOWN BY HON'BLE SUPREME COURT IN THE CASE OF NTPC (SUPRA). IT WAS ALSO OBSERVED THAT THE ISSUE RAISED IN ADDITIONAL GROUNDS BY THE ASSESSEE IS SIMILAR TO THE GROUNDS NOS. 1 TO 3 OF APPEAL RAISED ALONG WITH THE MEMO OF APPEAL IN FORM NO. 36. ACCORDINGLY WE PROCEED TO ADJUDICATE THE APPEAL OF THE ASSESSEE. 4. FIRST WE TAKE UP THE ADDITIONAL GROUNDS OF APPEA L AND THE GROUNDS NUMBERS 1, 2 & 3 RAISED BY THE ASSESSEE ALONG WITH THE MEMO OF APPEAL IN FORM NO. 36. 5. THE ASSESSEE HAS CHALLENGED THE VALIDITY OF THE REASSESSMENT PROCEEDINGS INITIATED U/S 147 OF THE ACT. 6. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND DERIVING HIS INCOME FROM RENT, FROM PARTNERSHIP FIRM AND OTH ER SOURCES. THE ASSESSEE FILED HIS RETURN OF INCOME ON 17.10.2007 AT A TOTAL INCOME OF RS.1,04,13,450/- ONLY. SUBSEQUENTLY THE RETURN WAS SELECTED UNDER SC RUTINY AND ASSESSMENT WAS FRAMED U/S 143(3) OF THE INCOME TAX ACT, 1961 V IDE ORDER DATED 30/11/2009 AT RS.1,05,02,850/- AFTER MAKING CERTAIN ADDITIONS/DISALLOWANCES TO THE TOTAL INCOME OF THE ASSESSEE. LATER ON A NOTICE U/S 154 OF THE ACT WAS ISSUED DAT ED 20.04.2010 BY THE AO FOR THE RECTIFICATION OF MISTAKE APPARENT FROM THE RECORD IN THE ASSESSMENT ORDER PASSED BY HIM UNDER SECTION 143(3) OF THE ACT . THE AO ALLEGED THAT THE ASSESSEE HAS CLAIMED EXEMPTION ON THE LONG TERM CAP ITAL GAIN INCOME ON ACCOUNT OF SALE OF SHARES UNDER SECTION 10(38) OF T HE ACT THOUGH THE ASSESSEE HAS NOT PAID STT ON THE SALE OF SUCH SHARES. THE ASSESSEE IN COMPLIANCE THERETO SUBMITTED THAT T HERE IS NO SUCH MISTAKE IN THE ORDER PASSED U/S 143(3) OF THE ACT. HOWEVER TH E AO SUBSEQUENTLY DROPPED THE PROCEEDINGS INITIATED U/S 154 OF THE IN COME TAX ACT, 1961 BY PASSING AN ORDER DATED 23/08/2010. THE AO IN HIS OR DER SHEET MAINTAINED FOR THE PROCEEDINGS UNDER SECTION 154 OF THE ACT RECORD ED DATED 23/08/2010 THAT NECESSARY CONTRACT NOTES WERE FILED BEFORE HIM IN S UPPORT OF THE PAYMENT OF ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 4 STT ON SALE OF SHARES. BUT THE AO OBSERVED THAT THE TRANSACTIONS OF SALE OF SHARES REQUIRE FURTHER VERIFICATION WHICH WAS BEYON D THE PURVIEW OF SECTION 154 OF THE ACT. 6.1 THE AO IN THE MEANTIME INITIATED PROCEEDINGS ON 22/08/2010 I.E. A DAY BEFORE PASSING THE ORDER U/S 154 OF THE ACT ISSUED NOTICE U/S 148 OF THE ACT FOR THE REOPENING OF THE CASE FOR ESCAPEMENT OF INC OME. IN COMPLIANCE THERETO THE ASSESSEE RAISED THE OBJECTION ON THE REOPENING OF THE CASE UNDER SECTION 147 OF THE ACT ON THE GROUND THAT IT WAS INITIATED ON THE SAME PREMISE AS DONE U/S 154 OF THE ACT. BUT THE AO REJECTED THE CONTENT IONS OF THE ASSESSEE AND FRAMED THE ASSESSMENT U/S 147/143(3) OF THE ACT AFT ER MAKING THE ADDITION TO THE TOTAL INCOME OF THE ASSESSEE. 7. AGGRIEVED ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A). THE ASSESSEE BEFORE THE LD. CIT(A) SUBMITTED THAT THE AO BEFORE THE ISSUE OF THE NOTICE U/S 148 OF THE ACT INITIATED THE PROCEEDINGS UNDER SECT ION 154 OF THE ACT FOR THE RECTIFICATION OF THE MISTAKE SO AS BRING THE LTCG O N SALE OF SHARES UNDER THE NET OF TAX. THE AO OF THE VIEW THAT THE LTCG WAS NO T EXEMPT FROM TAX AS THE STT WAS NOT PAID ON THE SALE OF SHARES. BUT THE AO LATER ON DROPPED THE PROCEEDINGS INITIATED U/S 154 OF THE ACT. THE AO HO WEVER ISSUED THE NOTICE U/S 148 OF THE ACT ON THE SAME ISSUE. THE ASSESSEE SUBM ITTED THAT THE ACT OF THE AO FOR ISSUING THE NOTICE U/S 148 OF THE ACT IS NOT HING BUT CHANGE OF OPINION WHICH IS NOT PERMITTED IN REASSESSMENT PROCEEDINGS. THE ASSESSEE IN SUPPORT OF HIS CLAIM HAS RELIED ON THE ORDERS OF THE HON'BL E HIGH COURTS. HOWEVER THE LD. CIT(A) DISREGARDED THE CONTENTION O F THE ASSESSEE AND HELD THAT THE REOPENING OF THE CASE U/S 147 OF THE ACT I S VALID BY OBSERVING AS UNDER:- THE ABOVE CASE LAWS ARE VALID IN THEIR RELATIVE SPH ERES BUT THEY CANNOT BE SELECTIVELY QUOTED TO SUIT THE ARGUMENTS OF THE ASSESSEE. IT HAS TO BE PROVED THAT THE FACTS OF THE CASE OF THE ASSESSEE N ECESSITATE THE APPLICATION OF THE ABOVE CASE LAWS. THIS HAS NOT BEEN PROVED IN THIS CASE. THE GUJARAT HIGH COURT IN THE CASE OF DAMODAR H. S HAH (SUPRA) HAS NOT SIMPLY HELD AS QUOTED BY THE ASSESSEE BUT THE HIGH COURT HAS EXPLAINED IN DETAIL THAT THE PROVISION OF SECTION 154 AND 147 OF THE ACT AND OPERATE IN DIFFERENT DOMAINS. THIS IS CLEAR FROM THE FOLLOWING EXTRACT OF THE ORDER OF THE HIGH COURT:- ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 5 8.1 THE EXPRESSION MISTAKE APPARENT FROM THE RECORD OCCURRING IN SECTION 154 WOULD MEAN, IN THE CONTEXT OF THE PROVI SION, THAT IT SHOULD BE EVIDENT ON A REASONABLE READING OF THE RECORD TO SHOW THAT THERE HAS BEEN COMMITTED BY THE ASSESSING OFFICER A MISTA KE IN THE ORDER WHICH NEEDS TO BE RECTIFIED. THE EXPRESSION FROM THE RECORD ENTAILS READING OF THE RECORD AND NOT A CURSORY LOOK AT ITS BULK. THE WORD APPARENT DOES NOT DILUTE THE NEED TO READ THE RECORD FOR A SCERTAINING WHETHER THERE IS A MISTAKE ON ITS PLAIN READING. IF THE RECORD SO READ IS NOT AT ALL CAPABLE OF BEING CONSTRUED IN A DIFFEREN T MANNER AND THE MISTAKE IS DEMONSTRATED ON ITS PLAIN READING, IT WO ULD BE A MISTAKE WHICH IS APPARENT, I.E. EVIDENT OR OBVIOUS FROM THE RECORD AND OUGHT TO BE RECTIFIED UNDER SECTION 154. IF, HOWEVER, ON REA DING THE RECORD IT CANNOT BE SAID THAT THE VIEW TAKEN IN THE ORDER IS MISTAKEN, THERE WOULD BE NO QUESTION OF RECTIFICATION BECAUSE THERE IS NO MISTAKE OBVIOUS FROM THE RECORD WHICH COULD BE RECTIFIED. A MISTAKE MAY HAVE ARISEN DUE TO MERE IGNORANCE OR FORGETFULNESS OF A FACT OR OUT OF A BELIEF THAT A PARTICULAR FACT EXISTS WHEN IT DOES NOT OR IT MAY B E A GLARING MISTAKE OF LAW. MISTAKE APPARENT FROM THE RECORD IS A MISTAKE, WHICH IS EX FACIE BORNE OUT FROM THE PLAIN READING OF THE RECORD OF T HE PROCEEDINGS AS IT STANDS. ON THE BASIS OF THE RECORD OF THE PROCEEDIN GS IT BECOMES OBVIOUS THAT THERE IS A MISTAKE COMMITTED, I.E. INC ORRECT CONCLUSION REACHED A MISTAKEN CONCLUSION WHICH IS NOT AT ALL W ARRANTED FROM THIS RECORD. IF, HOWEVER, THE CONCLUSION IS PLAUSIBLE AN D MAY BE WARRANTED FROM THE RECORD, THEN IT CANNOT BE SAID THAT FROM T HE RECORD THE MISTAKE IS INTELLECTUALLY EVIDENT OR OBVIOUS. IF ON THE EXI STING STATE OF RECORD, PERMISSIBLE DISCRETION IS EXERCISED OR TWO VIEW ARE REASONABLY POSSIBLE INCLUDING THE ONE WHICH IS TAKEN, THEN IT CANNOT BE SAID WITH THE REQUIRED CERTAINTY THAT THERE IS A MISTAKE IN THE O RDER WHICH IS APPARENT FROM THE RECORD. 9. ON THE OTHER HAND, THE EMPHASIS OF THE PROCEEDIN GS UNDER SECTION 147 IS ENTIRELY ON THE QUESTION WHETHER ACCORDING T O THE ASSESSING OFFICER, INCOME CHARGEABLE TO TAX HAS ESCAPED ASSES SMENT FOR ANY ASSESSMENT YEAR IRRESPECTIVE OF THE QUESTION WHETHE R THERE IS OR NOT AN OBVIOUS MISTAKE IN THE ASSESSMENT ORDER THAT HE MAY HAVE PASSED. IN THE ASSESSMENT PROCEEDINGS UNDER SECTION 147, THE A SSESSING OFFICER IS NOT JUST WANTING TO CORRECT THE MISTAKE THAT IS IDENTIFIED BY HIM, BY AMENDING THE ORDER ON THE BASIS OF THE RECORD OF TH E PROCEEDINGS, BUT WANTS TO FIND OUT THE CHARGEABLE INCOME THAT, ACCOR DING TO HIS PRIMA FACIE VIEW, HAD ESCAPED ASSESSMENT WHEN THE ORDER O F ASSESSMENT WAS MADE. THE REASON TO BELIEVE UNDER SECTION 147 I S ABOUT THE CHARGEABLE INCOME HAVING ESCAPED ASSESSMENT, THE AS CERTAINMENT OF WHICH REQUIRES REOPENING OF THE ASSESSMENT BY FOLLO WING THE PROCEDURE AS INDICATED UNDER SECTION 148. IN ALL CASES OF INC OME HAVING ESCAPED ASSESSMENT, INCLUDING THE CASES WHERE MISTAKE IS CO MMITTED IN THE ASSESSMENT ORDER, IT WOULD BE OPEN FOR THE ASSESSIN G OFFICER TO PROCEED UNDER SECTION 147 FOR ASSESSMENT, REASSESSM ENT OR RECOMPUTATION. HOWEVER, IN A CASE WHERE, ACCORDING TO HIM, THE ASSESSMENT ORDER REQUIRES TO BE AMENDED BY RECTIFYI NG THE MISTAKE DETECTED BY HIM WHICH IS OBVIOUS OR EVIDENT FROM TH E EXISTING RECORD AND, ACCORDING TO HIM, THERE IS NO NEED TO REOPEN T HE AM FOR ANY ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 6 ADDITIONAL MATERIAL, INFORMATION, INVESTIGATION OR SCRUTINY, HE MAY RESORT TO SECTION 154 AND RECTIFY IT BY AMENDING THE ASSES SMENT ORDER AS PER SECTION 154(3). IN FACT, SECTION 154 WOULD COVER AL L CASES OF MISTAKES APPARENT FROM THE RECORD, WHICH COULD BE RECTIFIED BY THE CONCERNED AUTHORITIES. MISTAKE APPARENT FROM THE RECORD WHICH HAS THE EFFECT OF ENHANCING ASSESSMENT OUGHT TO BE RECTIFIED BY RESOR TING TO THIS SPECIAL AND SPEEDY PROCEDURE WHEN IN THE VIEW OF THE ASSESS ING OFFICER IT IS UNNECESSARY TO RESORT TO REOPENING OF THE ASSESSMEN T. IN THE FIELD OF CHARGEABLE INCOME ESCAPING ASSESSMENT, HOWEVER, SEC TION 147 IS VERY WIDELY WORDED AND WOULD INCLUDE EVEN ESCAPEMENT DUE TO ANY MISTAKE IN THE ASSESSMENT ORDER. BUT, WHEN EVEN, ACCORDING TO THE ASSESSING OFFICER HIMSELF, THERE IS A MISTAKE APPARENT FROM T HE RECORD AS IT EXISTS, COMMITTED IN THE ORDER OF ASSESSMENT, WHICH IS RECT IFIABLE ON THE BASIS OF THE EXISTING RECORD UNDER SECTION 154 BEING A SP ECIAL PROVISION MADE FOR THE PURPOSE, AND THAT THERE IS NO NEED TO RESOR T TO REOPENING OF THE ASSESSMENT AS CONTEMPLATED BY SECTION 148 READ WITH SECTION 147, THEN HE MUST RESORT TO THE PROVISION AND CANNOT WAN TONLY OR ARBITRARILY AND WITHOUT VALID REASON RESORT TO REOPENING OF THE ASSESSMENT. 10. THE PROCESS OF ASSESSMENT, REASSESSMENT AND R ECOMPUTATION UNDER SECTION 147 IS MUCH MORE ONEROUS TO THE ASSES SEE THAN THE PROCESS OF RECTIFICATION UNDER SECTION 14. THE PROC EEDINGS UNDER SECTION IN 147 FOR ASSESSING INCOME CHARGEABLE TO T AX THAT HAS ESCAPED ASSESSMENT WOULD VERY OFTEN INVOLVE A COMPL ETE REWRITING OF THE ORIGINAL ASSESSMENT. ONCE THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, HE IS A T LIBERTY TO RECONSIDER THE WHOLE MATTER, AT ALL EVENTS IN RELAT ION TO EVERYTHING THAT IS MATERIAL TO THE ASSESSMENT OF THE TAX UNDER THE HEAD OF LIABILITY AFFECTED. HE IS AT LIBERTY TO RECONSIDER THE WHOLE QUESTION OF HOW HE WOULD ASCERTAIN THE ASSESSABLE AND TAXABLE INCOME O F THE TAXPAYER. THE FUNCTION OF THE ASSESSING OFFICER ACTING UNDER SECTION 147 IS NOT LIMITED AS UNDER SECTION 154, MERELY TO RECTIFYING THE RESULT WHICH MAY HAVE BEEN VITIATED DUE TO MISTAKE APPARENT FROM THE RECORD. IT WOULD, THEREFORE, FOLLOW THAT IN CASES OF MISTAKE RESULTIN G IN ESCAPEMENT, WHICH IS THE AREA WHERE BOTH THE PROVISIONS WOULD B ECOME RELEVANT, THE ASSESSING OFFICER WILL HAVE TO CONSID ER WHETHER HE WAS REQUIRED BY THE NATURE OF ESCAPEMENT TO RECONSI DER THE QUESTION OF HOW HE WOULD ASCERTAIN AND ASSESS INCOM E THAT HAS ESCAPED ASSESSMENT AND REOPEN THE ASSESSMENT OR IF THAT IS NOT REQUIRED, THEN MERELY TO RECTIFY THE MISTAKEN RESUL T ON THE BASIS OF THE EXISTING RECORD . IF HE CHOOSES TO RESORT TO THE FORMER, I.E. SECTI ON 147 READ WITH SECTION 148 PROCEEDINGS, HE CANNOT BE COMPELLED TO RESORT TO SECTION 154 BECAUSE THAT WOULD IMPINGE UP ON HIS SUBJECTIVE SATISFACTION UNDER SECTION 147. BUT IF HE RESORTS T O SECTION 154 ON THE GROUND THAT THE MISTAKE IN THE ORDER APPARENT FORM THE RECORD HAS RESULTED IN ESCAPEMENT WHICH COULD BE RECTIFIED BY AMENDING THE ORDER AND ENHANCING THE ASSESSMENT, THEN HE, ON FINDING T HAT THERE IS NO SUCH MISTAKE APPARENT FROM THE RECORD WARRANTING RE CTIFICATION SINCE THE VIEW TAKEN IS PLAUSIBLE, CANNOT IN ABSENCE OF A NY OTHER GROUND ON THE BASIS OF WHICH HE HAS STILL REASONS TO BELIEVE THAT THE INCOME HAS ESCAPE ASSESSMENT, START PROCEEDINGS AGAIN UNDER SE CTION 147. IF HE ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 7 FINDS THAT THERE IS NO SUCH MISTAKE SINCE THE RESUL T WAS WARRANTED FROM THE RECORD, THERE WOULD BE NO OCCASION TO AMEND THE ASSESSMENT ORDER. WHERE THE RECTIFICATION COULD NOT BE DONE ON THE GROUND THAT THERE WERE TWO VIEWS POSSIBLE OR THAT THERE WAS DIS CRETION LAWFULLY EXERCISED, THEN THE SAME WILL ALSO BE TRUE WHEN THE ASSESSING OFFICER STARTS THE PROCEEDING UNDER SECTION 147 ON THE SAME MATERIAL, BECAUSE, THAT POWER CANNOT BE INVOKED WHEN THERE IS ONLY A MERE CHANGE OF OPINION AND IN CASES WHERE IN THE PROCEED INGS UNDER SECTION 154 IT IS FOUND THAT WHAT WAS THOUGHT TO BE A MISTA KE WAS NOT A MISTAKE BECAUSE THAT VIEW WAS WARRANTED OR PERMISSIBLE FROM THE EXISTING RECORD, THEN THE SAME FINDING WILL BIND THE ASSESSI NG OFFICER WHEN TRYING TO EXERCISE POWERS UNDER SECTION 147. IN SUCH A CASE, IT WOULD BE INCUMBENT ON THE PART OF THE ASSESSING OFFICER W HO HAS CHOSEN TO RESORT TO SECTION 154 TO DEMONSTRATE WHY HE IS NOW FOR THE SAME PURPOSE RESORTING TO SECTION 147. THERE HA S TO BE SOME COMPELLING REASON IN SUCH A CASE FOR HIM STILL TO B ELIEVE THAT THE INCOME THAT WAS THE SUBJECT-MATTER OF RECTIFICATION HAS ESCAPED ASSESSMENT THOUGH THAT WAS NOT DUE TO ANY OBVIOUS M ISTAKE BORNE OUT FROM THE EXISTING RECORD, WHICH COULD BE RECTIFIED UNDER SECTION 154. TO PREVENT ARBITRARY EXERCISE OF POWER AND FISHING EXPEDITIONS IT WOULD, THEREFORE, BE NECESSARY FOR T HE ASSESSING OFFICER WHO HAS IN RESPECT OF THE SAME SUBJECT-MATT ER NOT BE ABLE TO FIND EXITING OF THE MISTAKE WHICH HE EARLIER THO UGHT WAS APPARENT FROM THE RECORD, I.E. ON THE BASIS OF THE EXISTING MATERIAL ON THE RECORD, IN ORDER TO RESORT TO SECTION 147 FR OM REOPENING THE ASSESSMENT, TO RECORD THAT THOUGH THE MISTAKE IN AS SESSMENTS IS NOT OBVIOUS FROM THE RECORD, HE STILL HAS REASON TO BELIEVE THAT THE SAID INCOME HAD ESCAPED ASSESSMENT WARRANTING REOPE NING OF THE ASSESSMENT UNDER SECTION 147. IT WILL NOT BE OPEN T O THE ASSESSING OFFICER TO ARBITRARILY OR WANTONLY RESORT TO THE PROVISIONS OF SECTION 147 WHERE THE PROCESS OF RECT IFICATION UNDER SECTION 154 FAILS ON MERITS. (EMPHASIS SUPPLIED) THE HIGH COURT HAS HELD THAT THE AO HAS TO HAVE THE BELIEF THAT THE MISTAKE CANNOT BE RECTIFIED UNDER SECTION 154 OF THE ACT AN D HENCE RECOURSE TO SECTION 147 OF THE ACT IS NEEDED. THE PRESENT APPEAL BY THE ASSESSEE IS NOT A CASE WHERE THE MISTAKE COULD HAVE BEEN RECTIFIED UNDER S ECTION 154 OF THE ACT. THE AO ALSO HAS NOT EXAMINED THE ISSUE U/S. 154 OF THE ACT ON MERITS. SIMILARLY THE VIEW OF THE HIGH COURT OF KOLKATA IN THE CASE O F BERGER PAINTS INDIA LTD V. ACIT 2010) 322 ITR 369 (CAL) (SUPRA) IS SAME AS IN THE CASE OF THE GUJARAT HIGH COURT WHEN THE COURT HOLDS; HOWEVER, IF THE ASSESSING OFFICER IS OF THE VIEW T HAT INCOME HAS ESCAPED ASSESSMENT BY REASON OF A MISTAKE APPARENT FORM RECORDS, AND TAKES RECOURSE TO SECTION 154, BUT FINDS LATER, THAT THERE IS NO APPARENT MISTAKE, THEN HE CANNOT, IN THE ABSENCE OF ANY OTHER GROUND ON THE BASIS OF WHICH HE STILL HAS REASON TO BELIEV E THAT THE INCOME HAS ESCAPED ASSESSMENT, START REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT. IN OTHER WORKS, THE ASSESSING OFFIC ER CANNOT AGAIN START REASSESSMENT PROCEEDINGS ON THE BASIS OF THE SAME R EASONS. ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 8 AS AGAINST THE CASE LAWS CITED BY THE ASSESSEE THE FOLLOWING DECISION OF THE DELHI HIGH COURT IS DIRECTLY O THE ISSUE. IN THE CA SE OF HONDA SIEL POWER PRODUCTS LTD. V. DCIT [2012] 340 ITR 53 (DEL) THE H IGH COURT HAS NEGATED SUCH A VIEW OF THE ASSESSEE WHEN IT HELD AS UNDER: - 18. LEARNED COUNSEL FOR THE PETITIONER HAD SUBMITT ED THAT REOPENING PROCEEDINGS CANNOT BE SUSTAINED AS AFTER THE ORIGIN AL ASSESSMENT PROCEEDINGS WERE CONCLUDED, NOTICE FOR RECTIFICATIO N OF MISTAKE WAS ISSUED UNDER SECTION 154 AND A REPLY DATED 20.11.20 04 WAS FILED BY THE PETITIONER-ASSESSEE. THEREAFTER, NOTHING WAS HEARD FROM THE ASSESSING OFFICER AND PRESUMABLY NO ORDER UNDER SECTION 154 O F THE ACT WAS PASSED. IT WAS SUBMITTED THAT AS A LEGAL PROPOSITIO N; THAT ONCE A NOTICE UNDER SECTION 154 OF THE ACT IS ISSUED, PROCEEDINGS UNDER SECTION 147 OF THE ACT ON THE SAME GROUND OR REASONS CANNOT BE TAKEN. IT IS NOT POSSIBLE TO ACCEPT THE SAID PROPOSITION IN BROAD TE RMS AS PROPOUNDED OR AS ONE HAVING UNIVERSAL APPLICATION. SCOPE AND A MBIT OF SECTIONS 154 AND 147/148 OF THE ACT ARE DIFFERENT. UNDER SEC TION 154 OF THE ACT, THE ASSESSING OFFICER CAN ONLY RECTIFY MISTAKES AND ERRORS. SECTION154 IS NOT A SUBSTITUTE FOR SECTION 147/148. IN A GIVEN CASE, RESORT TO PROVISIONS OF SECTION 154 OF THE ACT MAY BE AN APPR OPRIATE REMEDY BUT IN OTHER CASES RESORT TO SECTION 147/148 MAY BE REQ UIRED. THE QUESTION; WHETHER REOPENING IS JUSTIFIED WHEN BOTH PROVISIONS 154 AND 147/148 OF THE ACT ARE ATTRACTED, IS NOT URGED AND ARGUED BY THE PETITIONER. IT IS NOT THE CASE OF THE PETITIONER TH AT SECTION 154 OF THE ACT IS APPLICABLE AND CAN BE INVOKED TO MAKE ADDITION O N GROUND NO.2. 19. DECISION OF THE BOMBAY HIGH COURT IN HINDUSTAN UNILEVER LTD. V. DY CIT [2010] 325 ITR 102, WHICH OPINES THAT WHEN S ECTION 15 APPLIES, REOPENING UNDER SECTION 147 OF THE ACT SHO ULD NOT BE RESORTED TO, IS NOT APPLICABLE TO THE FACTS OF THE PRESENT C ASE. RELIANCE PLACED BY THE LEARNED COUNSEL FOR THE PETITIONER ON THE DECIS ION OF GUJARAT HIGH CURT IN DAMODAR H SHAH V. ASST. CIT [2000] 245 ITR 774 AND CALCUTTA HIGH CURT IN BERGER PAINTS INDIA LTD. V. ASSTT. CIT [2010] 322 ITR 36 FOR THE SAME REASON IS MISCONCEIVED. 20. THE AFORESAID JUDGMENTS DO NOT STATE THAT ONCE NOTI CE UNDER SECTION 154 OF THE ACT IS ISSUED, RESORT TO SECTION 147 IS BARRED OR PROHIBITED UNDER THE ACT. WHAT IS HIGHLIGHTED BY TH E GUJARAT HIGH COURT IS THE DISTINCTION BETWEEN SECTIONS 154 AND 1 47 OF THE ACT. IT IS FURTHER POINTED OUT THAT IF SECTION 154 OF THE A CT IS APPLICABLE THEN THE ASSESSING OFFICER SHOULD NOT ARBITRARILY A ND IN A WANTON MANNER RESORT TO PROCESS OF REOPENING THE ASSESSMEN T UNDER SECTION 147 OF THE ACT. THIS REASONING IS CONTRARY AND GOES AGAINST THE PLEA AND ARGUMENT OF THE PETITIONER AS IT ACCEP TS THE DIFFERENCE IN SCOPE AND AMBIT OF THE SAID PROVISIONS. IT HAS B EEN HELD THAT WHEN MISTAKES ARE APPARENT, THE ASSESSING OFFICER S HOULD INVOKE SECTION 154 OF THE ACT BUT IN CASES WHERE MISTAKES ARE NOT APPARENT FORM THE RECORD, THE ASSESSING OFFICER CAN REOPEN ASSESSMENTS UNDER SECTION 147 OF THE ACT WHEN THE P RE- CONDITIONS ARE SATISFIED . 21. RECTIFICATION OF A MISTAKE APPARENT FROM THE RE CORD CANNOT BE EQUATED WITH THE POWER OF REOPENING UNDER SECTIONS 147 AND 148 OF THE ACT, WHICH IS CONFERRED ON THE ASSESSING OFFICER TO REOPEN CASES UNDER ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 9 ASSESSMENT WHEN CONDITIONS MENTIONED IN THE SAID SE CTION ARE SATISFIED. THE OBJECT AND PURPOSE OF THE TWO PROVIS IONS IS SEPARATE AND THE PRECONDITIONS AND REQUIREMENTS ARE DIFFERENT. T HE WORDS REASONS TO BELIEVE WHEN INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSM ENT HAS A DIFFERENT CONNOTATION AND REQUIREMENTS AND CA NNOT BE EQUATED WITH THE POWER UNDER SECTION 154 TO RECTIFY MISTAKE S APPARENT FROM THE RECORD. IN SOME CASES ALBEIT NOT IN ALL CASES, SECT IONS 154 AND 147 BOTH MAY BE APPLICABLE AND, THEREFORE, THE AFORESAI D DECISIONS SUGGEST THAT RECOURSE TO SECTION 154 MAY BE JUSTIFIED RATHE R THAN RECOURSE TO THE PROVISIONS OF SECTION 147/148 OF THE ACT FOR RE OPENING OF ASSESSMENTS. BUT THIS IS DIFFERENT FROM STATING THA T IF NOTICE UNDER SECTION 154 IS ISSUED, THEN NOTICE UNDER SECTION 14 7/148 IS BARRED OR PROHIBITED. PER SE AND EX FACIE THE LANGUAGE OF SECTION 147 SHO WS THAT THE PRE-REQUISITES OF THE SAID PROVISION ARE N OT CONTROLLED, CURBED AND REGULATED WITH THE REQUIREMENT OF MISTAK E WHICH IS APPARENT FROM THE RECORD. 22. IN THE PRESENT CASE, THE ASSESSEE IN RESPONSE T O THE NOTICE UNDER SECTION 154 OF THE ACT HAD OBJECTED TO THE RECTIFIC ATION PROCEEDINGS. IT WAS SUBMITTED THAT RECTIFICATION PROCEEDINGS UNDER SECTION 154 OF THE ACT WERE NOT JUSTIFIED AND WITHOUT JURISDICTION AS THERE WAS NO MISTAKE OR ERROR APPARENT FROM THE RECORD. W HAVE EXAMINED THE SECOND GROUND. THE ASSESSING OFFICER COULD NOT HAVE RESORT ED TO SECTION 154 PROCEEDINGS TO DISALLOW EXPENDITURE UNDER SECTION 1 4A OF THE ACT. THIS WAS NOT POSSIBLE IN SECTION 154 PROCEEDINGS AS IT W AS NOT AN ERROR OR MISTAKE APPARENT FROM THE RECORD. THE WRIT PETITION STANDS ACCORDINGLY DISMISSED, WIT H NO ORDER AS TO COSTS (EMPHASIS SUPPLIED) THE ABOVE DECISION OF THE DELHI HIGH COURT HAS SINC E BEEN AFFIRMED BY THE SUPREME COURT OF INDIA IN THE CASE TITLED AS HONDA SIEL POWER PRODUCTS LTD. V. DCIT [2012] 340 ITR AND THE BRIEF ORDER READS A S UNDER:- RDER 1. IN OUR VIEW, THE REOPENING OF ASSESSMENT IS FULL Y JUSTIFIED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. HOWEVER, ON TH E MERITS OF THE CASE, IT WOULD BE OPEN TO THE ASSESSEE TO RAISE ALL CONTENTIONS WITH REGARD TO THE AMOUNT OF RS.98.46 LAKHS BEING OFFERE D FOR TAX AS WELL AS ITS CONTENTION ON SECTION 14A OF THE INCOME-TAX CT, 1961. 2. SUBJECT TO THE ABOVE, THE SPECIAL LEAVE PETITION IS DISMISSED(EMPHASIS SUPPLIED) IN VIEW OF THE DECISION OF THE SUPREME COURT ABOVE, IT IS SETTLED THAT IF THE PRECONDITIONS FOR SECTION 147 OF THE ACT ARE MET, T HEN THERE IS NO BAR ON ISSUING A NOTICE U/S. 148 OF THE ACT EVEN IF THE PR OCEEDINGS U/S. 154 OF THE ACT HAVE BEEN DROPPED BY THE AO ON THE SAME ISSUE. BEING AGGRIEVED BY THE ORDER OF LD. CIT(A) ORDER, T HE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 10 8. THE LD. AR BEFORE US FILED A PAPER BOOK COMPRISI NG OF PAGES 1 TO 53 OF THE PB AND SUBMITTED THAT AS UNDER: [INCOME ESCAPING ASSESSMENT. 147. IF THE [ASSESSING] OFFICER [HAS REASON TO BELI EVE] THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, A SSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENT LY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RE-COMPUTE THE L OSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY B E, FOR THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SE CTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR) : [PROVIDED ... [EXPLANATION 4.-- FOR REMOVAL OF.. .. I' DAY OF APR IL, 2012] RELEVANT EXTRACT REPRODUCED THE FOREGOING PROVISION SUGGESTS THAT IF THE ASSESS ING OFFICER HAS THE REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ES CAPED ASSESSMENT THEN THE ASSESSING OFFICER MAY, SUBJECT TO THE PROVISION S OF SECTION 148 TO 153 ASSESS OR REASSESS SUCH INCOME. THEREAFTER THE APPELLANT WOULD LIKE TO SUBMIT THAT REASON TO BELIEVE BEING THE FOREMOST CRITERIA FOR REOPENING OF ASSESSMENT UNDER SECTION 148 OF THE ACT, IT SHOULD BE INTERPRETED IN THE RIGHT PERSPECTIVE. 'RE ASON TO BELIEVE' CANNOT BE REASON TO SUSPECT MERELY. THERE MUST BE A DIRECT NE XUS BETWEEN THE MATERIAL COMING TO THE NOTICE OF THE ASSESSING OFFICER AND T HE SUBSEQUENT FORMATION OF A BELIEF THAT THERE HAS BEEN ESCAPEMENT OF INCOME O N THE PART OF THE ASSESSEE IN A PARTICULAR A.Y. THE BASIS OF THE BELI EF SHOULD BE DISCERNIBLE FROM THE MATERIAL ON RECORD, WHICH WAS AVAILABLE WI TH THE ASSESSING OFFICER, WHEN HE RECORDED REASON. A MERE CHANGE OF OPINION C ANNOT CONSTITUTE A REASON TO BELIEVE. IN LIGHT OF THE ABOVE THE APPELLANT WOULD LIKE TO R EITERATE THAT HIS CASE WAS ORIGINALLY ASSESSED U/S 143(3) OF THE ACT VIDE ORDE R DATED 30/11/2009 (COPY ENCLOSED AT PAGES 11 TO 13 OF THE PAPER BOOK) AT A TOTAL INCOME OF RS.1,05,02,850/-, AFTER MAKING ADDITION OF RS.20,40 0/- ON ACCOUNT OF FAIR RENT AND RS.69,000/- ON ACCOUNT OF APPELLANT'S SHARE OF RENT IN PROPERTY RENTED OUT. BEFORE PASSING THE ASSESSMENT ORDER U/S 143(3) OF T HE ACT THE AO HAD EXAMINED THE APPELLANT'S CLAIM OF EXEMPT LTCG U/S 1 0(38) OF THE ACT BY ISSUING NOTICE U/S 142(1) OF THE ACT ALONG WITH A Q UESTIONNAIRE (COPY ENCLOSED AT PAGES 07 TO 09 OF THE PAPER BOOK) ENQUIRING ABOU T THE APPELLANT'S CLAIM OF EXEMPT LTCG U/S 10(38) OF THE INCOME TAX ACT, 1961 ALONG WITH ENQUIRING ABOUT THE OTHER CLAIMS. THE APPELLANT IN RESPONSE TO THE LD. AO'S QUERY REP LIED VIDE LETTERS DATED 18/11/2009 AND 23/10/2009 (COPIES AT PAGES 10 AND 1 0A OF THE PAPER BOOK) BY SUBMITTING THE DETAILS OF EXEMPT LTCG U/S 10(38) OF THE ACT CONTRACT NOTES AND COMPUTATION OF THE EXEMPT LTCG WHICH INCLUDED T HE CAPITAL GAINS CLAIMED BY THE APPELLANT ON ACCOUNT OF SALE OF SHAR ES OF SHARDARAJ TRADEFIN LTD AND LOTUS HOMES (LTCG CLAIMED ON THEM REFERRED IN THE REASONS RECORDED). ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 11 THE SAME IS ALSO EVIDENT FROM THE LD. AO'S OBSERVAT IONS IN PARA 1 PAGE 2 OF THE ASSESSMENT ORDER PASSED BY HIM U/S 143(3) OF TH E INCOME TAX ACT, 1961 WHICH READS AS: 'IT IS SEEN THAT THE ASSESSEE HAD INCOME FROM HOUSE PROPERTY, REMUNERATION AND INTEREST ON CAPITAL FROM PARTNERSH IP FIRM, CAPITAL GAIN AND FROM OTHER SOURCES. ' THUS, THE ASSESSEE HAD MADE FULL AND TRUE DISCLOSUR E OF HIS CLAIM OF EXEMPT LTCG U/S 10(38) OF THE ACT AND THE SAME WAS ACCEPTE D BY THE ASSESSING OFFICER IN THE ORDER PASSED BY HIM U/S 143(3) OF TH E ACT ON 30/11/2009 AFTER EXAMINING THE CLAIM BY APPLYING HIS MIND TO THE DET AILS -SUBMITTED BY THE APPELLANT. THUS, WHILE PASSING HIS ORDER U/S 143(3) OF THE ACT ON 30/11/2009 THE ASSESSING OFFICER APPLIED HIS MIND TO ALL THE MATER IAL SUBMITTED BEFORE HIM BY THE ASSESSEE AND ACCEPTED THE VIEW CANVASSED BY THE APPELLANT WITH REGARD TO THE APPELLANT'S CLAIM OF EXEMPT LTCG U/S 10(38) OF THE ACT. IN FACT THE APPELLANT'S CASE FOR THE RELEVANT ASSES SMENT YEAR WAS REOPENED BY THE LD. AO U/S 147 OF THE ACT ON THE BASIS OF TH E DOCUMENTS WHICH WERE ALREADY ON RECORD BEFORE THE ASSESSING OFFICER AT T HE TIME OF PASSING THE ORDER U/S 143(3) OF THE. THIS IS EVIDENT FROM THE A O'S REASONS RECORDED (COPY AT PAGE 2 OF THE PAPER BOOK) WHICH BEGINS WITH 'IT IS SEEN FROM THE BALANCE SHEET OF SCHEDULE-IV/ FOR THE YEAR ENDED ON 31.03.2 007 'MAKING IT CLEAR THAT FOR REOPENING THE APPELLANT'S ASSESSMENT, HE D ID NOT HAVE ANY TANGIBLE MATERIAL OR INFORMATION COMING TO HIS NOTICE SUBSEQ UENT TO THE APPELLANT'S ASSESSMENT CONCLUDED U/S 143(3) OF THE ACT WHICH LE D HIM TO BELIEVE THAT THE APPELLANT'S INCOME ESCAPED ASSESSMENT. THEREFORE TH E IMPUGNED REOPENING OF THE LD. AO'S ASSESSMENT U/S 147 OF THE ACT FOR R E EXAMINING HIS CLAIM OF EXEMPT LTCG U/S 10(38) OF THE ACT ON SALE OF SHARES OF SHARDARAJ TRADEFIN LTD AND LOTUS HOMES, IN THE ABSENCE OF ANY NEW/TANG IBLE MATERIAL COMING TO THE LD. AO'S POSSESSION/NOTICE WHICH WAS NOT BEFORE THE AO WHILE PASSING THE ORDER U/S 143(3) OF THE INCOME TAX ACT, 1961 IS NOTHING BUT A MERE CHANGE OF OPINION. THEREFORE THE ORDER PASSED BY THE LD. AO U/S 147/14 3(3) OF THE INCOME TAX ACT, 1961 ON A CHANGE OF OPINION AND FURTHER UPHELD BY THE LD. CIT(A) IS BAD IN LAW AND SHOULD BE STRUCK DOWN. ON THE OTHER HAND THE LD DR SUBMITTED THAT LTCG INC OME WAS SHOWN BY THE ASSESSEE BUT NO VERIFICATION WAS CARRIED OUT BY THE AO DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. THEREF ORE THE NOTICE U/S 148 DATED 22.08.2010 WAS ISSUED UPON THE ASSESSEE. THER E IS NO DATE MENTION ON THE REASONS RECORDED BY THE AO FOR INITIATING THE P ROCEEDINGS UNDER SECTION 147 OF THE ACT. THE AO DROPPED THE PROCEEDINGS U/S 154 OF THE ACT C ONSIDERING THE FACT THAT THE ISSUE IN HAND CANNOT BE COVERED UNDER THE PROVI SIONS OF SECTION 154 OF THE ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 12 ACT. BUT THERE IS NO BAR FOR INITIATING THE PROCEED INGS UNDER SECTION 147 OF THE ACT IN THE CASES WHERE THE PROCEEDINGS U/S 154 OF T HE ACT HAD BEEN INITIATED AND SUBSEQUENTLY DROPPED. THE LD. DR VEHEMENTLY SUP PORTED THE ORDER OF AUTHORITIES BELOW. 9. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. AT THIS JUNCTURE WE FIND IMPOR TANT TO REPRODUCE THE REASONS RECORDED BY THE AO FOR REOPENING THE CASE U /S 147 OF THE ACT WHICH READS AS UNDER:- IT IS SEEN FROM THE BALANCE SHEET OF SCHEDULE-IV FO R THE YEAR ENDED 31.02.2007, THAT LONG TERM CAPITAL GAIN OF RS.23,36 ,882/- CLAIMED WHICH WAS FULLY EXEMPTED U/S 10(38) IF SUCH TRANSACTIONS IS COVERED UNDER STT OUT FROM THE DETAILED OF AFORESAID SCHEDULE-IV WAS SOWN SALE OF SHARES OF RS.17,39,150/- OF LOTUS HOME AND RS.99,091/- OF SHR ADRAJ TRADEFIN LTD. AGGREGATING OF RS.18,38,241/- WAS NOT COVERED UNDER STT OUT OF TOTAL LTCG OF RS.23,36,822/-. HENCE, THE LTCG OF RS.18,38,241/ - WAS REQUIRED TO BE ADDED BACK TO THE TOTAL INCOME OF THE ASSESSEE AS T HE SAID AMOUNT CLAIMED BY THE ASSESSEE IS HIS EXEMPTED INCOME RESULTING UN DER ASSESSMENT. ISSUE NOTICE U/S.148 OF THE ACT FOR THE ASSESSMENT YEAR 2 007-08. A PLAIN READING OF THE ABOVE REASONS REVEALS THAT I T WAS ALLEGED BY THE AO THAT THE INCOME ESCAPED ASSESSMENT ON ACCOUNT OF EX EMPTION CLAIMED BY THE ASSESSEE U/S 10(38) OF THE ACT ON THE SALE OF SHARE S BUT THE FACT IS THAT NO STT WAS PAID BY THE ASSESSEE ON THE SALE OF SHARES. HOWEVER WE NOTE THAT THE ASSESSEE DURING THE ASSESS MENT PROCEEDINGS U/S 143(3) OF THE ACT DULY FURNISHED THE DETAILS OF CAP ITAL GAIN INCOME. THE QUERIES WERE RAISED BY THE AO U/S 142(1) OF THE ACT VIDE LE TTER DATED 16-09-2009. THE REQUISITION MADE BY THE AO U/S 142(1) OF THE ACT IS PLACED ON PAGE 9 OF THE PAPER BOOK AND DETAILED AS UNDER:- ANNEXURE NAME : ANANDA PAUL ADDRESS: CF-125, SALT LAKE CITY, BIDHAN NAGAR, SECT OR-1, KOLKATA-64 P.A. NO. AFKPP201D ASSTT. YEAR : 2007-08 1. DETAILS OF PROPERTIES FROM WHICH RENT HAS BEEN E ARNED. 2. COPIES OF THE PROFIT & LOSS ACCOUNT AND BALANCE SHEET OF R.T PAUL 3. BREAK-UP OF THE SALARY RECEIVED DURING THE YEAR. 4. PROFIT & LOSS ACCOUNT OF A-AKHEE ANAND FOOD & BE VERAGE OF THE CURRENT YEAR AND LAST THREE FINANCIAL YEARS. ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 13 5. DETAILS OF CAPITAL GAIN WITH EVIDENCE. 6. DETAILS OF INCOME FROM OTHER SOURCES 7. EVIDENCE OF RECEIPT FROM LIC 8. CONFIRMATION OF GIFT. 9. CONFIRMATION OF ACCOMMODATION LOAN. 10. DETAILS OF FAMILY MEMBERS AND THEIR SOURCES OF INCOME. 11. COPIES OF BANK STATEMENTS. 12. BOOK OF ACCOUNTS OF THE PROPRIETORSHIP BUSINESS . THE ASSESSEE IN COMPLIANCE THERETO MADE A REPLY TO THE AO BY LETTER DATED 18 TH NOVEMBER 2009 AND 23 RD OCTOBER 2009 WHICH IS PLACED ON PAGES 10 AND 10A OF THE PAPER BOOK. THE RELEVANT EXTRACT OF THE REPLY PLACED ON PAGE 10 OF THE PAPER BOOK IS REPRODUCED BELOW. 1. SALARY 30,60,000/- 2. INTEREST ON CAPITAL 42,76,592/- 3. INTEREST FROM O/SOURCES 6,7,347/- 4. ROYALTY 23,33,334/- 5. HOUSE PROPERTY 2,21,970/- 6. LONG TERM C.G. (EXEMPTED) (22,78,940/-) 7. SHARE PROFIT FRO FIRM (EXEMPTED) (33,30,028/-) 8. SHORT TERM C.G. 57,941/- THE RELEVANT EXTRACT OF THE REPLY PLACED ON PAGE 10 A OF THE PAPER BOOK IS REPRODUCED BELOW. THE CALCULATION OF CAPITAL GAINS IS ENCLOSED. WE ALSO NOTE THAT THE ASSESSEE HAS FURNISHED THE DE TAILS OF THE INVESTMENT IN THE FORM OF SOME CHART AS EVIDENT FROM THE ORDER SH EET ENTRY OF THE AO RELATING TO ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF T HE ACT WHICH ARE PLACED ON PAGES 24 TO 27 OF THE PAPER BOOK. 9.1 WE ALSO FIND THAT THE ASSESSEE HAS DULY DISCLOS ED ITS EXEMPTED INCOME IN ITS COMPUTATION OF INCOME WHICH IS PLACED ON PAG ES 20 TO 23 OF THE PAPER BOOK. AS SUCH WE NOTE THAT THE AO INITIATED THE PRO CEEDINGS U/S 147 OF THE ACT ON THE BASIS OF THE MATERIALS WHICH WERE AVAILABLE BEFORE HIM DURING THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT. FROM THE ABOVE FACTS, WE FIND THAT THE AO AT THE TIME OF ORIGINAL ASSESSMENT HAD IN HIS POSSESSION ALL THE RELEVANT DETAILS REGARDING THE L TCG. ACCORDINGLY, WE DISAGREE WITH THE VIEW TAKEN BY THE LD. CIT(A) FOR VALIDATING THE INITIATION OF THE ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 14 REASSESSMENT PROCEEDINGS U/S 147 OF THE ACT AS VALI D. IN THE INSTANCE CASE, THE RELEVANT DATA /INFORMATION WAS AVAILABLE BEFORE THE AO AT THE TIME OF ASSESSMENT AND IT WAS DULY VERIFIED. THUS, IT CAN B E INFERRED THAT THE AO IN THE ORIGINAL ASSESSMENT PROCEEDINGS HAS CONSCIOUSLY TRE ATED THE LTCG AS EXEMPTED INCOME. THUS, IN OUR CONSIDERED VIEW THE I NITIATION OF PROCEEDINGS U/S 147 OF THE ACT ON THE SAME SET OF DOCUMENTS IS NOTHING BUT MERE CHANGE OF OPINION. IN THIS REGARD WE FIND SUPPORT AND GUID ANCE FROM THE JUDGMENTS OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS KELVINATOR OF INDIA LTD. REPORTED IN 320 ITR 561 (SC) WHEREIN IT HAS BEEN HE LD AS UNDER :- 'T HE CONCEPT OF ' CHANGE OF OPINION ' ON THE PART OF THE ASSESSING OFFICER TO REOPEN AN ASSESSMENT DOES NOT STAND OBLITERATED AFT ER THE SUBSTITUTION OF SECTION 147 OF THE INCOME-TAX ACT, 1961, BY THE DIR ECT TAX LAWS (AMENDMENT) ACTS, 1987 AND 1989. AFTER THE AMENDMEN T, THE ASSESSING OFFICER HAS TO HAVE REASON TO BELIEVE THAT INCOME H AS ESCAPED ASSESSMENT, BUT THIS DOES NOT IMPLY THAT THE ASSESSING OFFICER CAN REOPEN AN ASSESSMENT ON MERE CHANGE OF OPINION. THE CONCEPT OF ((CHANGE OF OPINION ' MUST BE TREATED AS AN IN BUILT TEST TO CHECK THE ABUSE OF P OWER. HENCE AFTER APRIL 1, 1989, THE ASSESSING OFFICER HAS POWER TO REOPEN AN ASSESSMENT, PROVIDED THERE IS ((TANGIBLE MATERIAL ' TO COME TO THE CONCLUSION THAT THERE WAS ENT INCOME FROM ASSESSMENT. REASON MUST HAVE A LINK WIT H THE FORMATION OF THE BELIEF' 9.2 FURTHER, RELIANCE IS ALSO PLACED ON THE FOLLOWI NG JUDGMENTS WHEREIN IT HAS BEEN REPEATEDLY HELD THAT RE-OPENING OF ASSESSM ENT ON MERE CHANGE OF OPINION IS NOT SUSTAINABLE: (1) M.J. PHARMACEUTICALS LTD VS. CIT (2008) 297 ITR 119 (BOM) (ASSESSMENT YEAR 2003- 2004), IN THIS CASE, THE HON 'BLE HIGH COURT OBSERVED AS UNDER: ' ISSUE REGARDING ADDITION OF AMOUNT OF DEFERRED TAXA TION FOR COMPUTING BOOK PROFITS U/S. 115JB HAVING BEEN RAISED BY THE A O AT THE TIME OF ORIGINAL ASSESSMENT U/S. 143(3) AND NO ADDITION HAV ING BEEN MADE BY AO ON THE ACCOUNT ON BEING SATISFIED WITH THE EXPLA NATION OF THE ASSESSEE REOPENING OF ASSESSMENT ON THE VERY SAME I SSUE SUFFERED FROM CHANGE OF OPINION IN THE ABSENCE OF ANY FRESH MATERIAL HENCE INVALID. ' ( 2) D. T. & T. D. C. LTD. VS. CIT (2010) 324 ITR 23 4 (DEL.), IN THE SAID CASE, IT WAS HELD AS UNDER: ' THE ASSESSING OFFICER HAS BEEN GIVEN POWER TO REASS ESS UNDER SECTION 147 UPON CERTAIN CONDITIONS BEING SATISFIED, AND TH E ASSESSING OFFICER DOES NOT HAVE POWER TO REVIEW. IF SUCH A CHANGE OF OPINION WERE TO BE ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 15 PERMITTED AS A GROUND OF REASSESSMENT THEN IT WOULD AMOUNT TO GRANTING A LICENCE TO THE ASSESSING OFFICER TO REVI EW HIS DECISION, WHICH HE DOES NOT HAVE UNDER THE PROVISION OF SECTION 147 .' (3) ASTEROIDS TRADING & INVESTMENT P. LTD. VS DCLT (2009) 308 LTR 190 (BOM) , IN THE SAID CASE, IT WAS HELD THAT SINCE NO NEW MAT ERIAL BROUGHT ON RECORD, REASSESSMENT ON CHANGE OF OPINION OF OFF ICER NOT VALID. (4) ASIAN PAINTS LTD. VS. DCIT (2008) 308 ITR 195 (BOM), IN THIS CASE, THE HON'BLE HIGH COURT OBSERVED THAT MERE CHANGE OF OPINION OF A.O. NOT GROUND FOR REASSESSMENT. (5) ICICI PRUDENTIAL LIFE INSURANCE CO. LTD. (2010 ) 325 ITR 471 (BOM), IN THE SAID CASE, THE HON'BLE BOMBAY HIGH COURT HEL D THAT RE-OPENING OF ASSESSMENT ON THE SAME GROUND IN THE ABSENCE OF ANY TANGIBLE MATERIAL WAS BASED ON MERE CHANGE OF OPINION AND THEREFORE I S NOT SUSTAINABLE. BASED ON THE RATIO OF JUDGMENT DECIDED IN THE AFORE SAID CASES, IT FOLLOWS THAT NO VALID PROCEEDING U/S.147 COULD BE INITIATED EVEN WITHIN A PERIOD OF FOUR YEARS ON MERE CHANGE OF OPINION, IF ALL MATERIAL FA CTS HAD BEEN DISCLOSED BY THE ASSESSEE AND THE AO HAD COMPLETE KNOWLEDGE OF A LL SUCH MATERIALS AND FURTHER, THE ASSESSMENT HAD ALSO BEEN COMPLETED AFT ER TAKING INTO CONSIDERATION ALL SUCH MATERIAL FACTS. THEREFORE, FOLLOWING THE ABOVE, THE CONCLUSION CAN BE DRAWN IN THE INSTANT CASE THAT IN ABSENCE OF NEW INFORMATION OR DETAIL B EING AVAILABLE TO THE AO, AFTER COMPLETION OF THE ORIGINAL ASSESSMENT U/S L43 (3) OF THE ACT, PROCEEDINGS INITIATED U/S.L47 OF THE ACT FOR THE RELEVANT ASSES SMENT YEAR IS NOT VALID. IT IS CLEAR IN THE PRESENT CASE OF THE ASSESSEE THA T THE ' REASON TO BELIEVE ' IS BASED ON NON EXISTING MATERIAL AND THEREFORE IN ABS ENCE OF TANGIBLE MATERIAL TO REACH A REASONABLE BELIEF THAT THE INCOME LIABLE TO TAX HAS ESCAPED ASSESSMENT, THE ENTIRE PROCEEDING INITIATED U/S.147 OF THE ACT IS LIABLE TO BE QUASHED. REFERENCE IN THIS CONNECTION IS ALSO INVI TED TO THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. AMITABH BACHCHAN , ITA NO.4646 OF 2010 WHEREIN IT WAS HELD AS UNDER: ' THE ASSESSEE HAD MADE A CLAIM FOR 30% AD HOC EXPEND ITURE. THIS WAS WITHDRAWN BY THE ASSESSEE WHEN ASKED BY THE AO TO S UBSTANTIATE. THE REOPENING ON THE BASIS THAT THE SAID AD HOC EXPENDI TURE CONSTITUTED ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 16 'UNEXPLAINED EXPENDITURE' U/S 69 WAS BASED ON THE S AME MATERIAL. THERE WAS NO FRESH TANGIBLE MATERIAL BEFORE THE AO TO REACH A REASONABLE BELIEF THAT THE INCOME LIABLE TO TAX HAS ESCAPED ASSESSMENT. IT IS A SETTLED POSITION OF LAW THAT REVIEW UNDER THE GARB OF REASSESSMENT IS NOT P ERMISSIBLE. ' 9.3 AGAIN, AT THIS JUNCTURE ATTENTION IS INVITED TO THE RECENT DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF PR. COMMISSIONER OF INCOME-TAX V. TUPPERWARE INDIA (P.) LTD . REPORTED IN [2016] 236 TAXMAN 494, WHEREIN THE COURT WHILE OBSERVING THAT THE EXPRESSION 'REASON T O BELIEVE' CANNOT HAVE TWO DIFFERENT STANDARDS OR SETS OF MEANING, ONE APPLICA BLE WHERE THE ASSESSMENT WAS EARLIER MADE U/S 143(3) AND ANOTHER APPLICABLE WHERE AN INTIMATION WAS EARLIER ISSUED U/S 143(1), HELD AS UNDER: THE REOPENING ORDER OF THE ASSESSING OFFICER ONLY R EFERS TO THE REPORT OF STATUTORY AUDITOR UNDER SECTION 44AB WHICH REPORT W AS ALREADY ENCLOSED WITH THE RETURN FILED BY THE ASSESSEE. THEREFORE, FACTUA LLY, THERE WAS NO NEW MATERIAL THAT THE ASSESSING OFFICER CAME ACROSS SO AS TO HAVE TREASONS TO BELIEVE THAT THE INCOME HAD ESCAPED ASSESSMENT. ' WE ALSO NOTE THAT THE AO INITIATED THE PROCEEDINGS U/S 147 OF THE ACT AFTER TAKING THE APPROVAL FROM THE LD CIT FOR ISSUING NOT ICE U/S 148 OF THE ACT. THE PERMISSION WAS OBTAINED BY THE AO ON 16-08-2010 FOR INITIATING THE PROCEEDINGS U/S 147 OF THE ACT WHEREAS THE PROCEEDI NGS U/S 154 OF THE ACT WERE DROPPED ON 18-08-2010. FROM THE ABOVE, IT IS I MPLIED THAT PROCEEDINGS WERE INITIATED AND PENDING BY THE AO ON THE SAME IS SUE SIMULTANEOUSLY U/S 147 AND 154 OF THE ACT WHICH IS NOT PERMITTED IN TH E EYES OF LAW. IN THIS REGARD WE FIND SUPPORT AND GUIDANCE FROM THE JUDGEMENT OF HONOURABLE JURISDICTIONAL HIGH COURT IN THE CASE OF BERGER PAINTS INDIA LTD V ERSUS ACIT REPORTED IN 322 ITR 369(CAL). THE RELEVANT EXTRACT OF THE ORDER IS REPRODUCED BELOW. IF THE ASSESSING OFFICER IS OF THE VIEW THAT INCOME HAS ESCAPED ASSESSMENT BY REASON OF A MISTAKE APPARENT FROM RECORDS, AND T AKES RECOURSE TO SECTION 154, BUT FINDS LATER, THAT THERE IS NO APPARENT MIS TAKE, THEN HE CANNOT, IN THE ABSENCE OF ANY OTHER GROUND ON THE BASIS OF WHICH H E STILL HAS REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT, STA RT REASSESSMENT PROCEEDINGS UNDER SECTION 147. IN OTHER WORDS, THE ASSESSING OFFICER CANNOT AGAIN START REASSESSMENT PROCEEDINGS ON THE BASIS O F THE SAME REASONS. ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 17 HOWEVER WE ALSO NOTE THAT THE LD CIT(A) HAS HEAVILY RELIED ON THE JUDGMENT OF HONBLE HIGH COURT OF DELHI IN THE CASE OF HONDA SI EL POWER PRODUCTS LTD VERSUS DCIT REPORTED IN 340 ITR 53 WHICH HAS BEEN D ISCUSSED IN THE PRECEDING PARAGRAPHS. HOWEVER AS PER OUR UNDERSTAND ING THE ISSUE WHETHER THE REVENUE CAN RESORT TO THE PROVISIONS OF SECTION 154 AND 147 OF THE ACT SIMULTANEOUSLY WAS NOT ADJUDICATED AS EVIDENT FROM THE JUDGMENT WHICH IS REPRODUCED BELOW : THE QUESTION; WHETHER REOPENING IS JUSTIFIED WHEN B OTH PROVISIONS 154 AND 147/148 OF THE ACT ARE ATTRACTED, IS NOT URGED AND ARGUED BY THE PETITIONER. IT IS NOT THE CASE OF THE PETITIONER THAT SECTION 154 OF THE ACT IS APPLICABLE AND CAN BE INVOKED TO MAKE ADDITION ON GROUND NO. 2. 9.4 SIMILARLY WE ALSO NOTE THAT THE HONBLE SUPREME COURT ON APPEAL AGAINST THE HONBLE DELHI HIGH COURT JUDGMENT IN TH E CASE OF HONDA SIEL POWER PRODUCTS LTD (SUPRA) REPORTED IN 340 ITR 64 H AS NOT GIVEN ANY FINDING ON SECTION 154 OF THE ACT FOR THE FACTS OF THE CASE IN HAND. THE RELEVANT EXTRACT OF THE HEAD NOTE OF THE ORDER IS REPRODUCED BELOW: SECTION 14A, READ WITH SECTION 147, OF THE INCOME-T AX ACT, 1961 - EXPENDITURE INCURRED IN RELATION TO EXEMPT INCOME - ASSESSMENT YEAR 2000-01 - ASSESSEE HAD EARNED DIVIDEND INCOME ON LONG-TERM NON-TRADE INVESTMENTS WHICH WAS CLAIMED AS EXEMPT UNDER SECTION 10(33) - ASSESSING OFFICER OPINED THAT EXPENSES RELATING TO EARNING OF DIVIDEN D INCOME WERE NOT ALLOWABLE - HE FOUND THAT ASSESSEE HAD REDUCED GROS S DIVIDEND INCOME FROM ITS INCOME FOR COMPUTING TAXABLE INCOME INSTEAD OF REDUCING NET DIVIDEND INCOME AFTER ACCOUNTING FOR EXPENSES RELATED TO EAR NING DIVIDEND INCOME AND, THEREFORE, INCOME OF ASSESSEE WAS UNDER ASSESSED ON THIS ACCOUNT - ASSESSING OFFICER, ACCORDINGLY, HELD THAT INCOME HA D ESCAPED ASSESSMENT BY REASONS OF FAILURE ON PART OF ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT AND, THUS, HE RE OPENED ASSESSMENT BY ISSUE OF NOTICE UNDER SECTION 148 - ASSESSEE CONTEN DED THAT ASSESSING OFFICER SOUGHT TO INVOKE SECTION 14A TO DISALLOW DE DUCTION OF SUCH EXPENSES WHICH WERE INCURRED FOR EARNING TAX-FREE INCOME WHI CH WAS EXEMPT; THAT SECTION 14A WAS INTRODUCED BY FINANCE ACT, 2001, WI TH RETROSPECTIVE EFFECT FROM 1-4-1962; THAT SINCE ASSESSEE HAD FILED ITS RE TURN OF INCOME ON 30-11- 2000, IT WAS NOT OBLIGATORY ON PART OF ASSESSEE TO DISCLOSE ANY FACT IN RESPECT OF EXPENDITURE INCURRED TO EARN EXEMPT/TAX-FREE INC OME - HIGH COURT HELD THAT FACTUM THAT SECTION 14A WAS IN STATUTE BOOK WAS KNO WN TO ASSESSEE WHEN ORIGINAL ASSESSMENT ORDER WAS PASSED AND, THUS, THE RE WAS AN OMISSION AND FAILURE ON PART OF ASSESSEE TO POINT OUT EXPENSES I NCURRED RELATABLE TO TAX- FREE/EXEMPT INCOME - ACCORDINGLY, HIGH COURT HELD T HAT REOPENING OF ASSESSMENT WAS JUSTIFIED - WHETHER REOPENING OF ASS ESSMENT WAS FULLY JUSTIFIED ON FACTS AND CIRCUMSTANCES - HELD, YES - WHETHER, HOWEVER, IT WOULD ITA NO.165/KOL/2015 A.Y. 2007-08 ANANDA PAUL VS. ACIT, CIR-50 KOL. PAGE 18 BE OPEN TO ASSESSEE TO RAISE CONTENTIONS ON MERITS WITH REGARD TO AMOUNT BEING OFFERED FOR TAX AS WELL AS ITS CONTENTION ON SECTION 14A - HELD, YES [IN FAVOUR OF REVENUE] IN VIEW OF ABOVE, WE HOLD THAT THE CASE LAWS RELIED BY THE LD CIT(A) IN HIS ORDER ARE DISTINGUISHABLE FROM THE FACTS OF THE INS TANT CASE. THEREFORE NO REFERENCE TO SUCH CASES CAN BE MADE WHILE DECIDING THE ISSUE IN HAND. IN VIEW OF ABOVE, WE HOLD THAT REASSESSMENT PROCEEDING S CANNOT BE RESORTED AFTER REALIZING THAT THE ERROR CANNOT BE RECTIFIED U/S 154 OF THE ACT. HENCE ON THIS COUNT ALSO WE REVERSE THE ORDER OF AUTHORITIES BELOW. AS THE ISSUE HAS BEEN DECIDED BY US ON TECHNICAL GR OUND WE REFRAIN OUR-SELF FROM ADJUDICATING THE ISSUE ON MERIT. THE APPEAL OF THE ASSESSEE IS ALLOWED. THUS, ON THIS COUNT ALSO, WE HOLD THAT ADDITION MAD E BY THE AO IN THE IMPUGNED ORDER IS UNSUSTAINABLE BEING BEYOND THE SC OPE OF ASSESSMENT FRAMED U/S 143(3)/147 OF THE ACT THE APPEAL OF ASSE SSEE IS ALLOWED AND OTHER GROUNDS RAISED ON MERITS HAVE BECOME PURELY INFRUCT US AND SAME ARE TREATED AS DISMISSED. 10. IN THE RESULT, ASSESSEES APPEAL STANDS ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT 20 /04/2018 SD/- SD/- ($ &) ( &) (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP, SR.P.S (- 20 / 04 /201 8 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-ANANDA PAUL, CF-125, SALT LAKE CITY, KOLKATA A-64 2. /RESPONDENT-ACIT, CIRCLE-50, MANICKTALA CIVIC CENTRE , UTTTARAPAN COMPLEX, DS-2&3,KOLKATA-54 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 $$3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ SR. PRIVATE SECRETARY, HEAD OF OFFICE/DDO 3,