ACIT, Coimbatore V. M/s. NDF Engineering Pvt Ltd., Coimbatore

ITA 1744/CHNY/2010

• Counselvise Citation: 174421714 RSA 2010
• Duration Of Justice: 11 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-10-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 29-09-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 19-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P R RAVIKUMAR; M N MURTHY
• Assessee Lawyers: T N SEETHARAMAN
• Keywords: Tangible material; Bad and doubtful debts; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 115JB; 147; 148; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C' BENCH, CHENNAI [BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI ABRAHAM P GEORGE, ACCOUNTANT MEMBER] I.T.A.NO.1726/MDS/2010 ASSESSMENT YEAR : 2004-05 M/S NDF ENGINEERING PVT. LTD C/O SHRI T.N.SEETHARAMAN, ADVOCATE # 384(OLD NO.196) LLOYDS ROAD CHENNAI 600 086 VS THE ACIT COMPANY CIRCLE IV(1) COIMBATORE [PAN - AABCN3966C] (APPELLANT) (RESPONDENT) I.T.A.NO.1744/MDS/2010 ASSESSMENT YEAR : 2004-05 THE ACIT COMPANY CIRCLE IV(1) COIMBATORE VS M/S NDF ENGINEERING PVT. LTD C/O SHRI T.N.SEETHARAMAN, ADVOCATE CHENNAI 600 086 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI T.N.SEETHARAMAN, ADVOCATE DEPARTMENT BY : S/SHRI P.R.RAVIKUMAR, CIT & M.N.MURTHY, JCIT DATE OF HEARING : 29.9.2011 DATE OF PRONOUNCEMENT : 07-10-2011 ITA 1726 & 1744/10 :- 2 -: O R D E R PER HARI OM MARATHA, JUDICIAL MEMBER: THESE CROSS APPEALS, PERTAINING TO AS SESSMENT YEAR 2004-05, ARE DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), C OIMBATORE, DATED 9.8.2010. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THA T THE ASSESSEE- COMPANY FILED ITS RETURN OF INCOME ON 1.11.2004 ADM ITTING LOSS UNDER NORMAL COMPUTATION AND DECLARED BOOK PROFIT OF ` 77,64,690/- U/S 115JB, WHICH WAS PROCESSED AND SUBSEQUENTLY TAKEN U P FOR SCRUTINY AND THEREAFTER ASSESSMENT WAS COMPLETED U/S 143(3) ON 23.12.2009. TAXABLE INCOME WAS DETERMINED AT ` 1,29,99,753/-. SUBSEQUENTLY, IT WAS NOTICED THAT INTER-CORPORATE LOANS OF ` 1,20,60,000/- WAS RETURNED BACK AS THE SAME WAS NOT PAYABLE BY THE ASSESSEE. WHILE COMPUTING THE TAX U/S 115JB, THE WRITTEN OFF AMOUNT OF INTER- CORPORATE LOANS/DEPOSITS WAS ADDED BACK TO THE BOOK PROFIT, H OWEVER, THE SAME WAS NOT CONSIDERED UNDER THE NORMAL COMPUTATION OF TAX. ACCORDINGLY, WRITTEN OFF OF LOANS/DEPOSITS WAS TREATED AS BENEFI T RECEIVED BY THE ASSESSEE-COMPANY IN THE EXERCISE OF ITS BUSINESS AS ENVISAGED U/S 28(IV) OF THE ACT. BASED ON THIS REASONING, THE AS SESSING OFFICER FORMED HIS OPINION THAT INCOME HAS ESCAPED ASSESSME NT AND THEREFORE, AFTER RECORDING SUCH A REASON, HE ISSUED NOTICE U/S 148 ITA 1726 & 1744/10 :- 3 -: DATED 1.5.2008 FOR REOPENING OF THE ASSESSMENT . IN COMPLIANCE THEREOF, THE ASSESSEE FILED WRITTEN SUBMISSION VIDE LETTER DATED 3.11.2009. BUT THE ASSESSING OFFICER FOUND THAT TH E ASSESSEE HAD TAKEN LOAN FROM CORPORATE FOR ITS BUSINESS PURPOSES DURING THE COURSE OF ITS BUSINESS AND IT IS THE LIABILITY OF THE ASSE SSEE TO REPAY THE SAME. IN CASE THE COMPANY HAS NOT PAID THE SAME BECAUSE OF LOSSES OR SOME OTHER REASONS, IF THE CREDITORS WRITE OFF THE LOAN AMOUNT, NATURALLY, IT IS A BENEFIT TO THE ASSESSEE. IF THE LIABILITY IS RELATED TO THE BUSINESS, THEREAFTER IF ANY BENEFIT ARISES DUE TO W RITE OFF OF THAT LIABILITY, IT IS A BENEFIT ARISING DURING THE COURS E OF BUSINESS ONLY. THE ASSESSING OFFICER HAS ACCEPTED THAT THE LOAN AMOUNT RECEIVED BY THE ASSESSEE IS CAPITAL IN NATURE AT THE TIME OF RECEIP T. BUT ONCE IT IS WRITTEN OFF, THE MONEY WOULD BECOME THE ASSESSEES OWN MONEY AND THE SAME HAS TO BE TREATED AS INCOME FROM BUSINESS. CONSEQUENTLY, IN RE-ASSESSMENT PROCEEDINGS, THE ASSESSEES INCOME FR O THE ASSESSMENT YEAR 2004-05 WAS RECOMPUTED. AGGRIEVED, THE ASSESS EE CHALLENGED THE REOPENING OF THE ASSESSMENT AS WELL AS ADDITIO N ON MERITS. THE LD. CIT(A) HAS ALLOWED THE APPEAL IN PART. BOTH TH E PARTIES ARE AGGRIEVED. ITA 1726 & 1744/10 :- 4 -: 3. AT THE TIME OF HEARING, WE HAVE FOUND THAT THE ASS ESSEE HAS CHALLENGED THE LEGALITY OF RE-ASSESSMENT PROCEEDING S IN THIS CASE VIDE GROUND NOS. 1 TO 4 OF ITS APPEAL, WHICH READ AS UND ER: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX(APPE ALS) IS OPPOSED TO LAW AND THE FACTS AND CIRCUMSTANCES OF T HE CASE. 2. THE COMMISSIONER(APPEALS) ERRED IN HOLDING TH AT THE REOPENING OF THE ASSESSMENT WAS VALID, REJECTING T HE APPELLANT COMPANYS CONTENTION THAT THE REOPENING WAS BASED O N MERE CHANGE OF OPINION AND IS INVALID. 3. THE COMM I SSIONER (APPEALS) ERRED IN NOT SEE I NG THAT I N THE PROF I T AND LOSS ACCOUN T ACCOMPANY I NG THE COMPANY ' S OR I G I NAL RETURN 'EXCESS PROVISION WR I TTEN BACK - LO A NS WR I TTEN OFF - HAS BEEN EXPLICITLY SHOWN AS A SEPARATE ITEM AND I N THE NOTE S O N AC C OU N T ( SCHEDULE 18 ) UNDER I TEM (3 ) THERE I S SPECIFIC MENT I ON THAT 'INTE R C ORPORATE LOANS OF ` 1 , 20 , 60 , 000 /- IS WR I TTEN BACK DURING THE YEAR AS THE AMOUN T IS NO T PAYABLE'. MOREOVER , I N ITS RETURN OF INCOME, UNDER COMPUTATION OF BOOK P R OF IT U/ S 1 15JB , THE APPELLANT HAD ADDED 'INTER CORPORATE LOANS WR I TTEN BA CK ` 1 , 20 , 60 , 000/ - ' THUS INFORMAT I ON REGA R DING THE SUM OF ` 1 , 20 , 60 , 000 /- WAS AVAILABLE TO THE ASSESS I NG OFFICER WHILE MAKING THE OR I GINAL ASSESSMENT U / S 1 43 ( 3 ) ON 2 9 . 12 . 2006 AND NO NEW FACTS HAD COME TO LIGHT SUBSEQUENTLY NOR WAS THERE A NY CHANGE IN THE SETTLED LAW FOR THE ASSESSING OFFICER TO BELIEVE THAT THE R E WAS ESCAPEMENT OF I NCOME TO INVOKE SECTION 147 OF THE ACT . 4. THE APPELLANT SUBMITS AND URGES THAT THE R E WAS NO ' TANG I BLE MATER I A L ' F OR THE ASSESSING OFFICER TO COME TO THE CONCLUSION TAT THERE WAS ESCAPEMENT OF I N COME WAR R ANT I NG REOPENING OF THE ASSESSMENT AND AS SUCH THE REASSESSMENT O R DE R UN DE R SECTION 143 ( 3 ) R . W . SECTION 147 DATED 23 . 12 ., 2009 DESERVES TO BE ST R UCK DOW N A S WITHOUT JURISD I CTION AND INVALID . THE APPELLANT PRAYS THAT THE HON ' BLE TRI BUNA L BE PLEASED TO DO SO . 4. WE HAVE HEARD BOTH SIDES ON THIS ISSUE. THE FACTS MENTIONED IN THE GROUNDS THAT IN THE PROFIT & LOSS ACCOUNT ACCOM PANYING THE COMPANYS ORIGINAL RETURN EXCESS PROVISION WRITTEN BACK LOANS ITA 1726 & 1744/10 :- 5 -: WRITTEN OFF HAS BEEN EXPLICITLY SHOWN AS A SEPARAT E ITEM AND IN THE NOTES ON ACCOUNT (SCHEDULE 18) UNDER ITEM (3) THERE IS SPECIFIC MENTION THAT INTER CORPORATE LOANS OF ` 1,20,60,000/- IS WRITTEN BACK DURING THE YEAR AS THE AMOUNT IS NOT PAYABLE. UND ER COMPUTATION OF BOOK PROFIT U/S 115JB, THE ASSESSEE HAS ADDED INTE R-CORPORATE LOANS WRITTEN BACK ` 1,20,60,000/-. THUS, THE INFORMATION REGARDING T HE SUM OF ` 1,20,60,000/- WAS AVAILABLE TO THE ASSESSING OFFIC ER WHILE MAKING THE ORIGINAL ASSESSMENT U/S 143(3) ON 29.12 .2006 AND NO NEW FACTS HAD COME TO LIGHT SUBSEQUENTLY NOR THERE WAS ANY CHANGE IN THE SETTLED LAW FOR THE ASSESSING OFFICER TO BELIEVE TH AT THERE WAS ESCAPEMENT OF INCOME TO INVOKE SECTION 147 OF THE A CT . WE HAVE FOUND THAT IN THE ORIGINAL ASSESSMENT ORDER, THE AS SESSING OFFICER HAS EXAMINED THIS ISSUE IN DETAIL VIDE HIS LETTER DATED 31.10.2006. A COPY OF THIS LETTER IS ENCLOSED AT PAGE 19 OF THE ASSESS EES PAPER BOOK. CONTENTS OF THIS LETTER IS INCORPORATED HEREIN BELO W FOR READY REFERENCE: NO.AABCN3966G DATED: 31 ST OCT.2006 M / S . N DF E NG I NEER I NG P VT L TD . C/ O MOHAN & VENKATRAMANAN CHARTERED ACCOUNTANTS 9 , BHARATHI PARK CROSS ROAD NO . 3 SA I BABA MISSION POST C OIMBATORE - 641 011 ITA 1726 & 1744/10 :- 6 -: SIR, SUB: INCOME TAX ASSESSMENT - ASSESSMENT YEAR 2004-05 YOUR OWN - REGARDING YOUR CASE IS POSTED FOR HEARING ON 10/11/2006 AT 11 .45 AM IN MY OFFICE AT COIMBATORE. Y OU ARE , THEREFORE , REQUESTED TO APPEAR BEFORE ME ON THAT DATE A ND PLEASE FU RNIS H T HE FOLLOW I NG : 1) WORKING OF BOOK PROFIT U/ S 115JB 2) PARTY WISE , ITEM WISE , MONTH WISE BREAK UP OF SALES MADE IN RESPECT OF ITEMS MENTIONED IN SCHEDULE 12 3) DETAILS OF RAW MATERIALS AND STORES - ITEMW I SE 4) PURCHASE - MONTHWISE , I TEM WISE AND PARTY WISE 5) MONTHWISE BREAK UP OF PURCHASE OF PACKING MATERIALS 6) MONTH WISE BREAK UP OF SALE OF FIN I SHED GOODS 7) MONTHWSIE BREAK UP OF SALARIES AND WAGES AND BONUS PA I D WITH EVIDENCE FOR PAYMENT OF LABOUR CHARGES PAID 8) C OPY OF SALES TAX ORDER IF ANY 9) DETAILS OF LOSS ON SALE OF SCRAP OF ASSETS 10) DETA I LS OF INTEREST PAID 11) NOTE : A) EXCESS PROVISION WRITTEN BACK B) BAD DEBTS WRITTEN OFF C) UNSECURED LOANS 12) D ETAILS OF PARTIES BALANCE WR I TTEN OFF 13) DETAILS OF REPAIRS AND MAINTENANCE WITH BI LLS AND VOUCHERS 14) DETAILS OF LOSS ON SALE OF DEPRECIABLE A SSETS ( SHORT TERM C AP I TA L L OSS ) . I N CASE NO CONVINCING REPLY RECEIVED , THE LOSS C L AIMED AS SHOR T TE RM CAPITAL LOSS WILL BE DISALLOWED . 15) NAME AND ADDRESS OF FIXED DEPOSIT HOLDERS WITH THE AMOUNT RECEIVED AND SETTLEMENT DETAILS AND THE PERSON TO W HOM BROKERAGE PAID. IT IS PROPOSED TO DISALLOW THE CLAIMS OF TANGIBLE ASSETS WRITTEN OFF AND R R&D EXPENSES CLAIMED SINCE NO BUSINESS ACTIVITY. 5. THE ASSESSEES LETTER DATED 9.11.2006 WHICH IS PLAC ED AT PAGES 21 TO 24 OF THE PAPER BOOK FURTHER SHOWS THAT THE A SSESSEE HAD CLEARLY REPLIED TO THE QUERY REGARDING EXCESS PROVISION WRI TTEN BACK AND ALSO ITA 1726 & 1744/10 :- 7 -: MENTIONED THE REASONS. PARA 7 OF THIS LETTER IS RE LEVANT AND WE EXTRACT BELOW THE SAME FROM PAGE 21 OF ASSESSEES PAPER BOO K: 7. (A) EXCESS PROVISION WRITTEN BACK IS RELATED T O WRITTEN BACK OF INTERCORPORATE LOAN BORROWED BY THE COMPANY AND NOT PAID DUE TO LOSSES AND WRITTEN OFF BY THE LENDER. (B) BAD DEBTS WRITTEN OFF DURING THE YEAR IS ` ` NIL (C) DETAILS OF UNSECURED LOANS IS GIVEN VIDE OUR LETTER DATED 6. THE EXISTENCE OF THESE LETTERS COULD NOT BE DENIED BY THE LD.DR. WE ARE CONVINCED THAT THE ASSESSING OFFICER, WHILE MAKING HIS ORIGINAL ASSESSMENT, HAS REALLY EXAMINED THIS ISSUE FROM ALL ANGLES AND HAD TAKEN A PLAUSIBLE VIEW IN THE GIVEN FACTS AND CIRCU MSTANCES OF THE CASE. SUBSEQUENTLY, ON THE BASIS OF SAME REASONS, IT IS NOT PERMISSIBLE TO REOPEN THE ASSESSMENT BY TAKING RECOURSE TO SEC TION 147 BECAUSE IT WOULD AMOUNT TO CHANGE OF OPINION AND A CHANGE OF O PINION CANNOT BE MADE A GROUND FOR REOPENING OF AN ALREADY SETTLED A SSESSMENT . AT PAGE 31 OF THE PAPER BOOK, THE REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT IS PLACED. WE REPRODUCE HEREIN BELOW THE LETTER WRITTEN BY THE ASSESSING OF FICER TO THE ASSESSEE IN TOTO: ITA 1726 & 1744/10 :- 8 -: AABCN3966G DATED: 25.8 .2009 TO M/S NDF ENGINEERING (P) LTD / M/S NDF ENGINEER ING (P) LTD 31, BHARATHIAR ROAD 9, BHARATHI PARK 3 RD CROSS PAPPANAICKENPALAYAM SAIBABA MISSION POST COIMBATORE 641 037 COIMBATORE 11 SIRS, SUB: INCOME-TAX ASSESSMENT U/S 148 ASSESSMENT YEAR 2004-05-YOUR OWN REG. REFERENCE: YOUR LETTER DATED 24.8.2009 PLEASE REFER TO THE ABOVE. 2. DURING THE PREVIOUS YEAR ENDED 31-3.2004, IT IS SEEN FROM NOTES ON ACCOUNTS SCHEDULE 18 NO.3 (ACCOUNTING PRAC TICES) THAT INTERCORPORATE LOANS/DEPOSITS OF ` L.20,60,.000/- IS WRITTEN BACK AS THE SAME WAS NOT PAYABLE BY THE ASSESSEE. F URTHER, WHILE COMPUTING TAX U/S 115JB, THE WRITE OFF AMOUNT OF INTERCORPORATE LOANS/DEPOSITS WAS ADDED BACK TO BOO K PROFIT. HOWEVER, THE SAME WAS NOT CONSIDERED UNDER THE NORM AL COMPUTATION OF TAX. AS SUCH THE WRITE OFF OF REPAYM ENT OF LOANS/DEPOSITS IS A BENEFIT RECEIVED BY THE ASSESSE E COMPANY IN THE EXERCISE OF ITS BUSINESS AS ENVISAGED U/S 28(IV ) OF THE INCOME-TAX ACT. HENCE, THE ASSESSING OFFICER HAS RE ASON TO BELIEVE THAT INCOME HAS ESCAPED THE ASSESSMENT. YOURS FAITHFULLY, SD/- (P.RENUGA DEVI) ASSISTANT COMMISSIONER OF INCOME-TAX COMPANY CIRCLE IV(1), COIMBATORE 7. AFTER COMPARING THE RELEVANT PORTIONS OF THE INVESTIGATION/ENQUIRY MADE DURING THE ORIGINAL ASSE SSMENT PROCEEDINGS WITH THE REASONS RECORDED FOR REOPENING, ANY PRUDEN T MAN WILL COME ITA 1726 & 1744/10 :- 9 -: TO AN IRRESISTIBLE CONCLUSION THAT THE ASSESSING OF FICER IS TRYING TO TAKE A U TURN BY MAKING RE-ASSESSMENT ON THE BASIS OF A CHANGED OPINION ABOUT THE SAME ITEM OF INCOME. THE LAW IS VERY MUC H SETTLED AND CLEAR ON THIS ISSUE. EVEN AFTER THE AMENDMENT IN T HE PROVISIONS OF SECTION 147, WHICH HAS BEEN SUCCINCTLY EXPLAINED BY THE HON'BLE SUPREME COURT IN THE CASES OF ACIT VS RAJESH JHAVE RI STOCK BROKERS PVT. LTD, 291 ITR 500, AND CIT VS KELVINATOR OF I NDIA LTD, 256 ITR 1, THAT OPINION AND REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT CANNOT BE BASED ON CHANGE OF OPINION ON THE PART OF THE ASSESSING OFFICER TO REOPEN AN ASSESSMENT AND THIS PROVISION STILL SURVIVES. IN THIS CASE, THERE IS NO TANGIBLE MATER IAL WHICH HAS COME IN THE POSSESSION OF THE ASSESSING OFFICER, ADMITTEDLY , AFTER THE ORIGINAL ASSESSMENT AND WITHIN THE DATE OF INITIATION OF R EOPENING PROCEEDINGS AND OF-COURSE UNTIL TODAY. IN THE CASE OF CIT VS K ELVINATOR OF INDIA LTD (SUPRA), THE HON'BLE SUPREME COURT HAS HELD AS UNDE R: THE CONCEPT OF 'CHANGE OF OPINION' ALL THE PART OF THE ASSESSING OFFICER TO REOPEN AN ASSESSMENT DOES NOT STAND OBLITERATED AFTER THE SUBSTITUTION OF SECTION 147 O F THE INCOME- TAX ACT, 1961, BY THE DIRECT TAX LAWS (AMENDMENT) A CTS, 1987 AND 1989. AFTER THE AMENDMENT, THE ASSESSING O FFICER HAS TO HAVE REASON TO BELIEVE THAT INCOME HAS ESCAP ED ASSESSMENT, BUT THIS DOES NOT IMPLY THAT THE ASSESS ING OFFICER CAN REOPEN AN ASSESSMENT ON MERE CHANGE OF OPINION. THE CONCEPT OF 'CHANGE OF OPINION' MUST BE TREATED AS A LL IN-BUILT TEST TO CHECK THE ABUSE OF POWER. HENCE AFTER APRIL 1, 1989, THE ASSESSING OFFICER HAS POWER TO REOPEN ALL ASSES SMENT, ITA 1726 & 1744/10 :- 10 - : PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO TH E CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT . REASON MUST HAVE A LINK WITH THE FORMATION OF THE B ELIEF. 8. THIS ISSUE HAS BEEN VERY SUCCINCTLY AND NEATLY DESC RIBED BY HON'BLE BOMBAY HIGH COURT WHILE DECIDING THE CASE O F ASIAN PAINTS LTD VS DY. CIT, 308 ITR 195, IN WHICH IT HAS BEEN HELD AS UNDER: WHEN A REGULAR ORDER OF ASSESSMENT IS PASSED IN TERMS OF SECTION 143(3) OF THE INCOME-TAX ACT, 1961 , A PRESUMPTION CAN BE RAISED THAT SUCH AN ORDER HAS BE EN PASSED ON APPLICATION OF MIND. IF NON-APPLICATION O F MIND BY THE ASSESSING OFFICER IN PASSING AN ORDER WOULD ITS ELF CONFER JURISDICTION UPON THE ASSESSING OFFICER TO REOPEN T HE PROCEEDING WITHOUT ANYTHING FURTHER, IT WOULD AMOUN T TO GIVING A PREMIUM TO AN AUTHORITY EXERCISING QUASI-JUDICIAL FUNCTION TO TAKE BENEFIT OF ITS OWN WRONG. THE LEGISLATURE HAS NOT CONFERRED POWER ON THE ASSESSING OFFICER TO REVIEW HIS OWN ORDER. THE ASSESSEE, A COMPANY, FILED ITS RETURNS OF INCOM E, INTER ALIA, DISCLOSING PROVISION FOR ESTIMATED LIAB ILITY FOR ARREARS OF WAGES PAYABLE TO WORKMEN AT ITS PLANT AND CONTRI BUTION BY WAY OF REIMBURSEMENT OF CAPITAL LOSS INCURRED BY PR OVIDENT, GRATUITY AND SUPERANNUATION FUNDS. PURSUANT TO THE NOTICE ISSUED DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE FURNISHED FURTHER INFORMATION RELATING TO WAGES PAYABLE TO WORKMEN AND CAPITAL LOSS INCURRED ON ACC OUNT OF CONTRIBUTION BY WAY OF PROVIDENT, GRATUITY AND SUPE RANNUATION FUNDS. AN ASSESSMENT ORDER WAS PASSED ALLOWING DEDU CTION IN RESPECT OF EXPENDITURE INCURRED DUE TO WAGES PAYABL E TO WORKMEN AND CONTRIBUTION BY WAY OF PROVIDENT, GRATU ITY AND SUPERANNUATION FUNDS. ON ISSUE OF NOTICE UNDER SECT ION 148 OF THE ACT, THE ASSESSEE CONTESTED THE NOTICE ON THE G ROUND THAT REASSESSMENT PROCEEDINGS COULD NOT BE INITIATED MER ELY BECAUSE THERE WAS A CHANGE OF OPINION. THE DEPUTY COMMISSIONER OF INCOME-TAX REJECTED THE OBJECTION O F THE ASSESSEE ON THE GROUND THAT ALL THE INFORMATION ON RECORD WAS NOT TAKEN INTO ACCOUNT WHILE FRAMING THE ASSESSMENT ORDER AND THEREFORE INCOME HAD ESCAPED ASSESSMENT. ON A W RIT PETITION: ITA 1726 & 1744/10 :- 11 - : HELD, ALLOWING THE PETITION, THAT INITIATION OF REA SSESSMENT PROCEEDINGS WOULD AMOUNT TO CHANGE OF OPINION OF TH E ASSESSING OFFICER AS IT WAS MERELY A FRESH APPLICAT ION OF MIND BY THE ASSESSING OFFICER TO THE SAME SET OF FACTS. SINCE THE ASSESSING OFFICER HAD FAILED TO APPLY HIS MIND TO T HE RELEVANT MATERIAL WHILE FRAMING THE ASSESSMENT ORDER, HE COU LD NOT TAKE ADVANTAGE OF HIS OWN WRONG AND REOPEN THE ASSE SSMENT UNDER SECTION 147 OF THE ACT. 9. INCIDENTALLY, WE MAY MENTION THAT THE LD. CIT(A) HA S HELD THAT THE AMOUNT UTILIZED FOR ACQUISITION OF CAPITAL ASSE T IN SUCH CIRCUMSTANCES CANNOT BE HELD TO BE A BENEFIT U/S 28 (IV) OF THE ACT, BE THAT AS IT MAY, AS PER THE PROVISION OF SECTION 147 R.W.S 148, NO ASSESSMENT U/S 143(3) CAN BE REOPENED AS PER THE E XPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR UNLE SS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT BY REASO N OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRUL Y ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT , FOR THAT ASSESSMENT YEAR. WE ARE NOT CONCERNED WITH THE PERIOD OF FOUR YEARS, BUT WE ARE CONCERNED WITH THE FACT THAT THE ASSESSEE HAS FULLY AND TRULY DISC LOSED ALL THE MATERIAL FACTS BEFORE THE ASSESSING OFFICER AND THIS FACT ST ANDS PROVED ON RECORD. THIS IS NOT A CASE OF VALIDITY OF THE RE-A SSESSMENT WITH RESPECT TO TIME FOR FOUR YEARS BUT THE ASSESSEES OBJECTION IS REGARDING CHANGE OF OPINION WHICH WAS EARLIER TAKEN IN ONE WAY AND L ATER ON IT WAS BEING DECIDED IN DIAGONALLY OPPOSITE MANNER. SUCH CHANGE OF OPINION AS PER ITA 1726 & 1744/10 :- 12 - : THE SETTLED LAW MENTIONED ABOVE, CANNOT BE MADE A B ASIS FOR REOPENING OF THE ASSESSMENT . ACCORDINGLY, ASSESSM ENT ORDER DATED 23.12.2009 BECOMES A NULLITY AND THEREFORE, DECLARE D AS VOID AB INITIO BEING BASED ON INVALID REASONS. OR TO SAY, A CHANG E OF OPINION WHICH IS NOT PERMITTED. WE DECLARE THE RE-ASSESSMENT ORD ER NULL AND VOID AND QUASH THE SAME. 10. IN VIEW OF OUR ABOVE FINDING, THE APPEAL OF THE REV ENUE BECOMES INFRUCTUOUS AND APPEAL OF THE ASSESSEE STA NDS ALLOWED. 11. IN THE RESULT, APPEAL OF THE REVENUE STANDS DISMI SSED WHEREAS THAT OF THE ASSESSEE STANDS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 07-10-2011. SD/- SD/- (ABRAHAM P GEORGE) ACCOUNTANT MEMBER ( HARI OM MARATHA ) JUDICIAL MEMBER DATED: 07 TH OCTOBER, 2011 RD COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) 4. CIT 5. DR