Shri. Kola Venkat Rama Naidu, Bangalore V. The Commissioner Of Income Tax (Appeals) - 6, Bangalore

ITA 205/BANG/2020

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 4083 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 11-02-2021
• Assessment Year: 2008-2009
• Appeal Filed On: 13-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS NEERA MALHOTRA
• Assessee Lawyers: V SRINIVASAN
• Keywords: Reopening of assessment; Capital asset; Depreciation; Search and seizure; Principle of natural justice; Question of law; Cost of acquisition; Tangible material; Difference of opinion; Assessment record; Right to appeal; Reason to believe; Change of opinion; Reassessment proceedings; Set aside; Capital Gains
• Section: 143(3); 133A; 133(6); 143(1); 205; 250; 113; 48; 13; 153; 22; 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCHES A BENCH: BANGALORE BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K , JUDICIAL MEMBER ITA NO. 205 /BANG/20 20 (ASSESSMENT YEAR: 20 0 8 - 0 9) SHRI KOLA VENKAT RAMA NAIDU, PROP. K VR HOUSING ARCHITECH & ENGINEERING, NO.13, 4THCROSS, 1 ST MAIN ROAD, DOLLARS COLONY, BENGALURU - 560 024 .APPELLANT . PAN ABMPN 6059K VS. COMMISSIONER OF INCOME TAX - 6 , BANGALOR E. RESPONDENT. ASSESSEE BY: SHRI V. SRINIVASAN, ADVOCATE. REVENUE BY: MRS. NEERA MALHOTRA, CIT (D.R) DATE OF HEARING : 11.02 .20 2 1 . DATE OF PRONOUNCEMENT : 15 .02. 20 2 1 . O R D E R PER SHRI CHANDRA POOJARI, A M : THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF C OMMISSIONER OF INCOME TAX (APPEALS) - 6 , BANGALORE DT.21.11.2019 FOR THE ASSESSMENT YEAR 2008 - 09. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS : 2 ITA NO. 205/BANG/2020 1, THE IMPUGNED ORDER DATED 16.11.2019 PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, APPEAL - 6 UNDER SECTION 250 OF THE INCOME TAX ACT 1961 FOR ASSESSMENT YEAR 2008 - 09 IS HIGHLY ILLEGAL, IMPROPER AND UNJUST AND ALSO IN THE GROSS VIOLAT ION OF THE PRINCIPLES OF NATURAL JUSTICE. 2. THE LEARNED RESPONDENT SERIOUSLY ERRED IN NOT NOTICING THE FACT THAT IN VIEW OF THE PENDENCY OF THE VARIOUS LEGAL LITIGATION ON THE PROPERTIES, THE APPELLANT HAD NOT GOT A COMPLETE LEGAL RIGHTS OVER THE PROPERTY WHICH WERE THE SUBJECT MATTER OF JOINT DEVELOPMENT AGREEMENT WITH M/S. SRI RAM PROPERTIES LIMITED RESULTING IN - COMPLETE INACTION MUCH LESS ANY COMMERCIAL ACTIVITY ON THE SAID PROPERTY WARRANTING ASSUMPTION OF INCOME IN THE MANNER ASSESSED IN THE IMPUGNED ORDER. 3. THE LEARNED RESPONDENT EQUALLY OVERLOOKED ALL THE GLARING FACTS AND SUBMISSIONS MADE BY THE APPELLANT BEFORE THE SURVEY AUTHORITIES AND THEREFORE THE IMPUGNED ORDERS ARE LIABLE TO BE QUASHED ON THIS GROUND ALONE. 4. THE LEARNED RESPONDENT FURTHER GROSSLY ERRED IN ASSUMING INCOME DURING THE IMPUGNED PERIOD ALTHOUGH THE APPELLANT HAD NEVER ACCRUED ANY INCOME IN VIEW OF COMPLETE INACTION ON THE PROJECT. 5. THE LEARNED RESPONDENT FURTHER GROSSLY ERRED IN ASSUMING THE SELLING PRICE ABSOLUTELY WITHOUT ANY BASIS AND HAD ARRIVED AT AN IMAGINARY FIGURE WITHOUT ANY BASIS AND THEREFORE THE IMPUGNED ORDERS IS LIABLE TO BE SET ASIDE ON THIS GROUND ALSO. 6. THE LEARNED RESPONDENT ALSO SERIOUSLY ERRED IN NOT CONSIDERING THE VARIOUS STATUTORY DOCUMENTS LIKE GR ANTING OF KHATA ON THE PROPERTY, RELEASING THE ORIGINAL JOINT DEVELOPMENT AGREEMENT BY THE REGISTERING AUTHORITY, CONTINUATION OF THE LITIGATION OVER THE PROPERTIES WHICH ARE THE SUBJECT MATTER OF JOINT DEVELOPMENT AGREEMENT WHICH DISABLED THE APPELLANT AS WELL AS THE TRANSFEREE FROM NOT CARRYING OUT ANY ACTIVITY ON THE PROPERTY SO AS TO REMOTELY PRESUMED ANY INCOME ASSESSABLE DURING THE IMPUGNED PERIOD. 7. THE LEARNED A.O HAS ERRED IN RE - OPENING OF ASSESSMENT FORD THE A.Y 2008 - 09 U/S 148 OF THE ACT, IS B ARRED BY LIMITATION AS THE NOTICE U/S 148 IS ISSUED BEYOND FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, AS THE ORIGINAL ASSESSMENT IS COMPLETED U/S 143(3) OF THE INCOME TAX ACT, 1961. 3 ITA NO. 205/BANG/2020 8. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE RE ASS ESSMENT ORDER PASSED BY THE LEARNED A.O IS ILLEGAL AND OPPOSED TO LAW AND LIABLE TO BE QUASHED AS THE A.0 HAS RECORDED COMPLETELY FALSE & WRONG FACTS ON REASONS RECORDED FOR RE - OPENING OF THE ASSESSMENT IN SPITE OF REPEATED REQUEST BY THE APPELLANT. 9. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE REASSESSMENT IS BAD IN LAW AND LIABLE TO BE QUASHED, AS THE ASSESSMENT IS RE - OPENED MERELY BY CHANGE OF OPINION, WITHOUT ANY ALLEGATION OF FAILURE ON THE PART OF THE APPELLANT TO DISCLOSE TRULY AND FULLY ALL TH E MATERIAL FACTS NECESSARY FOR COMPLETION OF ASSESSMENT.. 10. THE RESPONDENT ERRED IN HOLDING THAT THERE WAS 'TRANSFER' WITHIN THE MEANING OF SECTION 2(47)(V) OF THE INCOME TAX ACT, 1961 IS CLEARLY UN - SUSTAINABLE IN LAW. 11. WITHOUT PREJUDICE TO ANY OF THE AFORESAID GROUNDS, IT IS NOTED THAT CONSIDERATION ACCRUING CANNOT BE EVALUATED AS THE SUBJECT MATTER IS NOT IN EXISTENCE AND THEREFORE CANNOT BE ASCERTAINED AS ON THE DATE OF JDA AS IT WOULD AMOUNT TO CALCULATION OF DISCOUNTED FIGURES ON AN UNKNOWN V ALUE FOR A NON - EXISTED ASSET AND IN CAPABLE OF BEING DETERMINED. THEREFORE, IT IS SUBMITTED THAT THE COMPUTATION PROVISIONS CANNOT BE INVOLVED AND THEREFORE CHARGE TO CAPITAL GAIN FAILS. 12. THE LEARNED A.O, HAS GROSSLY ERRED IN CONSIDERING THE SALE VALU E OF CAPITAL ASSETS (CONSIDERATION) ON IMAGINARY BASIS WITHOUT ANY MATERIAL IN HAND AND ALSO HE HAS INCORRECTLY CONSIDERED THE COST OF ACQUISITION . 13. THAT THE APPELLANT CRAVES LEAVE TO ADD TO, ALTER AND AMEND, MODIFY, SUBSTITUTE, DELETE AND OR RESCIND ALL OR ANY OF THE GROUNDS OF APPEAL ON OR BEFORE THE FINAL HEARING. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSEE E - FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2008 - 09 ON 29.08.2008 DECLARING INCOME FROM BUSINESS, HOUSE PROPERTY AND OTHER SOURCES AT RS.1,85,85,160, CONSEQUENT TO SURVEY CONDUCTED. THEREAFTER ANOTHER SURVEY U/S. 133A OF THE INCOME TAX ACT, 1961 ('THE ACT') WAS CONDUCTED ON 2.3.2015. DURING THE COURSE OF SURVEY, IT WAS FOUND THAT THE ASSESSEE HAS ENTERED INTO A JOINT DEVELO PMENT AGREEMENT (JDA) ON 14.5.2007 WITH M/S. 4 ITA NO. 205/BANG/2020 SHRIRAM PROPERTIES LIMITED, CHENNAI FOR CONSTRUCTION OF RESIDENTIAL FLATS ON THE LANDS OWNED BY THE ASSESSEE MEASURING 12 ACRES 32 GUNTAS SITUATED AT SINGAPURA, JALAHALLI EAST, BENGALURU. VIDE THE JDA THE ASSES SEE TRANSFERRED 10 ACRES 27 GUNTAS TO THE DEVELOPER. SUBSEQUENTLY, ON 7.5.2009, THE ASSESSEE TRANSFERRED THE BALANCE 2 ACRES 5 GUNTAS TO THE DEVELOPER. AS IT WAS SEEN THAT THE CAPITAL GAINS ACCRUING FROM THE SALE/TRANSFER OF LAND WAS NOT OFFERED TO T AX FOR BOTH A.YS 2008 - 09 AND 20 10 - 11 . T HE ASSESSMENTS WERE REOPENED U/S. 147 OF THE ACT BY THE ISSUE OF NOTICE U/S. 148 OF THE ACT ON 9.3.2015. THE REASONS RECORDED FOR REOPENING THE CASE FOR ASSESSMENT YEAR 2008 - 09 ARE REPRODUCED FROM THE ASSESSMENT ORDER AS UNDER : THE ASSESSEE SRI K.V NAIDU (PAN: ABMPN6059K) HAS FILED HIS RETURN OF INCOME FOR THE A.Y. 2008 - 09 ON 29.09.2008 DECLARING TOTAL INCOME RS. 1,85,85,160/ - AS PER THE RECORDS THE RETURNS HAS BEEN PROCESSED U/S 143(1) AND NO SCRUTINY ASSESSMENT HAS BEEN MADE IN THIS CASE FOR THE ASSESSMENT YEAR 2008 - 09. A SURVEY U/S 133A WAS CONDUCTED IN THE BUSINESS PREMISES OF THE ASSESSEE ON 02.03.2015. DURING THE COURSE OF SURVEY, IT WAS FOUND THAT THE ASSESSEE HAD ENTERED INTO JDA ON 14.05.2007 WITH M/S SHR IRAM PROPERTIES LIMITED, CHENNAI FOR THE CONSTRUCTION OF RESIDENTIAL FLATS ON THE LANDS OWNED BY THE ASSESSEE BY TRANSFERRING THE LANDS MEASURING 12 ACRES AND 31.5 GUNTAS SITUATED AT SINGAPURA, JALAHALLI EAST, BENGALURU. THE ASSESSEE CLAIMS THAT THERE WERE LITIGATIONS IN THE CIVIL COURTS BY THE FAMILY MEMBERS OF THE ORIGINAL OWNERS OF THE LANDS AND THAT THE MATTER WAS SETTLED AND THE POSSESSION WAS HANDED OVER TO THE DEVELOPER ONLY IN THE MONTH OF OCTOBER 2013. IN THIS CONNECTION, STILL THE ASSESSEE HAS TO PROVE WITH THE DOCUMENTARY EVIDENCES WITH REGARD TO THE HANDING OVER THE POSSESSION OF THE LANDS TO THE DEVELOPER. 5 ITA NO. 205/BANG/2020 3.1 IT WAS SUBMITTED BY THE ASSESSEE DURING POST SURVEY PROCEEDINGS THAT THE LAND INVOLVED IN THE JDA DT.14.5.2007 AND SUBSEQUENT JDA DT.7.5.2009 TOTALING 12 ACRES 32 GUNTAS IN AREA HAD BEEN HANDED OVER TO THE DEVELOPERS ONLY IN F.Y. 2013 - 14 DUE TO CIVIL DISPUTES WITH FAMILY MEMBERS OF THE ORIGINAL LAND OWNERS. IN VIEW OF THE FACT THAT THE ASSESSEE HAD NOT BEEN ABLE TO SUBSTANTIATE HIS C LAIM THAT POSSESSION OF THE SAID LANDS HAD BEEN HANDED OVER TO THE BUILDER ONLY IN OCTOBER, 2013, THE ASSESSING OFFICER DID NOT ACCEPT THE ASSESSEE'S CONTENTION. AFTER EXAMINING THE CLAUSES OF THE RESPECTIVE JDAS, THE ASSESSING OFFICER OBSERVED THAT THE T RANSFER IN TERMS OF SECTION 2(47)(V) OF THE ACT HAD TAKEN PLACE IN THE YEAR OF THE JDA I.E. ;A.Y. 2008 - 09 AND A.Y. 2010 - 11. THE ASSESSING OFFICER NOTED THAT BUT FOR THE SURVEY, THE CAPITAL GAINS WOULD NOT HAVE BEEN BROUGHT TO TAX. ACCORDINGLY, THE AMOUNT OF RS.26,19,22,644 WAS ADDED TO THE ASSESSEE'S INCOME FOR ASSESSMENT YEAR 2008 - 09 AND AN AMOUNT OF RS.5,18,72,200 ADDED FOR A.Y. 2010 - 11. IN ADDITION, FOR A.Y. 2010 - 11 THE ASSESSEE DECLARATION GIVEN DURING POST SURVEY PROCEEDINGS THAT HE WAS OFFERING A SUM OF RS.1,37,60,592 TO TAX ON ACCOUNT OF DEVELOPMENT EXPENSES CLAIMED FOR WHICH THERE WAS NO SUPPORTING DOCUMENTARY EVIDENCE, THE ASSESSING OFFICER ADDED THIS SUM TOO TO THE ASSESSEE'S INCOME. ON APPEAL, THE CIT (APPEALS) CONFIRMED THE REOPENING OF ASSE SSMENT AS WELL AS ADDITION MADE ON MERIT. AGAINST THIS ADDITION AND REOPENING OF ASSESSMENT, THE ASSESSEE IS IN APPEAL BEFORE US. 6 ITA NO. 205/BANG/2020 4. AT THE TIME OF HEARING, AT THE OUTSET THE LEARNED AUTHORISED REPRESENTATIVE PRESSED UPON THE GROUNDS RELATING TO REOPENI NG OF ASSESSMENT BY ARGUING THE RELEVANT GROUND NOS. 7, 8, 9 & 10. 4. 1 THE LD. AR SUBMITTED THAT THE ASSESSEE IS CHALLENGING THE RE OPENING AND CONSEQUENTIAL ASSESSMENT ORDER PASSED BY THE LEARNED A.O. ON THE GROUND THAT THE MANDATORY REQUIREMENTS FOR RE - OPENING THE ASSESSMENT HAVE NOT BEEN COMPLIED WITH BY THE A O. IT WAS SUBMITTED THAT THERE WAS NO REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT ON THE BASIS OF THE REASONS RECORDED AND THAT ; (A) T HERE WAS ONLY A REASON TO SUSPECT THAT INCOME HAS ESC APED ASSESSMENT AND THERE WAS NO REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT; (B) THE RE - OPENING OF THE ASSESSMENT AFTER 4 YEARS WAS OPPOSED TO LAW SINCE THERE WAS AN EARLIER ASSESSMENT U/S. 143[3] ; (C) NO SANCTION U / S. 151 OF THE ACT, HAS BEEN OBTAINED BY THE LEARNED AO FOR ISSUE OF NOTICE U IS. 148 FOR RE - OPENING THE ASSESSMENT; AND 4. 2 THE LD. AR SUBMITTED THAT IN TERMS OF SECTION 147 OF THE ACT, THE ASSESSMENT CAN BE RE - OPENED IF THE AO HAS THE REASON TO BELIEVE THAT INCOME ESCAPED ASSESSMENT. IT WAS SUBMITTED THAT THE PHRASE EMPLOYED U/S. 147 OF THE ACT, REASON TO BELIEVE POSTULATES A BELIEF, WHICH IS IN THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THIS LIVE LINK MUST ALSO BE APPARENT FROM THE READING OF THE REASONS RECORDING. THE LD. AR SUBMITTED THAT THE CONCEPT OF LIVE - LINK AS EXPLAINED BY THE SUPREME COURT IN THE CASE OF CIT. VS. LAKHMANI MEWAT DAS REPORTED IN 103 ITR 437 WHEREIN IT WAS HELD THAT THE REASONS SET OUT BY THE A.O. TO THE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT IS TOTALLY AB SENT IN THIS. THE LD. AR RELIED ON THE 7 ITA NO. 205/BANG/2020 RELEVANT OBSERVATIONS OF THE SUPREME COURT IN THE AFORESAID CASE OF LAKHMANI MEWAL DAS (SUPRA) AS BELOW: THE REASONS FOR THE FO RMA TION OF BELIEF MUST HAVE A RAT IONAL CONNECTION OR RELEVANT BEARING ON TH E FORMATION OF THE BELIE F. FORMATION OF BELIEF POSTULATES THAT THERE MUST BE A DIRECT NEXUS OR LIVE LINK BETWEEN THE MATERIAL COMING TO THE NOTICE OF THE INCOME TAX OFFICES AND THE FORMATION OF HIS BELIE F THAT THERE H A S BEEN AN ESCAPEMENT OF INCOME OF THE ASSESSEE FROM A SSESSMENT. 4. 3 THE LD. AR SUBMITTED THAT TESTI NG THE AFO RESAID REASONS RECORDED ON THE RATIO OF THE JUDGMENT OF THE SUPREME COURT IN THE CASE OF LAKHMANI MEWA T DAS [SUPRA], IT IS SEEN THAT THERE ARE NO OBJECTIVE RE ASONS SET - OUT BY THE A O FOR ENTERTAINING A BONA FIDE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. ACCORDING TO THE LD. AR, THIS IS BECAUSE, THE A.O. HA D ARRIVED AT THE BELIEF THAT INCOME HA D ESCAPED ASSESSMENT BY VIRTUE OF THE FACT THAT SHRI PUSHPAR AJ JAIN HA D RECEIVED AN ADVANCE FOR SALE OF L AND FROM THE ASSESSEE AND HA D ALSO MADE CERTAIN ADVANCES TO SRI M.N. RAJENDRA KUMAR, THE TRUSTEE OF THE ASSESSEE TRUST. HOWEVER, IT WAS S UBMITTED THAT THERE IS NOTHING IN THE REASONS RECORDED T O SUPPORT THE BELIEF THAT THE ABOVE TRANSACTION IS HIT BY SECTION 2(47)(V) OF THE ACT, WHICH IS A MERE SURMISE DRAWN BY THE AO. 4. 4 IT WAS FURTHER SUBMITTED THAT THE A.O. HAD NOT EXAMINED THE NATURE OF THE TRANSACTION WITH THE APPELLANT BEFORE A RRIVING AT THE AFORESAID CONCLUSION . THUS, IT 8 ITA NO. 205/BANG/2020 WAS SUBMITTED THAT THE MERE MENTION OF THESE TRANSACTIONS WITHOUT BRIN G ING ON RECORD ANY MATERIAL TO SUPPORT THE SAID INFERENCE LEADS TO THE IR R ESISTIB L E CONCLUSION THAT THE SAID REASON STATED BY THE AO IS A MERE PRETENSE AND CANNOT BE REGARDED AS BONA FIDE REASONS INDUCING A BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. A T BEST, IT WAS SUBMITTED THAT THE REASONS MENTIONED BY THE AO SHOWS ONLY A BELIEF IN THE EXISTENCE OF REASONS AND NOTHING MORE. THEREFORE, IT WAS SUBMITTED THAT THERE IS ABSOLUTELY NO LIVE - LINK BETWEEN THE REASONS STATED BY THE A.O. AND THE BELIEF HELD BY HIM THAT THE INCOME OF THE ASSESSEE HAD ESCAPED ASSESSMENT AND HENCE, IT WAS SUBMITTED THAT THE REOPENING OF THE ASSESSMENT IS BAD IN LAW. 4. 5 THE LD. AR PLACED RELIANCE ON THE JUDGMENT OF THE K ARNATAKA HIGH COURT IN THE CASE OF CIT VS THIPPA S HETTY 322 ITR 525 AND THE UNREPORTED DECISION OF THE KARNATAKA HIGH COURT IN THE CASE OF CIT VS NAGAPPA IN WRIT APPEAL NUMBER 928 OF 1991. IT WAS SUBMI TTED THAT THE SINGLE BENCH JUDGMENT OF THE KARNATAKA HIGH COURT IN THE CASE OF A. NAGAPPA V. ACIT, WHEREIN THE REASONS OF THE ASSESSING OFFICER, WERE ELABORATE, WERE REPRODUCED , YET THE H IGH COURT PROCEEDED TO QUASH THE NOTICE ISSUED TO THE ASSESSEE UNDER SECTION 148 OF THE ACT. ACCORDING TO THE LD. AR THIS ORDER WAS THE SUBJECT MATTER OF CHALLENGE AT THE INSTANCE OF REVENUE IN W.A. NO. 928/ 1991 BEFORE THE DIVISION BENCH OF THE KARNATAKA HIGH COURT WHICH HE L D AS UNDER : 9 ITA NO. 205/BANG/2020 'MORE THAN THE AOS REPORT WHI CH THE LEARNED JUDGE CHAR A C TERIZED AS EV A SIVE AND SPECULATIVE, IT IS THE STATEMENT OF REASONS F OR THE REOPENING WHICH IS EVASIVE AND SPECULATIVE. WE FIND NO BASIS THEREIN WHICH COULD H A VE LED THE APPELLANT TO ENTERTAIN RE A SONS TO BELIEVE TH A T INCOME CH ARGEABLE TO TAX HAD ESCAPED ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR. IT IS IMPERATIVE THAT THE REASONS SHOULD HAVE A RATIONAL AND RELEVANT NEXUS TO THE FORMATION O F SUCH BELIEF. WE DO NOT F IND SUCH NEXUS. THE LD. AR SUBMITTED THAT THE RATIO OF THE AB OVE JUDGMENT SQUARELY APPLIES IN THE INSTANT CASE. ACCORDING TO THE LD. AR, IT IS BECAUSE, THE LEARNED A O HA D ENTERED INTO A SPECUL A TIVE ASSUMPTION THERE IS A TRANSFER IN TERMS OF SECTION 2(47)(V) OF THE ACT WHICH H AS NOT BEEN ESTABLISHED AT ALL. HENCE, IT WAS SUBMITTED THAT IT CANNOT BE SAID THAT THERE WAS A BONA FIDE BELIEF ENTERTAINED BY THE LEARNED A O THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT FOR THE ABOVE ASSESSMENT YEAR. IT WAS SUBMITTED THAT THERE WAS ABSOLUTELY NO LIVE LINK BETWEEN THE REASONS STATED BY AO AND THE BELIEF ENTERTAINED BY HIM THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSMENT. 4. 6 THE LD. AR SUBMITTED THAT THE REASONS BY THE AO AT BEST B ETRAYS A MERE 'REASON TO SUSPECT' THAT HAS ESCAPED ASSESSMENT AN D IT DOES NOT MAKE OUT A CASE OF REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT . THE LD. AR RELIED ON THE JUDGMENT OF THE S UPREME COURT IN THE CASE OF INDIAN OIL CORPORATION VS ITO REPORTED IN 159 ITR 956 AT PAGE 970 WHEREIN IT WAS HELD THAT REAS ON TO BELIEVE IS NOT THE SAME THING AS REASON TO SUSPECT. IT IS WELL SETTLED THAT REASON TO SUSPECT IS NARROWER THAN REASON TO BELIEVE. IT IS SUBMITTED THAT THE PHRASE EMPLOYED IN SECTION 10 ITA NO. 205/BANG/2020 147 OF THE ACT IS REASON TO BELIEVE' AND NOT A REASON TO SUSPECT. IT HAS BEEN HELD THAT WHERE THE RE A SONS RECORDED MERELY SHOWED THAT THERE WAS A MERE SUSPICION THAT INCOME HAS ESCAPED ASSESSMENT, IT WOULD NOT AMOUNT TO A REASON TO BELIEVE' AND HENCE, THE REOPENING OF THE ASSESSMENT WOULD NOT BE PROPER . HAVING REGARD T O THE RATIO OF THE AFORESAID DECISIONS AND CONSIDERING THE REASONS RECORDED, IT WAS SUBMITTED THAT THE RE - OPENING OF THE ASSESSMENT IS BAD IN LAW AND THEREFORE, THE IMPUGNED ORDER OF ASSESSMENT PASSED DESERVES TO BE CANCELLED. 4. 7 THE LD. AR FURTHER SUB MITTED THAT RE - OPENING OF THE ASSESSMENT AFTER THE EXPIRY OF 4 YEARS FROM THE END OF THE ASSESSMENT YEAR IS OPPOSED TO LAW ESPECIALLY, SINCE, THERE WAS AN ASSESSMENT ORDER PASSED U/ S.143[3] OF THE ACT EARLIER. IT WAS SUBMITTED THAT IN TERMS OF THE PROVISO TO SECTION 147 OF THE ACT, IT HAS BEEN LAID DOWN THAT NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF 4 YEARS FROM THE END OF T HE RELEVANT ASSESSMENT YEAR THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR THE FAILURE OF THE ASSESSEE TO FILE RETURNS OF INCOME OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. IT WAS SUBMITTED THAT THE PERIOD OF 4 YEARS FROM THE END OF THE ASSESSMENT YEAR UNDER APPEAL EXPIRED ON 31/03/ 2014 AND T HE AO ISSUED A NOTICE U/S. 148 OF THE ACT, ON 09/03/2015 , WHICH IS AFTER THE PERIOD SPECIFIED UNDER THE PROVISO TO SECTION 147 OF THE ACT. 11 ITA NO. 205/BANG/2020 4. 8 WITH THE AFORESAID BACKGROUND, THE LD. AR SUBMITTED THAT THERE I S NO ALLEGATION IN THE REASONS RECORDED THAT TH E ASSESSEE HAS FAILED T O DISCLOSE FU LL Y AND TRUL L Y ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMEN T YEAR. THUS, ACCORDING TO THE AO, THE PROVISO TO SECTION 147 OF THE ACT, BARS RE - O PENING OF THE ASSESSMENT SINCE THE CONDITIONS PERMITTING THE REOPENING D O NOT EXIST AND THE SAME IS NOT THE BASIS ON WHICH THE ASSESSMENT STANDS REOPENED. THE LD. AR PLACED R ELIANCE FOR THIS PRO POSITION ON THE RATIO OF THE JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF NIRMAL BANG SECURITIES PVT. LTD. , REPORTED IN 382 IT R 93 WHEREIN AFTER NOTICING THE REASONS RECORDED AND THE LEGAL POSITION AS WELL AS THE STATUTORY PROVISIONS OF THE ACT IN PARA [24] OF THE JUDGMENT, IT WAS HELD AS UNDER: - IN VIEW OF THE AFORESAID WELL - SETTLED LEGAL POSITION AND THERE ADM IT TEDLY BEING NOT EVEN AN ALLEGATION IN THE REASONS RECORDED THAT THERE WAS ANY F A IL U RE ON THE PORT OF THE PETITIONER TO DISCLOSE TRULY AND F ULLY A LL MATERIAL FACTS N ECESS A RY F OR ASSESSMENT, LET ALONE THE DETAILS THEREOF, THE IMPUGNED NOTICE DATED MARCH 30,2007 AND TH E IMPUGNED ORDER DATED DECEMBER 8 , 2007 ARE LIABLE TO BE QUASHED AND SET ASIDE ON THIS GROUND OF OUR. 4. 9 THE LD. AR PLACED RELIANCE ON THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF CHAITANYA PROPERTIES PRIVATE LIMITED REP ORTED IN 240 659 [KAR] WHEREIN, THE HON'BTE JURISDICTIONAL HIGH COURT HAS CONSIDERED THE SUBSTANTIAL QUESTION OF LAW AS TO WHETHER THE ABSENCE OF SPELLING OUT THAT THE ESCAPEMENT OF INCOME W A S DUE TO THE FACT THAT THE ASSESSEE H AS NOT DISCLOSED TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR COMP LETION OF ASSESSMENT, IN THE REASONS RECORDED, WOULD BE A VALID 12 ITA NO. 205/BANG/2020 REOPENIN G. NOTIC ING THAT THE IT AT, B ANGALORE BENCH HAD QUASHED THE ASSESSMENT HO L DING THAT THE RE - OPENING OF THE ASSESSMENT WAS INVALID, ON THIS COUNT, THE JURISDICTIONAL HIGH COURT UPHELD THE AFORESAID ORDER OF THE ITAT IN PARA [23] BY OBSERVING AS FOLLOWS : 23. WE ARE ALSO O F THE VIEW THAT INITIATION O F REASSESSMENT PROCEEDINGS WILL HAVE T O BE HELD AS INVALID FOR THE REASON THAT RE A SONS RECORDED BY THE A O DO NOT SPELL OUT THA T ESCAPEMENT OF INCOME W AS DUE TO THE ASSESSEE NOT FULLY AND TRULY DISCLOSING ALL M AT ERIAL FACTS NECESSARY FOR COMPLETION OF ASSESSMENT FOR THE RELEVAN T AS SESSMENT V EAR. IN THIS RECORD, WE ARE ALSO OF THE VIEW TH AT ALL LEGAL TOYS IN PARA 19 OF THE REASONS RECORDED DO NOT SPE LL OUT THE BEL IEF THAT THERE WAS A F A ILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL FAC TS. IN FACT , THE ASSESSEE H A D DISCLOSED ALL FACTS IN THE ORIGINAL A SSESSMENT PROCEEDINGS U/S. 43[3] OF THE ACT. IN VIEW OF THE ABOVE, THE LD. AR SUBMITTED THAT THE RE - OPENING OF THE ASSESSMENT IS BAD IN TAW JUDGING THE SAME ON THE BASIS OF THE REASONS AS RECORD ED AND IN THE ABSENCE OF ANY ALLEGATION THAT THE ASSESSEE HAD NOT FULLY AND TRU LY DISCLOSED ALL MATERIAL PARTICULARS FOR MAKING THE ASSESSMENT AND HENCE, THE RE - OPENING OF THE ASSESSMENT REQUIRES TO BE CANCELLED. 4. 10 THE LD. AR SUBMITTED THAT FOR TESTING THE VALIDITY OF REOPENIN G OF THE ASS ESSMENT, THE REASONS RECORDED ALONE HAS TO BE LOOKED INTO. THE LD. AR SUBMITTED THAT THE REASONS RECORDED HAVE TO BE VIEWED AS THEY ARE A ND THEY CANNOT BE SUPPORTED BY REFERENCE TO ANY EXTRANEOUS MATERIALS. THE REASON RECORDED MUST EITHER STAND OR FALL ON THE REASONS AS RECORDED ALONE AND NOTHING ELSE. RELIANCE IS 13 ITA NO. 205/BANG/2020 PLACED ON THE DECISIONS OF JAMANALAL KABRA REPORTED IN 69 ITR 461 ( ALL.), EQUITABLE INVESTM ENT VS. CIT REPORTED IN 174 ITR 714 (CAL) AND N.D. BHAT VS. IBM REPORTED IN 216 ITR 811 (BO M ). IN THE CASE OF HINDUSTAN LEVER LIMITED V.R.B. WADKAR VS. ASSISTANT COMMISSIONER OF INCOME TAX, 268 ITR 332, THE BOMBAY HIGH COURT IN ITS DECISION AT PAGE 338 IT HAS BEEN HELD THAT: IT IS NEEDLESS TO MENTION THAT THE REASONS ARE REQUIRED TO BE READ AS THEY WERE RECORDED BY THE ASSESSING OFFICER. NO SUBSTITUTION OR DELETION IS PERMISSIBLE. NO ADDITIONS CAN BE MODE TO THOSE REASONS. NO INFERENCE CAN B E ALLOWED TO BE DRAWN BASED ON REASONS NOT RECORDED. IT IS FOR THE ASSESSING 0FFICER TO DISCLOSE AND OPEN HIS MIND THROUGH REASONS RECORDED BY HIM. HE HAS TO SPEAK THROUGH HIS REASONS. LT IS FOR THE ASSESS ING OF FICER TO RE ACH THE CONCLUSION AS TO WHETHER THERE WAS FA ILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE CONCERNED ASSESSMENT YEAR. IT IS FOR THE ASSESSING OFFICER TO FORM HIS OPIN ION . IT IS FOR HIM TO PUT HIS OPINION ON RECORD IN BLACK AND WHITE. THE REASONS RECORDED SHOULD BE CLEAR AND UNAMBIGUOUS OR IT SHOULD NOT SUFFER FROM ANY VAGUENESS. THE REASONS RECORDED MUST DISCLOSE HIS MIND. THE REASONS ARE THE MANIFESTAT ION OF THE MIND OF THE ASSESSING OFFICER. THE REASONS RECORDED SHOULD BE SELF EXPLANATORY AND SHOULD NOT KEEP THE ASSESSEE GUESSING FOR THE REASONS. PERSONS PROVIDE THE LINK BETWEEN CONCLUSION A ND EVIDENCE. THE REASON RECORDED MUST BE BASED ON EVID ENCE. TH E A SSESSING OFFICE , IN THE EVENT OF CHALLENGE TO THE REASONS, MUST BE ABLE TO JUSTIFY THE SAME BASED ON MATERIAL AVAILABLE ON RECORD. HE MUST DISCLOSE IN THE REASONS AS TO WHICH FACT OR MATERIA L WAS NOT DISCLOSED BY THE ASSESSEE FULLY AND TRUL Y NECESSARY FOR ASSESSMENT OF THAT ASSESS MENT YEAR, SO AS TO ESTABLISH THE VITAL LINK BETWEEN THE REASONS AND EVIDENCE. THAT VITAL LINK IS TH E SAFEGUARD AGAINST THE REOPENING OF THE CONCLUDED ASSESSMENT. THE REASONS RECORDED MUST EITHER STAND OR FALL ON THE REASONS AS RECORDED ALONE AND NOTHING ELSE. THE LD. AR PLACED RELIANCE ON THE JUDGMENT OF THE ALLAHABAD HIGH COURT IN THE CASE OF JAMNALAL KABRA REPORTED IN 69 ITR 461, CALCUTTA HIGH COURT IN THE CASE OF EQUITABLE INVESTMENT VS. CIT REPORTED IN 174 I TR 714 AND BOMBAY 14 ITA NO. 205/BANG/2020 HIGH COURT IN THE CASE OF N.D. BHAT VS. IBM REPORTED IN 216 ITR 811. THE LD. AR RELIED ON THE JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN LEVER LIMITED VS. V.R.B. WADKAR, ACIT REPORTED IN 268 ITR 332 WHEREIN IT WAS HELD A S FOLLOWS: 4. 1 1 THE LD. AR RELIED ON THE JUDGMENT OF THE CALCUTTA HIGH COURT IN THE CASE OF EQUITABLE I NVESTMENT LTD. VS. ITO ( 174 ITR 74 ) WHEREIN IT WAS HELD AS FOLLOWS: THE POWERS OF THE INCOME - TAX OFFICER TO REOPEN ASSESSMENTS THOUGH WIDE, ARE NOT PLENARY. THE WORDS OF THE STATUTE ARE REASON TO BELIEVE AND NOT 'REASON TO SUSPECT'. THE REOPENING OF THE ASSESSMENT AFTER THE LAPSE OF MANY YEARS IS A SERIOUS MATTER. THE ACT NO DOUBT, CONTEMPLATES THE REOPENING OF THE ASSESSMENT IF GROUNDS IS FIT FOR BEL IEVING THAT INCOME OF THE ASSESSEE HAS ESCAPED ASSESSME NT. T HE UNDERLYING REASON FOR THAT IS THAT INSTANCES OF CONCEALED INCOME OR OTHER INCOME ESCAPING ASSESSMENT IN A LARGE NUMBER OF CASES COME TO THE NOTICE OF THE INCOME - TAX AUTHORI TIES AFTER THE ASSESSMENT HAS BEEN COMPLETED. THE PROVISIONS OF THE ACT IN THIS RESPECT DEPART FROM THE NORMAL RULE THAT THERE SHOULD BE , SUBJECT TO RIGHT OF APPEAL AND REVISION, FINAL ITS ABOUT ORDERS MADE IN JUDICIAL AND QUASI - JUDICIAL PROCEEDINGS. LT IS, THEREFORE, ESSENTIAL THAT BEFORE SUC H ACTIO N I S TOKE N TH E REQUIREMENT S O F LAW SHOULD BE SATISFIED. 4. 12 IN VIEW OF THE ABOVE SUBMISSIONS, IT WAS SUBMITTED THAT THE IMPUGNED ASSESSMENT ORDER, AFTER RE - OPENING OF ASSESSMENT ORD ER IS BAD IN LAW AND SINCE THE AO HAS NOT PASSED A SEPARATE SPEAKING ORDER DISPOSING OF THE OBJECTIONS TAKEN BY THE ASSESSEE, THE ASSESSMENT ORDER IS TO BE CANCELLED. 5. THE LD. DR SUBMITTED THAT THE IMPUGNED ASSESSMENT HAD BEEN REOPENED ON ACCOUNT OF T HE SURVEY FINDINGS THAT THE ASSESSEE HAD ENTERED INTO THE TWO JDAS 15 ITA NO. 205/BANG/2020 DT.14.5.2007 AND 7.5.2009 AND THE INCOME ACCRUING TO THE ASSESSEE OUT OF THESE JDAS HAD NOT BEEN OFFERED TO TAX AND THE ASSESSEE HAD NOT PROVIDED ANY DOCUMENTARY EVIDENCE THAT THE TRANSFER OF THE PROPERTY TO THE DEVELOPER HAD HAPPENED AT A LATER DATE AND FURHER THE LIMITATION FOR REOPENING THE ASSESSMENT FOR ASSESSMENT YEAR 2008 - 09 WAS 31.3.2015, THE ASSESSING OFFICER WAS JUSTIFIED IN HIS BELIEF THAT INCOME HAD ESCAPED TAXATION. THE INCUMB ENT ASSESSING OFFICER IN HER REMAND REPORT, THE MATERIAL FACTS THAT CAME TO LIGHT AS A RESULT OF THE SURVEY CONSTITUTED FRESH MATERIAL AS COMPARED WITH THAT HAD BEEN CONSIDERED AT THE TIME OF THE ORIGINAL SCRUTINY ASSESSMENT FOR ASSESSMENT YEAR 2008 - 09 AND HENCE THERE WAS NOT SIMPLY A CHANGE OF OPINION BASED ON THE SAME FACTS BUT ADEQUATE REASONS FOR THE ASSESSING OFFICER TO BELIEVE THAT INCOME HAD ESCAPED TAX. THE LD. DR SUBMITTED THAT THE FUNCTION OF THE ASSESSING OFFICER IS TO ADMINISTER THE STATUTE W ITH SOLICITUDE FOR THE PUBLIC EXCHEQUER WITH AN INBUILT IDEA OF FAIRNESS TO TAXPAYERS. AT THIS STAGE OF SURVEY AND POST SURVEY PROCEEDINGS, THE ASSESSING OFFICER WAS PRIMA FACIE SATISFIED THAT INCOME HAD ESCAPED ASSESSMENT, HE WAS COMPETENT TO TAKE ACTION U/S. 147 OF THE ACT TO BRING TO TAX ANY INCOME WHICH HAD ESCAPED ASSESSMENT AS HELD BY THE HON'BLE SUPREME COURT IN THE CASE OF ACIT VS. RAJESH JHAVERY STOCK BROKERS P. LTD. 291 ITR 500. THE APEX COURT IN THIS CASE, AFTER CONSIDERING VARIOUS DECISIONS RENDERED BY IT IN THE PAST, CONSTRUED THE WORDS REASON TO BELIEVE IN SECTION 147 OF THE ACT AND HELD THAT, IF THE ASSESSING OFFICER 16 ITA NO. 205/BANG/2020 HAS CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT ANY INCOME HAS ESCAPED ASSESSMENT, THEN IT COULD BE SAID THAT THE ASS ESSING OFFICER HAD REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. THE APEX COURT FURTHER HELD THAT THE EXPRESSION REASON TO BELIEVE IN SECTION 147 OF THE ACT CANNOT BE READ TO MEAN THAT THE ASSESSING OFFICER SHOULD HAVE FI NALLY ASCERTAINED THE FACT BY LEGAL EVIDENCE OR CONCLUSION. THE ASSESSEE'S CLAIM IS THAT THE POSSESSION OF THE PROPERTIES WAS HANDED OVER TO THE DEVELOPER ONLY IN OCTOBER, 2013 AND THE TRANSFER THEREFORE OCCURRED IN A.Y. 2014 - 15 AND CAPITAL GAINS WAS TO BE OFFERED IN THAT YEAR. AS FAR AS THE MERITS OF THE ADDITIONS MADE ARE CONCERNED, IT IS EVIDENT THAT THE ASSESSEE HAD UNDISPUTED TITLE TO THE PROPERTIES IN QUESTION AND HAD ALSO TRANSFERRED POSSESSION TO THE DEVELOPER FOR THE PURPOSE OF OBTAINING THE RE LEVANT LICENCES AND CARRYING ON THE CONSTRUCTION. THE ASSESSEE HAD ALSO GRANTED A POWER OF ATTORNEY TO THE DEVELOPER FOR THIS PURPOSE. THE LD. DR SUBMITTED THAT IN SUCH CIRCUMSTANCES, IT IS APPARENT THAT POSSESSION WAS GRANTED TO THE DEVELOPER AND ACCORD INGLY THE OPERATION OF SECTION 2(47)(V) OF THE ACT R.W.S. 53A OF THE TRANSFER OF PROPERTY ACT COMES INTO PLAY. SHE SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE THE ORIGI NAL ASSESSMENT WAS COMPLETED U/S. 143(3) OF THE ACT ON 26.03.2010 FOR THE ASSESSMENT YEAR 2008 - 09. THE REASSESSMENT NOTICE WAS ISSUED TO THE ASSESSEE ON 9.3.2015. HOWEVER IT WAS MENTIONED IN THE REASONS FOR REOPEN ING OF 17 ITA NO. 205/BANG/2020 ASSESSMENT THAT THE ORIGINAL ASSES SMENT WAS COMPLETED U/S. 143(1) OF THE ACT WHICH IS INCORRECT. AT THIS STAGE, IT IS APPROPRIATE TO MENTION THE PRINCIPLES OF LAW GOVERNING REASSESSMENT AS BELOW : (I) THE COURT SHOULD BE GUIDED BY THE REASONS RECORDED FOR THE REASSESSMENT AND NOT BY THE REASONS OR EXPLANATION GIVEN BY THE ASSESSING OFFICER AT A LATER STAGE IN RESPECT OF THE NOTICE OF REASSESSMENT. TO PUT IT IN OTHER WORDS, HAVING REGARD TO THE ENTIRE SCHEME AND THE PURPOSE OF THE ACT, THE VALIDITY OF THE ASSUMPTION OF JURISDICTION UNDER SECTION 147 CAN BE TESTED ONLY BY REFERENCE TO THE REASONS RECORDED UNDER SECTION 148(2) OF THE ACT AND THE ASSESSING OFFICER IS NOT AUTHORIZED TO REFE R TO ANY OTHER REASON EVEN IF IT CAN BE OTHERWISE INFERRED OR GATHERED FROM THE RECORDS. THE ASSESSING OFFICER IS CONFINED TO THE RECORDED REASONS TO SUPPORT THE ASSUMPTION OF JURISDICTION. HE CANNOT RECORD ONLY SOME OF THE REASONS AND KEEP THE OTHERS UPTO HIS SLEEVES TO BE DISCLOSED BEFORE THE COURT IF HIS ACTION IS EVER CHALLENGED IN A COURT OF LAW. (II) AT THE TIME OF THE COMMENCEMENT OF THE REASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS TO SEE WHETHER THERE IS PRIMA FACIE MATERIAL, ON THE BASIS OF WHICH, THE DEPARTMENT WOULD BE JUSTIFIED IN REOPENING THE CASE. THE 18 ITA NO. 205/BANG/2020 SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THAT STAGE. (III) THE VALIDITY OF THE REOPENING OF THE ASSESSMENT SHALL HAVE TO BE DETERMINED WITH REFERENCE T O THE REASONS RECORDED FOR REOPENING OF THE ASSESSMENT. (IV) THE BASIC REQUIREMENT OF LAW FOR REOPENING AND ASSESSMENT IS APPLICATION OF MIND BY THE ASSESSING OFFICER, TO THE MATERIALS PRODUCED PRIOR TO THE REOPENING OF THE ASSESSMENT, TO CONCLUDE THAT HE HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT. UNLESS THAT BASIC JURISDICTIONAL REQUIREMENT IS SATISFIED - A POST MORTEM EXERCISE OF ANALYSING THE MATERIALS PRODUCED SUBSEQUENT TO THE REOPENING WILL NOT MAKE AN INHERENTLY DEFECTIVE REASSESSMENT ORDER VALID. (V) THE CRUCIAL LINK BETWEEN THE INFORMATION MADE AVAILABLE TO THE ASSESSING OFFICER AND THE FORMATION OF THE BELIEF SHOULD BE PRESENT. THE REASONS MUST BE SELF EVIDENT, THEY MUST SPEAK FOR THEMSELVES. (VI) THE TANGIBLE MATERIAL WHICH FORMS TH E BASIS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT MUST BE EVIDENT FROM A READING OF THE REASONS. THE ENTIRE MATERIAL NEED NOT BE SET OUT. TO PUT IT IN OTHER WORDS, SOMETHING 19 ITA NO. 205/BANG/2020 THEREIN, WHICH IS CRITICAL TO THE FORMATION OF THE BELIEF MUST BE REFERRED TO. OTHERWISE, THE LINK WOULD GO MISSING. (VII) THE REOPENING OF ASSESSMENT UNDER SECTION 147 IS A POTENT POWER AND SHOULD NOT BE LIGHTLY EXERCISED. IT CERTAINLY CANNOT BE INVOKED CASUALLY OR MECHANICA LLY. (VIII) IF THE ORIGINAL ASSESSMENT IS PROCESSED UNDER SECTION 143(1) OF THE ACT AND NOT SECTION 143(3) OF THE ACT, THE PROVISO TO SECTION 147 WILL NOT APPLY. IN OTHER WORDS, ALTHOUGH THE REOPENING MAY BE AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, YET IT WOULD NOT BE NECESSARY FOR THE ASSESSING OFFICER TO SHOW THA T THERE WAS ANY FAILURE TO DISCLOSE FULLY OR TRULY ALL THE MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. ( I X) THE ASSESSING OFFICER, BEING A QUASI JUDICIAL AUTHORITY, IS EXPECTED TO ARRIVE AT A SUBJECTIVE SATISFACTION INDEPENDENTLY ON AN OBJECTIVE CRITERIA . (X) WHILE THE REPORT OF THE INVESTIGATION WING MIGHT CONSTITUTE THE MATERIAL, ON THE BASIS OF WHICH, THE ASSESSING OFFICER FORMS THE REASONS TO BELIEVE, THE PROCESS OF ARRIVING AT SUCH SATISFACTION SHOULD NOT BE A MERE REPETITION OF THE REPORT OF THE INV ESTIGATION. THE REASONS TO BELIEVE MUST DEMONSTRATE SOME 20 ITA NO. 205/BANG/2020 LINK BETWEEN THE TANGIBLE MATERIAL AND THE FORMATION OF THE BELIEF OR THE REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT. (XI) MERELY BECAUSE CERTAIN MATERIALS WHICH IS OTHERWISE TANGIBLE A ND ENABLES THE ASSESSING OFFICER TO FORM A BELIEF THAT THE INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, FORMED PART OF THE ORIGINAL ASSESSMENT RECORD, PER SE WOULD NOT BAR THE ASSESSING OFFICER FROM REOPENING THE ASSESSMENT ON THE BASIS OF SUCH MATERIA L. THE EXPRESSION 'TANGIBLE MATERIAL' DOES NOT MEAN THE MATERIAL ALIEN TO THE ORIGINAL RECORD. (XII) THE ORDER, DISPOSING OF OBJECTIONS OR ANY COUNTER AFFIDAVIT FILED DURING THE WRIT PROCEEDINGS BEFORE THE COURT CANNOT BE SUBSTITUTED FOR THE 'REASONS TO BE LIEVE'. (XI II) THE DECISION TO REOPEN THE ASSESSMENT ON THE BASIS OF THE REPORT OF THE INVESTIGATION WING CANNOT ALWAYS BE CONDEMNED OR DUBBED AS A FISHING OR ROVING INQUIRY. THE EXPRESSION 'REASON TO BELIEVE' APPEARING IN SECTION 147 SUGGESTS THAT IF THE INCOME TAX OFFICER ACTS AS A REASONABLE AND PRUDENT MAN ON THE BASIS OF THE INFORMATION SECURED BY HIM THAT THERE IS A CASE FOR REOPENING, THEN SECTI ON 147 CAN WELL BE PRESSED INTO SERVICE AND THE ASSESSMENTS BE REOPENED. AS A CONSEQUENCE OF SUCH REOPENING, CERTAIN OTHER FACTS MAY COME TO LIGHT. THERE IS NO BAN OR ANY LEGAL EMBARGO UNDER SECTION 21 ITA NO. 205/BANG/2020 147 FOR THE ASSESSING OFFICER TO TAKE INTO CONSIDERATION SUCH FACTS WHICH COME TO LIGHT EITHER BY DISCOVERY OR BY A FULLER PROBE INTO THE MATTER AND REASSESS THE ASSESSEE IN DETAIL IF CIRCUMSTANCES REQUIRE. (X I V) THE TEST OF JURISDICTION UNDER SECTION 143 OF THE ACT IS NOT THE ULTIMATE RESULT OF THE INQUIRY BUT THE TEST IS WHETHER THE INCOME TAX OFFICER ENTERTAINED A 'BONA FIDE' BELIEF UPON THE DEFINITE INFORMATION PRESENTED BEFORE HIM. POWER UNDER THIS SEC TION CANNOT BE EXERCISED ON MERE RUMOURS OR SUSPICIONS. (XV) THE CONCEPT OF 'CHANGE OF OPINION' HAS BEEN TREATED AS A BUILT IN TEST TO CHECK ABUSE. IF THERE IS TANGIBLE MATERIAL SHOWING ESCAPEMENT OF INCOME, THE SAME WOULD BE SUFFICIENT FOR REOPENING THE A SSESSMENT. (XVI) IT IS NOT NECESSARY THAT THE INCOME TAX OFFICER SHOULD HOLD A QUASI JUDICIAL INQUIRY BEFORE ACTING UNDER SECTION 147. IT IS ENOUGH IF HE ON THE INFORMATION RECEIVED BELIEVES IN GOOD FAITH THAT THE ASSESEE'S PROFITS HAVE ESCAPED ASSESSMENT OR HAVE BEEN ASSESSED AT A LOW RATE. HOWEVER, NOTHING WOULD PRECLUDE THE INCOME TAX OFFICER FROM CONDUCTING ANY FORMAL INQUIRY UNDER SECTION 133(6) OF THE ACT BEFORE PROCEEDING FOR REASSESSMENT UNDER SECTION 147 OF THE ACT. 22 ITA NO. 205/BANG/2020 (XVII) THE 'FULL AND TRUE' DISCLOSURE OF THE MATERIAL FACTS WOULD NOT INCLUDE THAT MATERIAL, WHICH IS TO BE USED FOR TESTING THE VERACITY OF THE PARTICULARS MENTIONED IN THE RETURN . ALL SUCH FACTS WOULD BE EXPECTED TO BE ELICITED BY THE ASSESSING OFFICER DURING THE COURSE OF THE ASSESSMENT. THE DISCLOSURE REQUIRED ONLY REFERENCE TO THOSE MATERIAL FACTS, WHICH IF NOT DISCLOSED, WOULD NOT ALLOW THE ASSESSING OFFICER TO MAKE THE NECESS ARY INQUIRIES. (XVIII ) THE WORD 'INFORMATION' IN SECTION 147 MEANS INSTRUCTION OR KNOWLEDGE DERIVED FROM THE EXTERNAL SOURCE CONCERNING THE FACTS OR PARTICULARS OR AS TO THE LAW RELATING TO A MATTER BEA RING ON THE ASSESSMENT. AN INFORMATION ANONYMOUS IS INFORMATION FROM UNKNOWN AUTHORSHIP BUT NONETHELESS IN A GIVEN CASE, IT MAY CONSTITUTE INFORMATION AND NOT LESS AN INFORMATION THOUGH ANONYMOUS. THIS IS NOW A RECOGNIZED AND ACCEPTED SOURCE FOR DETECTION OF LARGE SCALE TAX EVASION. THE NON - DISCLOSURE OF THE SOURCE OF THE INFORMATION, BY ITSELF, MAY NOT REDUCE THE CREDIBILITY OF THE INFORMATION. THERE MAY BE GOOD AND SUBSTANTIAL REASONS FOR SUCH ANONYMOUS DISCLOSURE, BUT THE REAL THING TO BE LOOKED INTO IS THE NATURE OF THE INFORMATION DISCLOSED, WHETHER IT IS A MERE GOSSIP, SUSPICION OR RUMOUR. IF IT IS NONE OF THESE, BUT A DISCOVERY OF FRESH FACTS OR OF NEW AND IMPORTANT MATTERS NOT PRESENT AT THE TIME OF THE ASSESSMENT, WHICH APPEARS TO BE CREDIBLE TO AN HONEST AND RATIONAL MIND LEADING TO A SCRUTINY OF FACTS 23 ITA NO. 205/BANG/2020 INDICATING INCORRECT ALLOWANCE OF THE EXPENSE, SUCH DISCLOSURE WOULD CONSTITUTE INFORMATION AS CONTEMPLATED IN CLAUSE (B) OF SECTION 147 . (X I X) T HE REASONS RECORDED OR THE MATERIAL AVAILABLE ON RECORD MUST HAVE NEXUS TO THE SUBJECTIVE OPINION FORMED BY THE ASSESSING OFFICER REGARDING THE ESCAPEMENT OF THE INCOME BUT THEN, WHILE RECORDING THE REASONS FOR THE BELIEF FORMED, THE ASSESSING OFFICER IS N OT REQUIRED TO FINALLY ASCERTAIN THE FACTUM OF ESCAPEMENT OF THE TAX AND IT IS SUFFICIENT THAT THE ASSESSING OFFICER HAD CAUSE OR JUSTIFICATION TO KNOW OR SUPPOSE THAT THE INCOME HAD ESCAPED ASSESSMENT . IT IS ALSO WELL SETTLED THAT THE SUFFICIENCY AND ADEQ UACY OF THE REASONS WHICH HAVE LED TO THE FORMATION OF A BELIEF BY THE ASSESSING OFFICER THAT THE INCOME HAS ESCAPED THE ASSESSMENT CANNOT BE EXAMINED BY THE COURT. 6.1 NOW, WE GO THROUGH THE PROVISIONS OF SECTION 147 OF THE ACT. 147. INCOME ESCAPING ASSE SSMENT. -- IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153 , ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, OR RECO MPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR 24 ITA NO. 205/BANG/2020 THE ASSESSMENT YEAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR).' 6. 2 CONSIDERING THE ABOVE, THE APEX COURT IN THE CASE OF KELVINATOR OF INDIA LTD. (320 ITR 561) (SC) OBSERVED AND HELD IN PARA 4 AS UNDER : - '4. ON GOING THROUGH THE CHANGES, QU OTED ABOVE, MADE TO SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO DIRECT TAX LAWS (AMENDMENT) ACT, 1987, RE - OPENING COULD BE DONE UNDER ABOVE TWO CONDITIONS AND FULFILMENT OF THE SAID CONDITIONS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BUT IN SECTION 147 OF THE ACT [WITH EFFECT FROM 1ST APRIL, 1989], THEY ARE GIVEN A GO - BY AND ONLY ONE CONDITION HAS REMAINED, V IZ., THAT WHERE THE ASSESSING OFFICER HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDICTION TO RE - OPEN THE ASSESSMENT. THEREFORE, POST - 1ST APRIL, 1989, POWER TO RE - OPEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GIVE A SCHEMATIC INTERPR ETATION TO THE WORDS 'REASON TO BELIEVE' FAILING WHICH, WE ARE AFRAID, SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO RE - OPEN ASSESSMENTS ON THE BASIS OF 'MERE CHANGE OF OPINION', W HICH CANNOT BE PER SE REASON TO RE - OPEN. 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 THE POWER TO RE - ASSESS. BUT RE - ASSESSMENT HAS TO BE BASED ON F ULFILLMENT OF CERTAIN PRE - CONDITION AND IF THE CONCEPT OF 'CHANGE OF OPINION' IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF RE - OPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' A S AN IN - BUILT TEST TO CHECK ABUSE OF POWER BY THE ASSESSING OFFICER. HENCE, AFTER 1ST APRIL, 1989, ASSESSING OFFICER HAS POWER TO RE - OPEN, PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. R EASONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. OUR VIEW GETS SUPPORT FROM THE CHANGES MADE TO SECTION 147 OF THE ACT, AS QUOTED HEREINABOVE. UNDER THE DIRECT TAX LAWS (AMENDMENT) ACT, 19 87, PARLIAMENT NOT ONLY DELETED THE WORDS 'REASON TO BELIEVE' BUT ALSO INSERTE D THE WORD 'OPINION' IN SECTION 147 OF THE ACT. HOWEVER, ON RECEIPT OF REPRESENTATIONS FROM THE COMPANIES AGAINST OMISSION OF THE WORDS 'REASON TO BELIEVE', PARLIAMENT RE - INTRODU CED THE SAID EXPRESSION AND DELETED THE WORD 'OPINION' ON THE GROUND THAT IT WOULD VEST ARBITRARY POWERS IN THE ASSESSING OFFICER. WE QUOTE HEREINBELOW THE RELEVANT PORTION OF CIRCULAR NO.549 DATED 31ST OCTOBER, 1989, WHICH READS AS FOLLOWS: '7.2 AMENDMENT MADE BY THE AMENDING ACT , 1989, TO REINTRODUCE THE EXPRESSION `REASON TO BELIEVE' IN SECTION 147 . A NUMBER OF REPRESENTATIONS WERE RECEIVED AGAINST THE OMISSION OF THE WORDS 'REASON TO BELIEVE' FROM SECTION 147 AND THEIR SUBSTITUTION BY THE 'OPINION' OF THE ASSESSING OFFICER. IT WAS POINTED OUT THAT THE MEANING OF THE EXPRESSION, 'REASON TO BELIEV E' HAD BEEN EXPLAINED 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 ASSESSING OFFICER TO REOPEN PAST ASSESSMENTS ON M ERE CHANGE OF OPINION. TO ALLAY THESE FEARS, THE AMENDING ACT , 1989, HAS AGAIN AMENDED SECTION 147 TO REINTRODUCE THE 25 ITA NO. 205/BANG/2020 EXPRESSION 'HAS REASON TO BELI EVE' IN PLACE OF THE WORDS 'FOR REASONS TO BE RECORDED BY HIM IN WRITING, IS OF THE OPINION'. OTHER PROVISIONS OF THE NEW SECTION 147 , HOWEVER, REMAIN THE SAME.' FOR THE AFORE - STATED REASONS, WE SEE NO MERIT IN THESE CIVIL APPEALS FILED BY THE DEPARTMENT, HENCE, DISMISSED WITH NO ORDER AS TO COSTS.' 6. 3 THE REOPENING OF ASSESSMENT BEING BASED ON A MERE CHANGE OF OPINION, THE ASSUMPTION OF JURISDICTION ON THE PART OF THE A.O. LACKS VALIDITY AND THE N OTICE U/S 148 OF THE ACT CANNOT BE SUSTAINED. 6. 4 THE ASSESSING OFFICER HAS POWER TO REOPEN THE ASSESSMENT, PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT AND THE REASONS MUST HAVE A L IVE LINK WITH THE FORMATION OF BELIEF. IN THE PRESENT CASE, THERE IS NO TANGIBLE MATERIAL. THE ISSUANCE OF THE IMPUGNED NOTICE U/S.148 IS NOTHING BUT MERE CHANGE OF OPINION. IN ABSENCE OF ANY NEW TANGIBLE MATERIAL AVAILABLE WITH THE A.O., IT IS NOT OPEN TO THE A.O. TO CHANGE HIS OPINION BY ISSUING THE NOTICE OF RE - ASSESSMENT. 7. BEING SO, IN OUR OPINION THE REOPENING OF ASSESSMENT WHICH IS ALREADY CONCLUDED UNDER SECTION 143(3) OF THE ACT ON 26.03.2010 CANNOT BE REOPENED WITHOUT ANY ALLEGATION BY THE ASSESSING OFFICER THAT THERE WAS NON - DISCLOSURE OF TRUE AND CORRECT FACTS BY THE ASSESSEE WHILE FRAMING THE ORIGINAL ASSESSMENT. IN ORDER TO ASSUME JURISDICTION UNDER SECTION 147 WHERE ASSESSMENT HAS B EEN MADE UNDER SUB - SECTION (3) OF SECTION 143 , TWO CONDITIONS ARE REQUIRED TO BE SATISFIED . THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT THE INCOME CHARGEABLE TO 26 ITA NO. 205/BANG/2020 TAX HAS ESCAPED ASSESSMENT; SUCH ESCAPEMENT OCCURRED BY REASON OF FAILURE ON THE PART OF T HE ASSESSEE EITHER TO MAKE A RETURN OF INCOME UNDER SECTION 139 OR IN RESPONSE TO THE NOTICE ISSUED UNDER SUB - SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT PURPOSE. THE POWER TO ASSESS OR REASSESS INC OME UNDER SECTION 147 OF THE I.T. ACT CANNOT INVOKED ROUTINELY UNLESS THE FOLLOWING CONDITIONS ARE SATISFIED : (I) THERE SHOULD BE `REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT REASON TO BELIEVE CANNOT BE CHANGE OF OPINION; AND (II) AO IS BARRED FROM TAKING ANY ACTION UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR IN THE FOLLOWING CASES: (A) WHERE AN ASSESSMENT UNDER SECTION 143(3) OR 147 HAS ALREADY BEEN CONCLUDED FOR THE RELEVANT ASSESSMENT YEA R; AND (B) THERE IS NO FAILURE FROM THE PART OF THE ASSESSEE TO: MAKE A RETURN UNDER SECTION 139 RESPONSE TO NOTICE UNDER SECTION 148 DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. 7.1 DURING THE COURSE OF ORIGINAL ASSESSMENT PR OCEEDINGS, THE ISSUE FOR WHICH THE ASSESSMENT IS SOUGHT TO BE REOPENED WAS SUBJECT MATTER OF EXAMINATION BY THE A.O. THUS, IT IS CLEAR THAT THE ASSESSEE HAD DISCLOSED ALL THE MATERIAL FACTS DURING THE REGULAR ASSESSMENT PROCEEDINGS. THEREFORE, IT CANNOT BE ALLEGED THAT THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT. 27 ITA NO. 205/BANG/2020 7.2 THE HONBLE APEX COURT IN THE CASE OF NEW DELHI TELEVISION V. DCIT [(2020) 116 TAXMANN.COM 151 (SC)] HAD HELD T HAT REOPENING OF THE ASSESSMENT BEYOND FOUR YEARS IS BAD IN LAW WHEN THE TAX PAYER HAS DISCLOSED THE FACTS AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS AND THE A.O. DID NOT DRAW ANY ADVERSE INFERENCE REGARDING THE SAME. 7.3 THE HONBLE SUPREME COURT IN THE CASE OF L & T LIMITED [(2020) 113 TAXMANN.COM 48 (SC)] OBSERVED THAT THERE WAS NO ELEMENT OF LACK OF TRUE AND FULL DISCLOSURE ON THE PART OF THE ASSESSEE, WHICH RESULTED INTO ANY INCOME CHARGEABLE TO TAX ESCAPING ASSESSMENT. THE REASONS CLEARLY REVEAL THAT THE ASSESSING OFFICER WAS PROCEEDING ON THE MATERIAL WHICH WAS ALREADY ON RECORD. IN THE ABSENCE OF THE STATUTORY REQUIREMENT OF INCOME CHARGEABLE TO TAX HAVE BEEN ESCAPED ASSESSMENT DUE TO THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AN D FULLY ALL MATERIAL FACTS BEEN SATISFIED, THE TRIBUNAL CORRECTLY HELD THAT THE NOTICE OF REOPENING OF ASSESSMENT WAS INVALID. 7.4 THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT V. KARNATAKA BANK [(2014) 52 TAXMANN.COM 526 (KARNATAKA)] HAD HELD THA T WHEN THERE IS NO CASE OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT AND FURTHER, WHERE THE ASSESSING AUTHORITY APPLIED ITS MIND AND BEING SATISFIED WITH THE CLAIM, ALLOWED THE CASE OF THE A SSESSEE, THE ASSESSING AUTHORITY COULD NOT HAVE INITIATED PROCEEDINGS U/S 147 OF THE ACT, AFTER THE END OF 4 YEARS. 7.5 THE HONBLE MADRAS HIGH COURT IN THE CASE OF SRI SHAKTHI TEXTILES LTD. V. JCIT [(193 TAXMAN 216 (MADRAS)] HAD HELD THAT INDICATION OF A SSESSEES FAILURE TO DISCLOSE ANY MATERIAL FACTS IN THE REASONS RECORDED IS A LEGAL REQUIREMENT. THE RELEVANT FINDING OF THE HONBLE HIGH COURT IS AS UNDER: - 28 ITA NO. 205/BANG/2020 THE ASSESSING OFFICER OUGHT TO HAVE EXAMINED THE QUESTION AS TO WHETHER THERE WERE REASONS FOR H IM TO BELIEVE THAT THE ESCAPEMENT WAS DUE TO THE FAILURE ON THE PART OF THE PETITIONER TO MAKE TRUE AND FULL DISCLOSURE OF THE INCOME OR NOT. IN THE EVENT OF ARRIVING AT SUCH A BELIEF THAT IT WAS BECAUSE OF THE PETITIONERS FAILURE, HE SHOULD HAVE RECORDED THE SAME IN THE ORDER. THAT IS THE LEGAL REQUIREMENT. ONLY IF THE TWIN CONDITIONS, AS LAID DOWN BY THE SUPREME COURT, ARE SATISFIED BY WAY OF RECORDING REASONS FOR BOTH THE CONDITIONS IN THE ORDER, THE ASSESSING OFFICER WILL GET JURISDICTION TO ISSUE NOTI CE UNDER SECTION 148 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. SINCE THE SAME HAD NOT BEEN DONE THE IMPUGNED NOTICES WERE WHOLLY WITHOUT JURISDICTION. IN THE LIGHT OF THE AFORESAID REASONING AND JUDICIAL PRONOUNCEMENTS C ITED SUPRA, WE HOLD THAT THE REASSESSMENT PROCEEDINGS IS BAD IN LAW AND WE QUASH THE SAME. IT IS ORDERED ACCORDINGLY. SINCE WE HAVE ANNULLED THE ASSESSMENT, WE ARE REFRAINED TO GO INTO OTHER GROUNDS OF APPEAL WHICH ARE OF ONLY ACADEMIC NATURE. THE APPEA L OF THE ASSESSEE IS ALLOWED. 8 . IN THE RESULT, THE ASSESSEE'S APPEAL IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE. SD/ - SD/ - ( GEORGE GEORGE K ) ( CHANDRA POOJARI ) JUDICIAL M EMBER ACCOUNTANT MEMBER DATED: 15 .02. 20 2 1 . *REDDY GP 29 ITA NO. 205/BANG/2020 COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT (A) 4. PR. CIT 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME - TAX APPELLATE TRIBUNAL BANGALORE