Micro Focus Software India Pvt Lt d, Bangalore V. Assistant commissioner of Income TAx Circle-5(1)(1), Bangalore

ITA 2091/BANG/2017

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 7745 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-07-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 31-10-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: T SURYANARAYANA SHRI M
• Keywords: Depreciation; Question of law; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 32; 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO. 2091/BANG/2017 ASSESSMENT YEAR : 2009 - 10 MICRO FOCUS SOFTWARE INDIA PVT. LTD. [FORMERLY KNOWN AS NOVELL SOFTWARE DEVELOPMENT (INDIA) PVT. LTD.], NO.65/2, LAUREL BLOCK D, BAGMANE TECH PARK, C.V. RAMAN NAGAR, BYRASANDRA, BENGALURU 560 093. PAN: AAACN 6992K VS. THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE 5(1)(1), BENGALURU. APP ELL ANT RESPONDENT A PP EL LANT BY : SHRI T. SURYANARAYANA, ADVOCATE RE SPONDENT BY : SHRI M. RAJASEKHAR, ADDL.CIT(DR)(ITAT), BENGALURU. DATE OF HEARING : 05 . 0 6 .201 8 DATE OF PRONOUNCEMENT : 06.07.2018 O R D E R PER N.V. VASUDEVAN, JUDICIAL MEMBER THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER DATED 20.7.2017 OF THE CIT(APPEALS)-V, BENGALURU RELATING TO ASSESSMENT YEAR 2009-10. 2. THE FACTS MATERIAL FOR ADJUDICATION OF GROUND N OS.1 & 2 ARE THAT THE ASSESSEE WHICH IS A COMPANY ENGAGED IN THE BUSINESS OF RENDERING SOFTWARE DEVELOPMENT SERVICES FILED ITS RETURN OF I NCOME FOR THE AY 2009-10 ITA NO. 2091/BANG/2017 PAGE 2 OF 10 ON 30.9.2009. AN ORDER OF ASSESSMENT U/S. 143(3) O F THE INCOME-TAX ACT, 1961 [THE ACT] WAS PASSED BY THE AO ON 30.4.2013. SUBSEQUENTLY, A NOTICE U/S. 148 OF THE ACT DATED 28.3.2016 WAS ISSU ED BY THE AO AFTER RECORDING THE FOLLOWING REASONS:- ' THE ASSESSEE HAS CLAIMED DEPRECIATION CLAIMED WRO NGLY AT 100% OF THE ELIGIBLE DEPRECIATION WHILE ACTUALLY THE ASSESS EE IS ELIGIBLE FOR CLAIMING ONLY 50% OF THE ELIGIBLE DEPRECIATION. SL. NO BLOCK OF ASSETS ADDITIONS WHERE EXCESS DEPRECIATION CLAIMED ELIGIBLE DEPRECIATION DEPRECIATION CLAIMED EXCESS CLAIMED TO BE ADDED BACK. 1. LEASE HOLD IMPROVEMENTS. 6,63,78,107 33,18,905 66,37,810 33,18,905 2. FURNITURE & FIXTURES 41,27,065 2,07,853 4,15,706 2,07,853 3. OFFICE EQUIPMENTS 2,58,59,315 19,39,449 38,78,898 19,39,449 4. COMPUTERS 7,94,83,515 2,38,45,055 4,76,90,110 2,38,45,055 TOTAL 17,58,48,002 2,93,11,262 5,86,22,524 2,93,11,262 HENCE, THE ASSESSEE HAS BEEN ALLOWED EXCESS DEPRECI ATION TO THE EXTENT OF RS.2,93,11,262/-.' I THEREFORE HAVE REASON TO BELIEVE THAT INCOME TO T HE EXTENT OF RS.2,93,11,262/-HAS ESCAPED ASSESSMENT. AS THERE IS A CHANGE IN INCUMBENT YOU ARE HEREBY GI VEN ONE MORE OPPORTUNITY AS PER THE PROVISIONS OF SECTION 129 OF THE I.T.ACT. HENCE, YOU ARE REQUESTED TO FILE OBJECTIONS IF ANY BEFORE 22/ 11/2016 IN THIS OFFICE. ITA NO. 2091/BANG/2017 PAGE 3 OF 10 3. IN THE REASSESSMENT PROCEEDINGS, THE ASSESSEE P OINTED OUT THAT DURING F.Y.:2008-09 (RELEVANT FOR A.Y.2009-10), THE ASSESSEE HAS ACQUIRED CERTAIN ASSETS AND HAS CLAIMED DEPRECIATION ON THE SAME AT THE RATES SPECIFIED IN SECTION 32 OF THE ACT READ WITH RULE 5 OF INCOME-TAX RULES, 1962 ('THE RULES'). THE DETAILS OF ADDITIONS MADE TO THE BLOCKS OF ASSETS AND DEPRECIATION CLAIMED FOR A.Y.2009-10 WAS GIVEN BY T HE ASSESSEE. 4. THE ASSESSEE POINTED OUT THAT IT HAD SHIFTED ITS REGISTERED OFFICE DURING F.Y.2008-09. OWING TO THIS, THERE WAS DELAY IN CAPITALIZATION OF CERTAIN ASSETS IN THE BOOK OF ACCOUNT DURING F.Y.20 08-09, EVEN THOUGH THE ASSETS WERE ACQUIRED AND PUT TO USE FOR THE PURPOSE OF BUSINESS. AS A RESULT OF WHICH, THE DATE OF CAPITALIZATION/ADDITIO NS OF CERTAIN ASSETS IN THE BOOK OF ACCOUNT WAS SUBSEQUENT TO THE DATE ON WHICH SUCH ASSETS WERE PUT TO USE FOR THE PURPOSE OF THE BUSINESS. SAMPLE COPIES OF JOURNAL EXTRACTS, ALONG WITH THE CORRESPONDING INSTALLATION REPORTS AND INVOICES EVIDENCING THE ABOVE WERE ALSO ENCLOSED BY THE ASSE SSEE. THE ASSESSEE SUBMITTED THAT IT HAD CONSIDERED THE 'DATE OF PUT T O USE' FOR THE PURPOSE OF ARRIVING AT THE QUANTUM OF DEPRECIATION UNDER SECTI ON 32 OF THE ACT AND ACCORDINGLY THERE OUGHT TO BE NO CHANGE IN THE COMP UTATION OF DEPRECIATION AS SUBMITTED BY THE COMPANY IN ANNEXURE II OF THE T AX AUDIT REPORT FOR THE YEAR ENDED 31.03.2009. IN VIEW OF THE ABOVE, IT WA S SUBMITTED THAT THERE IS NO EXCESSIVE CLAIM OF DEPRECIATION FOR A.Y.2009-10, THERE IS NO ESCAPEMENT OF INCOME AND THEREFORE NO BASIS FOR INI TIATING REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT. 5. THE AO, HOWEVER, DID NOT AGREE WITH THE CONTENTI ONS PUT FORTH BY THE ASSESSEE AND HE COMPUTED EXCESSIVE CLAIM OF DEPRECI ATION AS SHOWN BY HIM IN THE REASONS RECORDED AND ADDED A SUM OF RS.2 ,93,11,262 TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF DISALLOW ANCE OF DEPRECIATION. ITA NO. 2091/BANG/2017 PAGE 4 OF 10 6. BEFORE THE CIT(APPEALS), THE ASSESSEE POINTED OU T THAT IN THE CASE OF ASSESSEE FOR AY 2009-10, ASSESSMENT U/S. 143(3) OF THE ACT WAS ALREADY COMPLETED BY THE AO. ASSESSEE POINTED OUT THAT ASS ESSMENT PROCEEDINGS WERE SOUGHT TO BE REOPENED BY ISSUE OF NOTICE U/S. 148 OF THE ACT DATED 28.3.2016. ASSESSEE POINTED OUT THAT UNDER PROVISO TO SECTION 147 OF THE ACT, IF AN ASSESSMENT IS SOUGHT TO BE REOPENED AFTE R THE EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR AND WHERE ASSESSMENT FOR THE SAID ASSESSMENT YEAR HAS ALREADY BEEN COMPLETED U/S. 143(3) OF THE ACT, THEN INITIATION OF REASSESSMENT PROCEEDINGS CA N BE DONE ONLY IF THERE IS A FAILURE ON THE PART OF ASSESSEE TO FULLY AND T RULY DISCLOSE ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT OF THAT ASSESSME NT YEAR. ASSESSEE POINTED OUT THAT IN THE REASONS RECORDED BY THE AO, THERE IS NOT EVEN A WHISPER THAT ESCAPEMENT OF INCOME IS OWING TO THE A SSESSEES FAILURE TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECESSA RY FOR ASSESSMENT OF THAT ASSESSMENT YEAR. ASSESSEE SUBMITTED THAT IN THE AB SENCE OF SUCH AN ALLEGATION IN THE REASONS RECORDED, INITIATION OF R EASSESSMENT PROCEEDINGS SHOULD BE HELD TO BE BAD IN LAW AND IS LIABLE TO BE QUASHED. ASSESSEE IN THIS REGARD PLACED RELIANCE ON SEVERAL JUDICIAL PRO NOUNCEMENTS. BESIDES THE ABOVE, THE ASSESSEE ALSO SUBMITTED THAT THERE W AS NEW MATERIAL BASED ON WHICH THE AO CAME TO THE CONCLUSION THAT THERE W AS ESCAPEMENT OF INCOME. THE ASSESSEE SUBMITTED THAT THE REOPENING OF THE ASSESSMENT IS PURELY BASED ON CHANGE OF OPINION WHICH IS NOT PERM ISSIBLE U/S.147 OF THE ACT. 7. THE CIT(APPEALS), HOWEVER, DID NOT AGREE WITH TH E CONTENTIONS PUT FORTH BY THE ASSESSEE AND HE REJECTED THE CONTENTIO NS ON BEHALF OF THE ASSESSEE BY OBSERVING THAT A TAXPAYER SHOULD NOT BE ALLOWED TO TAKE ADVANTAGE OF AN OVERSIGHT OR MISTAKE COMMITTED BY T HE TAXING AUTHORITY AND ITA NO. 2091/BANG/2017 PAGE 5 OF 10 IN THIS REGARD REFERRED TO THE DECISION OF THE HON BLE SUPREME COURT IN THE CASE OF KALYANJI MAVJI & CO. V. CIT, 102 ITR 287 (SC) . 8. AGGRIEVED BY THE ORDER OF CIT(APPEALS), THE ASSE SSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. WE HAVE HE ARD THE RIVAL SUBMISSIONS. THE LD. COUNSEL FOR THE ASSESSEE REITE RATED THE SUBMISSIONS AS WERE MADE BEFORE THE CIT(APPEALS). HE ALSO DREW OUR ATTENTION TO THE DECISION OF THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF CIT V. HEWLETT PACKARD DIGITAL GLOBAL SOFT LTD. IN ITA NO. 406/2007 DATED 19.9.2011 WHEREIN THE HONBLE HIGH COURT OF KARNATAKA ON IDENTICAL FACTS AS THAT OF THE PRESENT CASE HELD THAT INITIATION OF REASSESSMENT PROCEEDINGS WAS NOT VALID. THE LD. COUNSEL FOR THE ASSESSEE AL SO PLACED RELIANCE ON THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE C ASE OF GENERAL MOTORS INDIA PVT. LTD. V. DCIT, 360 ITR 257 (GUJ). 9. THE LD. DR RELIED ON THE ORDER OF THE CIT(APPEAL S). 10. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RI VAL SUBMISSIONS. PROVISO TO SEC.147 LAYS DOWN THAT THAT WHERE AN ASS ESSMENT UNDER SUB- SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THI S SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PAR T OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THA T ASSESSMENT YEAR. 11. IN THE PRESENT CASE, IT IS NOT IN DISPUTE THAT PROVISO TO SECTION 147 OF THE ACT WILL APPLY. IT IS ALSO NOT IN DISPUTE THAT WHEN THE ORIGINAL ITA NO. 2091/BANG/2017 PAGE 6 OF 10 ASSESSMENT PROCEEDINGS U/S. 143(3) WAS COMPLETED, A UDIT REPORT BASED ON WHICH ASSESSMENT PROCEEDINGS WERE INITIATED WAS VER Y MUCH AVAILABLE TO THE AO. IN THESE CIRCUMSTANCES, IT CAN ALSO BE SAI D THAT THERE IS NO NEW MATERIAL AFTER CONCLUSION OF ASSESSMENT PROCEEDING WHICH HAS COME TO THE KNOWLEDGE OF THE AO, BASED ON WHICH HE FORMS AN OPI NION THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IT CAN A LSO BE SAID THAT INITIATION OF REASSESSMENT PROCEEDINGS IS MERELY ON A CHANGE OF OPINION. APART FROM THE ABOVE, WE FIND THAT IN THE DECISION CITED BY THE LD. COUNSEL FOR THE ASSESSEE IT HAS BEEN HELD THAT WHEREVER PRO VISO TO SECTION 147 APPLIES, THE AO SHOULD SPECIFY IN THE REASONS RECOR DED, AS TO WHAT WAS THE MATERIAL FACT WHICH WAS NOT FULLY AND TRULY DISCLOS ED FOR ASSESSMENT OF THE RELEVANT ASSESSMENT YEAR. IF THE REASONS DO NOT SP ECIFY SO, THEN THE INITIATION OF REASSESSMENT PROCEEDINGS HAVE TO BE H ELD AS INVALID. IN FACT, THE HONBLE HIGH COURT OF KARNATAKA IN THE CASE OF HEWLETT PACKARD DIGITAL GLOBAL SOFT LTD. (SUPRA) HAS IN THIS REGARD HELD AS FOLLOWS:- 7. IT IS OBSERVED IN THE SAID JUDGMENT THAT THE R EASON RECORDED BY THE ASSESSING OFFICER NO WHERE STATE THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRUL Y ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT OF THAT ASSESSME NT YEAR. IT IS FOR THE ASSESSING OFFICER TO DISCLOSE AND OPEN HIS MIND THROUGH REASONS. HE HAS TO SPEAK THROUGH HIS REASONS. IT IS FOR THE ASSESSING OFFICER TO REACH THE CONCLUSION AS TO WHE THER THERE WAS FAILURE UN THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE CONCERNED ASSESSMENT YEAR. IT IS FOR THE ASSESSING OFFICER TO FORM HIS OPINION. IT IS FOR HIM TO PUT HIS OPINION ON RECORD IN BLACK AND WHITE. THE REASONS RECORDED SHOULD BE CLEAR AND UNA MBIGUOUS AND SHOULD NOT SUFFER FROM ANY VAGUENESS. THE REASO NS RECORDED MUST DISCLOSE HIS MIND. THE REASONS ARE THE MANIFES TATION OF THE MIND OF THE ASSESSING OFFICER. THE REASONS RECORDED SHOULD BE SELF-EXPLANATORY AND SHOULD NOT KEEP THE ASSESSEE G UESSING FOR THE REASONS. REASONS PROVIDE THE LINK BETWEEN CONCL USION AND EVIDENCE. THE ORDER PASSED BY THE ASSESSING AUTHORI TY DID NOT ITA NO. 2091/BANG/2017 PAGE 7 OF 10 STATE ANYWHERE THAT THERE WAS A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECE SSARY FOR THE ASSESSMENT OF THAT YEAR. ALL THAT HAS BEEN STATED I N THE ORDER IS THAT THE ASSESSEE HAS APPENDED THE NOTE AND AT NO P OINT OF TIME, THE ASSESSEE HAS DISCLOSED AS TO THE NEXUS BETWEEN THE AMOUNT OF RS.10,06,617/- AND THE 10A UNIT. THE DISCLOSURE HAS TO BE FULL AND TRUE. BOTH THE CRITERIA HAVE TO BE MET. IN THE ASSE SSEE'S CASE, BY FAILING TO BRING OUT THE NEXUS BETWEEN THE 10A UNIT AND THE INTEREST INCOME, THE ASSESSEE HAS NOT DISCHARGED IT S RESPONSIBILITY OF FURNISHING FULL DISCLOSURE OF FACTS. AS SET OUT ABOVE, THE NOTE CLEARLY SETS OUT THE INTEREST INCOME EARNED BY THE STP UNIT AND THE CLAIM OF THE ASSESSEE FOR EXEMPTION UNDER SECTI ON 10A. IT IS NOT THE REQUIREMENT OF LAW THAT FURTHER THE ASSESSE E SHOULD SHOW THE NEXUS BETWEEN THE AMOUNT CLAIMED AND 10A UNIT. WHEN HE HAS CATEGORICALLY STATED THAT THE INTEREST, WHICH I S EARNED FROM STP UNIT, IS ELIGIBLE FOR EXEMPTION UNDER SECTION 1 0A, EVEN THAT NEXUS IS MANIFEST. THE ASSESSING AUTHORITY HAS NOT, PROPERLY APPLIED HIS MIND TOWARDS THE STATUTORY PROVISIONS A ND HAS NOT TAKEN INTO CONSIDERATION THAT THE ORIGINAL ASSESSME NT PASSED UNDER SECTION 143(3) WHICH WAS ALSO REOPENED ONCE AND ADJ USTMENT WAS MADE. IT IS FOR THE SECOND TIME, HE WAS RAISING ALL THESE OBJECTIONS. WHEN ADMITTEDLY THE SECOND REOPENING OF THE ASSESSMENT IS BEYOND FOUR YEARS, UNDER LAW, IT IS B ARRED BY TIME AND THE FINDINGS RECORDED BY THE TRIBUNAL IS LEGAL AND VALID AND DOES NOT SUFFER FROM ANY LEGAL INFIRMITY. IN THAT V IEW OF THE MATTER, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR C ONSIDERATION IN THESE APPEALS. ACCORDINGLY, THE APPEALS ARE DISMISS ED. 12. WE ARE OF THE VIEW THAT ADMITTEDLY, THE PROVISO TO SEC.147 OF THE ACT REFERRED TO ABOVE IS APPLICABLE IN THE PRESENT CASE SINCE ASSESSMENT FOR RELEVANT ASSESSMENT YEAR HAD BEEN COMPLETED BY THE AO ORIGINALLY U/S.143(3) OF THE ACT AND THE REASSESSMENT PROCEEDI NGS WERE SOUGHT TO BE INITIATED BEYOND A PERIOD OF 4 YEARS FROM THE END O F THE RELEVANT ASSESSMENT YEAR. THE AO FOR INITIATING THE RE-OPEN ING OF THE ASSESSMENT PROCEEDINGS BEYOND THE PERIOD OF 4 YEARS FROM THE E ND OF THE RELEVANT ASSESSMENT YEAR HAS TO ESTABLISH THAT THERE WAS ESC APEMENT OF INCOME CHARGEABLE TO TAX BECAUSE OF THE FAILURE OF THE ASS ESSEE TO DISCLOSE FULLY ITA NO. 2091/BANG/2017 PAGE 8 OF 10 AND TRULY THE MATERIAL FACTS NECESSARY FOR THE ASSE SSMENT. NEITHER IN THE REASONS RECORDED FOR RE-OPENING THE ASSESSMENT NOR IN THE ORDER OF RE- ASSESSMENT U/S147 OF THE ACT, THE AO HAS NOT BROUGH T OUT FACTS TO SHOW ANY OMISSION ON THE PART OF THE ASSESSEE TO DISCLOS E FULLY AND TRULY THE MATERIAL FACTS WHEN THE ORIGINAL ASSESSMENT WAS COM PLETED. WE ARE OF THE VIEW THAT THE RE-OPENING OF THE COMPLETED ASSESSMEN T U/S 143(3) OF THE ACT BEYOND THE PERIOD OF 4 YEARS CANNOT BE JUSTIFIED. W E HOLD THAT THE RE- OPENING OF THE ASSESSMENT IS BEYOND THE TIME CONTEM PLATED BY THE PROVISO TO SEC.147 OF THE ACT AND THEREFORE, INITIATION OF RE-ASSESSMENT PROCEEDINGS IS HELD TO BE BAD IN LAW. IN THE CASE OF GENERAL M OTORS INDIA PVT. LTD. VS. DCIT, 360 ITR 527 (GUJ) AND ACIT V. HEWLETT PACKARD DIGITAL GLOBAL SOLUTIONS LTD., ITA NO.406 OF 2007, JUDGMENT DATED 19.09.2011 OF KARNATAKA HIGH COURT, INITIATION OF REASSESSMENT PR OCEEDINGS WAS HELD TO BE INVALID FOR THE REASON THAT REASONS RECORDED BY THE AO DID NOT SPELL OUT THAT ESCAPEMENT OF INCOME WAS DUE TO THE ASSESSEE N OT FULLY AND TRULY DISCLOSING ALL MATERIAL FACTS NECESSARY FOR COMPLET ION OF ASSESSMENT FOR THE RELEVANT ASSESSMENT YEAR. 13. AS FAR AS THE VALIDITY OF INITIATION OF REASSE SSMENT PROCEEDINGS ON THE GROUND THAT THE REOPENING WAS MERELY ON A CHANGE OF OPINION, IT IS NOTICED THAT THE CASE OF THE ASSESSEE WAS ALSO THAT THERE W AS NO FRESH TANGIBLE MATERIAL IN THE POSSESSION OF AO AT THE TIME OF REC ORDING OF REASONS FOR INITIATING PROCEEDINGS U/S.147 OF THE ACT. A PERUSA L OF THE REASONS RECORDED BY THE AO IN THIS CASE REVEALS THAT AT THE TIME OF RECORDING OF THESE REASONS THE AO HAD EXAMINED ORIGINAL ASSESS MENT RECORDS ONLY AND REPORT OF THE AUDITOR FILED IN THOSE PROCEEDING S AND NO FRESH MATERIAL HAD COME IN THE POSSESSION OF THE AO. IN RESPONSE T O OUR SPECIFIC QUERY ALSO, LD DR COULD NOT POINT OUT ANY FRESH MATERIAL AVAILABLE WITH THE AO AT THE TIME OF REOPENING OF THE CASE OF THE ASSESSEE. THUS, ASSERTION OF THE ITA NO. 2091/BANG/2017 PAGE 9 OF 10 ASSESSEE THAT THERE WAS NO FRESH MATERIAL WITH AO F OR REOPENING OF THIS CASE, REMAINED UNCONTROVERTED. 14. IN THE LIGHT OF THE ABOVE FACTS WITH REGARD TO RECO RDING OF REASONS, LET US EXAMINE SETTLED POSITION OF LAW ON THIS ISSUE. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR INDIA LTD. 320 ITR 561 (SC), HAS HELD THAT FOR REOPENING OF THE ASSESSMENT, THE AO SHOULD HAVE IN ITS POSSESSION TANGIBLE MATERIAL . THE TERM TANGIBLE MATERIAL HAS BEEN UNDERSTOOD AND EXPLAIN ED BY VARIOUS COURTS SUBSEQUENTLY. THERE HAS BEEN UNANIMITY OF TH E COURTS ON THIS ISSUE THAT IN ABSENCE OF FRESH MATERIAL INDICATING ESCAPED INCOME, THE AO CANNOT ASSUME JURISDICTION TO REOPEN ALREADY CONCLUDED ASSESSMENT. THE DECISION IN THE CASE OF KALYANJI MAVJI & CO 102 ITR 287 (SC), WHERE IT WAS HELD THAT OVERSIGHT, INADVERTENCE OR MISTAKE IN PASSING ASSESSMENT ORDER WILL GIVE THE A.O JURIS DICTION TO REOPEN THE ASSESSMENT, IS NOT GOOD LAW IN VIEW OF T HE SUBSEQUENT DECISION IN INDIAN AND EASTERN NEWSPAPER SOCIETY VS. CIT 119 ITR 996 (SC) WHEREIN IT WAS HELD THAT AN ERROR DISC OVERED ON A RECONSIDERATION OF THE SAME MATERIAL (AND NO MORE) DOES NOT GIVE HIM THAT POWER. THE AFORESAID VIEW ON THE ABOVE PRO POSITION HAS BEEN REITERATED BY THE APEX COURT IN A.L.A.FIRM VS. CIT 183 ITR 285. THUS, REOPENING HAS HELD TO BE INVALID ON THIS GROU ND ALSO. 15. FOR THE REASONS GIVEN ABOVE, WE ALLOW GROUNDS RAISED WITH REGARD TO VALIDITY OF INITIATION OF REASSESSMENT PROCEEDIN GS U/S.147 OF THE ACT AND HOLD THAT THE PROCEEDINGS U/S.147 OF THE ACT WERE N OT VALIDLY INITIATED. THEREFORE, ORDER OF THE REASSESSMENT IS LIABLE TO B E ANNULLED AND IS HEREBY ANNULLED. SINCE THE RE-ASSESSMENT ORDER HAS BEEN AN NULLED, THE OTHER ITA NO. 2091/BANG/2017 PAGE 10 OF 10 GROUNDS RAISED BY THE ASSESSEE IN ITS APPEAL ON MER ITS DO NOT REQUIRE ANY ADJUDICATION. 16. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS A LLOWED. PRONOUNCED IN THE OPEN COURT ON THIS 06 TH DAY OF JULY, 2018. SD/- SD/- ( A.K. GARODIA ) ( N.V. VASUDEVAN ) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 6 TH JULY, 2018. / D ESAI S MURTHY / COPY TO: 1. APP ELL ANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY ITAT, BANGALORE.