Appeal details
Counselvise Citation
[2023] 102 COUNSELVISE.COM (IT) 7955 (ITAT-MUMBAI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 month(s) 4 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
27-04-2023
Appeal Filed By
Assessee
Order Result
PartlyAllowed
Bench Allotted
G
Next Hearing Date
26-04-2023
Assessment Year
2012-2013
Appeal Filed On
22-01-2023
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI KULDIP SINGH (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 216/MUM/2023 Assessment Year: 2012-13 Sai Prerana Co-op Society Ltd., 317, Puran Aasha Bldg. Gr. Fl. Narashi Natha Street, Katha Bazar Musjid Bunder (W), Mumbai-400 009. Vs. ITO-7(3)(2), Room No. 126, 1 st floor, Kautilya Bhavan, C-41 to C- 43 Block, Bandra Kurla Complex, Bandra (East) Mumbai-400051. PAN No. AADTS 5638 M Appellant Respondent Assessee by : Ms. Ruby Srivastava & Mr. Bharat Kumar, CA Revenue by : Mr. Milind S. Chavan, DR Date of Hearing : 27/04/2023 Date of pronouncement : 28/04/2023 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 29.02.2022 passed by the Ld. Commissioner of Income-tax – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2012-13, raising following grounds: 1. On the facts and circumstances of the c Ld. CIT (A) erred in confirming reopening of the case on the same facts and circumstances which is change in opinion. 2. On the facts and circumstances of the case in Law, Ld. CIT (A) erred in confirming of the reopening which was open after f on the part of the assesse which is bad in Law. 3. On the facts and circumstances of the case in Law, Ld. CIT (A) erred in disallowing 80P deduction on account of interest received from other than cooperative bank. 4. The Appellant keep its right reserve to add/modi delete the any grounds of appeal. 2. Briefly stated, facts of the case are that the assessee society. For the year under consideration of income u/s 139(1) of on 08.09.2012 declaring total income at Rs. Nil. The assessment u/s 143(3) of the Act was completed on 26.03.2015 and total income was assessed at Rs.3,22,880/ u/s 148 of the Act was the Act on the ground that the assessee had claimed deduction u/s 80P of the Act. The assessment ,recorded by the Assessing Officer as reproduced on page 1 of the assessment ord "The assessee, Sal Prerna Co assessed to tax in this charge. Assessee e filed its return of income for AY 2012 of Rs Nil/-.The case was duly concluded vide order dated 19.3.2015 at Rs NIL/ society. Sai Prerana Co On the facts and circumstances of the case in Law, Ld. CIT (A) erred in confirming reopening of the case on the same facts and circumstances which is change in opinion. On the facts and circumstances of the case in Law, Ld. CIT (A) erred in confirming of the reopening which was open after four years without established failure on the part of the assesse which is bad in Law. On the facts and circumstances of the case in Law, Ld. CIT (A) erred in disallowing 80P deduction on account of interest received from other than cooperative bank. The Appellant keep its right reserve to add/modi delete the any grounds of appeal. Briefly stated, facts of the case are that the assessee or the year under consideration, the assessee of income u/s 139(1) of the Income-tax Act, 1961 (in short ‘the Act’) on 08.09.2012 declaring total income at Rs. Nil. The assessment u/s 143(3) of the Act was completed on 26.03.2015 and total income was assessed at Rs.3,22,880/-. Subsequently, the u/s 148 of the Act was issued and case was reopened u/s 14 the Act on the ground that the assessee had claimed deduction u/s Act. The reasons to believe that income escaped recorded by the Assessing Officer as reproduced on page 1 of the assessment order, is extracted as under: "The assessee, Sal Prerna Co-op. Credit Society Ltd., is assessed to tax in this charge. Assessee e filed its return of income for AY 2012-13 on 08.09.2012 showing income .The case was duly concluded vide order dated 19.3.2015 at Rs NIL/-. Assessee is a co operative credit Sai Prerana Co-op Society Ltd. 2 ITA No. 216/M/2023 ase in Law, Ld. CIT (A) erred in confirming reopening of the case on the same facts and circumstances which is change On the facts and circumstances of the case in Law, Ld. CIT (A) erred in confirming of the reopening which our years without established failure on the part of the assesse which is bad in Law. On the facts and circumstances of the case in Law, Ld. CIT (A) erred in disallowing 80P deduction on account of interest received from other than The Appellant keep its right reserve to add/modify/ Briefly stated, facts of the case are that the assessee is a credit , the assessee filed return tax Act, 1961 (in short ‘the Act’) on 08.09.2012 declaring total income at Rs. Nil. The assessment u/s 143(3) of the Act was completed on 26.03.2015 and total . Subsequently, the notice case was reopened u/s 147 of the Act on the ground that the assessee had claimed deduction u/s to believe that income escaped recorded by the Assessing Officer as reproduced on is extracted as under: op. Credit Society Ltd., is assessed to tax in this charge. Assessee e filed its return 13 on 08.09.2012 showing income .The case was duly concluded vide order dated . Assessee is a co operative credit 2. Subsequently, in this case, it is found that assessee has claimed deduction under section 80P(2) of the Act of Rs 60,44,873/- 3. As per the that assessee received interest on FD of Rs 135,26,896/ The FD's as seen from the Balance sheet were mainly with co operative banks and not with co operative society. This clearly showed that assessee has e operative banks and not from society.. Section 80P(2)(d) does not extend the benefit of deduction for interest received from investments made with co operative banks, hence the deduction was required to be disallowed. 4. Assessee c in contravention to provisions of the Act. The income from FD was required to be offered under the head "Income from other sources" as per the . provisions of the Act as, co operative bank is a urban commercial b fall under the purview of co operätive society referred to section 80P(2)(d) of the Act. The claim of assessee for deduction clearly shows that there is failure on part of assessee in making true and full disclosure of its particulars of i 5 Section 147 of the Act states that if AO has reason to believe that " any income chargeable to tax has escaped assessment for any assessment year, he may subject to provisions of section 148 to 153, assessee or reassess such income other income which has escaped assessment and which comes to his notice subsequently in the course of proceedings under this section”. 2.1 The re-assessment was completed u/s 147 of the Act r.w.s. 144 of the Act withdrawing the deduction u/s 8 thereby assessing the interest income from other sources. 3. Aggrieved, the assessee filed appeal before the Ld. CIT(A) and challenged the validity of the reassessment u/s 147 of the Act as Sai Prerana Co Subsequently, in this case, it is found that assessee has claimed deduction under section 80P(2) of the Act of Rs and the same was also allowed in the order. As per the records from Profit & Loss Alc, it was noticed that assessee received interest on FD of Rs 135,26,896/ The FD's as seen from the Balance sheet were mainly with co operative banks and not with co operative society. This clearly showed that assessee has earned income from co operative banks and not from society.. Section 80P(2)(d) does not extend the benefit of deduction for interest received from investments made with co operative banks, hence the deduction was required to be disallowed. Assessee claimed deduction us 80P(2) which is clearly in contravention to provisions of the Act. The income from FD was required to be offered under the head "Income from other sources" as per the . provisions of the Act as, co operative bank is a urban commercial bank and does not fall under the purview of co operätive society referred to section 80P(2)(d) of the Act. The claim of assessee for deduction clearly shows that there is failure on part of assessee in making true and full disclosure of its particulars of income for AY 2012-13. Section 147 of the Act states that if AO has reason to believe that " any income chargeable to tax has escaped assessment for any assessment year, he may subject to provisions of section 148 to 153, assessee or reassess such income and also any other income which has escaped assessment and which comes to his notice subsequently in the course of proceedings under assessment was completed u/s 147 of the Act r.w.s. 144 of the Act withdrawing the deduction u/s 80P(2) of the Act and thereby assessing the interest income under the head of income Aggrieved, the assessee filed appeal before the Ld. CIT(A) and challenged the validity of the reassessment u/s 147 of the Act as Sai Prerana Co-op Society Ltd. 3 ITA No. 216/M/2023 Subsequently, in this case, it is found that assessee has claimed deduction under section 80P(2) of the Act of Rs and the same was also allowed in the order. records from Profit & Loss Alc, it was noticed that assessee received interest on FD of Rs 135,26,896/-, The FD's as seen from the Balance sheet were mainly with co operative banks and not with co operative society. This arned income from co operative banks and not from society.. Section 80P(2)(d) does not extend the benefit of deduction for interest received from investments made with co operative banks, hence the deduction was required to be disallowed. laimed deduction us 80P(2) which is clearly in contravention to provisions of the Act. The income from FD was required to be offered under the head "Income from other sources" as per the . provisions of the Act as, co ank and does not fall under the purview of co operätive society referred to section 80P(2)(d) of the Act. The claim of assessee for deduction clearly shows that there is failure on part of assessee in making true and full disclosure of its Section 147 of the Act states that if AO has reason to believe that " any income chargeable to tax has escaped assessment for any assessment year, he may subject to provisions of section and also any other income which has escaped assessment and which comes to his notice subsequently in the course of proceedings under assessment was completed u/s 147 of the Act r.w.s. 0P(2) of the Act and under the head of income Aggrieved, the assessee filed appeal before the Ld. CIT(A) and challenged the validity of the reassessment u/s 147 of the Act as well as addition on merit. The Ld. CIT(A) di challenging the validity of the reassessment order observing as under: “7.1 Ground Nos. 1 & 2 challenge the initiation of proceedings u/s147. Notice us 148 was dated 18.02.2019. This obviously means that though four years had elapsed the relevant A. Yr. and the concerned PCIT/CIT had the power to authorize re necessary official formalities were duly completed before issue of the notice us 148. There were no short before the re Ground Nos. 1 & 2 are, therefore disposed as "DISMISSED" 3.1 On merit, the Ld. CIT(A) allowed deduction u/s 80P(2)(d) of the Act in respect of interest earned by the assessee the co-operative bank interest earned by the assessee from deposits kept with nationalized banks. 4. Before us, the assessee has challenged the validity of the reassessment proceedings on the ground that same amounts change ofopinion. The that same is bad in law being without establishing any failure on the part of the assessee for reopening of the assessment beyond the four years from the end of the relevant assessment ye 5. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that Sai Prerana Co well as addition on merit. The Ld. CIT(A) disposed off the grounds challenging the validity of the reassessment order observing as 7.1 Ground Nos. 1 & 2 challenge the initiation of proceedings u/s147. Notice us 148 was dated 18.02.2019. This obviously means that though four years had elapsed but six years had not elapsed from the end of the relevant A. Yr. and the concerned PCIT/CIT had the power to authorize re-opening of assessment. The necessary official formalities were duly completed before issue of the notice us 148. There were no short before the re-assessment proceedings were initiated. Ground Nos. 1 & 2 are, therefore disposed as "DISMISSED" the Ld. CIT(A) allowed deduction u/s 80P(2)(d) of the Act in respect of interest earned by the assessee on operative bank, however did not allow the deduction interest earned by the assessee from deposits kept with nationalized Before us, the assessee has challenged the validity of the reassessment proceedings on the ground that same amounts ofopinion. The reopening was also challenged on the ground bad in law being without establishing any failure on the part of the assessee for reopening of the assessment beyond the the end of the relevant assessment ye We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that Sai Prerana Co-op Society Ltd. 4 ITA No. 216/M/2023 sposed off the grounds challenging the validity of the reassessment order observing as 7.1 Ground Nos. 1 & 2 challenge the initiation of proceedings u/s147. Notice us 148 was dated 18.02.2019. This obviously means that though four years but six years had not elapsed from the end of the relevant A. Yr. and the concerned PCIT/CIT had the opening of assessment. The necessary official formalities were duly completed before issue of the notice us 148. There were no shortcomings assessment proceedings were initiated. Ground Nos. 1 & 2 are, therefore disposed as the Ld. CIT(A) allowed deduction u/s 80P(2)(d) of the on deposits from allow the deduction of interest earned by the assessee from deposits kept with nationalized Before us, the assessee has challenged the validity of the reassessment proceedings on the ground that same amounts to also challenged on the ground bad in law being without establishing any failure on the part of the assessee for reopening of the assessment beyond the the end of the relevant assessment years. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. We find that the identical issue of validity of the reassessment proceedings in the case of the assessee for assessment year 2013 in favour of the assessee observing as under: “6. We have heard rival submission of the parties on the issue-in-dispute and perused the relevant material on record. Regarding the Ground No. 1 and 2 of the appeal related to the reassessment proceeding, we find that in the case assessment has been reopened years from the end of the relevant assessment year. As per the provisions of the Act , an assessment cannot be reopened beyond the period of four years from end of the relevant assessment year unless there is a failure on the part assessee to disclose fully and truly all material facts necessary for completion of assessment. In the case, in the regular assessment year completed u/s 143(3) of the Act, the assessee was allowed deduction u/s 80P of the Act in respect of interest income earned from the nationalized as well as co operative bank. The Assessing Officer has reopened the assessment based on the same material which was available before the Assessing Officer during original assessment proceedings, which is evident from the Assessing Officer ( i.e. reproduced by the Assessing Officer on page 1 of the assessment order). For ready reference same is reproduced as under: "The assessee, Sai Prerna Co assessed to tax in this c income for AY 2013 Nil.The case was duly concluded vide order us 143(3) dated 07.03.2016 at Rs NIL/ society. 2. Subsequently, in this case, it claimed deduction under section 80P(2) of the Act of R$ 97,49,7071- 3. As per the records from Profit & Loss Alc, it was noticed that assessee received interest on FD of Rs 163,45,298/ FD's as seen from the Balance sheet were mainty with co operative banks and not with co operative society. This clearly Sai Prerana Co the identical issue of validity of the reassessment proceedings in the case of the assessee for assessment year 2013-14 has been allowed in favour of the assessee observing as under: We have heard rival submission of the parties on the dispute and perused the relevant material on record. Regarding the Ground No. 1 and 2 of the appeal related to the reassessment proceeding, we find that in the case assessment has been reopened beyond the period of four years from the end of the relevant assessment year. As per the provisions of the Act , an assessment cannot be reopened beyond the period of four years from end of the relevant assessment year unless there is a failure on the part assessee to disclose fully and truly all material facts necessary for completion of assessment. In the case, in the regular assessment year completed u/s 143(3) of the Act, the assessee was allowed deduction u/s 80P of the Act in respect t income earned from the nationalized as well as co operative bank. The Assessing Officer has reopened the assessment based on the same material which was available before the Assessing Officer during original assessment proceedings, which is evident from the reasons recorded by the Assessing Officer ( i.e. reproduced by the Assessing Officer on page 1 of the assessment order). For ready reference same is reproduced as under: "The assessee, Sai Prerna Co-op. Credit Society Ltd., is assessed to tax in this charge. Assessee e filed its return of income for AY 2013-14 on 08.09.2012 showing income of Rs. .The case was duly concluded vide order us 143(3) dated 07.03.2016 at Rs NIL/-. Assessee is a co operative credit 2. Subsequently, in this case, it is found that assessee has claimed deduction under section 80P(2) of the Act of R$ and the same was also allowed in the order. 3. As per the records from Profit & Loss Alc, it was noticed that assessee received interest on FD of Rs 163,45,298/ FD's as seen from the Balance sheet were mainty with co operative banks and not with co operative society. This clearly Sai Prerana Co-op Society Ltd. 5 ITA No. 216/M/2023 the identical issue of validity of the reassessment proceedings in the has been allowed We have heard rival submission of the parties on the dispute and perused the relevant material on record. Regarding the Ground No. 1 and 2 of the appeal related to the reassessment proceeding, we find that in the case beyond the period of four years from the end of the relevant assessment year. As per the provisions of the Act , an assessment cannot be reopened beyond the period of four years from end of the relevant assessment year unless there is a failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of assessment. In the case, in the regular assessment year completed u/s 143(3) of the Act, the assessee was allowed deduction u/s 80P of the Act in respect t income earned from the nationalized as well as co- operative bank. The Assessing Officer has reopened the assessment based on the same material which was available before the Assessing Officer during original assessment the reasons recorded by the Assessing Officer ( i.e. reproduced by the Assessing Officer on page 1 of the assessment order). For ready reference same op. Credit Society Ltd., is harge. Assessee e filed its return of 08.09.2012 showing income of Rs. .The case was duly concluded vide order us 143(3) dated . Assessee is a co operative credit is found that assessee has claimed deduction under section 80P(2) of the Act of R$ and the same was also allowed in the order. 3. As per the records from Profit & Loss Alc, it was noticed that assessee received interest on FD of Rs 163,45,298/-. The FD's as seen from the Balance sheet were mainty with co operative banks and not with co operative society. This clearly showed that assessee has earned income from co operative banks and not from society. Section 80P(2)(d) does not extend the benefit of deduction for interest received from investments made with co operative banks, hence the deduction was required to be disallowed. 4. Assessee claimed deduction u/s 800(2) which is clearly in contravention to provisions of the Act. The income from FD was required to be offered under the head "income from other sources" as per the provisions of the Act as, co operative bank is a urban commercial bank and does not fall under the purview of co operative society referred to section 80P(2)(d) of the Act. The that there is failure on part of assessee in making true and full disclosure of its particulars of income for AY 2012 5. Section 147 of the Act states that If AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may subject to provisions of section 148 to 153, assessee or reassess such income and also any other inco assessment and which comes to his notice subsequently in the course of proceedings under this section." 6.1 On perusal of the above reasons recorded, it is evident that there is no tangible new information or material from either ‘internal’ or ‘external’ source to form reasons to believe that income escaped assessment. The Assessing Officer has merely re-appreciated the information which was available before him in original assessment proceedings and therefore, the reasons recorded are In para 4 of the reasons recorded though the Assessing Officer mentioned that there was a failure on the part of the assessee in making true and fully disclosure, however, he has not pointed out which information was no truly by the assessee. The interest income earned by the assessee from fixed deposits was duly explained before the Assessing Officer in original assessment proceedings and therefore, contention of the Assessing Officer in reason recorded of failure on the part of the assessee in making full and true disclosure,is devoid of merit and in the nature of an incorrect allegation only. Relying on the decision of the Hon’ble Jurisdictional High Court in the case of Sunjewels India (P.) Ltd. reported in [2022] 141 taxmann.com 72 Sai Prerana Co showed that assessee has earned income from co operative banks and not from society. Section 80P(2)(d) does not extend of deduction for interest received from investments made with co operative banks, hence the deduction was required to be disallowed. 4. Assessee claimed deduction u/s 800(2) which is clearly in contravention to provisions of the Act. The income from FD s required to be offered under the head "income from other sources" as per the provisions of the Act as, co operative bank is a urban commercial bank and does not fall under the purview of co operative society referred to section 80P(2)(d) of the Act. The claim of assessee for deduction clearly shows that there is failure on part of assessee in making true and full disclosure of its particulars of income for AY 2012- 5. Section 147 of the Act states that If AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may subject to provisions of section 148 to 153, assessee or reassess such income and also any other income which has escaped assessment and which comes to his notice subsequently in the course of proceedings under this section." On perusal of the above reasons recorded, it is evident that there is no tangible new information or material from rnal’ or ‘external’ source to form reasons to believe that income escaped assessment. The Assessing Officer has appreciated the information which was available before him in original assessment proceedings and therefore, the reasons recorded are based on merely ‘change of opinion’. In para 4 of the reasons recorded though the Assessing Officer mentioned that there was a failure on the part of the assessee in making true and fully disclosure, however, he has not pointed out which information was not disclosed fully and truly by the assessee. The interest income earned by the assessee from fixed deposits was duly explained before the Assessing Officer in original assessment proceedings and therefore, contention of the Assessing Officer in reason rded of failure on the part of the assessee in making full and true disclosure,is devoid of merit and in the nature of an incorrect allegation only. Relying on the decision of the Hon’ble Jurisdictional High Court in the case of Sunjewels India (P.) eported in [2022] 141 taxmann.com 72 Sai Prerana Co-op Society Ltd. 6 ITA No. 216/M/2023 showed that assessee has earned income from co operative banks and not from society. Section 80P(2)(d) does not extend of deduction for interest received from investments made with co operative banks, hence the deduction was 4. Assessee claimed deduction u/s 800(2) which is clearly in contravention to provisions of the Act. The income from FD s required to be offered under the head "income from other sources" as per the provisions of the Act as, co operative bank is a urban commercial bank and does not fall under the purview of co operative society referred to section 80P(2)(d) of claim of assessee for deduction clearly shows that there is failure on part of assessee in making true and full -13. 5. Section 147 of the Act states that If AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may subject to provisions of section 148 to 153, assessee or reassess such me which has escaped assessment and which comes to his notice subsequently in On perusal of the above reasons recorded, it is evident that there is no tangible new information or material from rnal’ or ‘external’ source to form reasons to believe that income escaped assessment. The Assessing Officer has appreciated the information which was available before him in original assessment proceedings and therefore, based on merely ‘change of opinion’. In para 4 of the reasons recorded though the Assessing Officer mentioned that there was a failure on the part of the assessee in making true and fully disclosure, however, he has not t disclosed fully and truly by the assessee. The interest income earned by the assessee from fixed deposits was duly explained before the Assessing Officer in original assessment proceedings and therefore, contention of the Assessing Officer in reason rded of failure on the part of the assessee in making full and true disclosure,is devoid of merit and in the nature of an incorrect allegation only. Relying on the decision of the Hon’ble Jurisdictional High Court in the case of Sunjewels India (P.) eported in [2022] 141 taxmann.com 72 (Bombay)reassessments based on appreciating same facts, which were available during original assessment proceedings,is bad in law on the reason of ‘change of opinion’. In writ petition no. 3048 of 2022 in the case of Mu Employees Co Bombay High Court held that satisfaction recorded by the AO in the reasons recorded was not based upon any material other than obtained on amount of ‘perusal of the record’, and hence it was based on change of opinion. The relevant finding of the Hon’ble High Court is reproduced as under: “8. We have heard learned Counsel for the parties. 9. It is no longer res integra that the action of the A.O. ininitiating reassessment proceedings touch stone of the reasons recorded. On a perusal of the reasons recorded as have been reproduced partially in the preceding paragraphs, it is clear that the A.O. felt that the claim of deduction under Section 80P(2)(d) of the Act had been allowed in favour of the Petitioner was not in conformity with the provisions of the said section, which consequently had resulted in an under assessment of income of Rs.92,08,876/ Rs.28,45,542/ reasons was not based upon any material other than obtained on account of ‘perusal of the record’. 10. It can be noticed that in the present case the assessment was under Section 143(3) of the Act, during which th Petitioner had been served with the notice under Section 142(1) of the Act dated 27th September, 2016 asking the Petitioner to explain with documentary evidence the claim of deduction under Chapter VI submitted by the Peti explanation that the Petitioner get fulflled the conditions of eligibility under Section 80P of the Act, whereafter the order of assessment came to be passed on 23rd November, 2016. It is therefore clear that the issue ofthe deduction under Section 80P of the Act while disallowing the same in regard to income from holiday home charges. 11. The A.O. therefore did not have any tangible material with him based upon which he could form his re income had escaped assessment. The entire basis for Sai Prerana Co (Bombay)reassessments based on appreciating same facts, which were available during original assessment proceedings,is bad in law on the reason of ‘change of opinion’. In writ petition no. 3048 of 2022 in the case of Mu Employees Co-operative Credit Society Ltd Vs ITO, the Hon’ble Bombay High Court held that satisfaction recorded by the AO in the reasons recorded was not based upon any material other than obtained on amount of ‘perusal of the record’, and e it was based on change of opinion. The relevant finding of the Hon’ble High Court is reproduced as under: 8. We have heard learned Counsel for the parties. 9. It is no longer res integra that the action of the A.O. ininitiating reassessment proceedings have to be tested on the touch stone of the reasons recorded. On a perusal of the reasons recorded as have been reproduced partially in the preceding paragraphs, it is clear that the A.O. felt that the claim of deduction under Section 80P(2)(d) of the Act had been allowed in favour of the Petitioner was not in conformity with the provisions of the said section, which consequently had resulted in an under assessment of income of Rs.92,08,876/- and a consequent short levy of tax of Rs.28,45,542/-. This satisfaction recorded by the A.O. in the reasons was not based upon any material other than obtained on account of ‘perusal of the record’. 10. It can be noticed that in the present case the assessment was under Section 143(3) of the Act, during which th Petitioner had been served with the notice under Section 142(1) of the Act dated 27th September, 2016 asking the Petitioner to explain with documentary evidence the claim of deduction under Chapter VI-A of the Act, reply thereto was submitted by the Petitioner on 10th October, 2016 with an explanation that the Petitioner get fulflled the conditions of eligibility under Section 80P of the Act, whereafter the order of assessment came to be passed on 23rd November, 2016. It is therefore clear that the issue stood considered as only a part the deduction under Section 80P of the Act while disallowing the same in regard to income from holiday home charges. 11. The A.O. therefore did not have any tangible material with him based upon which he could form his reason to believe that income had escaped assessment. The entire basis for Sai Prerana Co-op Society Ltd. 7 ITA No. 216/M/2023 (Bombay)reassessments based on appreciating same facts, which were available during original assessment proceedings,is bad in law on the reason of ‘change of opinion’. In writ petition no. 3048 of 2022 in the case of Mumbai Postal operative Credit Society Ltd Vs ITO, the Hon’ble Bombay High Court held that satisfaction recorded by the AO in the reasons recorded was not based upon any material other than obtained on amount of ‘perusal of the record’, and e it was based on change of opinion. The relevant finding 8. We have heard learned Counsel for the parties. 9. It is no longer res integra that the action of the A.O. have to be tested on the touch stone of the reasons recorded. On a perusal of the reasons recorded as have been reproduced partially in the preceding paragraphs, it is clear that the A.O. felt that the claim of deduction under Section 80P(2)(d) of the Act which had been allowed in favour of the Petitioner was not in conformity with the provisions of the said section, which consequently had resulted in an under assessment of income and a consequent short levy of tax of satisfaction recorded by the A.O. in the reasons was not based upon any material other than obtained 10. It can be noticed that in the present case the assessment was under Section 143(3) of the Act, during which the Petitioner had been served with the notice under Section 142(1) of the Act dated 27th September, 2016 asking the Petitioner to explain with documentary evidence the claim of A of the Act, reply thereto was tioner on 10th October, 2016 with an explanation that the Petitioner get fulflled the conditions of eligibility under Section 80P of the Act, whereafter the order of assessment came to be passed on 23rd November, 2016. It is stood considered as only a part the deduction under Section 80P of the Act while disallowing the same in regard to income from holiday home charges. 11. The A.O. therefore did not have any tangible material with ason to believe that income had escaped assessment. The entire basis for reopening is nothing but a change of opinion on the part of the A.O. that the beneft of deduction under Section 80P of the Act of Rs.92,08,876/ between the date of the assessment order under Section 143(3) of the Act and the date when the reasons were recorded, there has been neither any change in law nor any new material has been shown to have come to the knowledge of the A.O.. This therefore change of opinion as was rightly urged by Mr. Mistry and, therefore, impermissible for reopening the assessment. Apart from this, the assessment is sought to be reopened beyond the period of four years from the end of the re year 2014-15 and, therefore, it was incumbent upon the A.O. to establish that the Petitioner had failed to disclose fully and truly all material facts necessary for assessment during the relevant assessment proceedings. No such averment i in the 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, Assistant Commissi held: “......The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the manifestation of the mind of the Assessing Offcer. The reasons recorded should be self assessee guessing for the reasons. Reasons provide the link between conclusion and evi be based on evidence. The Assessing Offcer, 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 material was assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. In the aforementioned case the Court set aside the notice under Section 148 of the Act impugned therein, on the ground that the jurisdictional requirement of the proviso to Section 147 of the Act had not been complied with as the A.O. had nowhere stated in Sai Prerana Co reopening is nothing but a change of opinion on the part of the A.O. that the beneft of deduction under Section 80P of the Act of Rs.92,08,876/- ought not to have been allowed at all. between the date of the assessment order under Section 143(3) of the Act and the date when the reasons were recorded, there has been neither any change in law nor any new material has been shown to have come to the knowledge of the A.O.. This therefore is nothing but a clear case of change of opinion as was rightly urged by Mr. Mistry and, therefore, impermissible for reopening the assessment. Apart from this, the assessment is sought to be reopened beyond the period of four years from the end of the relevant assessment 15 and, therefore, it was incumbent upon the A.O. to establish that the Petitioner had failed to disclose fully and truly all material facts necessary for assessment during the relevant assessment proceedings. No such averment i 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, Assistant Commissioner of Income-Tax and others 1 “......The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons ed must disclose his mind. The reasons are the manifestation of the mind of the Assessing Offcer. The reasons recorded should be self-explanatory and should not keep the assessee guessing for the reasons. Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Offcer, 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 material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. n the aforementioned case the Court set aside the notice under Section 148 of the Act impugned therein, on the ground that the jurisdictional requirement of the proviso to Section 147 of the Act had not been complied with as the A.O. had nowhere stated in the reasons recorded that there was failure Sai Prerana Co-op Society Ltd. 8 ITA No. 216/M/2023 reopening is nothing but a change of opinion on the part of the A.O. that the beneft of deduction under Section 80P of the Act ought not to have been allowed at all. As between the date of the assessment order under Section 143(3) of the Act and the date when the reasons were recorded, there has been neither any change in law nor any new material has been shown to have come to the knowledge is nothing but a clear case of change of opinion as was rightly urged by Mr. Mistry and, therefore, impermissible for reopening the assessment. Apart from this, the assessment is sought to be reopened beyond the levant assessment 15 and, therefore, it was incumbent upon the A.O. to establish that the Petitioner had failed to disclose fully and truly all material facts necessary for assessment during the relevant assessment proceedings. No such averment is made 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, Tax and others 1, it was “......The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons ed must disclose his mind. The reasons are the manifestation of the mind of the Assessing Offcer. The reasons explanatory and should not keep the assessee guessing for the reasons. Reasons provide the link dence. The reasons recorded must be based on evidence. The Assessing Offcer, 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 not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. n the aforementioned case the Court set aside the notice under Section 148 of the Act impugned therein, on the ground that the jurisdictional requirement of the proviso to Section 147 of the Act had not been complied with as the A.O. had the reasons recorded that there was failure on the part of the assessee to disclose fully and truly all material facts. Similar facts situation exists even in the present case where the reasons recorded do not at all alleged any such failure on the part of condition prerequisite for invoking jurisdiction for reopening in addition to the condition of ‘reasons tobelieve’ as this was a case of reopening beyond the period of four years. 13. For the reasons mentioned hereinabove, we hav hesitation in holding that in the facts and circumstances of the present case, the reopening of the assessment is unsustainable. Be that as it may, the present petition is allowed. The notice under Section 148 of the Act as also the order of assessmen Section 147 r/w Section 144B of the Act are set aside. 6.2 Similar finding has been given by the Hon’ble Bombay High Court while deciding the writpetition no. 1809 of 2022 in the case of Tahnee Heights CHS Ltd Vs ITO. finding of the Hon’ble High Court is reproduced as under: “8. In the present case although the A.O. has recorded in the reasons that there was failure on the part of the assessee to disclosefully and truly material facts, it failed to identi what was that material fact which was not disclosed by the assessee which if so disclosed could have prevented the escapement of income. The alleged failure to disclose appears to be nothing but a statement to somehow overcome the hurdle of reopening the assessment beyond four years. Apart from the above, the A.O. could have proceeded to reopen the assessment only if he had reason to believe that ‘income had escaped assessment’. 9. In CIT V/s. Kelvinator of India Ltd. 2 the Supreme Court held: “ The Assessing Offcer has no power to review; he has the power to reassess. But reassessment has to be based on fulfllment of certain precondition and if the concept of “change of opinion” is removed, as contended on behalf of the Department, then, in the review would take place. One must treat the concept of “change of opinion” as an in Sai Prerana Co on the part of the assessee to disclose fully and truly all material facts. Similar facts situation exists even in the present case where the reasons recorded do not at all alleged any such failure on the part of the assessee which was a condition prerequisite for invoking jurisdiction for reopening in addition to the condition of ‘reasons tobelieve’ as this was a case of reopening beyond the period of four years. 13. For the reasons mentioned hereinabove, we hav hesitation in holding that in the facts and circumstances of the present case, the reopening of the assessment is unsustainable. Be that as it may, the present petition is allowed. The notice under Section 148 of the Act as also the order of assessment dated 30th March, 2022 passed under Section 147 r/w Section 144B of the Act are set aside. Similar finding has been given by the Hon’ble Bombay High Court while deciding the writpetition no. 1809 of 2022 in the case of Tahnee Heights CHS Ltd Vs ITO. The relevant finding of the Hon’ble High Court is reproduced as under: 8. In the present case although the A.O. has recorded in the reasons that there was failure on the part of the assessee to disclosefully and truly material facts, it failed to identi what was that material fact which was not disclosed by the assessee which if so disclosed could have prevented the escapement of income. The alleged failure to disclose appears to be nothing but a statement to somehow overcome the hurdle ing the assessment beyond four years. Apart from the above, the A.O. could have proceeded to reopen the assessment only if he had reason to believe that ‘income had escaped assessment’. 9. In CIT V/s. Kelvinator of India Ltd. 2 the Supreme Court The Assessing Offcer has no power to review; he has the power to reassess. But reassessment has to be based on fulfllment of certain precondition 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” as an in-built test to check abuse of power Sai Prerana Co-op Society Ltd. 9 ITA No. 216/M/2023 on the part of the assessee to disclose fully and truly all material facts. Similar facts situation exists even in the present case where the reasons recorded do not at all alleged the assessee which was a condition prerequisite for invoking jurisdiction for reopening in addition to the condition of ‘reasons tobelieve’ as this was a case of reopening beyond the period of four years. 13. For the reasons mentioned hereinabove, we have no hesitation in holding that in the facts and circumstances of the present case, the reopening of the assessment is unsustainable. Be that as it may, the present petition is allowed. The notice under Section 148 of the Act as also the t dated 30th March, 2022 passed under Section 147 r/w Section 144B of the Act are set aside.” Similar finding has been given by the Hon’ble Bombay High Court while deciding the writpetition no. 1809 of 2022 in The relevant finding of the Hon’ble High Court is reproduced as under: 8. In the present case although the A.O. has recorded in the reasons that there was failure on the part of the assessee to disclosefully and truly material facts, it failed to identify as to what was that material fact which was not disclosed by the assessee which if so disclosed could have prevented the escapement of income. The alleged failure to disclose appears to be nothing but a statement to somehow overcome the hurdle Apart from the above, the A.O. could have proceeded to reopen the assessment only if he had reason to believe that ‘income 9. In CIT V/s. Kelvinator of India Ltd. 2 the Supreme Court The Assessing Offcer has no power to review; he has the power to reassess. But reassessment has to be based on fulfllment of certain precondition and if the concept of “change of opinion” is removed, as contended on behalf of the opening the assessment, review would take place. One must treat the concept of built test to check abuse of power by the Assessing Offcer. Hence, after 1 Offcer has power to reopen, provided there i material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief.” 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of Income Tax 3 , the Court, in the in the background of section 147 of the Act, observed : “...................all that the Income was not right in allowing deduction under Section 80I because he had allowed the deductions wrongly and, th was of the opinion that the income had escaped assessment. Though he has used the phrase "reason to believe" in his order, admittedly, between the date of the orders of assessment sought to be reopened and the date of forming of opinion by the There is no change of law. No new material has come on record. No information has been received. It is merely a fresh application of mind by the same Assessing Offcer to the same set of facts. While passing the o the order dated February 28, 1994, passed by the Commissioner of Income Assessing Offcer. That order stands till today. What the Assessing Offce has said about the order of the Commissioner of Income-tax (Appeals) while recording reasons under Section 147 he could have said even in the original orders of assessment. Thus, it is a case of mere change of opinion which does not provide jurisdiction to the Assessing Offcer to initiate proceedings under S It is also equally well settled that if a notice under Section 148 has been issued without the jurisdictional foundation under Section 147 being available to the Assessing Offcer, the notice and the subsequent proceedings will be wi liable to be struck down in exercise of writ jurisdiction of this court. If "reason to believe" be available, the writ court will not exercise its power of judicial review to go into the suffciency or adequacy of the material available. is not a case of testing the suffciency of material available. It is a case of absence of material and hence the absence of Sai Prerana Co by the Assessing Offcer. Hence, after 1-4-1989, Assessing Offcer has power to reopen, provided there i material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief.” 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of Income Tax 3 , the Court, in the light of the facts before it and in the background of section 147 of the Act, observed : “...................all that the Income-tax Offcer has said is that he was not right in allowing deduction under Section 80I because he had allowed the deductions wrongly and, th was of the opinion that the income had escaped assessment. Though he has used the phrase "reason to believe" in his order, admittedly, between the date of the orders of assessment sought to be reopened and the date of forming of opinion by the Income-tax Offcer nothing new has happened. There is no change of law. No new material has come on record. No information has been received. It is merely a fresh application of mind by the same Assessing Offcer to the same set of facts. While passing the original orders of assessment the order dated February 28, 1994, passed by the Commissioner of Income-tax (Appeals) was before the Assessing Offcer. That order stands till today. What the Assessing Offce has said about the order of the Commissioner tax (Appeals) while recording reasons under Section 147 he could have said even in the original orders of assessment. Thus, it is a case of mere change of opinion which does not provide jurisdiction to the Assessing Offcer to initiate proceedings under Section 147 of the Act. It is also equally well settled that if a notice under Section 148 has been issued without the jurisdictional foundation under Section 147 being available to the Assessing Offcer, the notice and the subsequent proceedings will be without jurisdiction, liable to be struck down in exercise of writ jurisdiction of this court. If "reason to believe" be available, the writ court will not exercise its power of judicial review to go into the suffciency or adequacy of the material available. However, the present one is not a case of testing the suffciency of material available. It is a case of absence of material and hence the absence of Sai Prerana Co-op Society Ltd. 10 ITA No. 216/M/2023 1989, Assessing Offcer has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of light of the facts before it and in the background of section 147 of the Act, observed : tax Offcer has said is that he was not right in allowing deduction under Section 80I because he had allowed the deductions wrongly and, therefore, he was of the opinion that the income had escaped assessment. Though he has used the phrase "reason to believe" in his order, admittedly, between the date of the orders of assessment sought to be reopened and the date of forming of tax Offcer nothing new has happened. There is no change of law. No new material has come on record. No information has been received. It is merely a fresh application of mind by the same Assessing Offcer to the same riginal orders of assessment the order dated February 28, 1994, passed by the tax (Appeals) was before the Assessing Offcer. That order stands till today. What the Assessing Offce has said about the order of the Commissioner tax (Appeals) while recording reasons under Section 147 he could have said even in the original orders of assessment. Thus, it is a case of mere change of opinion which does not provide jurisdiction to the Assessing Offcer to It is also equally well settled that if a notice under Section 148 has been issued without the jurisdictional foundation under Section 147 being available to the Assessing Offcer, the notice thout jurisdiction, liable to be struck down in exercise of writ jurisdiction of this court. If "reason to believe" be available, the writ court will not exercise its power of judicial review to go into the suffciency or However, the present one is not a case of testing the suffciency of material available. It is a case of absence of material and hence the absence of jurisdiction in the Assessing Offcer to initiate the proceedings under Section 147/148 of the Act.” 11. Even in the present case there appears to be no tangible material with the A.O. as can be seen from the reasons recorded and that the reference was made only to the records of the assessment. It thus appears that between the date of the order of assessment nothing new had happened. There was no new information received by the Assessing Offcer nor was any reference made to any new material on record. The A.O. was simply attempting to deduction under Section 80P of the Act claimed and allowed in favour of the Petitioner. 12. We cannot forget that the order of assessment passed in the case of the assessee was under Section 143(3) of the Act. The Petitioner had specifcally claime Section 80P of the Act which was not only reflected in the return of income but also gone into specifcally as can be seen from the notice issued under Section 142(1) of the Act where by the details of various deductions and exemptions with documentary evidence had been sought for by the A.O., which fnally led to the passing of the order of assessment where by while certain disallowances were made in respect to certain items, the claim of deduction under Section 80P was allowed. It is settled law that if a query is raised during the assessment proceedings and the assessee submits a reply thereto, leading to the passing of the order of assessment, a reopening in the absence of any new tangible material would be nothing but a change the A.O. a basis for his ‘reasons to believe’ that income chargeable to tax had escaped assessment. 13. Be that as it may, we are of the opinion that the impugned notice is unsustainable on account of these jurisdict errors committed by the A.O.. Consequently, the petition is allowed. The impugned notice dated30th March, 2021 under Section 148 of the Act and the impugned order dated 10th March, 2022 are held to be unsustainable and are accordingly quashed.” 6.3 In the case of Surat District Co Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat), Hon’ble high Sai Prerana Co jurisdiction in the Assessing Offcer to initiate the proceedings under Section 147/148 of the Act.” ven in the present case there appears to be no tangible material with the A.O. as can be seen from the reasons recorded and that the reference was made only to the records of the assessment. It thus appears that between the date of the order of assessment and the date of the issuance of notice, nothing new had happened. There was no new information received by the Assessing Offcer nor was any reference made to any new material on record. The A.O. was simply attempting toaccord a fresh consideration on the i deduction under Section 80P of the Act claimed and allowed in favour of the Petitioner. 12. We cannot forget that the order of assessment passed in the case of the assessee was under Section 143(3) of the Act. The Petitioner had specifcally claimed the deduction under Section 80P of the Act which was not only reflected in the return of income but also gone into specifcally as can be seen from the notice issued under Section 142(1) of the Act where by the details of various deductions and exemptions with documentary evidence had been sought for by the A.O., which fnally led to the passing of the order of assessment where by while certain disallowances were made in respect to certain items, the claim of deduction under Section 80P was t is settled law that if a query is raised during the assessment proceedings and the assessee submits a reply thereto, leading to the passing of the order of assessment, a reopening in the absence of any new tangible material would be nothing but a change of opinion, which would not furnish to the A.O. a basis for his ‘reasons to believe’ that income chargeable to tax had escaped assessment. 13. Be that as it may, we are of the opinion that the impugned notice is unsustainable on account of these jurisdict errors committed by the A.O.. Consequently, the petition is allowed. The impugned notice dated30th March, 2021 under Section 148 of the Act and the impugned order dated 10th March, 2022 are held to be unsustainable and are accordingly n the case of Surat District Co-op Milk Producers Union Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat), Hon’ble high Sai Prerana Co-op Society Ltd. 11 ITA No. 216/M/2023 jurisdiction in the Assessing Offcer to initiate the proceedings ven in the present case there appears to be no tangible material with the A.O. as can be seen from the reasons recorded and that the reference was made only to the records of the assessment. It thus appears that between the date of and the date of the issuance of notice, nothing new had happened. There was no new information received by the Assessing Offcer nor was any reference made to any new material on record. The A.O. was simply accord a fresh consideration on the issue of deduction under Section 80P of the Act claimed and allowed in 12. We cannot forget that the order of assessment passed in the case of the assessee was under Section 143(3) of the Act. d the deduction under Section 80P of the Act which was not only reflected in the return of income but also gone into specifcally as can be seen from the notice issued under Section 142(1) of the Act where by the details of various deductions and exemptions along with documentary evidence had been sought for by the A.O., which fnally led to the passing of the order of assessment where by while certain disallowances were made in respect to certain items, the claim of deduction under Section 80P was t is settled law that if a query is raised during the assessment proceedings and the assessee submits a reply thereto, leading to the passing of the order of assessment, a reopening in the absence of any new tangible material would of opinion, which would not furnish to the A.O. a basis for his ‘reasons to believe’ that income 13. Be that as it may, we are of the opinion that the impugned notice is unsustainable on account of these jurisdictional errors committed by the A.O.. Consequently, the petition is allowed. The impugned notice dated30th March, 2021 under Section 148 of the Act and the impugned order dated 10th March, 2022 are held to be unsustainable and are accordingly op Milk Producers Union Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat), Hon’ble high Court of Gujrat held that when the assessee had given full details of dividend income, interest income, essential requirement to reopen as satisfied. The relevant finding of the Hon’ble High Court id reproduced asunder: “12. Having thus heard learned counsel for the parties and having perused the materials on record, we notice that in the return filed by the of gross income of interest and dividend of Rs.1,81,27,606 under Section 80P(2)(d) of the Act, the petitioner further provided various details. For example, in the Annexure the return, such deduction und bifurcated into dividend income of Rs.53,71,450 and interest income of Rs.1,27,56,156. Further, the petitioner had also supplied the full details of the statement showing dividend and interest income received from cooperative socie with dividend counters in the original. Additionally, along with Tax Audit Report under Section 44AB of the Act the petitioner had given details of the dividend income, interest income as well as interest expenses for the said year, which includ interest expenditure on fixed deposit, interest expenditure on the Society Savings, Employee Savings, etc. 13. Thus, it can be seen that full details with respect to petitioner's claim for deduction under Section 80P(2)(d) of the Act was very much befo return accompanied by the audited accounts of the petitioner society. There was, thus, no failure on the part of the petitioner to disclose fully and truly all the material facts necessary for assessment. The essent enable the Assessing Officer to reopen the assessment and the period of four years is, thus, not satisfied. Therefore, without going into the further question of the very maintainability of the belief of the Assessing Officer that the assessee's income has escaped assessment within the meaning of section 147 of the Act, we find sufficient justification in thepetitioner's questioning the reopening the process only on the ground that there was no failure on the part of the petitioner to dis facts. Sai Prerana Co Court of Gujrat held that when the assessee had given full details of dividend income, interest income, essential requirement to reopen assessment after four years was not satisfied. The relevant finding of the Hon’ble High Court id reproduced asunder: Having thus heard learned counsel for the parties and having perused the materials on record, we notice that in the return filed by the petitioner, in addition to claiming deduction of gross income of interest and dividend of Rs.1,81,27,606 under Section 80P(2)(d) of the Act, the petitioner further provided various details. For example, in the Annexure the return, such deduction under Section 80P(2)(d) was bifurcated into dividend income of Rs.53,71,450 and interest income of Rs.1,27,56,156. Further, the petitioner had also supplied the full details of the statement showing dividend and interest income received from cooperative socie with dividend counters in the original. Additionally, along with Tax Audit Report under Section 44AB of the Act the petitioner had given details of the dividend income, interest income as well as interest expenses for the said year, which includ interest expenditure on fixed deposit, interest expenditure on the Society Savings, Employee Savings, etc. Thus, it can be seen that full details with respect to petitioner's claim for deduction under Section 80P(2)(d) of the Act was very much before the Assessing Officer in the original return accompanied by the audited accounts of the petitioner society. There was, thus, no failure on the part of the petitioner to disclose fully and truly all the material facts necessary for assessment. The essential requirement to enable the Assessing Officer to reopen the assessment and the period of four years is, thus, not satisfied. Therefore, without going into the further question of the very maintainability of the belief of the Assessing Officer that the sessee's income has escaped assessment within the meaning of section 147 of the Act, we find sufficient justification in thepetitioner's questioning the reopening the process only on the ground that there was no failure on the part of the petitioner to disclose truly and fully all the material Sai Prerana Co-op Society Ltd. 12 ITA No. 216/M/2023 Court of Gujrat held that when the assessee had given full details of dividend income, interest income, essential sessment after four years was not satisfied. The relevant finding of the Hon’ble High Court id Having thus heard learned counsel for the parties and having perused the materials on record, we notice that in the petitioner, in addition to claiming deduction of gross income of interest and dividend of Rs.1,81,27,606 under Section 80P(2)(d) of the Act, the petitioner further provided various details. For example, in the Annexure-VII to er Section 80P(2)(d) was bifurcated into dividend income of Rs.53,71,450 and interest income of Rs.1,27,56,156. Further, the petitioner had also supplied the full details of the statement showing dividend and interest income received from cooperative societies along with dividend counters in the original. Additionally, along with Tax Audit Report under Section 44AB of the Act the petitioner had given details of the dividend income, interest income as well as interest expenses for the said year, which included interest expenditure on fixed deposit, interest expenditure on Thus, it can be seen that full details with respect to petitioner's claim for deduction under Section 80P(2)(d) of the re the Assessing Officer in the original return accompanied by the audited accounts of the petitioner society. There was, thus, no failure on the part of the petitioner to disclose fully and truly all the material facts ial requirement to enable the Assessing Officer to reopen the assessment and the period of four years is, thus, not satisfied. Therefore, without going into the further question of the very maintainability of the belief of the Assessing Officer that the sessee's income has escaped assessment within the meaning of section 147 of the Act, we find sufficient justification in thepetitioner's questioning the reopening the process only on the ground that there was no failure on the close truly and fully all the material 6.4 The contention of the ld DR that explanation below the section 147 of the Act prescribing‘producing books of amount does not amount to full and true disclosure of material facts’, is not relevant in the cas material fact, which was not disclosed during regular assessment proceedings. 6.5 In view of the above discussion, the reassessment proceedings cannot be sustained, firstly, due to the reason that reassessment proceedi opinion’, secondly, no disclosure of full and true material facts by the assessee before the assessing officer, has not been substantiated by the Assessing officer, thirdly, there being no internal or external material to tr assessment or for recording the reasons to believe that income escaped assessment, the action is a kind of review of assessment already completed, for which the AO is not permitted. Hence, the reassessment proceeding u/s 147 of the Act is quashed as void ab initio. The ground No. 1 and 2 of the appeal of the assessee are accordingly allowed. 5.1 The facts and circumstances of the year under consideration being identical to AY 2013 the ITAT (supra) for AY 2013 of the assessee itself, held as invalid and void ab issue of validity of the reassessment is Ground No. 1 and 2 of the appeal of the assessee are allowed. 5.2 Since we have already 147 of the Act as in valid the ground No. 3 in respect of deduction on acc received from other than co merely rendered academic and same is dismissed as infructuous. Sai Prerana Co The contention of the ld DR that explanation below the section 147 of the Act prescribing‘producing books of amount does not amount to full and true disclosure of material facts’, is not relevant in the case as the AO has not pointed out any material fact, which was not disclosed during regular assessment proceedings. In view of the above discussion, the reassessment proceedings cannot be sustained, firstly, due to the reason that reassessment proceeding are based on mere ‘change of opinion’, secondly, no disclosure of full and true material facts by the assessee before the assessing officer, has not been substantiated by the Assessing officer, thirdly, there being no internal or external material to trigger the reopening of assessment or for recording the reasons to believe that income escaped assessment, the action is a kind of review of assessment already completed, for which the AO is not permitted. Hence, the reassessment proceeding u/s 147 of the ct is quashed as void ab initio. The ground No. 1 and 2 of the appeal of the assessee are accordingly allowed.” The facts and circumstances of the year under consideration being identical to AY 2013-14, respectfully following the (supra) for AY 2013-14 on the issue in dispute in the case itself, the reassessment order passed by the AO is held as invalid and void ab-initio. The order of the Ld. CIT(A) on the of the reassessment is accordingly set as 2 of the appeal of the assessee are allowed. Since we have already held the reassessment order passed u/s in valid and bad in law therefore, adjudication of the ground No. 3 in respect of deduction on account of interest received from other than co-operative bank i.e. nationalized bank is merely rendered academic and same is dismissed as infructuous. Sai Prerana Co-op Society Ltd. 13 ITA No. 216/M/2023 The contention of the ld DR that explanation below the section 147 of the Act prescribing‘producing books of amount does not amount to full and true disclosure of material facts’, e as the AO has not pointed out any material fact, which was not disclosed during regular In view of the above discussion, the reassessment proceedings cannot be sustained, firstly, due to the reason ng are based on mere ‘change of opinion’, secondly, no disclosure of full and true material facts by the assessee before the assessing officer, has not been substantiated by the Assessing officer, thirdly, there being no igger the reopening of assessment or for recording the reasons to believe that income escaped assessment, the action is a kind of review of assessment already completed, for which the AO is not permitted. Hence, the reassessment proceeding u/s 147 of the ct is quashed as void ab initio. The ground No. 1 and 2 of the The facts and circumstances of the year under consideration espectfully following the finding of on the issue in dispute in the case the reassessment order passed by the AO is order of the Ld. CIT(A) on the set aside and the 2 of the appeal of the assessee are allowed. the reassessment order passed u/s and bad in law therefore, adjudication of ount of interest operative bank i.e. nationalized bank is merely rendered academic and same is dismissed as infructuous. 6. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on Sd/ (KULDIP SINGH JUDICIAL MEMBER Mumbai; Dated: 28/04/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Sai Prerana Co In the result, the appeal of the assessee is partly allowed. nounced in the open Court on 28/04/2023. Sd/- KULDIP SINGH) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Sai Prerana Co-op Society Ltd. 14 ITA No. 216/M/2023 In the result, the appeal of the assessee is partly allowed. 04/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai
AI Insights
The case involves Sai Prerana Co-op Society Ltd., which appealed against the order of the Commissioner of Income-tax - National Faceless Appeal Centre, Delhi, concerning the reassessment for the assessment year 2012-13. The primary issues revolved around the validity of the reassessment under Section 147 of the Income Tax Act and the disallowance of deduction under Section 80P for interest received from non-cooperative banks. The Tribunal examined whether the reassessment was justified and whether the assessee had adequately disclosed all material facts during the original assessment proceedings.
