M/s VXL Technologies Ltd., New Delhi V. ACIT, New Delhi

ITA 2728/DEL/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4783 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2004-2005
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAMEER SHARMA
• Keywords: Reopening of assessment; Retrospective amendment; Tangible material; Bad and doubtful debts; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 115JB; 147; 148; 11

Judgement Text

ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `H NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER I.T.A.NO.2728/DEL/2013 ASSESSMENT YEAR : 2004-05 VXL TECHNOLOGIES LTD., VS ASSTT.COMM ISSIONER OF INCOME TAX, ECE HOUSE, 2 ND FLOOR, CIRCLE 17(1), NEW D ELHI. 28, K.G. MARG, NEW DELHI-110001 (PAN: AAACV2853K) (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI AJAY VOHRA, MS SHAILY GU PTA, MR. GAURAV JAIN RESPONDENT BY : SHRI SAMEER SHARMA, SR. DR O R D E R PER CHANDRAMOHAN GARG, JUDICIAL MEMBER THIS APPEAL HAS BEEN PREFERRED BY THE ASSESSEE AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX(A)-19, NEW DELHI DATED 1 7.1.2013 IN APPEAL NO. 302/2011-12 FOR AY 2004-05. 2. THE ASSESSEE HAS RAISED GROUNDS NO. 1 TO 3 CHALL ENGING THE IMPUGNED ORDER BY WHICH THE ACTION OF THE ASSESSING OFFICER INITIATING REASSESSMENT PROCEEDINGS U/S 147 AND 148 OF THE ACT HAS BEEN UPH ELD, WHICH READS AS UNDER:- 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN NOT HOLDING THAT THE ORDER PASSED BY THE A SSESSING ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 2 OFFICER UNDER SECTION 147/143(3) OF THE INCOME-TAX ACT. 1961 ('THE ACT') IS BEYOND JURISDICTION, BAD IN LAW AND VOID-AB-INITIO. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS ) ERRED IN UPHOLDING THE ACTION OF THE ASSESSING OFFI CER IN INITIATING PROCEEDINGS UNDER SECTION 147 OF THE ACT AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVA NT ASSESSMENT YEAR, WITHOUT APPRECIATING THAT THE SAME WERE BARRED BY LIMITATION IN TERMS OF PROVISO TO THAT SE CTION CONSIDERING THAT (A) THE ORIGINAL ASSESSMENT FOR IM PUGNED YEAR WAS COMPLETED UNDER SECTION 143(3) OF THE ACT, AND (B) THERE WAS NO FAILURE ON THE PART OF THE APPELLA NT TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR ASSESSMENT. 2.1 THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, THE COMMISSIONER OF INCOME TAX(A) ERRED IN HOL DING THAT IN ABSENCE OF DISCLOSURE BY WAY OF NOTE IN THE RETURN FORM AND REPORT UNDER SECTION 11 SJB OF THE ACT, TH E APPELLANT FAILED TO DISCLOSE FULLY AND TRULY ALL MA TERIAL FACTS NECESSARY FOR ASSESSMENT. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CA SE AND IN LAW, (HE COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN HOLDING THE REASONS RECORDED BY THE ASSESSING OFFIC ER AS VALID, WITHOUT APPRECIATING THAT THE SAME DID NOT S TATE ANY FAILURE ON PART OF THE APPELLANT IN DISCLOSING MATE RIAL FACTS. 3. BRIEFLY STATED, THE FACTS GIVING RISE TO THIS AP PEAL ARE THAT ORIGINALLY THE RETURN WAS FILED BY THE ASSESSEE ON 29.10.2004 DECL ARING INCOME OF RS.3,90,30,258. THE ASSESSING OFFICER COMPLETED AS SESSMENT PROCEEDINGS U/S 143(3) OF THE ACT AT A BOOK PROFIT OF RS. 2,30, 41,047/- ON 28.11.2006. ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 3 SUBSEQUENTLY, THE ASSESSMENT WAS REOPENED U/S 147 O F THE ACT BY ISSUING NOTICE U/S 148 OF THE ACT DATED 29.3.2011. THE REA SONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING OF ASSESSMENT READ AS UNDER:- 'REASONS RECORDED FOR REOPENING OF ASSESSMENT U/S 147 OF THE I. T. ACT, 1961 IN THIS CASE RETURN OF INCOME FOR A Y 2004-05 WAS FILED ON 29/10/2004 DECLARING THEREIN TOTAL INCOME OF RS3.90.30.258/- BUT THE TAX WAS PAID ON THE BOOK PR OFIT OF RS. 2.30,41.047/- U/S 115JB OF THE INCOME TAX ACT, 1961. THE SAME WAS PROCESSED U/S 143(1) OF THE INCOME - T AX ACT, 1961 ON 03/03/2005. ASSESSMENT U/S 143(3) WAS MADE AT BOOK PROFIT OF RS. 2.30,41,047/- U/S 115JB VIDE ORDER DATED 28/11/2006. SECTION 115J B OF THE INCOME TAX ACT 1961, PROVIDES THAT AN ASSESSEE BEING A COMPANY, THE INCO ME TAX PAYABLE ON THE TOTAL INCOME AS COMPUTED UNDER THE A CT IN RESPECT OF ANY PREVIOUS YEAR RELEVANT TO THE ASSESS MENT YEAR COMMENCING ON AS AFTER 151 APRIL 2001 IS LESS THAN SEVEN AND ONE AND HALF PERCENT OF ITS BOOK PROFIT, SUCH BOOK PROFIT SHALL BE DEEMED TO BE THE TOTAL INCOME OF THE ASSESSEE AND THE TAX PAYABLE BY THE ASSESSEE ON SUC H TOTAL INCOME SHALL BE THE AMOUNT OF INCOME TAX AT THE RAT E SEVEN AND ONE HALF PERCENT. ASSESSMENT OF THE ABOVE COMPANY FOR THE ASSESSMENT YEAR 2004-05 WAS COMPLETED IN NOVEMBER 2006 AT AN INCOME OF RS. 2,30,41,047/- UNDER SPECIAL PROVISION S OF THE ACT COMPUTING THE BOOK PROFIT OF THE COMPANY PROVIS ION OF DOUBTFUL, DEBTS, AND ADVANCES OF RS. 1,30,19,784/- AND DIMINUTIONS IN THE VALUE OF INVESTMENTS FOR RS. 12, 05,877/- WERE NOT ADDED TO NET PROFIT BY THE ASSESSEE. THIS FAILURE BY THE ASSESSEE RESULTED IN UNDER ASSESSMENT OF INCOME BY RS. 1,42,25,661/- WITH CONSEQUENT SHORT LEVY OF TAX OF RS. 11,59,211/- INCLUDING INTEREST. ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 4 3. THEREFORE, I HAVE REASON TO BELIEVE THAT INCO ME TO THE EXTENT OF RS. 1,42,25,661/- HAS ESCAPED ASSESSMENT ON ACCOUNT OF THE ASSESSEE NOT DISCLOSING FULLY AND TR ULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT PROCEED INGS AT THE TIME OF ASSESSMENT U/S 143(3). HENCE, THE ASSES SMENT PROCEEDINGS NEED TO BE REOPENED U/S 147 OF THE I. T . ACT. 1961. APPROVAL OF COMMISSIONER OF INCOME TAX, NEW DELHI IS SOLICITED HEREBY U/S 151 (1) OF THE I.T. A CT, 1961. 4. THE ASSESSEE CHALLENGED THE INITIATION OF REASSE SSMENT PROCEEDINGS AND NOTICE U/S 148 OF THE ACT. THE ASSESSING OFFIC ER REJECTED THE CONTENTIONS OF THE ASSESSEE AND HELD THAT IN VIEW O F EXPLANATION 1(I) TO SECTION 115JB, ANY AMOUNT SET ASIDE AS PROVISIONS F OR DIMINUTION IN THE VALUE OF ANY ASSET HAS BEEN INSERTED WITH THE FINAN CE ACT 2009 WITH RETROSPECTIVE EFFECT FROM 04.01.2001 AND AS PER EXP LANATION 1(B) AND (C), ANY AMOUNT CARRIED TO ANY RESERVE OR SET ASIDE TO P ROVISIONS MADE FOR MEETING LIABILITIES, OTHER THAN ASCERTAINED LIABILI TIES IS TO BE ADDED TO THE BOOK PROFITS. CONSEQUENTLY, THE ASSESSING OFFICER MADE AN ADDITION OF RS.12,05,877/- ON ACCOUNT OF DIMINUTION IN THE VALU E OF ASSETS AND ANOTHER ADDITION OF RS.1,30,19,784/- ON ACCOUNT OF PROVISIO N OF DOUBTFUL DEBTS AND ADVANCES. 5. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFO RE THE COMMISSIONER OF INCOME TAX(A) AGAINST ABOVE REASSESSMENT U/S 147 AND 148 OF THE ACT AND ADDITION MADE THEREIN. THE COMMISSIONER OF INCO ME TAX(A) CONSIDERED ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 5 VARIOUS DECISIONS AND CITATIONS OF HONBLE SUPREME COURT AND HIGH COURT INCLUDING DECISION OF HONBLE JURISDICTIONAL HIGH C OURT OF DELHI IN THE CASE OF COMMISSIONER OF INCOME TAX VS USHA INTERNATIONAL LT D. 348 ITR 485(DEL) AND HELD THAT REOPENING OF ASSESSMENT WAS JUSTIFIE D. THE RELEVANT OBSERVATIONS OF COMMISSIONER OF INCOME TAX(A) IN TH E IMPUGNED ORDER READ AS UNDER:- 3.20 AS DISCUSSED ABOVE, THE APPELLANT RELIED ON R ETURN FILED IN FORM NO.1 AND THE REPORT U/S 115JB IN FORM NO.29B IN SUPPORT OF HIS CLAIM OF HAVING MADE FULL AND TRUE DISCLOSURE. HOWEVER, IN THE RETURN FORM AND TH E REPORT U/S 115JB, THERE IS NO MENTION OF ANY PROVIS ION FOR DOUBTFUL DEBT & ADVANCES AND THE DIMINUTION IN THE VALUE OF ASSETS. WHEN THE APPELLANT WAS RELYING ON AN INTERPRETATION OF LAW UNDER WHICH THESE AMOUNTS ARE NOT TO BE ADDED TO BOOK PROFIT, HE WAS EXPECTED TO MAKE A CLEAR AND FULL DISCLOSURE OF HIS CLAIM BY WAY OF A NOTE I N THE RETURN FORM AND THE REPORT U/S 115JB. IT IS SETTLED LAW THAT GIVING THIS INFORMATION TUCKED SOMEWHERE IN THE RET URN DOES NOT AMOUNT TO FULL DISCLOSURE. EXPLANATION 1 T O SECTION 148 CLARIFIES THE LAW ON THIS ISSUE. THE AP PELLANT HAS NOT BEEN ABLE TO SHOW THAT THIS ISSUE AROSE AT ANY TIME DURING THE ORIGINAL ASSESSMENT PROCEEDINGS, OR THAT HE EVER DREW THE ATTENTION OF THE A.O. TO HIS CLAIM IN REGARD TO THESE AMOUNTS. THE ORIGINAL ASSTT. ORDER DATED 28.1 1.06 HAS NO REFERENCE TO THE ISSUE ON WHICH ASSTT. HAS B EEN REOPENED. THE APPELLANT COULD NOT SHOW THAT THERE W AS ANY QUERY ON THIS ISSUE. CONSIDERING THESE FACTS, IT IS CLEAR THAT THE APPELLANT FAILED TO DISCLOSE FULLY AND TRULY AL L MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT IN TERMS OF THE PROVISO TO SECTION 147. REOPENING OF ASSESSMENT IS THEREFOR E, JUSTIFIED AND IS UPHELD. THE GROUNDS ARE DISMISSED. ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 6 6. NOW, THE AGGRIEVED ASSESSEE IS BEFORE THIS TRIBU NAL IN THIS SECOND APPEAL CHALLENGING THE INITIATION OF REASSESSMENT. WE HAVE HEARD RIVAL ARGUMENTS OF BOTH THE PARTIES AND CAREFULLY PERUSED THE RECORD INCLUDING PAPER BOOK OF THE ASSESSEE AS WELL AS CITATIONS REL IED BY BOTH THE PARTIES. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT THE COMMISSIONER OF INCOME TAX(A) ERRED IN UPHOLDING THE ACTION OF THE ASSESSI NG OFFICER WHICH INITIATED THE REASSESSMENT PROCEEDINGS WHICH WERE B EYOND JURISDICTION, BAD IN LAW AND VOID AB INITIO. THE COUNSEL FURTHER SUB MITTED THAT THE COMMISSIONER OF INCOME TAX(A) ERRED IN UPHOLDING TH E ACTION OF THE ASSESSING OFFICER IN INITIATING PROCEEDINGS U/S 147 OF THE ACT AFTER EXPIRY OF 4 YEARS WITHOUT APPRECIATING THAT THE SAME WERE BAR RED BY LIMITATION IN TERMS OF PROVISO ATTACHED TO SECTION 147 OF THE ACT. HE FURTHER CONTENDED THAT THE ORIGINAL ASSESSMENT FOR THE YEAR UNDER CONSIDERATIO N WAS COMPLETED U/S 143(3) OF THE ACT AND THERE WAS NO FAILURE ON THE P ART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR THE ASSESSMENT. 7. ON BEHALF OF THE ASSESSEE IT WAS ALSO CONTENDED THAT THE COMMISSIONER OF INCOME TAX(A) ERRED IN HOLDING THAT IN ABSENCE O F DISCLOSURE BY WAY OF NOTE IN THE WRITTEN FORM AND REPORT U/S 115JB OF TH E ACT, THE ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECE SSARY FOR THE ASSESSMENT. IT WAS ALSO CONTENDED ON BEHALF OF THE ASSESSEE THAT T HE COMMISSIONER OF ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 7 INCOME TAX(A) ERRED IN HOLDING THE REASONS RECORDED BY THE ASSESSING OFFICER AS VALID IGNORING THE FACT THAT THE REASONS RECORDED BY ASSESSING OFFICER FOR REOPENING OF ASSESSMENT STATE ANY FAILU RE ON THE PART OF ASSESSEE IN DISCLOSING MATERIAL FACTS. 8. REPLYING TO THE ABOVE, LD. DR SUBMITTED THAT THE ASSESSEE MAINLY RELIED ON THE RETURN FILED IN FORM NO. 1 AND THE RE PORT U/S 115JB IN FORM NO. 29B IN SUPPORT OF HIS CLAIM OF HAVING MADE FULL AND TRUE DISCLOSURE BUT IN THE RETURN FORM AND IN THE REPORT U/S 115JB OF THE ACT, THERE WAS NO MENTION OF ANY PROVISION FOR DOUBTFUL DEBTS AND ADVANCE AND DI MINUTION IN THE VALUE OF THE ASSETS. THE DR FURTHER SUBMITTED THAT WHEN THE ASSESSEE WAS RELYING ON AN INTERPRETATION OF LAW UNDER WHICH THESE AMOUNTS ARE NOT TO BE ADDED TO THE BOOK PROFIT, THEN HE WAS EXPECTED TO MAKE A CLE AR AND FULL DISCLOSURE OF HIS CLAIM BY WAY OF A NOTE IN THE RETURN FORM AND I N THE REPORT U/S 115JB. THE DR POINTED OUT THAT GIVING THIS INFORMATION TUG GED SOMEWHERE IN THE RETURN DOES NOT AMOUNT TO FULL DISCLOSURE. THE DR VEHEMENTLY CONTENDED THAT THE ASSESSEE HAS NOT BEEN ABLE TO SHOW THAT TH IS ISSUE AROSE DURING THE ORIGINAL ASSESSMENT PROCEEDINGS OR THE ASSESSEE EVE R DREW THE ATTENTION OF THE ASSESSING OFFICER TO HIS CLAIM IN REGARD TO IMP UGNED AMOUNTS. THE DR FINALLY CONTENDED THAT THE AUTHORITIES BELOW RIGHTL Y NOTED AND OBSERVED THAT THE ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 8 HIS ASSESSMENT IN TERMS OF PROVISO TO SECTION 147 O F THE ACT AND THEREFORE REOPENING OF ASSESSMENT WAS JUSTIFIED AND RIGHTLY U PHELD BY THE COMMISSIONER OF INCOME TAX(A). 9. AFTER CAREFUL CONSIDERATION OF ABOVE SUBMISSIONS , WE OBSERVE THAT THE COMMISSIONER OF INCOME TAX(A) HAS RELIED ON THE OBS ERVATION OF HONBLE JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF C OMMISSIONER OF INCOME TAX VS USHA INTERNATIONAL LTD. (SUPRA) WHEREIN PARA 25 AND 26 HAS BEEN CONSIDERED AND REPRODUCED BY THE COMMISSIONER OF IN COME TAX(A) IN THE IMPUGNED ORDER. THE COUNSEL OF THE ASSESSEE POINTE D OUT THAT THERE SHOULD BE NO PICK AND CHOOSE. THE RATIO OF THE JUDGMENT C AN ONLY BE CONSIDERED FROM ENTIRE JUDGMENT. LD. COUNSEL OF THE ASSESSEE HAS DRAWN OUR ATTENTION TOWARDS PARA 39 OF THE ABOVE JUDGMENT WHEREIN IT HA S BEEN HELD THAT THE ASSESSING OFFICER MUST HAVE APPLIED HIS MIND ON THE ENTRY CLAIM OR DEDUCTION ETC. AND IT MAY BE APPARENT AND OBVIOUS T O HOLD THAT THE OFFICER WOULD NOT HAVE GONE INTO THE SAID QUESTION OR APPLI ED HIS MIND. SPEAKING FOR THE FULL BENCH OF THE HONBLE DELHI HIGH COURT FROM PARAS 42, THE FULL BENCH ALSO HELD THAT THE ASSESSMENT CANNOT BE VALID LY REOPENED U/S 147 OF THE ACT EVEN WITHIN FOUR YEARS IF THE ASSESSEE HAD FURNISHED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT WITH REFERENCE TO THE INCOME ALLEGED TO HAVE ESCAPED ASSESSMENT IF ORIGINAL ASSE SSMENT WAS MADE U/S ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 9 143(3) OF THE ACT. THEIR LORDSHIPS ALSO HELD THAT SO LONG AS THE ASSESSEE HAS FURNISHED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT AND SO LONG AS THE ASSESSMENT ORDER IS FRAMED U/S 143(3) O F THE ACT, IT MATTERS LITTLE THAT THE ASSESSING OFFICER DID NOT ASK ANY QUESTION OR QUERY WITH RESPECT TO ONE ENTRY OR NOTE BUT HAD RAISED QUERIES AND QUESTI ONS ON THE OTHER ASPECT. IN THIS DECISION OF FULL BENCH, THEIR LORDSHIPS ALS O HELD THAT SECTION 114(E) OF THE EVIDENCE ACT 1972 CAN BE APPLIED TO AN ASSESSME NT ORDER FRAMED U/S 143(3) OF THE ACT PROVIDED THAT THERE HAS BEEN A FU LL AND TRUE DISCLOSURE OF MATERIAL AND PRIMARY FACTS AT THE TIME OF ORIGINAL ASSESSMENT. IN SUCH A CASE, IF THE ASSESSMENT IS REOPENED IN RESPECT OF A MATTE R COVERED BY THE DISCLOSURE, IT WOULD AMOUNT TO CHANGE OF OPINION. 10. IN THE PRESENT CASE, FROM THE PROFIT AND LOSS A CCOUNT (PB PAGE NO. 24- 36), WE OBSERVE THAT THE ASSESSEE HAS GIVEN ALL DET AILS PERTAINING TO ITS CLAIM. FROM COMPUTATION OF TOTAL INCOME AT PAGE 15 OF THE PAPER BOOK, WE OBSERVE THAT THE ASSESSEE HAS CLEARLY SHOWN THE AMOUNT OF D IMINUTION IN THE VALUE OF INVESTMENTS AND PROVISION FOR DEBTS AND ADVANCES. FROM PAPER BOOK PAGE NO. 18, WE ALSO OBSERVE THAT THE ASSESSEE HAS FURNI SHED REPORT U/S 115JB OF THE ACT FOR COMPUTING THE BOOK PROFIT OF THE COMPAN Y WHICH WAS ALSO PLACED BEFORE THE AUTHORITIES BELOW AT THE TIME OF RELEVAN T PROCEEDINGS. IN THE LIGHT OF THESE DETAILS AND FACTUAL MATRIX AND ON CAREFUL CONSIDERATION OF THE ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 10 REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPE NING OF ASSESSMENT, WE OBSERVE THAT THE ALLEGATION HAS BEEN MADE IN THE RE ASONS RECORDED FOR REOPENING OF ASSESSMENT PERTAINING TO THE DETAIL WH ICH WAS ALREADY BEFORE THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSES SMENT AND THERE WAS NO NEW TANGIBLE MATERIAL BEFORE THE ASSESSING OFFICER AT THE TIME OF INITIATION OF REASSESSMENT PROCEEDINGS AND ISSUANCE OF NOTICE U/S 148 OF THE ACT. IN THIS SITUATION, PRESUMPTION U/S 114(E) OF THE EVIDENCE A CT, 1872 CAN EASILY BE APPLIED TO THE ORIGINAL ASSESSMENT ORDER FRAMED U/S 143(3) OF THE ACT AND CONCLUSION CAN BE DRAWN THAT THERE HAS BEEN A FULL AND TRUE DISCLOSURE OF ALL MATERIAL AND PRIMARY FACTS AT THE TIME OF ORIGINAL ASSESSMENT BY THE ASSESSEE. IN SUCH A CASE, REOPENING OF ASSESSMENT IN RESPECT OF A MATTER OR ISSUE ALREADY COVERED BY THE DISCLOSURE OBVIOUSLY AMOUNTS TO CHANGE OF OPINION. UNDER THESE CIRCUMSTANCES, WE HOLD THAT THE COMMISS IONER OF INCOME TAX(A) MISUNDERSTOOD THE RATIO OF THE JUDGMENT OF H ONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS USHA INTERNATIONAL LTD. (SUPRA) AND ON THE OTHER HAND, THE BENEFIT OF THE R ATIO OF THIS JUDGMENT IS AVAILABLE FOR THE ASSESSEE TO HOLD THAT THERE WAS T RUE DISCLOSURE OF ALL MATERIAL AND PRIMARY FACTS AT THE TIME OF ORIGINAL ASSESSMENT AND ASSESSMENT WAS REOPENED IN RESPECT OF THE MATTER ALREADY COVER ED BY THE DISCLOSURE MADE BY THE ASSESSEE DURING ORIGINAL ASSESSMENT PRO CEEDINGS AND INITIATION ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 11 OF REASSESSMENT PROCEEDINGS ON THE SAME MATERIAL WO ULD OBVIOUSLY AMOUNT TO CHANGE OF OPINION. CONSEQUENTLY, WE HOLD THAT T HE INITIATION OF REASSESSMENT, IN ABSENCE OF ANY NEW TANGIBLE MATERI AL WAS CHANGE OF OPINION WHICH IS NOT PERMISSIBLE AS PER STATUTORY P ROVISIONS OF THE ACT. ACCORDINGLY, THE ACT OF THE ASSESSING OFFICER IN IN ITIATION OF REASSESSMENT PROCEEDINGS AND NOTICE ISSUED U/S 148 OF THE ACT IS QUASHED. ACCORDINGLY, GROUND NO. 1 TO 3 OF THE ASSESSEE ARE ALLOWED. GROUND NO. 4, 4.1 & 5 11. SINCE WE HAVE QUASHED INITIATION OF REASSESSMEN T PROCEEDINGS AND NOTICE U/S 148 OF THE ACT, THEREFORE OTHER GROUNDS OF THE ASSESSEE DO NOT SURVIVE FOR ADJUDICATION ON MERITS. IN THIS SITUAT ION, ABOVE GROUNDS OF THE ASSESSEE ARE DEEMED TO BE DISMISSED. 12. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 13.12.2013. SD/- SD/- (G.D. AGRAWAL) (CHANDRAMOHAN GARG) VICE PRESIDENT JUDICIAL MEMBER DT. 13TH DECEMBER 2013 GS ITA NO. 2728/DEL/2013 ASSTT.YEAR: 2004-05 12 COPY FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. C.I.T.(A) 4. C.I.T. 5. DR BY ORDER ASSTT.REGISTRAR