INCOME TAX OFFICER, MUMBAI V. Svadeshi Enterprise(Hubli), Mumbai

ITA 2785/MUM/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 7410 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-05-2024
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 29-04-2024
• Assessment Year: 2014-2015
• Appeal Filed On: 07-08-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings; TDS; Capital Gains
• Section: 147; 148; 154; 143(3); 142(1); 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G”, MUMBAI BEFORE SHRI NARENDRA KUMAR BILLAIYA, HON'BLE ACCOUNTANT MEMBER AND SHRI RAHUL CHAUDHARY, HON'BLE JUDICIAL MEMBER ITA NO. 2785/MUM/2023 (A.Y: 2014-15) INCOME TAX OFFICER R.N. 234, 2 nd Floor Kautilya Bhawan, BKC Mumbai, Maharashtra- 400051 v. Svadeshi Enterprise(Hubli) 12/A Yusuf Building Veer Nariman Road, Fort Mumbai-400023 PAN: AAPFS0181B (Appellant) (Respondent) Assessee Represented by : Shri Vijay Mehta Department Represented by : Shri Veerbhandra Mahajan Date of conclusion of Hearing : 30.04.2024 Date of Pronouncement : 03.05.2024 O R D E R PER NARENDRA KUMAR BILLAIYA (AM) 1. This appeal by the revenue is preferred against the order dated 05.06.2023 by National Faceless Appeal Centre, Delhi [hereinafter in short “Ld. CIT(A)”] pertaining to A.Y.2014-15. ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 2 2. The sum and substance of the grievance of the revenue is that the Ld. CIT(A) erred in quashing the reopening and further erred in allowing the compensation of ₹.2.11 Crores and ₹.2.50 Crores. 3. Representatives of both the sides were heard at length. Case records carefully perused and the relevant documentary evidences duly considered, in the light of Rule 18(6) of the ITAT Rules. 4. Briefly stated the facts of the case are that the original assessment was framed under section 143(3) of Income-tax Act, 1961 (in short “Act”) vide order dated 30.12.2016 wherein the return of income of the assessee at ₹.1,36,30,420/- was assessed at ₹.12,47,66,420/-. 5. Assuming jurisdiction conferred upon him by the provisions of section 148 of the Act, the Assessing Officer issued notice dated 29.03.2019. The reasons for reopening read as under: - “Subject: Reasons for reopening for A.Y. 2014-15 – Reg. 1. Assessee, M/s Svadeshi Enterprises Hubli, PAN: AAPS0181B is assessed to tax under this charge. Assessee has filed return of income for AY 2014-15 on 28.11.2014 showing income of Rs 136,30,420/-. The return was duly processed u/s.143(1) and the case was subjected to assessment u/s.143(3) of the Act and same was duly completed vide order dated 30.12.2016 at assessed income of Rs 12,47,66,420/-. Assessee is a Firm and has shown income from business, capital gains and income from other sources. ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 3 2. Subsequently, in this case it is found that, assessee claimed deduction of compensation of Rs 4,61,00,000/- in Profit and Loss A/c for AY 2014-15. The compensation was claimed to have been paid to different parties namely Sameer Kotecha, Mahavir Developers and Builders, Manoj Kishore Chandra, Kumar Girdharlal and Reliance Prolific Traders Pvt Ltd. It was found that, assessee during the year under consideration showed sale of Hubli project of Rs 32.35 crores and against the said revenue in P & L A/c, assessee claimed deduction of Rs 4.61 crores. Assessee stated that, compensation to Sameer Kotecha, Mahavir Developers and Builders, Manoj Kishore Chandra and Kumar Girdharlal Shah was paid on account of repayment of booking advances received from the said parties for booking of property in project Satellite which could not be completed and hence the compensation was paid. In respect of compensation paid to Reliance Prolific Traders Pvt Ltd, assessee stated that same has been paid as full and final settlement of the issue under Negotiable instrument Act vice order dated 23.8.2013. 3. On perusal of records, it is found that, the compensation was paid on stamp paper of Rs 100/- and confirmation was filed but evidences which proves the connection of compensation payment to Satellite project were not evident. Further, during the year under consideration, assessee showed sales from Hubli Project hence, if the project is completed and available of sale, than in such scheme of circumstances, the need and justification for compensation payment cannot be accepted as project is developed. Further, assessee easily getting ready to pay the compensation and that to on stamp paper of Rs 100 even if P & L A/c of assessee shows that, project is completed and is in sale condition only proves that, the claim of compensation payment is not genuine and is merely a colourable device to reduce the taxable income. 4. There is difference between tax planning and colourable devices. Tax planning may be legitimate provided it is within the framework of law. Colourable devices cannot be part of tax planning and it is wrong to accept such methods as same are tools to reduce the genuine tax liabilities. Accordingly, assessee claimed deduction of compensation payment of Rs 4.61 crores which is completely unjustifiable considering the ground facts as to sale of projects and mere paper documentation of claim to give colour of genuinety to compensation. Hence, in the case of assessee, there exist substantial basis to form reason to believe that income to the tune of Rs 4.61 crores has escaped assessment. ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 4 5. The provisions of section 147 clearly states that, if the AO has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of section 148 to 153, assess or reassess such income and also any other income chargeable to tax, which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section. 6. Applicability of the provisions of section 147/151 to the facts of the case: In this case, return of income was filed for the year under consideration and regular assessment u/s 143(3) was completed on 30.12.2016. Since, 4 years has not elapsed from the end of AY 2014-15, the requirement to initiate proceeding u/s 147 of the Act are reason to believe that income has escaped assessment, which has been recorded above. It is pertinent to mention here that in this case an assessment was made as stipulated u/s 2(40) of the Act. However, as discussed in reason to believe in this case, the income of the assessee has been subjected to excessive deduction of compensation of Rs 4.61 crores which is merely a colourable device. In view of the above, the provisions of clause c of explanation 2 to section 147 are applicable to facts of the case and the assessment year under, consideration is deemed to be a case where income chargeable to tax has escaped assessment.” 6. The entire reopening revolves around the claim of deduction of compensation of ₹.4.61 crores in the profit and loss account for the A.Y.2014-15. A perusal of the profit and loss account at Page No. 4 of the Paper Book show that the assessee has claimed compensation of ₹.14.61 Crores. During the course of the original assessment proceedings, the Assessing Officer has issued the following notice under section 142(1) of the Act raising following queries: - ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 5 ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 6 ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 7 7. It can be seen from the above at Point No. 13 the Assessing Officer has specifically asked the assessee to furnish Name, Address and amounts to whom compensation is paid. Assessee filed a detailed reply dated 20.10.2016 and furnished the necessary details which is as under:- SVADESHI ENTERPRISES (HUBLI) F Y 2013-14 A Y 2014-15 ANNEXURE B DETAILS OF COMPENSATION PAID NAME ADDRESS PAN NO COMPENSATI ON PAID TDS 10% DEDUCTED SAMEER KISHORE BHAI KOTICHA 702 SHILPA APARTMENT , 968 S G MARG, PRABHADEVI MUMBAI AAWPK9080A 4,000,000 400,000 ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 8 SVADESHI ENTERPRISES (HUBLI) F Y 2013-14 A Y 2014-15 ANNEXURE B DETAILS OF COMPENSATION PAID NAME ADDRESS PAN NO COMPENSATI ON PAID TDS 10% DEDUCTED MAHAVIR DEVLOPERS & BUILDERS G-41 EUREKA CENTRE, KOPPIKAL ROAD HUBLI (KARNATAKA) AACFM7464Q 3,500,000 350,000 MANOJ KISHORE CHANDRA SONAWALA A-7 USHA KIRAN , OPP LALLUBAHI PARK, ANDHERI (WEST) MUMBAI 400058 ABRPS7157A 10,300,000.00 1,030,000.00 KUMAR GIRDHARLAL SHAH ' 21/22 5 th FLOOR , GIRIKUNJ NETAJI SUBHASH ROAD, 71, MARINE DRIVE , MUMBAI 400020 AAFPS1435A 7,200,000.00 720,000.00 SVADESHI ENTERPRISES (MUMBAI) 12/A YUSUF BUILDING , VEER NARIMAN ROAD, FORT MUMBAI 400023 AAPFS0180A 100,000,000.00 10,000,000.00 RELIANCE PROLIFIC TRADERS PVT LTD RAMAN TRATI APARTMENT, NEAR ASHAPURA HOTEL, SARU SECTION V ROAD JAMNAGAR 361002 21,100,000.00 TOTAL 146,100,000 8. It can be seen from the aforementioned reply not only the assessee has furnished the names and address but also the PAN numbers of the payees. The Assessing Officer further probed and vide letter dated 13.12.2016 the assessee has again explained and furnished the details of compensation paid. The same is read as under: - ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 9 ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 10 ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 11 9. After considering the details submitted by the assessee, the Assessing Officer was satisfied with the claim of compensation of ₹.4.61 crores and disallowed the claim to the extent of ₹.10 crores. The above facts clearly show that the impugned issue was verified by the Assessing Officer at the time of original assessment proceedings and therefore to verify the same facts on the basis of the same documents amount to change of opinion. 10. The Hon’ble Jurisdictional High Court of Bombay in the case of Asian Paints Limited v. DCIT [308 ITR 195] had the occasion to consider the similar situation and held as under: - “7. We have heard the learned counsel appearing for both sides. We have also gone through the judgments on which reliance was placed by the learned counsel appearing for both sides. 8. In the order rejecting the objection filed by the petitioner to the notice under s. 148, respondent No. 1 has observed "Verification of assessment record reveals that the said details were called for but inadvertently the same were not taken into account while framing the assessment and, therefore, it cannot be said that there is a change of opinion." According to respondent No. 1, thus, the relevant material was available on record, but he failed to apply his mind to that material in making the assessment order. The question is, can respondent No. 1 take recourse to the provision of s. 147 for his own failure to apply his mind to the material which, according to him, is relevant and which was available on record. We find that this situation has been considered by the Full Bench of the Delhi High Court in its judgment in the case of CIT vs. Kelvinator of ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 12 India Ltd. (2002) 174 CTR (Del)(FB) 617 : (2002) 256 ITR 1 (Del)(FB) and the Full Bench has observed thus : "The said submission is fallacious. An order of assessment can be passed either in terms of sub-s. (1) of s. 143 or sub-s. (3) of s. 143. When a regular order of assessment is passed in terms of the said sub-s. (3) of s. 143, a presumption can be raised that such an order has been passed on application of mind. It is well known that a presumption can also be raised to the effect that in terms of cl. (e) of s. 114 of the Indian Evidence Act, judicial and official acts have been regularly performed. If it be held that an order which has been passed purportedly without application of mind would itself confer jurisdiction upon the AO to reopen the proceeding without anything further, the same would amount to giving a premium to an authority exercising quasi-judicial function to take benefit of its own wrong." 9. It is clear from the observations made above that the Full Bench of the Delhi High Court has taken a view that in a situation where according to the AO he failed to apply his mind to the relevant material in making the assessment order, he cannot take advantage of his own wrong and reopen the assessment by taking recourse to the provisions of s. 147. We find ourself in respectful agreement with the view taken by the Full Bench of the Delhi High Court. 10. It is further to be seen that the legislature has not conferred power on the AO to review its own order. Therefore, the power under s. 147 cannot be used to review the order. In the present case, though the AO has used the phrase "reason to believe", admittedly between the date of the order of assessment sought to be reopened and the date of formation of opinion by the AO, nothing new has happened, therefore, no new material has come on record, no new information has been received; it is merely a fresh application of mind by the same AO to the same set of facts and the reason that has been given is that the some material which was available on record while assessment order was made was inadvertently excluded from consideration. This will, in our opinion, amount to opening of the assessment merely because there is change of opinion. The ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 13 Full Bench of the Delhi High Court in its judgment in the case of Kelvinator (supra) referred to above, has taken a clear view that reopening of assessment under s. 147 merely because there is a change of opinion cannot be allowed. In our opinion, therefore, in the present case also, it was not permissible for respondent No. 1 to issue notice under s. 148.” 11. In the case of CIT v. Aroni Commercial Ltd., [393 ITR 673] the Hon’ble Jurisdictional High Court of Bombay was seized with the following substantial question of law: - “(i) Whether on the facts and circumstances of the case, the Tribunal was correct in law in treating the reopening of the case as bad in law by holding it to be a mere change of opinion without appreciating the fact that the notice u/s 148 of the Income Tax Act, 1961 was issued within four years from the end of the assessment year and due process of law was followed in this regard? (ii) Whether on the facts and circumstances of the case, the Tribunal was correct in law, in not adjudicating the issue of compensation claimed by the assessee as long term capital gains as against its treatment as business income by the Assessing Officer?” 12. And after considering the facts, the Hon’ble High Court observed / held as under: - “(f) On the basis of the above facts, the impugned order concludes that the very issue / basis of the reasons recorded in support of the reopening notice was considered during the regular assessment proceedings. It was only on the Assessing Officer being satisfied with the justification of the respondent assessee’s claim that the Assessing Officer accepted it to be capital gains. Thus, allowing the respondent assessee’s appeal. ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 14 (g) The grievance of the Revenue before us is that it is not a case of change of opinion. It is pointed out that the Assessing Officer had not dealt with the issue raised in the reopening notice in the assessment order dated 29th September, 2007. This, it is submitted is an indication of non-consideration of the aforesaid issue by him. Further, it is contended that the aspect now raised to the effect that the amount received on the so called extinguishment of capital gains was in fact a business income on account of the agreement entered into by the respondent assessee and the same was not considered due to oversight during the regular assessment proceedings. In support, reliance is placed upon the decision of this Court in Export Credit Guarantee Corporation of India Vs. Commissioner of Income Tax, 350ITR 651. (h) The first contention urged before us by the Revenue is identical to the contentions which was urged by the Revenue in the earlier decision of this Court in respect of the same respondent assessee reported as Aroni Commercials Ltd. Vs. Deputy Commissioner of Income- Tax and Anr., 362 ITR 403. This Court had in the aforesaid decision dealt with the above objections raised by the Revenue as under “We are of the view that once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment. It is not necessary that an assessment order should contain reference and / or discussion to disclose its satisfaction in respect of the query raised. If an Assessing Officer has to record the consideration bestowed by him on all issues raised by him during the assessment proceedings even where he is satisfied then it would be impossible for the Assessing Officer to complete all the assessments which are required to be scrutinised by him under Section 143(3)of the Act. Moreover, one must not forget that the manner in which an assessment order is to be drafted is the sole domain of the Assessing Officer and it is not open to an assessee to insist that the assessment order must record all the questions raised and the satisfaction in respect thereof of the Assessing Officer. The only requirement is that the ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 15 Assessing Officer ought to have considered the objection now raised in the grounds for issuing notice under Section 148 of the Act, during the original assessment proceedings. ” The aforesaid observations will apply to the first grievance of the Revenue before us. In this case also a query was raised during the regular assessment proceedings and it was responded to by the assessee. This non consideration of the same in the assessment order is no evidence of the Assessing Officer not being satisfied with the issue raised. (i) The next contention on behalf of the Revenue on consideration of the issue due to oversight in the regular assessment proceedings cannot be said to be forming of opinion. In support, the decision of this Court in Export Credit Guarantee Corporation of India (supra) was relied upon, where the Court has held that there can be no change of opinion. If an Assessing Officer has ignored the relevant material in regular assessment proceedings in arriving at assessment. The aforesaid decision is completely distinguishable on facts. In the aforesaid case of Export Credit Guarantee Corporation of India (supra) though the assessment was completed just as in this case under Section 143(3) of the Act and the assessment order of the Assessing Officer therein was also silent on the issue on which the assessment was sought to be reopened, the distinguishing feature is in that case no query was raised with regard to the issue on which reopening was sought to be done. As opposed to the above, in the present case, query as reproduced hereinabove as raised touched upon all the facets of the amounts received on extinguishment of asset by the respondent assessee. Therefore, this is not a case where the Assessing Officer has ignored / overlooked by oversight the claim made by the assessee in its return of income while allowing it as in the case of Export Credit Guarantee Corporation of India (supra). This is a case where the Assessing Officer did apply his mind as evidenced by the query raised to the very issue which is now sought to be raised as the basis for reopening the notice and the Assessing Officer was satisfied with the response to the query during the regular assessment proceedings. ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 16 (j). In the above view, the view taken by the impugned order of Tribunal that the reopening notice is without jurisdiction as it is founded on a mere change of opinion is on facts covered by the decision of this Court in favour of the respondent assessee. (k). In the above view, the question (i) as raised does not give rise to any substantial question of law. Thus, not entertained.” 13. In the case of CIT v. Jet Speed Audio P. Ltd., [372 ITR 762] the Hon’ble Jurisdictional High Court of Bombay seized with the following substantial question of law: “(A) Whether, on the facts and the circumstances of the case, the Tribunal was justified in cancelling the re-assessment order passed under Section 147 and holding the same as bad in law ? (B) Whether, on the facts and the circumstances of the case, the Tribunal was justified in holding that it was a case of change of opinion when the Assessing Officer had not expressed any opinion during the regular assessment proceeding? (C) Whether, on the facts and the circumstances of the case, the Tribunal was justified in holding that the issue of notice under Section 148 after the issue of under Section 154 is bad in law?” 14. And the Hon’ble High Court answered as under: - “QUESTIONS (A) & (B) 8. The grievance of the Revenue with regard to the impugned order so far as change of opinion is concerned, is that the Assessing Officer had acted upon on audit objection which has been received by him. Thus, there was tangible material available for issuing notice for reopening of the assessment. It is further submitted that merely because the Assessing Officer does not deal with a particular issue in the original assessment ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 17 proceedings, it would not prohibit the Revenue from issuing reopening notice, otherwise provisions of Section 147 and 148 would be rendered redundant. Mr.Chhotaray, learned Counsel for the Revenue relied upon various decisions including the decision of the Supreme Court in the case of “Kalyanji Mavji & Co. Vs. Commissioner of Income Tax, West Bengal II, (102 ITR 287)”, the decision of Delhi High Court in the case of “New Light Trading Co. Vs. Commissioner of Income Tax, (256 ITR 391)”, and the decision of this Court in the case of “Dr.Amin's Pathology Laboratory Vs. P.N.Prasad, Joint Commissioner of Income Tax & Ors (No.1), (252 ITR 673)”. 9. We find that the impugned order of the Tribunal has rendered a finding of fact on the basis of material before it, in particular the fact that during original assessment proceedings a query was made with regard to the same issue which was responded to by the respondent - Assessee and on satisfaction of the same, the Assessing Officer had passed an assessment order. Therefore, reopening of assessment on an issue in respect of which a query was raised and responded to by the assessee would amount to a change of opinion. The tangible material being urged before us by Mr.Chhotaray, is the audit objections received by the Assessing Officer. However, as would be clear from the reasons reproduced hereinabove, there is no mention of any tangible material in the reasons recorded for issuing reopening notice under Section 148 of the Act. Thus, we find no fault with the findings of the Tribunal that there is no tangible material mentioned in the reasons recorded by the Revenue which would warrant a different opinion being taken then which was taken when the original order of assessment was passed. It is a settled position in law that a reopening notice can be sustained only on the basis of grounds mentioned in the reasons recorded. It is not open to the Revenue to add and/or supplement later the reasons recorded at the time of issuing reopening notice. 10. Mr.Chhotaray, learned Counsel for the Revenue urged on merits of the Revenue's case to charge Rs.1.34 crores allowed as bad debts, has to be appropriately brought to tax as capital loss. We pointed out to Mr.Chhotaray, learned Counsel for the Revenue that the scope of the present proceedings is only with regard to reopening notice under Section 148 of the Act and we ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 18 are not dealing with the merits of the assessibility of the income alleged to have escaped assessment. On this Mr.Chhotaray submitted that the issue which he seeks to urge is that merely because the Assessing Officer has been careless in bringing to tax a particular amount which is chargeable to tax, the Revenue should not be precluded from issuing notice under Section 148 of the Act. This submission of Mr.Chhotaray overlooks the facts that power to reopen is not a power to review an assessment order. At the time of passing assessment order, it expected of the Assessing Officer that he will apply mind and pass an order. An assessment order is not a mere scrap of paper. To accept the submission of Mr.Chhotaray, would mean to negate the well settled position in law as stated by the Supreme Court in the case “CIT Vs. Kelvinator of India Ltd., [(2002) 256 ITR 1 (Delhi)(FB)]” that the concept of 'change of opinion' brought in so as to have in built test to check abuse of power. In view of the above, we find no substance in the submissions raised by Mr.Chhotaray. 11. The decisions cited by Mr.Chhotaray, learned Counsel on behalf of the Revenue in support of his submissions that oversight in passing assessment order will give Assessing Officer jurisdiction to issue notice, placed heavy reliance upon the case “Kalyanji Mavji & Co.” (supra). However, on the above aspect it has been held to be no longer good law by the subsequent decision of the Supreme Court in the case of “Indian and Eastern Newspaper Society Vs. Commissioner of Income Tax, New Delhi, (119 ITR 996)” wherein the Supreme Court has observed thus:- “Now, in the case before us, the ITO had, when he made the original assessment, considered the provisions of S.9 and 10. Any different view taken by him afterwards on the application of those provisions would amount to a change of opinion on material already considered by him. The revenue contends that it is open to him to do so, and on that basis to reopen the assessment under s.147(b). Reliance is placed on Kalyanji Mavji & Co. V. CIT (1976) 102 ITR 287 (SC), where a Bench of two learned Judges of this court observed that a case where income had escaped assessment due to the “oversight, inadvertence or mistake” of the ITO must fall within S.34(1)(b) of the ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 19 Indian I.T.Act,1922. It appears to us, with respect that the proposition is stated too widely and travels farther than the statute warrants in so far as it can be said to lay down that if, on reappraising the material considered by him during the original assessment, the ITO discovers that he has committed an error in consequence of which income has escaped assessment, it is open to him to reopen the assessment. In our opinion, an error discovered on a reconsideration of the same material (and no more) does not give him that power. That was the view taken by this Court in Maharaj Kumar Kamal Singh V. CIT (1959)35 ITR 1 (SC), CIT V. A.Raman and Co. (1968)67 ITR 11 (SC) and Bankipur Club Ltd. V. CIT (1971) 82 ITR 831 (SC) and we do not believe that the law has since taken a different course. Any observations in Kalyanji Mavji & Co. V. CIT (1976) 102 ITR 287(SC) suggesting the contrary do not, we say with respect, lay down the correct law.” (emphasis supplied) 12. The aforesaid view on the above proportion has been reiterated by the Apex Court in A.L.A.Firm vs Commissioner of Income Tax 183 ITR 285 wherein the Court held that change of opinion where opinion was formed earlier does not give the Assessing Officer jurisdiction to reopen an assessment. The Apex Court interalia on the above issue held as under: “Even making allowances for this limitation placed on the observations in Kalyanji Mavji (1976) 102 ITR 287 (SC) the position as summarised by the High Court in the following words represents, in our view the correct position in law (at p.620 of 102 ITR) : “The result of these decisions is that the statute does not require that the information must be extraneous to the record. It is enough if the material on the basis of which the reassessment proceedings are sought to be initiated, came to the notice of the Income tax Officer subsequent to the original assessment. If the income Tax Officer had considered and formed an opinion on the said material in the original assessment itself then he would be powerless ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 20 to start the proceedings for reassessment. Where, however the Income Tax Officer had not considered the material and subsequently came by the material from the record itself, the such a case would fall within the scope of section 147 (b) of the Act” (emphasis supplied) 13. The decision of Delhi High Court in the case “New Light Trading Co.”(supra) does not indicate what reasons were recorded for issuing notice of reopening therein. In the present case the reasons as recorded by the Assessing Officer and reproduced hereinabove clearly indicate that there was no tangible material adverting to the reasons recorded for issuing reopening notice. Similarly the decision of this Court in the case “Dr.Amin's Pathology Laboratory” (supra), it has been observed that if any item has escaped from assessment which otherwise is includible within the assessment and the Assessing Officer notices it subsequently by his own investigation or by reason of some information received by him, one cannot say that it constitutes change of opinion. In the present facts during original proceedings itself this issue was investigated by the Assessing Officer by raising specific query with regard to bad debts of Rs.1.35 crores. Consequently, this is not a case where this information has been noticed by the Assessing Officer subsequently in the assessment proceedings. In view of the above, in our opinion, none of the three decisions are applicable in the present facts. 14. In view of the above, questions (A) and (B) as raised by the Revenue for our consideration do not give rise to any substantial questions of law as the findings of the Tribunal that there has been change of opinion in issuing impugned notice, is a finding based on the facts and same has not been shown to be perverse. Accordingly, questions (A) and (B) are dismissed.” 15. The Hon’ble High Court in the aforementioned case has also considered the present grievance of the revenue. ITA NO. 2785/MUM/2023 (A.Y: 2014-15) Svadeshi Enterprise(Hubli) Page No. 21 16. Considering the facts of the case in detail in the light of the judicial decisions discussed hereinabove, we do not find any reason to interfere with the findings of the Ld. CIT(A) in so far as quashing of the notice under section 148 is concerned. Since notice under section 148 is quashed the assessment framed under section 143(3) r.w.s. 147 of the Act is also quashed. Since we have quashed the assessment order, we do not find it necessary to dwell into the merits of the case. Appeal of the revenue is accordingly dismissed. 17. In the result, appeal filed by the revenue is dismissed. Order pronounced in the open court on 03 rd May, 2024. Sd/- Sd/- (RAHUL CHAUDHARY) (NARENDRA KUMAR BILLAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai / Dated 03.05.2024 Giridhar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// BY ORDER (Asstt. Registrar) ITAT, Mum