M/s. Uttarakhand Purv Sainik Kalyan Nigam Ltd., Dehradun V. ITO, Dehradun

ITA 3070/DEL/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 3621 (ITAT-DEHRADUN)
• Duration Of Justice: 5 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 30-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N C UPPADHAY
• Keywords: Reopening of assessment; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 271(1)(c); 143(3); 142(1); 13; 147; 27; 148; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIB UNAL DEHRADUN CIRCUIT BENCH: DEHRADUN BEFORE, SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.3070/DEL/2016 (ASSESSMENT YEAR 2009-10) M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LIMITED, STATION SUB AREA, GARHI CANTT. DEHRADUN. PAN AAACU 7129D VS. INCOME TAX OFFICER, WARD-2(5), DEHRADUN. (APPELLANT) (RESPONDENT) APPELLANT BY SH. SANJAY MALIK, ADV. SH. SANKALAP MALIK, ADV. RESPONDENT BY SH. N.C.UPPADHAY, SR. DR DATE OF HEARING 04.03.2021 DATE OF PRONOUNCEMENT 31.05.2021 ORDER PER SUDHANSHU SRIVASTAVA, JM: THE APPEAL IS FILED BY THE ASSESSEE AGAINST ORDE R PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEA LS), DEHRADUN {CIT (A)} VIDE ORDER DATED 28/03/2016 RELATING TO A SSESSMENT YEAR (AY) 2009-10. 2 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO 1.1 THE FOLLOWING GROUNDS OF APPEAL HAVE BEEN RAIS ED: 1. THAT THE LD. CIT (A) ERRED IN HOLDING THAT THE A PPELLANT CORPORATION WAS NOT SET UP BY A CENTRAL, STATE OR P ROVISIONAL ACT FOR THE WELFARE AND ECONOMIC UPLIFTMENT OF EX S ERVICEMAN BEING THE CITIZEN OF INDIA AS REQUIRED U/S. 10(26BB B) OF THE INCOME TAX ACT, 1961. 2. THAT, LD. CIT (A) AND LD ASSESSING OFFICER ERRED IN HOLDING THAT THE APPELLANT WAS NOT ESTABLISHED BY THE A CEN TRAL, STATE OR PROVISIONAL ACT, BOTH THE LD. A.O. AND THE CIT ( A)ERRED IN JUSTIFYING THAT: A. THAT UTTARAKHAND PURV SAINIK KALYAN NIGAM LIMITE D WAS ESTABLISHED BY GOVERNMENT OF UTTARAKHAND FOR WELFAR E AND ECONOMIC UPLIFTMENT OF EX-SERVICEMAN AND HAVING DULY SATISFIED THE PRESCRIBED CONDITIONS OF SECTION10(26BBB) OF THE INCOME TAX ACT, 1961. B. THE MAIN OBJECTS OF THE UTTARAKHAND PURVSAINIK KALYAN NIGAM LIMITED WERE TO PROVIDE EMPLOYMENT, FINANCIAL ASSISTANCE, LOANS, SUBSIDY/GRANTS, TO IMPART TRAINI NG FOR ENTREPRENEURSHIP TO THE EX-SERVICEMAN AND THEIR DEPENDENTS AND HAVING DULY SATISFIED THE CONDITIONS PRESCRIBED IN THE SECTION 10(26BBB) OF THE INCOME T AX ACT, 1961. 3. THAT, AS ALL THE CONDITIONS PRESCRIBED IN SECTIO N 10(26BBB) OF THE INCOME TAX ACT,1961 WERE SATISFIED, THE LD.CIT( A) AND 3 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO LD. ASSESSING OFFICER ERRED IN HOLDING THAT ASSESSE E IS NOT ELIGIBLE FOR EXEMPTING THE INCOME OF RS 5,38,77,984 /- FOR THE ASSESSMENT YEAR 2009-10 IN TERMS OF THE SAID SECTIO N. 4. THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER U/S 143(3)/147 DATED25/02/2015 IS MERELY CHANGE IN OPINION'. THE ORDER U/S 143(3) PASSED BY THE LD. AO DATED 28.12.2011 DOES NOT IN ANY WAY REPRESENT ERRONEOUS ORDER. THE ACTION OF THE LD. ASSESSING OFFICER FOR RE-OPEN ING THE CASE WAS WHOLLY UNREASONABLE, UNCALLED FOR AND BAD IN LAW 5. THAT THE LEVY OF INTEREST UNDER SECTION 234A/B/C AND 234D IS ERRONEOUS AND DESERVES TO BE DELETED. 6. THAT THE INTENTION OF PENALTY PROCEEDINGS U/S 27 1(1)(C) ARE BAD IN LAW AND NOT SUSTAINABLE IN LAW UNDER THE FAC TS AND CIRCUMSTANCES OF THE CASE IN SO FAR AS THERE WAS NE ITHER ANY WILLFUL CONCEALMENT OF INCOME NOR DID THE APPELLANT FURNISH INACCURATE PARTICULARS ON INCOME. 2.0 THE BRIEF FACTS OF THE CASE LEADING TO DISPUT E ARE THAT THE ASSESSEE IS A COMPANY INCORPORATION U/S 61 7 OF THE COMPANIES ACT, 1956. THE PRIMARY OBJECTIVE OF THE A SSESSEE COMPANY IS TO WORK TOWARDS WELFARE AND UPLIFTMENT OF E X- SERVICEMEN OF STATE OF UTTARAKHAND. THE ASSESSEE HA D CLAIMED EXEMPTION U/S 10(26BBB) OF THE INCOME TAX ACT, 1961 (HEREINAFTER 4 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO CALLED THE ACT) IN ITS RETURN OF INCOME FILED FOR THE YEAR UNDER REFERENCE. THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT VIDE ORDER DATED 28/12/2011 WHEREIN THE CLAIM OF EXEMPTION U/S 10(26BBB) WAS PARTIALLY DISALLOWED TO THE EXTENT OF RS. 41,68,140/- BY HOLDING THAT THE ASSESSEE COMPANY HA D PROVIDED SERVICES TO PERSON OTHER THAN EX-SERVICEMEN AND THE IR DEPENDENTS. 2.1 SUBSEQUENTLY, THE CASE WAS REOPENED U/S 147 OF THE ACT AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE ASSE SSMENT YEAR VIDE NOTICE DATED 22/01/2015. THE REOPENING U/S 147 WAS M ADE ON THE GROUND THAT THE ASSESSEEE HAD NOT FULFILLED THE PRE -CONDITION FOR CLAIM OF EXEMPTION U/S 10(26BBB) AND THE ENTIRE CLA IM NEEDS TO BE DISALLOWED. EVENTUALLY, THE REASSESSMENT PROCEEDING S CULMINATED INTO ORDER PASSED U/S 143(3)/147 DATED 25/02/2015 A FTER MAKING DISALLOWANCE OF THE ENTIRE CLAIM OF EXEMPTION U/S 10 (26BBB) OF THE INCOME TAX ACT, 1961. 2.2 THE ASSESSEEE REMAINED UNSUCCESSFUL IN ITS AP PEAL BEFORE THE LD. FIRST APPELLATE AUTHORITY. 5 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO 3.0 THE ASSESSEE, BEFORE US, HAS EFFECTIVELY RAIS ED 6 GROUNDS OF APPEAL OUT OF WHICH GROUND NO. 6 IS REGAR DING INITIATION OF PENALTY U/S 271(1)(C) OF THE ACT WHICH IS PREMAT URE AND IS HEREBY DISMISSED. FURTHER GROUND NO. 1 TO 3 ARE ON MERITS OF THE ISSUE OF CLAIM OF EXEMPTION U/S 10(26BBB) AND GROUN D NO. 4 CONTAINS CHALLENGE TO JURISDICTION U/S 147 OF THE I NCOME TAX ACT, 1961. 3.1 AS THE ISSUE OF JURISDICTION U/S 147 OF THE A CT IS GERMANE FOR DECIDING THE LEGALITY OF THE ASSESSMENT ORDER, WE ARE FIRST TAKING UP GROUND NO. 4 FOR ADJUDICATION. 3.2 THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED TH AT THE ISSUE OF EXEMPTION U/S 10(26BBB) OF THE ACT WAS EXAM INED IN GREAT DETAIL BY THE ASSESSING OFFICER AT THE TIME OF THE ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT WHEREIN PARTIAL DISALLOWANCE OF EXEMPTION WAS MADE AND AS SUCH THE NOTICE U/S 148 WAS PURELY ON TH E BASIS OF CHANGE OF OPINION. THE LD. COUNSEL DREW OUR ATTENTIO N TO ASSESSMENT ORDER U/S 143(3) DATED 28/12/2011, NOTIC ES ISSUED AND REPLIES FILED DURING ORIGINAL ASSESSMENT PROCEEDING S AS PLACED AT 6 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO PAGES 52-84 OF THE PAPER BOOK TO SHOW THAT THE SUBJ ECT MATTER OF ORIGINAL ASSESSMENT PROCEEDINGS WAS THE VERY SAME IS SUE OF EXEMPTION U/S 10(26BBB). IT WAS FURTHER SUBMITTED T HAT THE NOTICE U/S 148 HAS BEEN ISSUED AFTER EXPIRY OF FOUR YEARS AND THAT IN ABSENCE OF ANY FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSING TRUE AND FULL PARTICULARS, THE NOTICE IS BARRED BY LIMIT ATION IN TERMS OF PROVISO TO SECTION 147 OF THE INCOME TAX ACT, 1961. IT WAS SUBMITTED THAT ONCE THE ISSUE OF EXEMPTION U/S 10(26BBB) HAS BEEN EXAMINED IN THE COURSE OF ORIGINAL ASSESSMENT, THE ASSESSING OFFICER LOSES HIS JURISDICTION TO REOPEN THE PROCEEDINGS ON THE VERY SAME ISSUE WITHOUT ANY FRESH TANGIBLE MATERIAL. 4.0 THE LD. DR, ON THE OTHER HAND, SUPPORTED THE FINDING OF THE LD. CIT (A) AND ARGUED THAT IN THE O RIGINAL ASSESSMENT U/S 143(3), THE ASSESSING OFFICER DID NOT EXAMINE T HE ELIGIBILITY TO CLAIM EXEMPTION U/S 10(26BBB) AND AS SUCH THE CONCE PT OF CHANGE OF OPINION IS NOT APPLICABLE. THE LD. DR FURTHER AR GUED THAT PROVISO TO SECTION 147 IS ALSO SATISFIED AS THE ASSESSEE IS GUILTY OF NOT HIGHLIGHTING THE CRUCIAL FACT THAT IT HAS NOT BEEN FORMED UNDER 7 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO CENTRAL OR PROVINCIAL ACT AND AS SUCH THERE WAS FAI LURE ON PART OF THE ASSESSEE IN DISCLOSING TRUE AND FULL PARTICULAR S. ACCORDINGLY, IT WAS SUBMITTED THAT THERE IS NO DEFECT IN ASSUMPTION OF JURISDICTION U/S 147 OF THE INCOME TAX ACT, 1961. 5.0 WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND GONE THROUGH THE MATERIAL PLACED ON RECORD. THE ISSUE BE FORE US IS REGARDING VALIDITY OF NOTICE U/S 148 ISSUED AFTER E XPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. IT IS TRITE LA W THE REASSESSMENT PROCEEDINGS U/S 147 ARE EXTRA-ORDINARY PROCEEDINGS WHICH REQUIRE SATISFACTION OF PRE-REQUISITE CONDITIONS IN ORDER T O CONFER VALID JURISDICTION UPON ASSESSING OFFICER. NO DOUBT THAT HEADING OF SECTION 147 CONTAIN THE TERM INCOME ESCAPING ASSESSMENT B UT THE MERE FACT THAT INCOME HAS ESCAPED ASSESSMENT IS NOT SUFF ICIENT TO ENABLE THE ASSESSING OFFICER TO ASSUME JURISDICTION U/S 14 7 OF THE INCOME TAX ACT, 1961. AS PER THE LAW LAID DOWN BY THE HONBL E APEX COURT IN THE CASE OF CIT VS. KELVINATOR INDIA LTD. 320 ITR 561 (SC), IT IS EVIDENT THAT POWER UNDER SECTION 147 CANNOT BE EXERC ISED FOR CORRECTING THE WRONG COMMITTED IN THE ORIGINAL ASSES SMENT. FURTHER, 8 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO THE ACTION U/S 147 IS NOT IN THE NATURE OF REVIEW BU T TO BRING INTO TAX NET INCOME WHICH HAS ESCAPED ASSESSMENT DUE TO F ACTORS BEYOND THE CONTROL OF THE ASSESSING OFFICER AT THE TIME OF FRAMING THE ORIGINAL ASSESSMENT. THE USE OF TERM CHANGE OF OPI NION BY THE HONBLE SUPREME COURT MAKES IT ABUNDANTLY CLEAR THA T ASSESSING OFFICER HAS NO POWER TO INITIATE REASSESSMENT PROCEE DINGS U/S 147 IN RESPECT OF ISSUES WHICH HAVE BEEN DEALT WITH AND C ONSIDERED IN THE ORIGINAL ASSESSMENT. FURTHER, THE REQUIREMENT O F TANGIBLE MATERIAL IS IN-BUILT CHECK TO ENSURE THAT THERE IS NO REVIEW OF MATERIAL ALREADY ON RECORD. 5.1 IN ADDITION TO ABOVE, IN CASE OF REASSESSMENT BEYOND FOUR YEARS FROM THE END OF THE ASSESSMENT YE AR, THE SATISFACTION OF ESSENTIAL CONDITION OF FAILURE ON P ART OF THE ASSESSEE IN DISCLOSING AND TRUE AND FULL PARTICULARS BECOME RELEVANT IN DECIDING THE EXPIRY DATE OF ACTION U/S 147 OF THE A CT. IT MEANS THAT WHERE THERE IS NO FAILURE ON PART OF THE ASSESSEE, T HE LIMITATION FOR ISSUE OF NOTICE U/S 148 EXPIRES ON FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. 9 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO 5.2 THE LAW LAID DOWN IN KELVINATOR INDIA (SUPRA) HAS BEEN SUCCINCTLY EXPLAINED BY HONBLE DELHI HIGH COU RT IN THE CASE OF SUN PHARMACEUTICAL INDUSTRIES LTD. V. DCIT [2016] 3 81 ITR 387 (DELHI) WHEREIN IT WAS HELD THAT ONCE THERE IS FULL DISCLOSU RE OF FACTS AND IN ABSENCE OF TANGIBLE MATERIAL, NO ACTION CAN BE TAKEN U/S 147 OF THE ACT. 5.3 ON THE TOUCHSTONE OF PRINCIPLE LAID DOWN BY TH E HONBLE SUPREME COURT, WE WILL NOW ANALYSE THE FACTS O F THE PRESENT CASE. ON PERUSAL OF REASONS RECORDED FOR ISSUE OF N OTICE, IT IS NOTED THAT THE BASIS FOR ASSUMING JURISDICTION U/S 147 IS CLAIM OF EXEMPTION U/S 10(26BBB) OF THE INCOME TAX ACT, 1961 . NOW, WHEN WE EXAMINE THE ORIGINAL ASSESSMENT PROCEEDINGS U/S 1 43(3), IT IS FOUND THAT THE ISSUE OF EXEMPTION U/S 10(26BBB) HAS BEEN EXTENSIVELY DEALT WITH AND THE ASSESSMENT WAS ULTIMAT ELY COMPLETED AFTER MAKING PROPORTIONATE DISALLOWANCE OF CLAIM OF EXEMPTION. NEXT, WE TURN TO ORDER-SHEET OF THE ORIGINAL ASSESS MENT FILE PLACED AT PB PAGES 46-49 AS PER WHICH IT CLEAR THAT THE ISSUE OF EXEMPTION U/S 10(26BBB) WAS DULY DISCUSSED WITH THE AUTHORIZED 10 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO REPRESENTATIVE OF THE ASSESSEE ON VARIOUS DATES. FU RTHER, VIDE NOTICE U/S 142(1) DATED 16/11/2011 ISSUED DURING PROCEEDIN GS U/S 143(3), THE ASSESSING OFFICER HAS SPECIFICALLY ASKE D THE ASSESSEE TO PROVE WITH DOCUMENTARY EVIDENCES THE CONDITIONS FOR CLAIMING EXEMPTION U/S 10(26BBB). THE ASSESSEE, VIDE LETTERS DATED 28/11/2011 AND 20/11/2011DULY SUBMITTED THE COMPLET E DETAILS OF THE LEGAL STATUS OF THE COMPANY, ITS FORMATION A ND OBJECTS IN COMPLIANCE TO NOTICES SO ISSUED. IN THE LIGHT OF AB OVE BACKGROUND, WE FIND THAT ISSUE OF EXEMPTION U/S 10(26BBB) HAS BE EN ELABORATELY CONSIDERED IN THE ASSESSMENT PROCEEDING U/S 143(3) OF THE INCOME TAX ACT, 1961 AND AS SUCH THE CONCEPT OF CHANGE OF OPINION IS FULLY APPLICABLE TO THE FACTS OF THE CASE. 5.4 ANOTHER IMPORTANT ASPECT IS THE SATISFACTION OF FIRST PROVISO TO SECTION 147 OF THE INCOME TAX ACT, 1961. IN THIS REGARD, WE NOTE THAT IT IS INCUMBENT UPON THE ASSESSING OFFI CER TO DEMONSTRATE THE FAILURE ON PART OF THE ASSESSEE IN DISCLOSING TRUE AND FULL PARTICULARS IN THE REASONS ITSELF. THE REA SONS MUST STATE AS TO WHAT FACTS OR MATERIAL WAS NOT DISCLOSED BY THE AS SESSEE LEADING 11 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO TO INCOME ESCAPING ASSESSMENT. HOWEVER, THE REASONS RECORDED IN THE PRESENT CASE FAIL ON THIS COUNT AS WELL AND OTHE R THAN EMPTY STATEMENT AT THE END OF THE REASONS, THERE IS NOTHI NG TO SHOW THAT THERE WAS ANY FAILURE IN TERMS OF FIRST PROVISO TO S ECTION 147 OF THE INCOME TAX ACT, 1961. IN FACT, ON COLLECTIVE ANALYS IS OF ASSESSMENT ORDER, NOTICES, RESPONSES FILED IN THE ORIGINAL PRO CEEDINGS AS WELL AS REASSESSMENT ORDER, WE DO NOT FIND ANY FAILURE ATTRI BUTABLE TO ASSESSEE AS MANDATED IN FIRST PROVISO TO SECTION147 OF THE ACT. MOREOVER, NO WHISPER OF ANY FRESH TANGIBLE MATERIAL IN THE REASONS FURTHER FORTIFIES THE FACT THAT ENTIRE RE-ASSESSMEN T PROCEEDINGS IS BASED ON EXISTING MATERIAL WHICH WAS ALREADY PART OF RECORD. 5.5 THUS, IT IS APPARENT THAT ACTION U/S 147 WAS S OLELY FOR THE PURPOSE OF ENHANCING THE DISALLOWANCE OF CL AIM OF EXEMPTION U/S 10(26BBB) ALREADY MADE IN THE ORIGINAL ASSESSME NT U/S 143(3) OF THE INCOME TAX ACT, 1961, WHICH IN OUR VIEW, IS IM PERMISSIBLE AND NOT IN ACCORDANCE WITH SPIRIT OF SECTION 147 OF THE ACT. THE REASONS RECORDED FAIL TO SATISFY THE DUAL JURISDICT IONAL REQUIREMENTS AS PER LAW. 12 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO 5.6 IN REACHING THE ABOVE CONCLUSION, WE FIND STRE NGTH FROM THE DECISION OF HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF OIL AND NATURAL GAS CORP. LTD. V. DCIT [2003] 262 I TR 648. IN THE SAID DECISION, THE ASSESSING OFFICER CONSIDERED 10% DISALLOWANCE OF INTEREST EXPENSES IN THE ORIGINAL ASSESSMENT PROCEE DINGS U/S 143(3) AND NOTICE U/S 148 WAS ISSUED FOR THE PURPOSE OF MAK ING FURTHER DISALLOWANCE OF INTEREST EXPENSE. THE HONBLE HIGH C OURT QUASHED THE RE-ASSESSMENT PROCEEDINGS BY OBSERVING AS UNDER : 8. AT THE OUTSET IT NEEDS TO BE MENTIONED THAT IN THE REASONS FOR REOPENING OF ASSESSMENT WHICH HAVE BEEN REPRODUCED ABOVE IT HAS NOT BEEN ALLEGED THAT THERE HAS BEEN OMISSION O R FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRUL Y ALL THE MATERIAL FACTS NECESSARY FOR ASSESSMENTS. THE REASO NS ITSELF, IN FACT, INDICATE THAT THE ASSESSEE HAS DISCLOSED FULL Y AND TRULY FACTS ABOUT THE BORROWINGS OF FUNDS AS WELL AS INVE STMENTS MADE IN TAX FREE PUBLIC SECTOR UNDERTAKING BONDS. T HE REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT WAS THAT THE ASSESSING OFFICER HAS, IN FACT, NOT GIVEN CONSCIOUS CONSIDERATION TO THE ASPECT THAT IF THE ASSESSEE HAD NOT INVESTED IN TAX FREE BONDS THERE WOULD NOT HAVE BEEN NECESSITY FOR BORRO WING OF FUNDS BY THE ASSESSEE AND BY MISTAKE UNDERESTIMATIO N OF THE INCOME WAS MADE. IT IS, THUS, OBVIOUS THAT THE REAS ONS SHOWN 13 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO DO NOT SATISFY THE CONDITIONS AS ENVISAGED UNDER TH E PROVISO TO SECTION 147 FOR REASSESSMENT. 9. ON BEHALF OF THE PETITIONER RELIANCE WAS PLACED ON THE APEX COURT DECISION IN PARASHURAM POTTERY WORKS CO. LTD. V. ITO [1977] 106 ITR 1 , IN SUPPORT OF THE CONTENTION THA T FOR FAILURE OF THE ASSESSING OFFICER IN ASSESSING THE TAXABLE INCO ME RECOURSE TO SECTION 147 OF THE ACT CANNOT LEGALLY BE TAKEN. THE APEX COURT IN THE REPORTED DECISION HAS OBSERVED THAT: '. . . THE DUTY WHICH IS CAST UPON THE ASSESSEE IS TO MAKE A TRUE AND FULL DISCLOSURE OF THE PRIMARY FACTS AT THE TIME OF THE ORIGINAL ASSESSMENT. PRODUCTION BEFORE THE INCO ME-TAX OFFICER OF THE ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEE N DISCOVERED BY THE INCOME-TAX OFFICER WILL NOT NECES SARILY AMOUNT TO DISCLOSURE CONTEMPLATED BY LAW. THE DUTY OF THE ASSESSEE IN ANY CASE DOES NOT EXTEND BEYOND MAKING A TRUE AND FULL DISCLOSURE OF PRIMARY FACTS. ONCE HE HAS DONE THAT HIS DUTY ENDS. IT IS FOR THE INCOME-TAX OFFICE R TO DRAW THE CORRECT INFERENCE FROM THE PRIMARY FACTS. IT IS NO RESPONSIBILITY OF THE ASSESSEE TO ADVISE THE INCOME -TAX OFFICER WITH REGARD TO THE INFERENCE WHICH HE SHOUL D DRAW FROM THE PRIMARY FACTS. IF AN INCOME-TAX OFFICER DR AWS AN INFERENCE WHICH APPEARS SUBSEQUENTLY TO BE ERRONEOU S, MERE CHANGE OF OPINION WITH REGARD TO THAT INFERENC E WOULD NOT JUSTIFY INITIATION OF ACTION FOR REOPENING ASSE SSMENT. . . .' (P. 7) 10. THE PRINCIPLES LAID DOWN SQUARELY APPLY TO THE FACTS OF THE INSTANT CASE AND ON THE PRETEXT THAT THERE WAS NO C ONSCIOUS 14 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO CONSIDERATION OF THE POINTED FACTS AT THE TIME OF T HE ASSESSMENT, REOPENING OF THE ASSESSMENT IS NOT LEGALLY PERMISSI BLE BY VIRTUE OF THE PROVISO TO SECTION 147 OF THE ACT. 11. IN MECDERMOTT INTERNATIONAL INC. V. ADDL. CIT [ 2003] 259 ITR 138 (UTTARANCHAL) TO WHICH ONE OF US (HUSSAIN, J.) WAS A PARTY, THIS COURT HAS RECENTLY HELD THAT AN ASSESSMENT COU LD NOT BE REOPENED WHEN THERE WAS NO FAILURE ON THE PART OF T HE ASSESSEE TO MAKE A FULL AND TRUE DISCLOSURE OF ALL MATERIAL FACTS. IT WAS REITERATED THAT A REASSESSMENT CANNOT BE INITIATED ON THE BASIS OF A CHANGE OF OPINION AND THAT EXPLANATION 2 TO SE CTION 147 OF THE ACT PERMITS REASSESSMENT WITHIN THE PERMISSIBLE PERIOD UNDER SECTION 147 WHEREAS TO CARRY REASSESSMENT BEY OND A PERIOD OF FOUR YEARS, THE CONDITIONS UNDER THE PROV ISO HAVE TO BE FULFILLED. 5.7 IN AFORESAID BACKGROUND, WE FIND TO DIFFICULT TO CONCUR WITH REASONING GIVEN BY THE LD. CIT (A) WHILE UPHOLDING THE VALIDITY OF NOTICE U/S 148 WHICH IS NOT IN CONSONANC E WITH ESTABLISHED LEGAL PRINCIPLES AS DISCUSSED ABOVE. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF CONSIDERED VIEW THAT NOTICE U/ S 148 DATED 22/01/2015 IS VITIATED ON DUAL COUNT OF CHANGE OF O PINION AS WELL AS FIRST PROVISO TO SECTION 147 OF THE INCOME TAX A CT, 1961 AND SAME IS HEREBY QUASHED. RESULTANTLY, THE RE-ASSESSM ENT ORDER 15 ITA NO.3070 /DEL/2016 M/S UTTARAKHAND PURV SAINIK KALYAN NIGAM LI MITED VS. ITO PASSED U/S 143(3)/147 AND ADDITION MADE THEREIN ALS O GETS ANNULLED. GROUND NO. 4 IS ALLOWED. 5.8 SINCE WE HAVE QUASHED THE RE-ASSESSMENT PROCEE DINGS U/S 147, THE GROUND NOS. 1 TO 3 RELATING TO MERITS OF THE ISSUE NEED TO ADJUDICATION AS HAVING BECOME ACADEMIC IN NATURE . 6.0 IN THE FINAL RESULT, THE APPEAL OF THE ASS ESSEE STANDS ALLOWED. ORDER PRONOUNCED ON 31/05/2021. SD/- SD/- (PRASHANT MAHARISHI) (SUDHANSHU SRIVASTAVA ) ACCOUNTANT MEMBER JUDICIAL MEMB ER DATED: 31/05/2021 *DRAGON* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI (DEHRADUN CIRCUIT BENCH, DEHRADUN)