SHRI R PANNERSELVAM, CHENNAI V. DCIT, CC-3(3), CHENNAI

ITA 3356/CHNY/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 1582 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 11-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Revision of order; Depreciation; Search and seizure; Principle of natural justice; Question of law; Tangible material; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Borrowed satisfaction; Capital Gains
• Section: 148; 263; 69C; 40A(3); 139; 143(3); 54F; 133A; 143(1); 13; 153

Judgement Text

आयकर अपीलीय अिधकरण, ‘ए’ ᭠यायपीठ, चे᳖ई IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH, CHENNAI Įी महावीर ͧसंह, उपाÚय¢ एवं Įी ͬगरȣश अĒवाल, लेखा सदèय के सम¢ BEFORE SHRI MAHAVIR SINGH, VICE PRESIDENTAND SHRI GIRISH AGRAWAL, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.: 3356/CHNY/2019 िनधाᭅरण वषᭅ /Assessment Year: 2008-09 Shri. R. Pannerselvam, 43, Rohini Vasantham, Sarangapani Street, T. Nagar, Chennai – 600 017. PAN: AAGPP-5343-K v. The Deputy Commissioner of Income Tax, Central Circle – 3(3), Chennai. (अपीलाथᱮ/Appellant) (ᮧ᭜यथᱮ/Respondent) अपीलाथᱮ कᳱ ओर से/Appellant by : Shri. S. Sridhar, Advocate & Shri. N. Arjunraj, CA ᮧ᭜यथᱮ कᳱ ओर से/Respondent by : Shri AR V Sreenivasan, Addl. CIT स ु नवाई कȧ तारȣख/Date of Hearing : 23.05.2022 घोषणा कȧ तारȣख/Date of Pronouncement : 23.05.2022 आदेश /O R D E R PER GIRISH AGRAWAL, ACCOUNTANT MEMBER: This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-18, Chennai, in ITA no. 89/19- 20 dated 28.10.2019 against the order of the DCIT, Non- Corporate Circle-2, Chennai passed u/s. 143(3) r.w.s 147 of the Income-tax Act, 1961 (herein after referred to as “the Act”) dated 10.02.2016. 2 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 2. The grounds of appeal taken by the assessee are reproduced as here under: “ 1. The order of the Commissioner of Income Tax (Appeals) - 18, Chennai dated 28.10.2019 in I.T.A.No. 89 /19-20, for the above mentioned Assessment Year is contrary to law, facts, and in the circumstances of the case. 2. The CIT (Appeals) erred in sustaining the assumption of jurisdiction u/s 147 of the Act beyond 4 years from the end of the relevant assessment year by the Assessing Officer while sustaining the consequential re-assessment order passed u/s 143(3) read with section 147 of the Act dated 10.02.2016 without assigning proper reasons and justification. 3. The CIT (Appeals) ought to have appreciated that the reasons for reopening of the proceedings, the subject matter of the first scrutiny assessment proceedings and the grounds pertaining to revision proceedings u/s 263 of the Act were identical while demonstrating change of opinion, thereby vitiating the consequential re-assessment order dated 10.02.2016. 4. The CIT (Appeals) failed to appreciate the fact that the action of the Assessing Officer in assuming jurisdiction u/s 147 of the Act for the purpose of extending the statutorily prescribed time limit for giving effect to the revision order u/s 263 of the Act dated 27.03.2013 in garb of re-opening of the proceedings and completing the re-assessment on 10.02.2016 should be reckoned as bad in law. 5. The CIT (Appeals) failed to appreciate the very issue/reasons for reopening had been the subject matter of the two proceedings prior to the assumption of jurisdiction u/s 147 of the Act by way of scrutiny assessment proceedings as well as revisonal proceedings u/s 263 of the Act in direct contradiction to the many judicial precedents relied upon by the appellant, thereby vitiating the related findings in the impugned order. 6. The CIT (Appeals) failed to appreciate the judgment relied upon by the Appellant in the case of M/s Pine Chemicals Ltd. reported in 57 Taxmann.com 302 in proper perspective there by vitiating the findings recorded at Para 7.6 of the impugned order. 7. The CIT (Appeals) ought to have appreciated that the action of the Assessing Officer in assuming jurisdiction without any fresh/tangible materials should be reckoned as bad in law while further ought to have appreciated that in the absence of the failure on the part of the appellant in disclosing fully and truly the material facts, the assumption of jurisdiction in such circumstances especially after expiry of four years from the end of the relevant assessment year was wrong, erroneous, unjustified, incorrect and not sustainable in law. 3 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 8. The CIT(Appeals) failed to appreciate that having failed to give effect to the order of revision u/s 263 of the Act dated 27.03.2013, the assumption of jurisdiction u/ s 147 of the Act to cover up the said lapse should be reckoned as fatal to such assumption of jurisdiction and ought to have appreciated further that having not demonstrated the availability of fresh materials, the stand of the appellant would get fortified, thereby vitiating the related findings from para 7 of the impugned order. 9. The CIT (Appeals) failed to appreciate that the order of re- assessment under consideration was passed out of time, invalid, passed without jurisdiction and not sustainable both on facts and in law. 10. The CIT (Appeals) erred in sustaining the denial of exemption u/s 54F of the Act for want of evidence towards the construction of new house/asset without assigning proper reasons and justification. 11. The CIT (Appeals) failed to appreciate that the Assessing Officer having not disputed the creation of the new asset within the time specified under the Act, the claim for such deduction/tax exemption would get fortified while further ought to have appreciated that the conditions prescribed for getting the said exemption/deduction u/s 54F of the Act were concurrently fulfilled/ complied with, thereby vitiating the reasons recorded to deny the said claim. 12. The CIT(Appeals) failed to appreciate that the denial of the claim for tax exemption/deduction u/s 54F of the Act merely on the ground of nonproduction of individual bills/vouchers towards construction which were unavailable on account of passage of time was wrong, erroneous and bad in the eyes of law. 13. The CIT (Appeals) erred in sustaining the disallowance of Rs. 1,50,000/being interest paid as unaccounted in the computation of taxable total income without assigning proper reasons and justification. 14. The CIT (Appeals) erred in sustaining the addition of Rs. 90,000/- on the application of the provisions in Section 40A(3) of the Act in the computation of taxable total income without assigning proper reasons and justification. 15. The CIT (Appeals) failed to appreciate the provisions of Section 40A(3) of the Act had no application to the factual matrix of the case and ought to have considered the proviso below sub section (3A) of the Act in proper perspective thus vitiating the related findings. 16. The CIT (Appeals) failed to appreciate that there was no proper opportunity given before passing the impugned order and any order passed in violation of the principles of natural justice is nullity in law. 17. The Appellant craves leave to file additional grounds/arguments at the time of hearing.” 4 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 3. Brief facts of the case are that the assessee is an individual deriving income from rental and business of running hotel in the name of Hotel Rohini International and Hotel Sri Rohini Nivas. He also derives income from supply of water tanker, advertisement etc. Return of income was originally filed on 05.06.2009 reporting an income of Rs. 51,11,380/- along with agricultural income of Rs. 1,30,000/-. The assessment was taken up for scrutiny which was completed u/s. 143(3) of the Act on 31.12.2010 accepting the income returned by the assessee. Subsequently, survey u/s. 133A of the Act was conducted in the business premises of the assessee on 27.02.2008 wherein it was revealed that assessee has received a sum of Rs. 1,41,45,066/- as compensation from National Highways Authority of India (NHAI) for acquisition of land at Vanagaram belonging to the assessee and was alleged to be undisclosed in the return of income filed by the assessee. Certain other incomes were also noted from the survey conducted by the assessee, which had escaped the assessment. 4. At later point of time on 27.03.2013, proceedings u/s. 263 of the Act were initiated by the Commissioner of Income Tax -4, Chennai by issuing show cause notice dated 12.03.2013 placed in the paper book at page 29, filed by the assessee. Para 2 of the show cause notice stated the consideration for the issuance of the said notice wherein the 5 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 issue of receipt of compensation of Rs. 1,41,45,066/- from NHAI for the land acquired for NH-4 project not offered towards capital gains arising there from, was noted. Issues relating to interest of Rs. 1,50,000/-, payment of Rs. 90,000/- in cash and suppression of sum of Rs. 16,24,298/- towards bar sales were also noted in the said show cause notice. For ease of reference, the contents of the show cause notice are reproduced as here under: “It is seen from the records that you had filed your return of income for the assessment year 2008-09 on 05.06.2009 electronically declaring an income of Rs.51,11,380 and an --.agricultural income of Rs.1,30,000. The return of income was processed u/s 143(1) of the Income tax Act and the scrutiny assessment u/s 143(3) of the Assistant Commissioner of Income tax Business Circle II, Chennai on 31.12.2010. 2. From the perusal of the assessment records, it is seen that you had received a compensation of Rs.1,41,45,066 from NHAI for the (land acquired for NH-4 Project. However, you had not offered· any capital gain from the above transaction. Further, you had paid a sum of Rs.1,50,000 as interest from undisclosed sources. You have also paid a sum of Rs.90,000 by cash which has to be disallowed u/s 40A(3), Further, there is a suppression of a sum of Rs.16,24,298 being the bar sales during the relevant period. Since the above amounts have not been considered while passing the assessment order by the assessing officer, the said action of the Assessing Officer appears to be erroneous and prejudicial to the interests of revenue. 3. Since, the Scrutiny assessment order has been passed without application of law and facts with regard to the deficiencies above noted, I am of the view that the said scrutiny assessment is prima facie erroneous and prejudicial to the interests of revenue. I, therefore, propose to pass an appropriate order under section 263 of the Income tax Act, 1961 based on the facts available on the records to protect the interests of revenue.” 5. Ld. CIT concluded the revisionary proceedings u/s. 263 of the Act vide order dated 27.03.2013 by holding that no submissions or explanation have been received from the assessee and that the 6 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 Assessing Officer has passed the assessment order without considering the above point and without application of law and fact with regard to the deficiency noted in the show cause notice which has rendered the assessment order as erroneous and prejudicial to the interest of revenue, cancelling the same. He further directed the AO to pass fresh assessment order after taking into consideration the points noted in the show cause notice to arrive at the total income as per the provisions of the Act. 5.1 The findings and directions given by the ld. CIT vide order u/s 263 are reproduced as under: “4.1 No explanation / submission have been received from the assessee or from the authorized representative to the proposed action. Hence, as the assessing officer has passed the assessment order without considering the above points during the completion of the assessment, and further the order has been passed without application of law and facts with regard to the deficiencies above noted, the said scrutiny assessment is prima facie erroneous and prejudicial to the interests of revenue. 4.2 As assessment order dated 31.12.2010 for the Assessment Year 2008-09 has been passed without consideration of the above deficiencies noted and caused prejudice to the interest of revenue, the same is cancelled. The Assessing Officer is directed to pass fresh assessment order after taking into consideration of the points as detailed""a6ove and arrive at the total income as per the provisions of the Act and tax payable thereon accordingly, The demand arising out of the order thus passed will be collected forthwith as per law.” 6. On a specific query by the bench to the Ld. Counsel of the assessee on the status of the order passed u/s. 263 of the Act dated 27.03.2013, it was submitted that this order was not challenged by the assessee before the Tribunal. On further query by the bench to 7 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 understand the status of the assessment order passed giving consequential effect to the revisionary order passed u/s. 263 of the Act, both the ld. Counsel of the assessee and Ld. Sr. DR submitted that no such order is available on record in this regard. It was stated that no consequential assessment order giving effect to the revisionary order passed u/s. 263 of the Act has been made. 7. Later, notice u/s. 148 of the Act dated 26.11.2014 was issued for reopening the case towards income escaping assessment. Reasons to believe recorded for issue of notice u/s. 148 of the Act took note of the same issues which were raised by the ld. CIT in the show cause notice dated 12.03.2013 issued for initiating the revisionary proceedings u/s. 263 of the Act. Reasons to believe recorded by the ld. AO are reproduced hereunder for ease of reference: “The reasons recorded for reopening of assessment in your case for the Asst. Year 2008-09 is as under: “A survey u/s 133A has been conducted in the case of Shri R. Panneerselvam on 27/02/2008, by the ADIT(Inv.), Unit-II(2), Chennai. There is information available that the assessee had received a compensation of Rs.1,41,45,066/- from NHAI for the land acquired for NH-4 project. However, the assessee had not offered any capital gain from the above transaction. Due to assessee's failure to admit capital gains in respect of the above, there is reason to believe that income chargeable to tax has escaped assessment. During the course of survey it was found that during the financial year 2007-08, the assessee has made an interest: payment of Rs. 1,50,000/- from undisclosed sources. Further, it was also found during the course of survey that the assessee had made cash payments to the tune of Rs. 90,000/- 8 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 during the F.Y. 2007-08. The same calls for disallowance u/s 40A(3). However, the assessee has not added back/disallowed the same while computing the total income." In view of the above, there is reason to believe that income chargeable to tax has escaped assessment for the Assessment Year 2008-09.” 8. Assessee submitted the explanation and details in the proceedings u/s. 147 of the Act which did not find favor with the ld. AO who proceeded to complete the assessment by making the addition of Rs. 1,39,50,316/- towards long term capital gains on acquisition of land by NHAI, of Rs. 1,50,000/- towards interest payment as unexplained expenditure u/s. 69C of the Act and of Rs. 90,000/- towards disallowance u/s. 40A(3) of the Act. Aggrieved, the assessee went in appeal before the Ld. CIT(A). Before the Ld. CIT(A), assessee took additional grounds challenging the legal issue of reopening proceedings initiated by the Ld. AO u/s 147 of the Act. 8.1 Ld. CIT(A) held against the assessee by giving finding that no interference in the decision of the AO is called for reopening the assessment as there was clear default on the part of the assessee for disclosing fully and truly particulars of income that escaped the assessment. On the merits of the case Ld. CIT(A) dismissed all the grounds summarily by observing that assessee has not been able to produce any information/supporting documents to substantiate his 9 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 claim. Accordingly, the appeal of the assessee was dismissed. Aggrieved, the assessee is in appeal before the Tribunal. 9. Out of the 17 grounds taken by the assessee before the Tribunal, ground no. 1 to 9 essentially deals with the legal issue of reopening proceedings undertaken by the Ld. AO u/s. 147 of the Act which has been dismissed by the Ld. CIT(A). 10. At the outset, Ld. Counsel of the assessee Shri. S. Sridhar, Advocate and Shri. N. Arjunraj, CA submitted that the instant reopening proceedings are beyond the period of 4 years which falls within the meaning of proviso to section 147 of the Act. According to him, where the assessment u/s. 143(3) of the Act has been made, no action shall be taken u/s. 147 of the Act after the expiry of 4 years from the end of the relevant assessment year, unless there is a reason of failure on the part of the assessee to disclose fully and truly, all material facts necessary for assessment of that year. Ld. Counsel of the assessee further referred to the reasons to believe recorded prior to the issue of notice u/s. 148 of the Act and submitted that the factual noting which forms the reasons to believe are nothing but borrowed satisfaction as they are verbatim copy of all the factual noting made by the ld. CIT(A) in the show cause notice dated 12.03.2013 issued for 10 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 initiating the proceedings u/s. 263 of the Act. He emphasized on the fact that it was because the Department had missed the bus of passing the consequential order to the order passed u/s. 263 of the Act that, it has restored to the instant proceedings of reopening, by invoking the provisions of section 147 of the Act. Such an approach of the Ld. AO is bad in law and ought to be quashed. 11. Ld. Counsel further placed strong reliance on the decision of Hon’ble High Court of Gujarat in the case of Pine Chemicals Ltd v. DCIT (2015) 57 taxmann.com 302 (Guj) dated 16.12.2014. He submitted that Hon’ble High Court of Gujarat has given its findings that there can be no reassessment when original assessment order was cancelled by Commissioner in revision and no fresh order shall be passed pursuant to re-assessment. Ld. Counsel pointed out from the said decision in para 5 to the substantial question of law dealt by the Hon’ble High Court, which is reproduced as under: “5. On 10th December, 2014, this Court had passed the following order: '1. Being aggrieved and dissatisfied with the impugned order dated 09.03.2000 passed by the Income Tax Appellate Tribunal, Ahmedabad Bench in Income Tax Appeal No. 2428/ Ahd/1994 for the assessment year 1987-88, the assessee has preferred the present tax appeal. 2. This Court admitted the present appeal for consideration of the following substantial question of law: (i) Whether on the facts and in the circumstances of the case, the Tribunal was justified in upholding the validity of the Reassessment Order dated 3.6.93 passed u/s. 143(3) r.w.s. 147 of the Act especially when the original assessment order passed u/s. 143(3) of the Act on 15.12.1989 was cancelled by C.l.T., 11 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 Amritsar vide his order dated 28.2.92 passed u/s. 263 of the Act and no fresh order was passed pursuant thereto? (ii) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that assessment was validly reopened u/s. 147 of the Act, inspite of the fact that all primary facts were disclosed by the appellant in the return of income and after considering the same, deduction u/s. 80 HH was allowed on interest income, dividend income and rental income in the original assessment and hence mere change of opinion does not constitute information within the meaning of Sec. 14 7 of the Act? 12. Ld. Counsel referred to the findings on the substantial question of law given in para 8 of the said order, wherein it was held that validity of re-assessment order passed u/s. 143(3) r.w.s. 147 of the Act cannot be upheld, when the original assessment order passed u/s. 143(3) of the Act has been cancelled by the ld. CIT(A) passed u/s. 263 of the Act and no fresh order was passed pursuant thereto. Accordingly, the Hon’ble High Court answered substantial question of law in favor of the assessee. The same is reproduced as under: “8. The question of law, therefore, are answered likewise that on the facts and circumstances of the case, the tribunal was not justified in upholding the validity of the Reassessment Order dated 03.06.93 passed u/s. 143(3) r.w.s. 147 of the Act especially when the original assessment order passed u/s. 143(3) of the Act on 15.12.1989 was cancelled by C.I.T. Amritsar vide his order dated 28.02.92 passed u/s. 263 of the Act and no fresh order was passed pursuant thereto. Therefore, the question no. 1 is answered in favour of the appellant.” 13. Per contra, the Ld. Sr. DR vehemently argued on the matter and submitted that ld. CIT(A) in para 7.3 of the his order has dealt with the matter elaborately and it is noted that assessee had not disclosed fully 12 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 and truly particulars of income in order to explain how the capital gains from NHAI was not taxable. Ld. Sr. DR also referred to the reasons to believe recorded and submitted that survey was conducted u/s. 133A of the Act on 27.02.2008 by ADIT (Inv.), Unit-II(2), Chennai, fact of which is noted therein. This transaction was revealed only during the survey operation u/s 133A of the Act carried out at the business premise of the assessee. It was a clear case of escapement of income as original assessment was passed u/s. 143(3) of the Act by non disclosure of full particulars regarding the impugned transaction of acquisition of land by NHAI. The assessee had failed to make full and true disclosure before the Income Tax Authorities. In the light of such facts, it has been rightly construed that there is failure on the part of the assessee to disclose fully and truly, particulars of income. 14. In the course of hearing, the assessment records were produced by the ld. Sr. DR before the bench which were verified to understand whether the facts relating to issues which form part of reasons to believe recorded for initiating the proceedings u/s 147 of the Act were already on record or not when the original assessment u/s 143(3) of the Act was completed. From the perusal of the assessment records, it was observed that the necessary details relating to the issues raised in 13 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 the reasons to believe were already on record by way of disclosures made in the financial statements of the assessee. 15. We have heard the rival contentions, perused the material on record and have given thoughtful consideration to the submissions made before us. At the outset, we find that there is multiplicity of proceedings which have taken place in the instant case. First and the foremost being the assessment completed u/s. 143(3) of the Act vide order dated 31.12.2010. This assessment order was subjected to revisionary proceedings by the Ld. CIT vide order passed u/s. 263 of the Act dated 27.03.2013. It is also an undisputed fact that the revisionary order passed u/s. 263 of the Act attained finality as it was not appealed against by the assessee before the higher appellate forums. The findings given by the Ld. CIT in the order passed u/s. 263 of the Act that the assessment order u/s 143(3) of the Act dated 31.12.2010 stands cancelled, holds the field as on date. It is also an undisputed fact that no consequential assessment order has been passed giving effect to the directions given by the Ld. CIT in the revisionary order passed u/s. 263 of the Act cancelling the original assessment. From the chronology of the events of multiplicity of proceedings, it is oozing out that the Department missed the bus of passing the consequential assessment order by giving effect to the order of ld. CIT passed u/s. 263 of the Act. The impugned proceedings 14 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 initiated u/s. 148 r.w.s 147 of the Act are nothing but to cover up the miscarriage so transpired as it is observed that issues raised in the show cause notice by the Ld. CIT for the revisionary proceedings u/s. 263 of the Act and those noted in the reasons to believe recorded prior to issuance of notice u/s. 148 of the Act, are identical in nature, tantamounting to borrowed satisfaction relied upon by the ld. AO for initiating the reopening proceedings. 16. We find that the both the parties resorted to the proviso to section 147 of the Act according to which in a case where originally assessment has been completed u/s 143(3) of the Act, reopening proceedings can be taken up for the year beyond four years only when there is failure on the part of the assessee to fully and truly disclose all the material facts relevant to the assessment. The relevant text of proviso to section 147 of the Act is reproduced hereunder for ease of reference – “147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 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, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year) : Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the 15 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year:” 16.1 From the above reading of proviso to section 147 of the Act, we note that it applies when the assessment u/s 143(3) has been made for the relevant assessment year. In the case before us, the revisionary order passed u/s 263 of the Act by ld. CIT cancelled the original assessment which is an undisputed fact. Further, no consequential assessment order giving effect to the revisionary order u/s 263 is available on record. In such facts and circumstances of the present case, there exists no assessment order passed u/s 143(3) of the Act rendering the proviso to section 147 of the Act inapplicable. Thus, reopening in such a case could have been done only when there exist fresh tangible material relating to the escapement of income from assessment. To this effect, a specific query was raised by the Bench to the ld. Sr. DR to demonstrate what was the fresh tangible material on record based on which the impugned proceedings u/s 147 rws 148 of the Act were initiated. On this query, ld. Sr. DR submitted that survey u/s 133A of the Act was conducted in the case of the assessee which revealed the issues recorded in the reasons to believe and thus based on the same, notice u/s 148 was issued. We find that survey u/s 133A of the Act was conducted on 27.02.2008 by the ADIT(Inv.), Unit-II(2), 16 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 Chennai, fact and findings of which were available to the ld. AO at the time of passing the original assessment order u/s 143(3) of the Act on 31.12.2010. Even the examination of assessment records produced by the Department before us in the course of hearing revealed that all the material facts relating to the assessment were duly disclosed and placed on record. In the light of these facts and the law, we find that there is no occasion to apply the proviso to section 147 of the Act in the present case. Further, there ought to have been fresh tangible material with the ld. AO for recording of reasons to believe to initiate the proceedings u/s 148 rws 147 of the Act which is not so in the present case. Our view is fortified by the decision of Hon’ble Supreme Court in the case of CIT v. Kelvinator of India Ltd [2010] 320 ITR 561 (SC) wherein it was held in Para 4 as under - “...Therefore, post 1-4-1989 , power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of certain pre-condition 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 by the Assessing Officer. Hence, after 1-4-1989, Assessing Officer 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 the formation of the belief...” [emphasis supplied by us] 17 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 17. We are further guided by the decision of Hon’ble High Court of Gujarat in the case of Pine Chemicals Ltd (supra) which squarely covers the legal issue involved in the present case before us. In the said decision, it is held that the reassessment order passed u/s. 143(3) r.w.s. 147 of the Act cannot be upheld especially when the original assessment order passed u/s. 143(3) of the Act was cancelled by the ld. CIT by passing an order u/s. 263 of the Act and no fresh order was passed pursuant thereto. The facts in the present case before us and the facts dealt by the Hon’ble High Court of Gujarat while answering the substantial question of law are identical and covers the case of the assessee in his favor. 18. Considering the factual matrix, material placed on record, applicable law and force derived from the order of Hon’ble High Court of Gujarat, we do not find any hesitation in allowing the appeal of the assessee on the legal grounds raised before us, challenging the reopening proceedings u/s. 147 of the Act. Accordingly, ground nos. 1 to 9 are decided in favor of the assessee and are allowed. Since the appeal has been disposed off on the legal issue as aforesaid, adjudication on the merits of the case vide ground no. 10 to 17 will be of mere academic nature and therefore they are not adjudicated upon. Accordingly, the appeal of the assessee is allowed. 18 Shri. R. Panneerselvam ITA No. 3356/Chny/2019 AY: 2008-09 19. In the result, the appeal filed by the assessee is allowed. Order pronounced on 23 rd May, 2022 at Chennai. Sd/- (महावीर ᳲसह ) (MAHAVIR SINGH) उपा᭟यᭃ /VICE PRESIDENT Sd/- (िगरीश अᮕवाल) (GIRISH AGRAWAL) लेखा सद᭭य /ACCOUNTANT MEMBER चे᳖ई/Chennai, ᳰदनांक/Dated, the 23 rd May, 2022 JPV आदेश कᳱ ᮧितिलिप अᮕेिषत/Copy to: 1. अपीलाथᱮ/Appellant 2. ᮧ᭜यथᱮ/Respondent 3. आयकर आयुᲦ (अपील)/CIT(A) 4. आयकर आयुᲦ /CIT 5. िवभागीय ᮧितिनिध/DR 6. गाडᭅ फाईल/GF