ITO, New Delhi V. M/s. A.K. Goenka & Sons Pvt. Ltd., New Delhi

ITA 3569/DEL/2015

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3464 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 8 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2006-2007
• Appeal Filed On: 03-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA NEB
• Assessee Lawyers: DR RAM SAMUJH
• Keywords: Depreciation; Search and seizure; Tangible material; Difference of opinion; Accommodation entries; Procedural lapse; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 133(6); 147; 68; 148; 15; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : A NEW DELHI BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER ITA NO.3569/DEL/2015 ASSESSMENT YEAR: 2006-07 ITO, WARD 1(1), NEW DELHI. VS A.K. GOENKA & SONS PVT. LTD., N-86, CONNAUGHT PLACE, NEW DELHI. PAN: AADCA3663M CO NO.80/DEL/2016 (ITA NO.3569/DEL/2015) ASSESSMENT YEAR: 2006-07 A.K. GOENKA & SONS PVT. LTD., N-86, CONNAUGHT PLACE, NEW DELHI. PAN: AADCA3663M VS. ITO, WARD 1(1), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : DR. RAM SAMUJH, ADVOCATE REVENUE BY : MS ASHIMA NEB, SR. DR DATE OF HEARING : 30.01.2019 DATE OF PRONOUNCEMENT : 25.02.2019 ORDER PER R.K. PANDA, AM: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 27 TH MARCH 2015 OF THE CIT(A)-1, NEW DELHI, RELATING TO ASSESSMENT YEAR 2006-2007. THE ASSESSEE HAS ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 2 FILED CO AGAINST THE APPEAL FILED BY THE REVENUE. F OR THE SAKE OF CONVENIENCE THESE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY TH IS COMMON ORDER. ITA NO.3569/DEL/2015 2. THE ONLY EFFECTIVE GROUND RAISED BY THE REVENUE READS AS UNDER:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LD.CIT(A) HAS ERRED IN HOLDING THAT THE REOPENING OF CASE U/S 147 WAS B AD IN LAW AND QUASHING THE REASSESSMENT WHEN THE ASSESSEE HAD FAILED TO DISCLO SE ALL THE MATERIAL FACTS BEFORE THE A.O. AT THE TIME OF ORIGINAL ASSESSMENT THEREBY LEADING TO ESCAPEMENT OF INCOME. 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSESS EE IS A COMPANY ENGAGED IN BUSINESS ACTIVITIES. IT FILED ITS RETURN OF INCOME ON 13 TH NOVEMBER 2006 DECLARING TOTAL LOSS OF RS.29,972/-. THE A.O. PASSED THE ORDER U/S 143(3) ON 15 TH OCTOBER 2008 ACCEPTING THE RETURNED LOSS OF RS.29,972/-. SUBSEQU ENTLY, ON THE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING, THE ASSESSING OFFICER REOPENED THE ASSESSMENT BY RECORDING THE FOLLOWING REASONS:- THE DCIT CIRCLE 12(1) NEW DELHI, VIDE LETTER NO. DCIT/CIRCLE/12(1)/ 2012-13/2122 DATED 28.03.2013 ADDRESSED TO THE ADDL .CIT RANGE-1 NEW DELHI, FORWARDED LETTER NO.ASSTT.DIT(INV.)/ UNITIII(3)/201 2-13/333 DATED 25.03.2013 RECEIVED FROM A ADIT(INV.) UNIT III(3), NEW DELHI. THE LETTER OF ADIT(INV.) REFERRED ABOVE INTIMATED THAT WHILE INVESTIGATING I NTO THE CASE OF M/S G.D. GOENKA, IT WAS OBSERVED THAT THE G.D GOENKA GROUP O BTAINED ACCOMMODATION ENTRY IN THE VARIOUS GROUP COMPANIES IN THE FORM OF SHARE CAPITAL/SHARE PREMIUM FROM VARIOUS SUSPICIOUS/NON-EXISTING PARTIES/PAPER COMPANIES. FURTHER, THE FIELD ENQUIRY BY THE INVESTIGATION WING REVEALED THAT MOS T OF THE ENTRY PROVIDER ENTITIES DID NOT EXIST AT THE GIVEN ADDRESSES. ALSO, THE DET AILS OF THE INCOME TAX RETURNS OF THE ENTRY PROVIDER ENTITIES CREATED SERIOUS DOUBTS ABOUT THEIR CREDITWORTHINESS. FURTHER, WHEN THE GOENKA GROUP WAS ASKED TO FURNISH DETAILS OF THE ENTRY PROVIDER PARTIES (ALLEGED INVESTORS WHO INVESTED IN THE GOENKA GROUP ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 3 COMPANIES), TO VERIFY THEIR IDENTITY, CREDITWORTHIN ESS AND THE GENUINENESS OF THE TRANSACTIONS, THE GOENKA GROUP DID NOT FURNISH SUCH DETAILS. AS PER THE DETAILS RECEIVED THE FOLLOWING ENTRIES H AVE BEEN TAKEN BY THE ASSESSEE COMPANY FROM THE ENTRY OPERATORS:- S.NO. INVESTOR/ENTRY PROVIDER ADDRESS AMOUNT 1 CAP VANIJYA PVT. LTD. 14-C, MAHARISHI DEVENDRA RO AD, 4 TH FLOOR, KOLKATA 400000 2. ANIKIT TRACOM PVT. LTD. 14-C, MAHARISHI DEVENDRA ROAD, 4 TH FLOOR, KOLKATA 3000000 3. ANIKIT TRACOM PVT. LTD. 14-C, MAHARISHI DEVENDRA ROAD, 4 TH FLOOR, KOLKATA 6000000 4. LODHA & CO. PVT. LTD. 1&2, OLD COURT HOUSE CORNE R, 2 ND FLOOR, NO.3F, KOLKATA. 500000 5. TWINKLE TRADERS PVT. LTD. 29A, WESTERN STREET, 1 ST FLOOR, KOLKATA 6500000 6. JANET INVESTMENT PVT. LTD. 48, S.N. ROY ROAD, KO LKATA 500000 7. JABALI COMMERCIAL CO. PVT. LTD. 1&2, OLD COURT HOUSE CORNER, 2 ND FLOOR, NO.3F, KOLKATA. 500000 8 BALRAMPUR COM ENTERPRISES PVT. LTD. 23A, N.S. ROAD, 8 TH FLOOR, ROOM NO.6A, KOLKATA. 3000000 9. COORG VINCOM PVT. LTD. 9/12, LAL BAZAR STREET, 2 ND FLOOR, BLOCK E, KOLKATA 5000000 10. ALPHA VINIMAY PVT. LTD. 9/12, LAL BAZAR STREET, 2 ND FLOOR, BLOCK E, KOLKATA 2500000 27900000 SUCH TRUE NATURE OF THE TRANSACTION UNDERTAKEN BY T HE ASSESSEE COMPANY HAS COME TO LIGHT ONLY AFTER THE DETAILED INVESTIGATION CARR IED BY THE INVESTIGATION WING, DELHI. THIS TANTAMOUNT TO FRESH INFORMATION IN RESP ECT OF THE ASSESSEE, AS A BENEFICIARY OF BOGUS ACCOMMODATION ENTRIES PROVIDED TO IT AND REPRESENTS THE UNDISCLOSED INCOME OF THE ASSESSEE COMPANY, WHICH H AS NOT BEEN OFFERED TO TAX BY THE ASSESSEE IN ITS RETURN FILED. THE TOTAL OF THE ABOVE ACCOMMODATION ENTRIES TAKEN BY THE ASSESSEE COMPANY COMES TO RS.2,79,00,000/-. HAVING PERUSED AND CONSI DERED THE INFORMATION RECEIVED FROM THE INVESTIGATION WING AND ON THE BAS IS OF THIS NEW INFORMATION, I HAVE REASON TO BELIEVE THAT THE INCOME OF RS.2,79,0 0,000/- HAS ESCAPED ASSESSMENT AS DEFINED BY SEC.147 OF THE IT ACT. 4. IN COMPLIANCE TO THE NOTICE ISSUED UNDER SECTION 148 OF THE IT ACT, THE ASSESSEE FILED A LETTER ON 9 TH APRIL 2013 REQUESTING THE ASSESSING OFFICER TO TRE AT THE RETURN OF ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 4 INCOME FURNISHED ON 13.11.2006 AS RETURN FILED IN R ESPONSE TO NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT. ON BEING ASKED BY THE ASSESS EE THE AO PROVIDED THE REASONS FOR SUCH REOPENING. THE ASSESSEE FILED OBJECTIONS F OR SUCH REOPENING WHICH WAS DISPOSED OF BY THE ASSESSING OFFICER BY PASSING A S PEAKING ORDER. SUBSEQUENTLY NOTICES UNDER SECTION 143(2)/142(1) OF THE INCOME TAX ACT W ERE ALSO ISSUED TO THE ASSESSEE AND THE ASSESSEE APPEARED BEFORE THE ASSESSING OFFI CER FROM TIME TO TIME. 5. ON THE BASIS OF THE DETAILS RECEIVE FROM THE INV ESTIGATION WING, THE ASSESSING OFFICER NOTED THAT THE ASSESSEE HAS TAKEN ENTRIES F ROM 10 ENTRY OPERATORS THE DETAILS OF WHICH ARE AS PER PAGE 1 AND 2 OF THE ASSESSMENT ORD ER. HE ISSUED NOTICE U/S 133(6) TO VARIOUS COMPANIES WHO HAVE GIVEN SHARE APPLICATION MONEY/PREMIUM TO THE ASSESSEE ON THE ADDRESSES WHICH WERE GIVEN AT THE TIME OF OR IGINAL ASSESSMENT U/S 143(3). THE ASSESSING OFFICER NOTED THAT IN THE FOLLOWING CASES THE NOTICES WERE RETURNED BACK UNDELIVERED:- (I) JANET INVESTMENT PVT. LTD., (II) JABALI COMMERCIAL CO. PVT. LTD., (III) ALPHA VINIMAY PVT. LTD., (IV) BALRAMPUR COM ENTERPRISES PVT. LTD., (V) COORG VINCOM PVT. LTD. 6. HE, THEREFORE, ASKED THE ASSESSEE TO FILE THE AD DRESSES FROM WHOM SHARE APPLICATION MONEY WAS RECEIVED. THE ASSESSEE FILED THE LATEST ADDRESSES OF THE ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 5 COMPANIES AND ACCORDINGLY NOTICES U/S 133(6) WERE A GAIN ISSUED AS PER THE NEW ADDRESSES. CONFIRMATIONS WERE RECEIVED FROM THE FOL LOWING COMPANIES BY COURIER:- S.NO. NAME OF THE ASSESSEE CONFIRMATION RECEIVED RETURN OF INCOME 1. BALRAMPUR COM ENTERPRISES PVT. LTD. 07.03.2014 0 2. JABALI COMMERCIAL CO. PVT. LTD. 07.03.2014 0 3. ANKIT TRACOM PVT. LTD. 06.03.2014 1210 4. COORG VINCOM PVT. LTD. 06.03.2014 4525 5. CAP VANIJYA PVT. LTD. 06.03.2014 3260 6. ALPHA VINIMAY PVT. LTD. 06.03.2014 -2675 7. TWINKLE TRADERS PVT. LTD. 02.01.2014 3226 7. HOWEVER, NO CONFIRMATIONS WERE RECEIVED IN RESPE CT OF LODHA & CO. PVT. LTD. AND JANET INVESTMENT PVT. LTD. THE ASSESSING OFFICE R EXAMINED THE DETAILS FURNISHED BY THE COMPANIES WHO HAVE INVESTED IN THE SHARE APPLIC ATION MONEY OF THE ASSESSEE COMPANY. FROM THE VARIOUS DETAILS FURNISHED BY THE ASSESSEE, HE OBSERVED THAT THE INCOME DECLARED IN THE RETURN BY THE SHARE APPLICAN TS WAS VERY LESS COMPARED WITH THE SHARE APPLICATION MONEY GIVEN TO THE ASSESSEE. THE COMPANIES ARE FILING EITHER NIL INCOME OR DECLARED VERY NEGLIGIBLE INCOME BETWEEN R S.2000 TO RS.5000. THE BANK ACCOUNTS EXAMINED BY THE ASSESSING OFFICER SHOWS T HAT THOSE WERE OPERATED ONLY JUST TO GIVE THE SHARE APPLICATION MONIES TO VARIOUS COM PANIES. IT WAS FURTHER NOTICED THAT FOR EACH TYPE OF ENTRIES IN THE ACCOUNT, THERE IS A CREDIT ENTRY WHICH IS BEFORE A DAY OR ON THE SAME DAY IN THEIR ACCOUNTS. SINCE NO INFORMA TION WAS SUBMITTED TO VERIFY THE FLOW OF FUNDS AND DETAILS WHICH COULD SUBSTANTIATE THE IDENTITY, CREDITWORTHINESS AND GENUINENESS OF THE TRANSACTION ENTERED INTO BY THE ASSESSEE COMPANY THE ASSESSING OFFICER GATHERED THE SAME FROM THE ROC SITE AND NOT ED THAT THE LATEST ADDRESS IS TOTALLY ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 6 DIFFERENT AND IN SOME CASES NO DATA IS APPEARING ON THE ROC SITE. ACCORDING TO THE ASSESSING OFFICER THE ASSESSEE INTENTIONALLY HAS GI VEN SUCH ADDRESSES FROM WHERE THE REPLY MAY BE SENT IN RESPONSE TO NOTICE UNDER SECTI ON 133(6). REJECTING THE VARIOUS EXPLANATIONS GIVEN BY THE ASSESSEE AND OBSERVING TH AT THE ASSESSEE FAILED TO FULFIL THE INGREDIENTS OF SECTION 68 OF THE INCOME TAX ACT BY PROVING: (I) THE IDENTITY OF THE APPLICANTS; (II) GENUINENESS OF THE SHARE CAPITAL R ECEIVED; AND (III) THE CREDITWORTHINESS OF THE SHARE APPLICANTS, THE ASSESSING OFFICER MADE ADDITION OF RS.2,79,00,000/- TO THE TOTAL INCOME OF THE ASSESSEE U/S 68 OF THE INCOME T AX ACT. WHILE DOING SO HE RELIED ON A PLETHORA OF DECISIONS INCLUDING THE DECISION OF T HE HONORABLE DELHI HIGH COURT IN THE CASE OF M/S EMPIRE BUILDTECH PRIVATE LIMITED IN ITA NO.493/2013, ORDER DATED 27.01.2014 AND N.R. PORTFOLIO P. LTD. VIDE ORDER DA TED 22.11.2013. 8. BEFORE CIT(A) APART FROM CHALLENGING THE ADDI TION ON MERIT THE ASSESSEE CHALLENGED THE VALIDITY OF REASSESSMENT PROCEEDINGS INITIATED BEYOND A PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. IT WAS ARGUED THAT THE NOTICE UNDER SECTION 148 HAS BEEN ISSUED 4 YEARS AFTER THE COMPL ETION OF ASSESSMENT UNDER SECTION 143(3) AND IN THE NOTICE ISSUED UNDER SECTION 148 O F THE IT ACT THERE IS NO RECORDING BY THE ASSESSING OFFICER THAT THERE WAS ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR COMPLETION OF THE ASSESSMENT. THE ASSESSEE ALSO ARGUED THAT THE OBJECTION AGAINST REASON FOR REOPENING WAS NOT DISPOSED OF BY THE ASSESSING OFFICER AND THE REOPEN ING WAS INITIATED ON THE DIRECTION OF THE SUPERIOR AUTHORITIES WHICH IS BAD IN LAW. IT WA S ARGUED THAT NEITHER THE COPY OF ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 7 INVESTIGATION REPORT NOR OPPORTUNITY OF CROSS EXAMI NATION WAS PROVIDED TO THE ASSESSEE. IT WAS FURTHER SUBMITTED THAT THERE WAS NO EVIDENCE OF PRIOR PERMISSION OF THE JCIT UNDER SECTION 151(1) OF THE IT ACT. IT WAS ARGUED T HAT THE ASSESSMENT HAS BEEN REOPENED MERELY ON THE BASIS OF CHANGE OF OPINION A ND, THEREFORE, THE SAME WAS BAD IN LAW. THE DECISION OF THE HONBLE DELHI HIGH COURT I N THE CASE OF CIT VS VINIYAS FINANCE & INVESTMENT (P) LTD. (2013) 215 TAXMAN 20 (DEL) AND IN THE CASE OF CIT VS. SUREN INTERNATIONAL PRIVATE LIMITED (2013) 357 ITR 24 (DEL) WERE RELIED UPON. VARIOUS PROCEDURAL LAPSES WERE ALSO BROUGHT TO THE NOTICE OF THE CIT(A). 9. BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE AND FOLLOWING THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS VINIYAS FINANCE & INVESTMENT (P) LTD. AND CIT VS. SUREN INTERNATIONAL PRIVATE LIMITE D (SUPRA) , THE LD.CIT(A) QUASHED THE REASSESSMENT PROCEEDINGS. WHILE DOING SO HE NOT ED THAT THE ASSESSING OFFICER HAS INVESTIGATED THE SHARE APPLICANTS DURING THE ORIGIN AL ASSESSMENT U/S 143(3) OF THE INCOME-TAX ACT AND ACCEPTED THEM TO BE GENUINE. SI NCE THE ASSESSMENT HAD BEEN REOPENED AFTER 4 YEARS OF COMPLETION OF ASSESSMENT UNDER SECTION 143(3) OF THE IT ACT AND THERE WAS NO FAILURE ON THE PART OF THE ASSESSE E TO DISCLOSE ALL MATERIAL FACTS, THEREFORE, THE NOTICE UNDER SECTION 148 OF THE ACT ISSUED BY THE ASSESSING OFFICER WAS HELD BY HIM TO BE BAD IN LAW. 10. AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 8 11. THE LD. DR STRONGLY CHALLENGED THE ORDER OF T HE CIT(A) IN QUASHING THE REASSESSMENT PROCEEDINGS INITIATED UNDER SECTION 14 8 OF THE ACT. SHE SUBMITTED THAT THE ASSESSEE, IN THE INSTANT CASE, HAS TAKEN ACCOMM ODATION ENTRIES TO THE EXTENT OF RS.2.79 CRORES FROM VARIOUS NON-EXISTENT COMPANIES CLAIMED TO BE SHARE APPLICANTS. THE INFORMATION WAS RECEIVED FROM THE INVESTIGATION WING, WHICH IS AN ARM OF THE DEPARTMENT, AFTER DETAILED FIELD ENQUIRIES AND AFTE R COMPLETION OF ASSESSMENT. SINCE THE TRUE NATURE OF TRANSACTION CAME TO LIGHT ONLY AFTER DETAILED ENQUIRY BY THE INVESTIGATION WING, THE ASSESSING OFFICER FORMED A BELIEF THAT T HE ASSESSEE HAD FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR CO MPLETION OF THE ASSESSMENT BEFORE THE ASSESSING OFFICER THEREBY LEADING TO ESCAPEMENT OF INCOME TO THE TUNE OF RS.2.79 CRORES. SHE FURTHER SUBMITTED THAT AFTER OBTAINING THE APPROVAL OF ADDL.CIT, RANGE- 1,WHO HAS ALSO RECORDED HIS SATISFACTION, NOTICE UN DER SECTION 148 WAS ISSUED. THEREFORE, THE LD. CIT(A) WAS NOT JUSTIFIED IN QUAS HING THE REASSESSMENT RELYING ON THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS SUREN INTERNATIONAL PVT. LTD., SINCE THE FACTS OF THE PRESENT CASE ARE DISSI MILAR TO THAT OF SUREN INTERNATIONAL PVT. LTD. (SUPRA). 12. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, STRONGLY SUPPORTED THE ORDER OF THE CIT(A). REFERRING TO PAGE 48 OF THE PAPER B OOK HE DREW THE ATTENTION OF THE BENCH TO THE ASSESSMENT COMPLETED U/S 143(3) OF THE ACT ON 15 TH OCTOBER 2008 ACCEPTING THE RETURNED LOSS OF RS.29,972/-. REFERR ING TO PAGE 23 OF THE SECOND PAPER BOOK, THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATT ENTION OF THE BENCH TO THE ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 9 QUESTIONNAIRE ISSUED BY THE ASSESSING OFFICER VIDE LETTER DATED 7 TH APRIL 2008. REFERRING TO CLAUSE 7 AND 8 OF THE SAID LETTER HE DREW THE AT TENTION OF THE BENCH TO THE QUERY RAISED BY THE ASSESSING OFFICER REGARDING THE NAME AND ADDRESS OF THE DEBTORS/CREDITORS OUTSTANDING AT THE BEGINNING AND AT THE END OF THE YEAR AND NAME AND ADDRESS OF THE PARTIES FROM/TO WHOM LOAN/ADVANCE OF ABOVE RS.50,00 0/- WAS RECEIVED OR GIVEN DURING THE PREVIOUS YEAR AND TO DISCHARGE THE ONUS IN CASE OF LOANS/ADVANCES RECEIVED AS PER SECTION 68 OF THE IT ACT. REFERRING TO THE REPLY DA TED 21 ST APRIL 2008, COPY OF WHICH IS PLACED AT PAGE 24 OF THE PAPER BOOK, THE LD. COUNSE L FOR THE ASSESSEE DREW THE ATTENTION OF THE BENCH TO THE DETAILS OF THE SHAREHOLDERS ALO NG WITH QUANTUM OF HOLDING AS ON 01.04.2005 TO 31.03.2006 AND THE COPY OF THE BANK S TATEMENT OF THE ASSESSEE COMPANY. REFERRING TO PAGE 25 OF THE PAPER BOOK, HE DREW THE ATTENTION OF THE BENCH TO THE NOTICE ISSUED UNDER SECTION 133(6) OF THE ACT TO M/S JANET INVESTMENTS PVT. LTD. REFERRING TO PAGE 13 OF THE SAID PAPER BOOK, HE DREW THE ATTENTI ON OF THE BENCH TO THE INFORMATION UNDER SECTION 133(6) OBTAINED BY THE ASSESSING OFFI CER FROM M/S COORG VINCOM PVT. LTD. REFERRING TO PAGE 8 TO 68 OF THE PAPER BOOK FI LED BY THE REVENUE THE LD. COUNSEL DREW THE ATTENTION OF THE BENCH TO VARIOUS SUBMISSI ONS MADE BY THE ASSESSEE BEFORE THE ASSESSING OFFICER FROM TIME TO TIME DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS SUBSTANTIATING THE SHARE APPLICATION MO NEY RECEIVED BY THE ASSESSEE COMPANY. HE ACCORDINGLY SUBMITTED THAT WHEN ALL ASP ECTS OF SHARE APPLICATION MONEY WAS EXAMINED BY THE ASSESSING OFFICER DURING THE CO URSE OF ORIGINAL ASSESSMENT PROCEEDINGS AND THE ORDER HAS BEEN PASSED U/S 143(3 ), THEREFORE, IN ABSENCE OF ANY ALLEGATION BY THE ASSESSING OFFICER OF ANY FAILURE ON THE PART OF THE ASSESSEE TO ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 10 DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR COMPLETION OF THE ASSESSMENT, THE REASSESSMENT INITIATED AFTER A PERIOD OF FOUR Y EARS IS NOT IN ACCORDANCE WITH THE LAW. 13. THE LD. COUNSEL FOR THE ASSESSEE DREW THE ATTEN TION OF THE BENCH TO THE REASONS RECORDED COPY OF WHICH IS PLACED AT PAGE 51 AND 52 OF THE PAPER BOOK. HE SUBMITTED THAT THE INFORMATION WAS RECEIVED FROM THE INVESTIG ATION WING OF THE DEPARTMENT AND THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND AND HE HAS NOT VERIFIED THE DETAILS GIVEN BY THE INVESTIGATION WING. HE NEITHER CONDUCTED AN ENQUIRY NOR VERIFIED THE RECORDS. HE SUBMITTED THAT AS PER THE NOTICE ISSUED UNDER SE CTION 148 THE ASSESSING OFFICER HAS MENTIONED THE AMOUNT OF RS.4 LAKHS RECEIVED BY SHAR E APPLICATION MONEY FROM M/S CAP VANIJYA PVT. LTD. WHEREAS AS PER THE CONFIRMATI ONS AND DETAILS SUBMITTED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS THE A MOUNT IS RS 40 LAKHS. SIMILARLY, IN THE CASE OF TWINKLE TRADERS PVT. LTD., THE AMOUNT H AS BEEN MENTIONED AS RS.65 LAKHS WHEREAS AS PER THE CONFIRMATION FILED DURING THE CO URSE OF ORIGINAL ASSESSMENT PROCEEDINGS INCLUDING THE BANK STATEMENT OF THE ASS ESSEE AND THE SHARE APPLICANTS THE AMOUNT IS ONLY RS.15 LAKHS. THUS, THE AMOUNT OF RS. 2,79,00,000/- AS ALLEGED BY THE ASSESSING OFFICER AS RECEIPT TOWARDS SHARE APPLICAT ION MONEY, THE CORRECT AMOUNT IS RS.2,65,00,000/-. THUS, IT CLEARLY SHOWS THAT THERE IS NON-APPLICATION OF MIND BY THE ASSESSING OFFICER AND HE HAS IN A MECHANICAL MANNER PROCEEDED TO ISSUE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT. THE LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITTED THAT THERE IS NO MENTION OF ANY PERMISSION OBTAINED AS PER PROVISIONS OF SECTION 151 OF THE INCOME TAX ACT. REFERRING TO PAGE 49 OF THE PAP ER BOOK, HE DREW THE ATTENTION OF ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 11 THE BENCH TO THE NOTICE ISSUED UNDER SECTION 148 OF THE ACT WHERE THE ASSESSING OFFICER HAS MENTIONED THAT THE NOTICE IS BEING ISSUED AFTER OBTAINING THE NECESSARY SATISFACTION OF THE ADDL.CIT RANGE-1, NEW DELHI. REFERRING TO P AGE 69 OF THE PAPER BOOK FILE BY THE REVENUE, HE SUBMITTED THAT HERE ALSO IT WAS CLE ARLY MENTIONED THAT APPROVAL OF ADDL. CIT, RANGE-1, NEW DELHI WAS OBTAINED. REFERR ING TO THE PROVISIONS OF SECTION 151 OF THE IT ACT, HE SUBMITTED THAT SINCE THE NOTI CE HAS BEEN ISSUED AFTER THE EXPIRY OF A PERIOD OF 4 YEARS FROM THE END OF THE RELEVANT AS SESSMENT YEAR, WHERE THE ORDER WAS PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, THEREFORE, THE NOTICE SHOULD HAVE BEEN ISSUED AFTER OBTAINING PRIOR PERMISSION OF THE PR. CIT OR CIT AS THE CASE MAY BE. HOWEVER, IN THE INSTANT CASE, THE APPROVAL HAS BEEN OBTAINED FROM THE ADDL. CIT, THEREFORE, THE VERY BASIS OF THE ISSUE OF NOTICE IS BAD IN LAW AND, THEREFORE, THE REASSESSMENT PROCEEDINGS HAVE TO BE QUASHED. 14. THE LD. COUNSEL FOR THE ASSESSEE IN HIS ALTERNA TE ARGUMENT SUBMITTED THAT THE ORIGINAL ASSESSMENT WAS COMPLETED UNDER SECTION 143 (3) AND THE ISSUE RELATING TO SHARE APPLICATION MONEY WAS THOROUGHLY EXAMINED, THEREFOR E, ISSUE OF NOTICE UNDER SECTION 148 AMOUNTS TO CHANGE OF OPINION. REFERRING TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ITO VS. M/S TAXMAN INDIA PRIVATE LIMITED & ANR., VI DE CIVIL APPEAL NO.2732 OF 2007, ORDER DATED 24 TH APRIL 1998, HE IS SUBMITTED THAT THE HONBLE SUPREME COURT IN THE SAID DECISION HAS HELD THAT RE OPENING OF THE COMPLETED ASSESSMENT IS NOT JUSTIFIED FOR MERE CHANGE OF OPIN ION. ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 12 15. IN YET ANOTHER ALTERNATE ARGUMENT, THE LD. COUN SEL FOR THE ASSESSEE SUBMITTED THAT MERELY ON THE BASIS OF REPORT OF THE INVESTIGATION WING, THE AO CANNOT REOPEN THE ASSESSMENT WITHOUT INDEPENDENT APPLICATION OF MIND AND WITHOUT CONFRONTING THE ASSESSEE REGARDING SHARE APPLICATION AND WITHOUT CO NDUCTING ANY ENQUIRY AT HIS LEVEL. HE FURTHER SUBMITTED THAT THE OBJECTIONS RAISED BY THE ASSESSEE TO ISSUE OF SUCH NOTICE UNDER SECTION 148 HAS NOT BEEN PROPERLY DISPOSED OF BY THE ASSESSING OFFICER, THEREFORE, ON ALL COUNTS, THE REASSESSMENT PROCEEDINGS ARE BAD IN LAW AND, THEREFORE, THE ORDER OF THE CIT(A) HAS TO BE UPHELD AND THE GROUND RAISED B Y THE REVENUE SHOULD BE DISMISSED. 16. THE LD. DR, IN HER REJOINDER, REFERRING TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ITO VS. BIJU PATNAIK REPORTED IN (1990) INSC 383 (7 TH DECEMBER 1990) DREW THE ATTENTION OF THE BENCH TO THE FOLLOWING OB SERVATIONS:- HELD: (1) SECTION 147 (A) OF THE INCOME TAX ACT POSTULATES TWO CONDITIONS, NAMELY, THAT THE INCOME-TAX OFFICER MUST, ON THE B ASIS OF MATERIAL FACTS ON RECORD, PRIMA FACIE, BE SATISFIED THAT THE INCOME O F THE ASSESSEE IS EXIGIBLE TO TAX FOR THAT RELEVANT ASSESSMENT YEAR AND THAT HE HAD R EASON TO BELIEVE THAT IT HAD ESCAPED ASSESSMENT. FURTHER, HE MUST HAVE REASON TO BELIEVE THAT THE ESCAPEMENT OF INCOME WAS ON ACCOUNT OF THE OMISSION OR FAILURE OF THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL THE MATERIAL FACT S NECESSARY FOR THE ASSESSMENT. BOTH THE CONDITIONS ARE CONDITIONS PRECEDENT TO TH E EXERCISE OF THE JURISDICTION UNDER SECTION 147 (A) READ WITH SECTION 148. [492B- C] CALCUTTA DISCOUNT CO. LTD. V. I.T.O., [1961] 41 I.T.R. 191 (SC), REFERRE D TO. (2) IT IS TRUE THAT THE NOTICE DOES NOT PRIM A FACIE DISCLOSE THE SATISFACTION OF THE TWO CONDITIONS PRECEDENT ENJO INED UNDER SECTION 147 (A), BUT IN THE COUNTER AFFIDAVIT FILED BY THE INCOME-TAX OF FICER IN THE HIGH COURT, HE ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 13 HAS STATED ALL THE MATERIAL FACTS. IT IS SETTLED LA W THAT IN AN ADMINISTRATIVE ACTION, THOUGH THE ORDER DOES NOT EX FACIE DISCLOSE THE SATISFACTION BY THE OFFICER OF THE NECESSARY FACTS, BUT IF THE RECORD DISCLOSES THE SA ME, THE NOTICE OR THE ORDER DOES NOT PER SE BECOME ILLEGAL. [492G-493B]. 17. SHE ACCORDINGLY SUBMITTED THAT MERE NON-MENTION ING OF ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MAT ERIAL FACTS NECESSARY FOR COMPLETION OF THE ASSESSMENT WILL NOT INVALIDATE THE NOTICE OR TH E ORDER. 18. REFERRING TO THE DECISION OF THE HONBLE SUPREM E COURT IN THE CASE OF RAYMOND WOOLLEN MILLS VS. ITO (1999) 236 ITR 34 (SC), SHE DREW THE ATTENTION OF THE BENCH TO THE FOLLOWING OBSERVATIONS OF THE HONBLE SUPREME C OURT:- 3. IN THIS CASE, WE DO NOT HAVE TO GIVE A FINAL DE CISION AS TO WHETHER THERE IS SUPPRESSION OF MATERIAL FACTS BY THE ASSESSEE OR NO T. WE HAVE ONLY TO SEE WHETHER THERE WAS PRIMA FACIE SOME MATERIAL ON THE BASIS OF WHICH THE DEPARTMENT COULD REOPEN THE CASE. THE SUFFICIENCY OR CORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THIS STAGE. WE ARE OF THE VIEW THAT T HE COURT CANNOT STRIKE DOWN THE REOPENING OF THE CASE IN THE FACTS OF THIS CASE. IT WILL BE OPEN TO THE ASSESSEE TO PROVE THAT THE ASSUMPTION OF FACTS MADE IN THE NOTI CE WAS ERRONEOUS. THE ASSESSEE MAY ALSO PROVE THAT NO NEW FACTS CAME TO T HE KNOWLEDGE OF THE INCOME- TAX OFFICER AFTER COMPLETION OF THE ASSESSMENT PROC EEDING. WE ARE NOT EXPRESSING ANY OPINION ON THE MERITS OF THE CASE. THE QUESTION S OF FACT AND LAW ARE LEFT OPEN TO BE INVESTIGATED AND DECIDED BY THE ASSESSING AUT HORITY. THE APPELLANT WILL BE ENTITLED TO TAKE ALL THE POINTS BEFORE THE ASSESSIN G AUTHORITY. THE APPEALS ARE DISMISSED. THERE WILL BE NO ORDER AS TO COSTS. 19. SHE ACCORDINGLY SUBMITTED THAT SUFFICIENCY OR C ORRECTNESS OF THE MATERIAL IS NOT A THING TO BE CONSIDERED AT THE TIME OF ISSUE OF NOTI CE UNDER SECTION 148. SHE ACCORDINGLY SUBMITTED THAT THE ORDER OF THE CIT(A) BEING NOT IN ACCORDANCE WITH LAW HAS TO BE REVERSED AND REASSESSMENT PROCEEDINGS HAVE TO BE HE LD AS VALID. ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 14 20. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE ALSO CONS IDERED THE VARIOUS DECISIONS CITED BEFORE US. WE FIND THE ASSESSMENT IN THE INSTANT CA SE WAS COMPLETED U/S 143(3) ON 15 TH OCTOBER, 2008. WE FIND THE ASSESSING OFFICER, ON T HE BASIS OF INFORMATION RECEIVED FROM THE INVESTIGATION WING THAT THE ASSESSEE HAS T AKEN ACCOMMODATION ENTRIES TO THE TUNE OF RS.2.79 CRORES FROM TEN SHARE APPLICANTS, R EOPENED THE ASSESSMENT U/S 147 OF THE IT ACT. WE FIND THE LD.CIT(A) QUASHED THE REAS SESSMENT PROCEEDINGS ON THE GROUND THAT THE ORIGINAL ASSESSMENT WAS COMPLETED U /S 143(3) AND THE REASSESSMENT PROCEEDINGS WERE INITIATED AFTER FOUR YEARS FROM TH E END OF THE RELEVANT ASSESSMENT YEAR AND THERE WAS NO ALLEGATION OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR COMPLETI ON OF THE ASSESSMENT. WHILE DOING SO, HE RELIED ON THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS. VINIYAS FINANCE & INVESTMENT (P) LTD. (SUPRA) AND THE DECISION IN THE CASE OF SUREN INTERNATIONAL PVT. LTD. (SUPRA). 21. WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF TH E CIT(A). ADMITTEDLY, THE ASSESSMENT WAS REOPENED BEYOND FOUR YEARS WHERE THE ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3). A PERUSAL OF THE REASONS REC ORDED IN THE NOTICE ISSUED FOR REOPENING OF THE ASSESSMENT DOES NOT SHOW ANY FAILU RE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR COMPLETION OF THE ASSESSMENT. PROVISO TO SECTION 147(1) READS AS UNDER:- ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 15 INCOME ESCAPING ASSESSMENT. 147. IF THE ASSESSING OFFICER HAS REASON TO BELIEVE THA T 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 AS SESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PRO CEEDINGS 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 (HER EAFTER 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 Y EAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS F ROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON TH E PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTIO N (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT Y EAR: 22. AS MENTIONED EARLIER, THE ASSESSMENT HAS BEEN C OMPLETED U/S 143(3) OF THE ACT AND NOTICE HAS BEEN ISSUED AFTER A PERIOD OF FOUR Y EARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND THERE IS NO ALLEGATION OF ANY F AILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR THE COMPLETION OF THE ASSESSMENT. THEREFORE, THE DECISION RELIED ON BY T HE LD.CIT(A) ARE FULLY APPLICABLE TO THE FACTS OF THE CASE AND, THEREFORE, THERE IS NO I NFIRMITY IN HIS ORDER QUASHING THE REASSESSMENT PROCEEDINGS. 23. SO FAR AS THE DECISION RELIED ON BY THE LD. DR IN THE CASE OF BIJU PATNAIK (SUPRA) IS CONCERNED, THE SAME IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE AND IS DISTINGUISHABLE. IN THAT CASE, THE NOTICE WAS ISSU ED U/S 147(A) AS IT THEN STOOD. HOWEVER, THE PROVISIONS OF 147(A) HAS UNDERGONE A C HANGE AND THE ENTIRE PROVISIONS OF SECTION 147 HAS BEEN AMENDED BY THE DIRECT TAXES LA W (AMENDMENT) ACT, 1987 ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 16 W.E.F. 01.04.1989. THIS VIEW OF OURS IS FORTIFIED B Y THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF M/S ALCATEL-LUCENT FRANCE AND ANR. VS. ASSTT. DIREC TOR OF INCOME-TAX AND BATCH OF OTHER APPEALS . THE HON'BLE JURISDICTIONAL HIGH COURT IN THE BATCH OF APPEALS DELIVERED ON 27 TH APRIL, 2016, HAS DISTINGUISHED THE DECISION IN THE CASE OF BIJU PATNAIK (SUPRA) AND HAS OBSERVED AS UN DER WHICH IS BEING REPRODUCED FOR THE SAKE OF CLARITY:- 31. AS FAR AS THE RELIANCE OF THE DECISION IN BIJU PATNAIK (SUPRA) IS CONCERNED, AS RIGHTLY POINTED OUT BY MR. AGGARWAL, THAT DEALT WITH SECTIO N 147(A) AS IT THEN STOOD. SECTION 147 (A) HAS UNDERGONE A CHANGE THAT HAS BEEN EXPLAI NED IN SOME DETAIL BY THE SUPREME COURT IN KELVINATOR INDIA (SUPRA) AND IN PARTICULAR THE FOLLOWING EXTRACT: 'ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MADE T O SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO THE DIRECT TAX LAWS (AM ENDMENT) ACT, 1987, REOPENING COULD BE DONE UNDER THE ABOVE TWO CONDITI ONS AND FULFILMENT OF THE SAID CONDITIONS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BUT IN SECTION 147 OF THE A CT (WITH EFFECT FROM 1ST APRIL, 1989), THEY ARE GIVEN A GO-BY AND ONLY ONE C ONDITION HAS REMAINED, VIZ., THAT WHERE THE ASSESSING OFFICER HAS REASON T O BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDICTION TO REOPEN THE ASSESSMENT. THEREFORE, POST-1ST APRIL, 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 GIV E ARBITRARY POWERS TO THE ASSESSING OFFICER TO REOPEN ASSESSMENTS ON THE BASI S 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 REV IEW AND POWER TO REASSESS. THE ASSESSING OFFICER HAS NO POWER TO REV IEW ; HE HAS THE POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON FU LFILMENT OF CERTAIN PRECONDITIONS AND IF THE CONCEPT OF 'CHANGE OF OPIN ION' IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF REOPENING THE ASSESSMENT, REVIEW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' AS AN IN-BUILT TEST TO CHECK ABUSE OF P OWER BY THE ASSESSING OFFICER. HENCE, AFTER 1ST APRIL, 1989, THE ASSESSIN G OFFICER HAS POWER TO REOPEN, PROVIDED THERE IS 'TANGIBLE MATERIAL' TO CO ME TO THE CONCLUSION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REAS ONS MUST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. OUR VIEW GET S SUPPORT FROM THE CHANGES MADE TO SECTION 147 OF THE ACT, AS QUOTED H EREINABOVE. UNDER THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, PARLIAMENT N OT ONLY DELETED THE WORDS 'REASON TO BELIEVE' BUT ALSO INSERTED THE WOR D 'OPINION' IN SECTION 147 OF THE ACT. HOWEVER, ON RECEIPT OF REPRESENTATI ONS FROM THE COMPANIES AGAINST OMISSION OF THE WORDS 'REASON TO BELIEVE', PARLIAMENT REINTRODUCED THE SAID EXPRESSION AND DELETED THE WORD 'OPINION' ON THE GROUND THAT IT ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 17 WOULD VEST ARBITRARY POWERS IN THE ASSESSING OFFICE R. WE QUOTE HEREINBELOW THE RELEVANT PORTION OF CIRCULAR NO. 549 DATED OCTO BER 31, 1989 ([1990] 182 ITR (ST.) 1, 29), WHICH READS AS FOLLOWS: '7.2 AMENDMENT MADE BY THE AMENDING ACT, 1989, TO R EINTRODUCE THE EXPRESSION 'REASON TO BELIEVE' IN SECTION 147.- A NUMBER OF REPRESENTATIONS WERE RECEIVED AGA INST THE OMISSION OF THE WORDS 'REASON TO BELIEVE' FROM SECT ION 147 AND THEIR SUBSTITUTION BY THE 'OPINION' OF THE ASSESSING OFFI CER. IT WAS POINTED OUT THAT THE MEANING OF THE EXPRESSION, 'REASON TO BELIEVE' HAD BEEN EXPLAINED IN A NUMBER OF COURT RULINGS IN THE PAST AND WAS WELL SETTLED AND ITS OMISSION FROM SECTION 147 WOULD GIV E ARBITRARY POWERS TO THE ASSESSING OFFICER TO REOPEN PAST ASSE SSMENTS ON MERE CHANGE OF OPINION. TO ALLAY THESE FEARS, THE A MENDING ACT, 1989, HAS AGAIN AMENDED SECTION 147 TO REINTRODUCE THE EXPRESSION 'HAS REASON TO BELIEVE' IN PLACE OF THE WORDS 'FOR REASONS TO BE RECORDED BY HIM IN WRITING, IS OF THE OPINION'. OTH ER PROVISIONS OF THE NEW SECTION 147, HOWEVER, REMAIN THE SAME.'' 32. IN VIEW OF THE ABOVE AUTHORITATIVE ENUNCIATION OF THE LEGAL POSITION IN LIGHT OF THE AMENDED SECTION 147, THE RELIANCE BY THE REVENUE ON THE DECISION OF BIJU PATNAIK (SUPRA) IS TO NO AVAIL. 33. WHERE REOPENING OF THE ASSESSMENT IS SOUGHT TO BE DONE MORE THAN FOUR YEARS AFTER THE END OF THE RELEVANT ASSESSMENT YEAR, THEN THE R EQUIREMENT OF THE REVENUE HAVING TO SAY THAT THERE WAS A FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS BY THE ASSESSEE LEADING TO ESCAPEMENT OF INCOME IS A SINE QUA NON. IN RITU INVESTMENTS V. DCIT (SUPRA), THE COURT TOOK NOTE OF THE FACT THAT THE AO WOULD N OT GET JURISDICTION TO REOPEN THE ASSESSMENT ONLY ON THE BASIS OF MERE 'ERROR OF JUDG MENT'. THE COURT REFERRED TO THE DECISION IN GEMINI LEATHER STORES V. INCOME TAX OFF ICER, B-WARD, AGRA (1975) 100 ITR 1 (SC), AND HELD THAT WHEN THE AO HAD ALL THE M ATERIAL FACTS BEFORE HIM HE COULD NOT TAKE RECOURSE TO SECTION 147(A) 'TO REMEDY THE ERROR RESULTING FROM HIS OWN OVERSIGHT'. REFERENCE WAS ALSO MADE TO THE DECISION IN OF THE SUPREME COURT IN INDIAN & EASTERN NEWSPAPER SOCIETY V. COMMISSIONER OF INCO ME TAX, NEW DELHI (1979) 119 ITR 996 (SC), AND IT WAS NOTED THAT THE CONTRARY VI EW IN KALYANJI MAVJI & CO. V. CIT (1976) 102 ITR 287 (SC) WAS NO LONGER GOOD LAW. IN THIS CONTEXT REFERENCE WAS ALSO MADE TO THE DECISION OF ATMA RAM (SUPRA). THE COURT CLARIFIED THAT EXPLANATION (1) TO SECTION 147 APPLIES ONLY WHERE THE AO ON THE BASIS OF ACCOUNT BOOKS OR OTHER EVIDENCE FAILS TO DISCOVER THE MATERIAL FACTS AND NOT WHERE THE AO FAILS TO APPLY THE RELEVANT LAW. THERE CAN BE NO DOUBT THAT AS FAR AS THE PRESENT CA SE IS CONCERNED, THE REASONS DO NOT REFER TO ANY FAILURE ON THE PART OF ALF TO DISCLOSE ANY MATERIAL WHEN IT FILED ITS ORIGINAL RETURN OR EVEN THE RETURN PURSUANT TO THE EARLIER N OTICES ISSUED UNDER SECTION 148 OF THE ACT. 24. IN VIEW OF THE DECISION OF THE JURISDICTIONAL H IGH COURT CITED (SUPRA) THE DECISION RELIED ON BY THE LD. DR IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. IN ITA NO.3569/DEL/2015 CO NO.80/DEL/2016 18 THIS VIEW OF THE MATTER, WE UPHOLD THE ORDER OF THE CIT(A) AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 25. NOW, COMING TO THE CO NO.80/DEL/2016, THE ASSES SEE HAS RAISED THE GROUND IN THE CO REGARDING THE NON-ADJUDICATION OF THE GROUND AGAINST THE ADDITION OF RS.279 LAKHS ON MERIT. 26. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY BOTH THE SIDES. SINCE THE APPEAL FILED BY THE REVENUE HAS BEEN DISMISSED, THE REFORE, THE CO FILED BY THE ASSESSEE BECOMES INFRUCTUOUS. ACCORDINGLY, THE SAM E IS DISMISSED. 27. IN THE RESULT, THE APPEAL FILED BY THE REVENUE AS WELL AS THE CO FILED BY THE ASSESSEE ARE DISMISSED. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 2 5.02.2019. SD/- SD/- (K. NARASIMHA CHARY) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMFBER DATED: 25 TH FEBRUARY, 2019 DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR ASSTT. REGISTRAR, ITAT, NEW DELHI