ACIT, New Delhi V. M/s. The Handicrafts and Handlooms Exports Corporation of India Ltd., New Delhi

ITA 3770/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 91144 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-06-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 04-06-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 13-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DAM KANUNJNA SENIOR
• Assessee Lawyers: SURESH ANANTHARAMAN
• Keywords: Reopening of assessment; Business income; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings; Capital expenditure
• Section: 142(1); 80HHC; 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH H : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI GEORGE GEORGE K, JUDICIAL MEMBER ITA NO.3770/DEL./2013 (ASSESSMENT YEAR : 2002-03) DCIT, CIRCLE 16 (1), VS. THE HANDICRAFTS AND HANDL OOMS NEW DELHI. EXPORTS CORPORATION OF INDIA LTD. , JAWAHAR VYAPAR BHAWAN, 5 TH FLOOR, 1, TOLSTOY MARG, NEW DELHI 110 001. (PAN : AAACH0628J) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI SURESH ANANTHARAMAN, ADVOCATE REVENUE BY : SHRI P. DAM KANUNJNA, SENIOR DR DATE OF HEARING : 04.06.2015 DATE OF PRONOUNCEMENT : 12.06.2015 O R D E R PER GEORGE GEORGE K., JM : THIS APPEAL, AT THE INSTANCE OF THE DEPARTMENT, IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-X II, NEW DELHI DATED 15.03.2013. THE RELEVANT ASSESSMENT YEAR IS 2002-03 . 2. THE SOLITARY EFFECTIVE GROUND READS AS FOLLOWS : - LD. CIT (A) ERRED IN LAW AND ON THE FACTS OF THE CASE IN QUASHING THE REOPENING OF THE ASSESSMENT UNDER SECT ION 148 OF THE I.T. ACT. ITA NO.3770/DEL./2013 2 3. BRIEFLY STATED, THE FACTS OF THE CASE ARE AS FOL LOWS. THE ASSESSEE COMPANY IS A PUBLIC SECTOR UNDERTAKIN G UNDER THE MINISTRY OF TEXTILES. IT IS ENGAGED IN THE BUSINES S OF EXPORT AND DOMESTIC SALES OF HANDICRAFTS, HANDLOOMS, READYMADE GARMENTS , CARPETS, JEWELLERY ETC. THE ASSESSEE HAD FILED ITS RETURN OF INCOME O N 31.10.2002 DECLARING AN INCOME OF RS.63,25,117/-. THE ASSESSMENT WAS TAKEN FOR SCRUTINY BY ISSUING OF A NOTICE U/S 143(2) OF THE ACT. THE SCR UTINY ASSESSMENT WAS COMPLETED VIDE ORDER DATED 28.02.2005 BY ACCEPTING THE RETURNED INCOME AS DECLARED BY THE ASSESSEE. SUBSEQUENTLY, A NOTIC E U/S 148 OF THE ACT WAS ISSUED AND DULY SERVED UPON THE ASSESSEE ON 31.03.2 009 BY RECORDING THE FOLLOWING REASONS :- '1. IN THIS CASE SCRUTINY ASSESSMENT WAS COMPLETED ON 28TH FEBRUARY, 2005 FOR THE ASSESSEE YEAR 2002-03 A T AN INCOME OF RS 63,25,120/-. THE ASSESSEE WAS ALLOWED DEDUCTION U/S 80HHC AMOUNTING TO RS 2,38,91,769/- W HICH INCLUDES 'INCOME FROM OTHER SOURCES' AMOUNTING TO RS.1,18,06,275/-. AS DEDUCTION U/S 80HHC WAS ALLOWA BLE ONLY AGAINST BUSINESS INCOME, THE ACT OF THE ASSESS ING OFFICER IS NOT CORRECT. THE MISTAKE RESULTED IN UND ER ASSESSMENT OF INCOME BY RS.54,81,158/- (AS PER ANNE XURE ENCLOSED) WITH THE CONSEQUENT SHORT LEVY OF TAX OF RS.19,56,773/-. 2. SECTION 35DDA OF THE INCOME-TAX ACT, 1961, PROVI DES THAT WHERE AN ASSESSEE INCREASES ANY EXPENDITURE IN ANY PREVIOUS YEAR BY WAY OF PAYMENT OF ANY SUM TO AN EM PLOYEE AT THE TIME OF HIS VOLUNTARY RETIREMENT, ONE FIFTH OF THE AMOUNT SO PAID SHALL BE DEDUCTED IN COMPUTING THE P ROFIT AND GAINS OF THE BUSINESS FOR THAT PREVIOUS YEAR AN D THE BALANCE-SHALL BE DEDUCTED IN EQUAL INSTALLMENT FOR EACH OF THE FOUR IMMEDIATELY SUCCEEDING PREVIOUS YEAR. ITA NO.3770/DEL./2013 3 THE ASSESSMENT OF M/S HANDICRAFT & HANDLOOM EXPORTS CORPORATION FOR THE ASSESSMENT YEAR 2002-03 WAS COMPLETED AFTER SCRUTINY IN FEBRUARY 2005, DETERMIN ING AN INCOME OF RS.63,25,120/-. THE ASSESSEE HAD DEBITED TO PROFIT AND LOSS ACCOUNT A SUM OF RS.71,69,000/- ON ACCOUNT OF PAYMENT UNDER VOLUNTARY RETIREMENT SCHEME WHICH WAS FULLY ALLOWED BY THE ASSESSING OFFICER WHEREAS AS P ER INCOME TAX ACT, ONE FIFTH OF THE TOTAL EXPENDITURE OF RS.14,33,800/- WAS TO BE ALLOWED AS DEDUCTION AND T HE REMAINING FOUR FIFTH EXPENDITURE OF RS 57,35,2001- WAS TO BE DISALLOWED. THE MISTAKE RESULTED IN UNDER ASSESS MENT OF INCOME BY RS.57,35,2001- WITH CONSEQUENT SHORT LEVY OF TAX RS.20,47,466/-. 3. INCOME TAX ACT, 1961, PROVIDES THAT ANY EXPENDIT URE NOT BEING EXPENDITURE OF CAPITAL NATURE LAID NOT WH OLLY OR EXCLUSIVELY FOR THE PURPOSE OF BUSINESS IS ALLOWABL E AS DEDUCTION IN COMPUTATION OF THE INCOME CHARGEABLE U NDER THE HEAD ''PROFIT & GAINS OF BUSINESS OR PROFESSION ' FURTHER IT HAS BEEN JUDICIALLY HELD IN THE CASE OF HASINAGA R INDUSTRIES AND ANOTHER V CIT 231 ITR 842 THAT IF BA D DEBT DEBITED IN THE PROFIT & LOSS ACCOUNT RELATES TO ANY ADVANCES ON CAPITAL ACCOUNT THEY ARE NOT ADMISSIBLE AS DEDUC TION AS THE LOSS IS CAPITAL LOSS. IF THE LOAN TAKEN ON CAPI TAL ACCOUNT BECOME IRRECOVERABLE, THE LOSS INCURRED IS CAPITAL LOSS. THE ASSESSMENT OF ABOVE ASSESSEE FOR THE ASSESSMENT YEAR 2002-03 WAS COMPLETED AFTER SCRUTINY IN FEBRUARY 20 05, DETERMINING AN INCOME OF RS.63,25,120/-. THE ADVANC ES WERE OF CAPITAL IN NATURE AND SHOULD HAVE BEEN ADDE D TO THE INCOME OF THE ASSESSEE. THE OMISSION TO DO SO RESUL TED UNDER ASSESSMENT OF INCOME BY RS.76,91,649/- INVOLV ING SHORT LEVY OF TAX OF RS.27,45,909/-. THE VARIOUS OBJECTIONS RAISED BY THE ASSESSEE FOR R EOPENING THE ASSESSMENT, WAS REJECTED BY THE ASSESSING OFFICER AND REASSESSM ENT U/S 147 READ WITH SECTION 143 (3) OF THE ACT WAS COMPLETED BY AN ORDE R DATED 30.12.2009, COMPUTING THE TOTAL INCOME AT RS.1,24,24,380/-. ITA NO.3770/DEL./2013 4 4. THE ASSESSEE BEING AGGRIEVED BY THE REASSESSMENT FILED AN APPEAL TO THE CIT (A). THE CIT (A) QUASHED THE REASSESSMENT FOR THE REASON THAT PROVISO TO SECTION 147 IS APPLICABLE AND THERE IS N O FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERI AL FACTS NECESSARY FOR THE ASSESSMENT. 5. THE REVENUE, BEING AGGRIEVED, IS IN THE APPEAL B EFORE US. 6. THE LD. DR SUPPORTED THE ORDER OF ASSESSMENT AND SUBMITTED THAT ON ACCOUNT OF UNDER-ASSESSMENT, REOPENING OF ASSESSMEN T IS JUSTIFIED AND THE CIT (A) HAS ERRED IN QUASHING THE REASSESSMENT PROC EEDINGS. 7. ON THE OTHER HAND, THE LD. AR REITERATED THE SUB MISSIONS MADE BEFORE THE INCOME-TAX AUTHORITIES AND ALSO RELIED O N THE RECENT JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF M ADHUKAR KHOSLA VS. ACIT REPORTED IN 367 ITR 165. THE LD. COUNSEL SUBM ITTED THAT WITHOUT ANY NEW MATERIAL COMING INTO THE POSSESSION OF THE ASSESSING OFFICER THAT INDICATE ESCAPEMENT OF INCOME, THE REASSESSMENT IS BAD IN LAW. 8. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE CIT (A) HAD QUASHED THE REASSESSMENT P ROCEEDINGS FOR THE REASON THAT THE REOPENING HAS BEEN DONE AFTER FOUR YEARS AND PROVISO TO SECTION 147 OF THE ACT IS APPLICABLE TO THE INSTANT CASE. ACCORDING TO THE CIT (A), THE ASSESSING OFFICER HAVING NOT RECORDED IN THE NOTICE U/S 148 THAT THERE HAS BEEN A FAILURE ON THE PART OF THE AS SESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSE SSMENT, THE REASSESSMENT ITA NO.3770/DEL./2013 5 IS BAD IN LAW. THE RELEVANT FINDINGS OF THE CIT (A ), FOR READY REFERENCE, IS REPRODUCED BELOW :- (ON PAGE 6).. FROM THE ABOVE, IT IS CLEARLY EVIDENT THAT THERE IS NO ALLEGATION OR WHISPER THAT THERE IS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY 'ALL MATERIAL FACTS'. THIS VERY ISSUE GOES TO THE JURISDICTION OF THE AO TO IS SUE NOTICE UNDER SECTION 148 OF THE ACT. THE NON RECORDING OF SUCH SATISFACTION IN THE REASONS RECORDED MAKES THE ENTI RE RE- ASSESSMENT PROCEEDING BAD IN LAW AND VOID. IT IS SEEN THAT THE REOPENING U/S 147 WAS DONE SUBS EQUENT TO THE FOUR-YEAR PERIOD STIPULATED IN THE PROVISO TO S ECTION 147 AND, CONSEQUENTLY, THE SAME COULD ONLY BE INITIATED IF ANY INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE UNDER SECTION 142(1) OR SECTION 148 OR 'TO DISCLOSE FULLY AND TRU LY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT' FOR TH AT ASSESSMENT YEAR. THERE HAS BEEN NO FAILURE WHICH COULD BE ATTRIBUTED TO THE ASSESSEE OF NOT DISCLOSING FULLY TRULY ALL RELEVANT PRIMARY MATERIAL FACTS NECESSARY FOR COMPLETION ASSESSMENT BECAUSE IN THE REASONS ITSELF IT IS MENTIONED THAT - THE AS SESSEE HAD DEBITED TO PROFIT AND LOSS ACCOUNT A SUM OF RS.71,6 9,000/- ON ACCOUNT OF PAYMENT UNDER VOLUNTARY RETIREMENT SC HEME ... ' IT IS EVIDENT THAT REASONS RECORDED ARE BASED ON THE BALANCE SHEET OF THE ASSESSEE WHICH WERE FURNISHED WITH THE RETURN OF INCOME. FURTHER IT IS SELF EVIDENT THAT T HE INFORMATION WAS AVAILABLE IN COURSE OF ORIGINAL ASS ESSMENT AND ALL THE MATERIAL INFORMATION NECESSARY FOR FRAM ING AN ASSESSMENT. IT IS ALSO SEEN THAT NO NEW FACTS OR M ATERIAL HAD BEEN BROUGHT ON RECORD WHICH PROVIDES REASONS T O BELIEVE THAT THE INCOME OF THE APPELLANT HAS ESCAPE D ASSESSMENT. IN VIEW OF THE ABOVE FACTS THIS IS NOT A FIT CASE FOR REOPENING OF ASSESSMENT. MY ATTENTION WAS FURTHER DRAWN TO THE PROVISO TO SE CTION 147: ITA NO.3770/DEL./2013 6 '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 END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE OM THE PART OF THE ASSESSEE T O 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 MATE RIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR. ' AS THE ASSESSING OFFICER HAS NO WHERE STATED IN THE REASONS RECORDED THAT THE ASSESSEE HAS FAILED TO DISCLOSE F ULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. THIS CASE IS SQUARELY COVERED BY MY ORDER IN THE CASE OF JCIT (OSD), CIRCLE 9(1), NEW DELHI VS SMS DEMANG PVT. LTD. THE ITAT DELHI BENCH '0' IN ITA NO. 5666/DEL/2011VIDE ORDER DATED 08/02/2013 HAS UPHELD THE SIMILAR ISSUE AND HAS STA TED THAT:- ' ... IN THE PRESENT CASE BEFORE US AS DISCUSSED AB OVE THE ASSESSING OFFICER DURING ORIGINAL ASSESSMENT PROCEE DINGS HAD RAISED A QUESTION ON THE ISSUE OF THE CLAIMED B AD DEBT AND ON THE PROVISION OF WARRANTY AND CURRENT LIABIL ITIES VIDE QUERY NO.12 OF THE QUESTIONNAIRE AND BEING CONVINCE D WITH THE SUBMISSION OF THE ASSESSEE MADE IN THIS REGARD HE HAD ACCEPTED THE CLAIM. THE TAX AUDIT REPORT FILED BY T HE ASSESSEE WAS ALREADY THERE ON RECORD ON THE BASIS O F WHICH REOPENING OF ASSESSMENT U/S 147 HAS BEEN INITIATED AFTER RECORDING THE REASONS. UNDER THESE CIRCUMSTANCES WE FIND THAT THE ID. CIT(A) HAS RIGHTLY ACCEPTED THE OBJECTION OF THE AS SESSEE THAT INITIATION OF REOPENING PROCEEDINGS U/S 147 OF THE ACT IN THE PRESENT CASE AFTER THE EXPIRY OF 4 YEARS FRO M THE END OF THE RELEVANT ASSESSMENT YEAR WAS NOT VALID AS PE R THE PROVISO TO SECTION 147 OF THE ACT SINCE THERE WAS N O FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT FOR ASS ESSMENT YEAR UNDER CONSIDERATION ... ITA NO.3770/DEL./2013 7 WE DO NOT FIND REASON TO INTERFERE WITH THE FINDING S OF THE ID. CIT(A) THAT INITIATION OF REOPENING PROC EEDINGS IN THE PRESENT CASE WAS BARRED UNDER THE PROVISO OF SE CTION 147 OF THE ACT AND HENCE WE ARE OF THE VIEW THAT TH E LD. CIT(A) HAS RIGHTLY QUASHED THE ASSESSMENT U/S 147/1 43(3) OF THE ACT MADE IN FURTHERANCE TO THE INVALID NOTIC E ISSUED U/S 148 OF THE ACT.' RELIANCE IN THIS RESPECT IS ALSO PLACED ON THE FOLL OWING JUDGMENT IS AS UNDER:- IN THE CASE OF COMMISSIONER OF INCOME-TAX VS PUROLA TOR INDIA LTD. [2012] 343 ITR 155 (DELHI HIGH COURT) IT IS HELD THAT:- ' ... ONE OF THE JURISDICTIONAL PRE-CONDITIONS FOR REOPENING OF AN ASSESSMENT AFTER FOUR YEARS IS THAT THERE SHO ULD BE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE MAT ERIAL FACTS NECESSARY FOR ASSESSMENT. THE EXPRESSION 'MATERIAL FACTS' IN EXPLANATION 1 TO SECTION 147 OF THE INCOME-TAX A CT, 1961 REFERS TO PRIMARY FACTS. THE TERM 'PRIMARY FACTS' O R 'MATERIAL FACTS' ARE THOSE FACTS WHICH ARE MATERIAL AND RELEVANT FOR THE DECISION OF THE QUESTION BEFORE TH E ASSESSING OFFICER AND NON-DISCLOSURE OF WHICH WOULD HAVE A MATERIAL BEARING ON THE QUESTION OF ESCAPEMENT OF INCOME FROM ASSESSMENT. WHETHER OR NOT 'PRIMARY FACTS' HAV E BEEN DISCLOSED IS NORMALLY A QUESTION OF FACT AND DEPEND S UPON THE FACTS AND CIRCUMSTANCES OF EACH CASE. THE REQUI REMENT OF EXPLANATION 1 IS THAT THERE SHOULD BE FULL AND T RUE DISCLOSURE OF THE PRIMARY OR MATERIAL FACTS AND NOT BEYOND THAT. IT IS THE OBLIGATION OF THE ASSESSEE TO DISCL OSE FULLY AND TRULY THE PRIMARY FACTS. IT IS NOT THE OBLIGATION O F THE ASSESSEE-TO INDICATE AND STATE WHAT LEGAL INFERENCE CAN BE DRAWN FROM THE PRIMARY FACTS. THE ASSESSEE HAD CLAIMED SPECIAL DEDUCTION FOR THE ASSESSMENT YEAR 2000-01 UNDER SECTION 80HHC. THE DEDUCTION WAS REDUCED BY THE ASSESSING OFFICER. THE ORIGINAL RETURN OF INCOME WAS ACCOMPANIED BY AUDITE D ACCOUNTS AND AUDITOR'S REPORT REQUIRED TO BE SUBMIT TED IN TERMS OF SECTION 80HHC (4) OF THE ACT. SIMILARLY, T HE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80-IB OF THE ITA NO.3770/DEL./2013 8 ACT, WHICH WAS SPECIFICALLY MENTIONED IN THE AUDITE D ACCOUNTS AND THE AUDITOR'S REPORT. THE SPECIAL DEDU CTIONS WERE ALLOWED. SUBSEQUENTLY, IN MARCH, 2006, REASSES SMENT PROCEEDINGS WERE INITIATED BY THE ASSESSING OFFICER AFTER RECORDING THAT THE COMPUTATION OF DEDUCTION UNDER S ECTION 80HHC WAS ALLOWED WITHOUT REDUCING THE DEDUCTION CLAIMED AND ALLOWED UNDER SECTION 80-IB AS REQUIRED BY SECTION 80-IA (9), WHICH IS ALSO APPLICABLE TO SECT ION 80-IB. THE TRIBUNAL HELD THAT THE REASSESSMENT PROCEEDINGS WERE NOT VALID. ON APPEAL TO THE HIGH COURT: HELD, DISMISSING THE APPEAL, THAT THERE WAS NO INDI CATION THAT THE ASSESSEE HAD FAILED OR ADMITTED TO DISCLOS E THE MATERIAL OR PRIMARY FACTS. THESE WERE AVAILABLE ON RECORD. THE ASSESSING OFFICER HAD FAILED TO DRAW CORRECT LE GAL INFERENCES AT THE TIME OF ORIGINAL ASSESSMENT FROM THE PRIMARY FACTS. THIS WAS NOT AN ERROR OR OMISSION ON THE PART OF THE ASSESSEE. IT WAS NOT ALLEGED THAT THE ASSESS EE HAD SUPPRESSED, MISREPRESENTED OR FALSIFIED THE RECORD/ FACTS. IT WAS ALSO NOT ALLEGED THAT THERE WAS ANY SUBSEQUENT FACTUAL INFORMATION ON THE BASIS OF WHICH IT WAS FOUND THAT THE ASSESSEE HAD NOT FULLY DISCLOSED THE PRIMARY FACTS OR HAD FALSIFIED OR DISCLOSED INCORRECT PRIMARY FACTS. THE REASSESSMENT PROCEEDINGS WERE NOT VALID ... ' ATMA RAM PROPERTIES PVT. LTD. VS. DCIT[2012) 343 IT R 141(DELHI) THE DELHI HIGH COURT HAS STATED AS UNDER :- ' ... IN ORDER TO INITIATE PROCEEDINGS FOR REASSESS MENT AFTER FOUR YEARS, THERE SHOULD HAVE BEEN A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE MATERIAL FACTS NECESSARY F OR ASSESSMENT. IF THE ASSESSING OFFICER HAD FAILED TO APPLY LEGAL PROVISIONS/SECTION OF THE INCOME-TAX ACT, 196 1, THE FAULT CANNOT BE ATTRIBUTED TO THE ASSESSEE. THE REQ UIREMENT IS THAT THE ASSESSEE SHOULD HAVE FAILED OR OMITTED TO MAKE FULL AND TRUE DISCLOSURE OF MATERIAL FACTS. THE ASS ESSEE IS NOT REQUIRED TO DISCLOSE, STATE OR EXPLAIN THE LAW ... ' BLB LIMITED VS ASSISTANT COMMISSIONER OF INCOME-TAX [2012] 343 ITR 129 (DEL.) ' ... HELD, ALLOWING THE PETITION, THAT THE ASSESSE E HAD DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS RELEVA NT FOR THE ITA NO.3770/DEL./2013 9 ASSESSMENT. THE REASONS RECORDED DID NOT DISCLOSE O R STATE THAT THERE WAS FAILURE OR OMISSION TO DISCLOSE FULL Y AND TRULY ALL MATERIAL FACTS. THERE WAS NO INDICATION AND IT WAS NOT ALLEGED THAT THERE WAS SOME MATERIAL OR INFORMATION AVAILABLE ON RECORD WHEN REASONS TO REOPEN WERE REC ORDED, TO SHOW THAT THE ASSESSEE HAD CONCEALED OR HAD NOT DISCLOSED FULLY AND TRULY ALL MATERIAL FACTS. IN TH E ORIGINAL ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER HAD CONSIDERED AND EXAMINED WHETHER OR NOT THE NON-COMP ETE FEE PAYMENT WAS OF CAPITAL OR REVENUE NATURE. THE ASSESSING OFFICER ACCEPTED THE STAND OF THE ASSESSE E AND TREATED THE NON-COMPETE FEE AS A REVENUE EXPENDITUR E. THE REASSESSMENT PROCEEDINGS COULD NOT, THEREFORE, BE I NITIATED ON THE GROUND THAT THE ASSESSING OFFICER WAS LEGALL Y WRONG AND HAD MISAPPLIED AND WRONGLY UNDERSTOOD THE LAW/L EGAL POSITION.' FURTHER RELIANCE IS ALSO PLACED IN THE CASE OF CIT VS USHA INTERNATIONAL LTD. IN ITA NO. 2026/2010 DATED SEPTEMBER 21, 2012 WHERE IN THE COURT REITERATED TH AT ONUS IS ON AO TO PROVE THAT THERE IS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY OF ALL PARTICU LARS OF INCOME WHICH RESULTED INTO AN ESCAPED ASSESSMENT. I N CASE OF THE NON-OBSERVATION OF THE SAME, THE ENTIRE PROC EEDINGS IN PURSUANT OF THE SAME ARE VOID AND BAD IN LAW. THE ASSESSING OFFICER WAS NOT CORRECT IN HIS ACTION TO ASSUME JURISDICTION OVER THE APPELLANT FOR THE YEAR UNDER CONSIDERATION IN VIEW OF THE PROVISO TO SECTION 147 OF THE ACT. ADDITIONALLY REASONS RECORDED ARE BASED ON BAL ANCE SHEET FURNISHED WITH RETURN OF INCOME AND ACCEPTED IN ORIGINAL ASSESSMENT. IT IS A CASE OF CHANGE OF OPIN ION I.E. REAPPRAISAL OF SAME FACTS. ON WHICH EARLIER ASSESSI NG OFFICER HAD TAKEN A VIEW ON WHICH THE NEW ASSESSING OFFICER DIFFERS. IN VIEW OF THE ABOVE, IT IS SUBMIT TED THAT, PROCEEDINGS INITIATED U/S 147 OF THE ACT AND COMPLE TION OF ASSESSMENT U/S 147/143(3) OF THE ACT IS ILLEGAL AND IS QUASHED. THE CIT (A) HAS CONSIDERED THE PRECEDENT ON THE SUB JECT AND HELD THAT THE REOPENING IS BAD IN LAW SINCE THE ASSESSING OFFICER HAS NOT MENTIONED IN ITA NO.3770/DEL./2013 10 THE REASONS RECORDED THAT THE INCOME HAS ESCAPED A SSESSMENT ON ACCOUNT OF THE FAILURE OF THE ASSESSEE TO FULLY AND TRULY D ISCLOSE MATERIAL FACTS NECESSARY FOR ASSESSMENT. MOREOVER, IN THE RECENT JUDGMENT OF THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF MA DHUKAR KHOSLA VS. ACIT (SUPRA), THE HONBLE COURT HAS HELD THAT IF T HERE IS NO REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT BAS ED ON NEW TANGIBLE MATERIAL, THEN THE REOPENING OF ASSESSMENT AMOUNTS TO IMPERMISSIBLE REVIEW. THE RELEVANT FINDING OF THE HONBLE JURIS DICTIONAL HIGH COURT READS AS FOLLOWS:- 11. THE FOUNDATION OF THE AOS JURISDICTION AND TH E RAISON DETRE OF A REASSESSMENT NOTICE ARE THE REA SONS TO BELIEVE. NOW THIS SHOULD HAVE A RELATION OR A LINK WITH AN OBJECTIVE FACT, IN THE FORM OF INFORMATION OR FACTS EXTERNAL TO THE MATERIALS ON THE RECORD. SUCH EXTERNAL FACTS OR MATERIAL CONSTITUTE THE DRIVER, OR THE KEY WHICH ENABLES THE AUTHORITY TO LEGITIMATELY RE-OPEN THE COMPLETED ASSESSMENT. I N ABSENCE OF THIS OBJECTIVE TRIGGER, THE AO DOES NO T POSSESS JURISDICTION TO REOPEN THE ASSESSMENT. IT IS AT THE NEXT STAGE THAT THE QUESTION, WHETHER THE RE-OPENING OF ASSESS MENT AMOUNTS TO REVIEW OR CHANGE OF OPINION ARISES. IN OTHER WORDS, IF THERE ARE NO REASONS TO BELIEVE B ASED ON NEW, TANGIBLE MATERIALS, THEN THE REOPENING AMOUN TS TO AN IMPERMISSIBLE REVIEW. HERE, THERE IS NOTHING TO SHOW WHAT TRIGGERED THE ISSUANCE OF NOTICE OF REASSESSME NT NO INFORMATION OR NEW FACTS WHICH LED THE AO TO BELIEV E THAT FULL DISCLOSURE HAD NOT BEEN MADE. THE IMPUGNED NOT ICE, THE AOS ORDER REJECTING THE OBJECTIONS, AND THE AR GUMENTS OF THE REVENUE NOWHERE INDICATE HOW THE AO WAS IMPE LLED TO SEEK RE-OPENING OF THE ASSESSEES CASE, AS DISTI NGUISHED FROM THE SEVERAL OTHER COMPLETED ASSESSMENTS. ITA NO.3770/DEL./2013 11 9. IN THE INSTANT CASE, THE CIT (A) HAS CLEARLY MEN TIONED THAT THE ESCAPEMENT OF INCOME WAS NOT ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSEE TO FULLY OR TRULY DISCLOSE ALL MATERIAL FA CTS NECESSARY FOR ASSESSMENT. FURTHER, THERE IS NOTHING ON RECORD TO SUGGEST THAT THERE IS A NEW MATERIAL IN POSSESSION OF THE ASSESSING OFFICER , INDICATING ESCAPEMENT OF INCOME, TO INITIATE REASSESSMENT PROCEEDINGS. T HEREFORE, IN THE LIGHT OF THE ABOVE MENTIONED JUDICIAL PRONOUNCEMENT, WE HOLD THAT CIT (A) IS JUSTIFIED IN QUASHING THE REASSESSMENT PROCEEDINGS AND WE SEE NO REASON TO INTERFERE WITH THE SAME. IT IS ORDERED ACCORDINGLY . 10. IN THE RESULT, THE APPEAL OF THE REVENUE IS DIS MISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 12 TH DAY OF JUNE, 2015. SD/- SD/- (N.K. SAINI) (GEORGE GEORGE K) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 12 TH DAY OF JUNE, 2015 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-XXV, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.