DCIT, New Delhi V. M/s. Oriental Bank of Commerce, Gurgaon

ITA 4334/DEL/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 1485 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 10 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 05-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA M BISWAS
• Assessee Lawyers: KVSR KRISHNA CA SHRI AMAN GOEL
• Keywords: Reopening of assessment; Search and seizure; Tangible material; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings; Set aside
• Section: 143(3); 40(a)(ia); 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH E : NEW DELHI) BEFORE SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4334/DEL./2016 (ASSESSMENT YEAR : 2006-07) DCIT, VS. ORIENTAL BANK OF COMMERCE, CIRCLE 19 (1), PLOT NO.5, SECTOR 32, NEW DELHI. INSTITUTIONAL AREA, GURGAON 122 001. (PAN : AAACO0191M) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI KVSR KRISHNA, CA SHRI AMAN GOEL, CA REVENUE BY : MS. PARAMITA M. BISWAS, CIT DR DATE OF HEARING : 03.06.2019 DATE OF ORDER : 10.06.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, DCIT, CIRCLE 19 (1), NEW DELHI (HEREINA FTER REFERRED TO AS THE REVENUE) BY FILING THE PRESENT APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 02.05.2016 PASSE D BY THE COMMISSIONER OF INCOME-TAX (APPEALS)-7, NEW DELHI Q UA THE ASSESSMENT YEAR 2006-07 ON THE GROUNDS INTER ALIA T HAT :- 'ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE L D. CIT(A) HAS ERRED IN LAW AND FACTS IN QUASHING THE REASSESSMENT ORDER PASSED U/S 147/143(3) OF THE INCOME TAX ACT, 1961 BY THE A SSESSING ITA NO.4334/DEL./2016 2 OFFICER WITHOUT APPRECIATING THE FACTS THAT THE ASS ESSEE COMPANY HAS NOT TRULY AND FULLY DISCLOSED ALL THE FACTS BEF ORE THE ASSESSING OFFICER AND IT DID NOT PRODUCED ANY MATERIAL FACTS ON RECORD BEFORE THE ASSESSING OFFICER AT THE TIME OF ASSESSM ENT PROCEEDINGS AS WELL AS REASSESSMENT PROCEEDINGS. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE CONTROVERSY AT HAND ARE : INITIALLY, ASSESSMENT OF THE ASSESSEE WAS COMPLETED UNDER SECTION 143 (3) OF THE INCOME-TAX A CT, 1961 (FOR SHORT THE ACT) VIDE ORDER DATED 27.11.2007 AT AN INCOME OF RS.714,07,00,170/-. THEREAFTER, AO, AFTER RECORDIN G THE REASONS FOR REOPENING, ISSUED A NOTICE U/S 148 OF THE ACT TO WH ICH ASSESSEE FILED OBJECTIONS WHICH HAVE BEEN DISPOSED OFF. 3. AO AFTER DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE THAT ASSUMPTION OF JURISDICTION TO INITIATE THE PROCEED INGS U/S 147/143 (3) IN VIEW OF PROVISO TO SECTION 147, PUT IN SPECI FIC RESTRICTION ON THE AO TO REOPEN THE CASE IN WHICH ASSESSMENT HAS B EEN COMPLETED U/S 143 (3) OF THE ACT WHEN THE ASSESSEE HAS FULLY AND TRULY DISCLOSED ALL MATERIAL FACTS NECESSARY FOR ASSESSME NT, AO PROCEEDED TO MAKE ADDITION OF RS.14,04,00,000/- DEB ITED IN P&L ACCOUNT AS PROVISION ON ACCOUNT OF STAFF WELFARE FU ND. 4. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS DELETED THE ADDITION AFTER ALLO WING THE APPEAL. ITA NO.4334/DEL./2016 3 FEELING AGGRIEVED, THE REVENUE HAS COME UP BEFORE T HE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. 5. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 6. UNDISPUTEDLY, REOPENING U/S 147 OF THE ACT HAS B EEN MADE BY AO BEYOND A PERIOD OF FOUR YEARS AFTER FRAMING A SSESSMENT U/S 143 (3) OF THE ACT. IT IS ALSO NOT IN DISPUTE THAT ALL THE ITEMS AS TO PROVISIONS OF RS.14,04,00,000/- ON ACCOUNT OF STAFF WELFARE AND PROVISION OF RS.2,83,51,006/- ON ACCOUNT OF EXPENSE S ARE ITEMS OF THE BALANCE SHEET. 7. CHALLENGING THE IMPUGNED ORDER PASSED BY THE LD. CIT (A), LD. DR FOR THE REVENUE CONTENDED INTER ALIA THAT IT IS NOT A CASE OF CHANGE OF OPINION; THAT THE AO WAS HAVING PRIMA FAC IE MATERIAL ON THE BASIS OF WHICH REOPENING HAS BEEN MADE AND RELI ED UPON THE ASSESSMENT ORDER. LD. DR ALSO RELIED UPON THE DECI SIONS RENDERED BY HONBLE SUPREME COURT AS WELL AS HONBLE HIGH CO URT CITED AS R.K. MALHOTRA, ITO VS. KASTURBHAI LALBHAI 109 ITR 537 (SC), RAYMOND WOOLLEN MILLS LTD. VS. ITO 236 ITR 34, CIT VS. P.V.S. BEEDIES LTD. 237 ITR 13 (SC), YUVRAJ VS. UOI 315 IT R 84 (SC), HONDA SIEL POWER PRODUCTS LTD. VS. DCIT 340 ITR 64 (SC), ITA NO.4334/DEL./2016 4 HONDA SIEL POWER PRODUCTS LTD. VS. DCIT 340 ITR 53 (DELHI), NEW DELHI TELEVISION LTD. VS. DCIT (2017) 84 TAXMAN N.COM 136 (DELHI), SUN DIRECT TV PVT. LTD. VS. ACIT (2018) 98 TAXMANN.COM 201 (MADRAS), A SRIDEVI VS. ITO 2018-TI OL-2246- HC-MAD-IT, SOUTH ASIA FM LTD. VS. ACIT (2018) 98 TAXMANN.COM 200 (MADRAS), PRANAWA LEAFIN (P.) LTD. VS. DCIT (2013) 33 TAXMANN.COM 454 (BOMBAY), CIT VS. KIRANBH AI JAMNADAS SHETH (HUF) (2013) 39 TAXMANN.COM 116 & DI SHMAN PHARMACEUTICALS & CHEMICALS LTD. 346 ITR 228 (GUJ.) . 8. HOWEVER, ON THE OTHER HAND, TO REPEL THE ARGUMEN TS ADDRESSED BY THE LD. DR FOR THE REVENUE, LD. AR FOR THE ASSESSEE CONTENDED INTER ALIA THAT WHEN THE ASSESSEE HAS FUL LY AND TRULY DISCLOSED ALL THE MATERIAL PARTICULARS NECESSARY FO R ASSESSMENT, REOPENING IS NOT PERMISSIBLE; THAT THE REASONS RECO RDED DO NOT JUSTIFY REOPENING U/S 147/148 IN CASE OF COMPLETED ASSESSMENT U/S 143(3) AS NO TANGIBLE MATERIAL HAS COME TO THE LIGH T FOR INITIATING REASSESSMENT PROCEEDINGS AND RELIED UPON THE DECISI ONS CITED AS ALLIED STRIPS LTD. VS. ACIT 384 ITR 424 (DELHI), DO NALDSON INDIA FILTERS SYSTEMS PVT. LTD. VS. DCIT 371 ITR 87 (DELH I), LALIT BAGAI VS. DCIT (2014) 91 CCH 7 (DEL.)(HC), CIT VS. VALVOLINE CUMMINS LTD. (2014) 90 CCH 0233 (DEL.)(HC), GLOBAL SIGNAL ITA NO.4334/DEL./2016 5 CABLES (INDIA) PVT. LTD. VS. DCIT 368 ITR 609 (DEL. ) AND CIT VS. KELVINATOR OF INDIA LTD. 320 ITR 561 (SC) . 9. BEFORE PROCEEDING FURTHER, WE WOULD LIKE TO EXTR ACT THE REASONS RECORDED BY AO FOR REOPENING OF ASSESSMENT U/S 147 OF THE ACT FOR READY PERUSAL AS UNDER :- REASONS FOR THE BELIEF THAT INCOME HAS ESCAPED ASSE SSMENT:. THE ASSESSMENT U/S 143(3) OF THE ACT WAS COMPLETED AT AN INCOME OF RS.7,14,07,00,170/- IN NOVEMBER, 2008. FROM THE PERUSAL OF ASSESSMENT RECORDS OF AY 2006-0 7 IT HAS BEEN. FOUND THAT: I) THE ASSESSEE HAD MADE A PROVISION OF RS.14,04,00,000/- ON ACCOUNT 'STAFF WELFARE' IN THE BALANCE SHEET. AS THE PROVISION MADE WAS NOT AN ASCERTAINED LIABILITY, THE SAME SHOULD HAVE BEEN DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. HENCE UNDER ASSESSMENT OF RS.14,04,00,000/-. II) THE ASSESSEE HAD MADE A PROVISION OF RS.2,38,51,006/- ON ACCOUNT OF 'EXPENSES' IN THE BALANCE SHEET. AS THE PROVISION MADE WAS NOT AN ASCERTAINED LIABILITY, THE SAME SHOULD HAVE BEEN DISALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE HENCE UNDER ASSESSMENT OF RS.2,83,51,006/-. ON THE BASIS OF EXAMINATION OF THE FACTS AND CIRCUMSTANCES FOR AY 2006-07, AS ABOVE, I HAVE REAS ON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT ON ACCOUNT O F FAILURE ON THE PART OF THE ASSESSEE, TO DISCLOSE TRULY AND FUL LY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT WITHIN THE MEANING O F PROVISO TO SECTION 147 OF THE IT ACT, 1961. SINCE FOUR YEARS HAVE EXPIRED FROM THE END OF THE R ELEVANT ASSESSMENT YEAR AND THE ASSESSMENT WAS MADE U/S 143 (3) OF THE IT ACT, AS PER PROVISIONS OF SECTION 151(1) OF THE IT ACT, NECESSARY APPROVAL OF THE COMMISSIONER OF INCOME TA X, DELHI-V, NEW DELHI IS SOLICITED FOR ISSUE OF NOTICE U/S 148 OF THE IT ACT, FOR AY. 2006-07. ITA NO.4334/DEL./2016 6 10. BARE PERUSAL OF THE REASONS RECORDED EXTRACTED ABOVE GOES TO PROVE THAT AO SOUGHT TO REOPEN THE ASSESSMENT ONLY FROM THE PERUSAL OF ASSESSMENT RECORD FOR AY 2006-07 THAT (I) THE ASSESSEE HAD MADE A PROVISION OF RS.14,04,00,000/- ON ACCOUN T 'STAFF WELFARE' IN THE BALANCE SHEET. AS THE PROVISION MAD E WAS NOT AN ASCERTAINED LIABILITY, THE SAME SHOULD HAVE BEEN DI SALLOWED AND ADDED BACK TO THE INCOME OF THE ASSESSEE. HENCE UND ER ASSESSMENT OF RS.14,04,00,000/-; AND (II) THE ASSESSEE HAD MAD E A PROVISION OF RS.2,38,51,006/- ON ACCOUNT OF 'EXPENSES' IN THE BA LANCE SHEET. AS THE PROVISION MADE WAS NOT AN ASCERTAINED LIABILITY , THE SAME SHOULD HAVE BEEN DISALLOWED AND ADDED BACK TO THE I NCOME OF THE ASSESSEE HENCE UNDER ASSESSMENT OF RS.2,83,51,006/- . 11. WHEN UNDISPUTEDLY ASSESSEE HAS BROUGHT ON RECOR D ALL THE FACTS AS TO MAKING PROVISIONS OF RS.14,04,00,000/- ON ACCOUNT OF STAFF WELFARE AND HAS MADE PROVISION OF RS.2,83,51, 006/- ON ACCOUNT OF EXPENSES BEING ITEMS OF THE BALANCE SHEE T, THERE IS NOT AN IOTA OF MATERIAL ON RECORD THAT THE ASSESSEE HAS NOT FULLY AND TRULY DISCLOSED ALL MATERIAL PARTICULARS NECESSARY FOR ASSESSMENT. OPENING WORDS OF REASONS RECORDED THAT, FROM THE PERUSAL OF ASSESSMENT RECORD OF AY 2006-07, GOES TO PROVE THAT THE AO HAS SOUGHT TO REVIEW THE ASSESSMENT ALREADY FRAMED U/S 143 (3) OF THE ACT, THAT TOO AFTER FOUR YEARS OF THE ASSESSMENT, W HICH IS NOT ITA NO.4334/DEL./2016 7 PERMISSIBLE UNDER LAW, BECAUSE AO HAS ONLY POWER TO REASSESS THE ASSESSEE AND NOT TO REVIEW THE ASSESSMENT ALREADY F RAMED U/S 143 (3) OF THE ACT. 12. HONBLE APEX COURT IN CIT VS. KELVINATOR OF INDIA LTD. (SUPRA) HAS EXPLAINED THE PROVISIONS RELATING TO RE ASSESSMENT AFTER AMENDMENT OF THE ACT IN 1989 AND AFTER PERUSING THE CBDT CIRCULAR NO.549 DATED 31.10.1989 BY RETURNING FOLLO WING FINDINGS:- 6. ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MAD E TO SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO DIRE CT TAX LAWS (AMENDMENT) ACT, 1987, RE-OPENING COULD BE DONE UND ER ABOVE TWO CONDITIONS AND FULFILLMENT OF THE SAID CONDITIO NS ALONE CONFERRED JURISDICTION ON THE ASSESSING OFFICER TO MAKE A BACK ASSESSMENT, BUT IN SECTION 147 OF THE ACT [WITH EFF ECT FROM 1ST APRIL, 1989], THEY ARE GIVEN A GO-BY AND ONLY ONE C ONDITION HAS REMAINED, VIZ., THAT WHERE THE ASSESSING OFFICER HA S REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDICTION TO RE-OPEN THE ASSESSMENT. THEREFORE, POST-1ST APRI L, 1989, POWER TO RE-OPEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GIV E A SCHEMATIC INTERPRETATION TO THE WORDS 'REASON TO BE LIEVE' FAILING WHICH, WE ARE AFRAID, SECTION 147 WOULD GIVE ARBITR ARY POWERS TO THE ASSESSING OFFICER TO RE-OPEN ASSESSMENTS ON THE BASIS OF 'MERE CHANGE OF OPINION', WHICH CANNOT BE PER SE RE ASON TO RE- OPEN. WE MUST ALSO KEEP IN MIND THE CONCEPTUAL DIFF ERENCE BETWEEN POWER TO REVIEW AND POWER TO RE-ASSESS. THE ASSESSING OFFICER HAS NO POWER TO REVIEW; HE HAS THE POWER TO RE-ASSESS. BUT RE-ASSESSMENT HAS TO BE BASED ON FULFILLMENT 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-B UILT TEST TO CHECK ABUSE OF POWER BY THE ASSESSING OFFICER. HENC E, AFTER 1ST APRIL, 1989, ASSESSING OFFICER HAS POWER TO RE-OPEN , PROVIDED THERE IS 'TANGIBLE MATERIAL' TO COME TO THE CONCLUS ION THAT THERE IS ESCAPEMENT OF INCOME FROM ASSESSMENT. REASONS MU ST HAVE A LIVE LINK WITH THE FORMATION OF THE BELIEF. OUR VIE W GETS SUPPORT FROM THE CHANGES MADE TO SECTION 147 OF THE ACT, AS QUOTED HEREINABOVE. UNDER THE DIRECT TAX LAWS (AMENDMENT) ACT, 1987, PARLIAMENT NOT ONLY DELETED THE WORDS 'REASON TO BELIEVE' ITA NO.4334/DEL./2016 8 BUT ALSO INSERTED THE WORD 'OPINION' IN SECTION 147 OF THE ACT. HOWEVER, ON RECEIPT OF REPRESENTATIONS FROM THE COM PANIES AGAINST OMISSION OF THE WORDS 'REASON TO BELIEVE', PARLIAMENT RE- INTRODUCED THE SAID EXPRESSION AND DELETED THE WORD 'OPINION' ON THE GROUND THAT IT WOULD VEST ARBITRARY POWERS I N THE ASSESSING OFFICER. WE QUOTE HERE IN BELOW THE RELEVANT PORTIO N OF CIRCULAR NO.549 DATED 31ST OCTOBER, 1989, WHICH READS AS FOL LOWS: '7.2 AMENDMENT MADE BY THE AMENDING ACT, 1989, TO REINTRODUCE THE EXPRESSION `REASON TO BELIEVE' IN S ECTION 147. --A NUMBER OF REPRESENTATIONS WERE RECEIVED AG AINST THE OMISSION OF THE WORDS `REASON TO BELIEVE' FROM SECTION 147 AND THEIR SUBSTITUTION BY THE `OPINION' OF THE ASSESSING OFFICER. IT WAS POINTED OUT THAT THE MEAN ING OF THE EXPRESSION, `REASON TO BELIEVE' HAD BEEN EXPLAI NED IN A NUMBER OF COURT RULINGS IN THE PAST AND WAS WELL SE TTLED AND ITS OMISSION FROM SECTION 147 WOULD GIVE ARBITR ARY POWERS TO THE ASSESSING OFFICER TO REOPEN PAST ASSESSMENTS ON MERE CHANGE OF OPINION. TO ALLAY THE SE FEARS, THE AMENDING ACT, 1989, HAS AGAIN AMENDED SECTION 147 TO REINTRODUCE THE EXPRESSION `HAS REAS ON TO BELIEVE' IN PLACE OF THE WORDS `FOR REASONS TO BE R ECORDED BY HIM IN WRITING, IS OF THE OPINION'. OTHER PROVIS IONS OF THE NEW SECTION 147, HOWEVER, REMAIN THE SAME.' FOR THE AFORE-STATED REASONS, WE SEE NO MERIT IN TH ESE CIVIL APPEALS FILED BY THE DEPARTMENT, HENCE, DISMISSED W ITH NO ORDER AS TO COSTS. 13. SO, WHEN NOTICE U/S 148 HAS BEEN ISSUED AFTER A PERIOD OF FOUR YEARS AFTER FRAMING ASSESSMENT U/S 143 (3) OF THE ACT PARTICULARLY WHEN THERE IS NO FAILURE ON THE PART O F THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR ASSESSMENT, NOTICE FOR INITIATING THE REASSESSMENT PROCEEDINGS IS NOT VALID AS HAS BEEN HELD BY HONBLE DELHI HIGH COURT IN CASE C ITED AS ALLIED STRIPS LTD. VS. ACIT (SUPRA) BY RETURNING FOLLOWING FINDINGS :- HELD, ALLOWING THE PETITION, THAT THE MATTER WAS O NE OF CHANGE OF OPINION. THE QUESTIONNAIRE SPECIFICALLY RAISED THE ISSUE WITH REGARD TO SHARE CAPITAL. IT REQUIRED THE ASSESSEE T O GIVE A LIST, SOURCE, GENUINENESS, IDENTITY OF THE SHARE-HOLDERS ALONG WITH CONFIRMATION COPIES-OF THE LEDGER ACCOUNT OF THE PA RTY INCLUDING ITA NO.4334/DEL./2016 9 CONFIRMATION OF THE MODE, DATE; ADDRESS AND ACKNOWL EDGMENT OF RETURN, ETC. FROM THE PARTY ALONG WITH SOURCE AND R ELEVANT BANK ENTRIES. THE INFORMATION WAS PROVIDED BY THE ASSESS EE. AFTER RECEIPT OF THE INFORMATION, THE ASSESSING OFFICER D ID NOT THINK IT FIT TO MAKE AN ADDITION AND, UNDER THESE CIRCUMSTAN CES, NO ADDITION ITSELF AMOUNTED TO FORMING AN OPINION. ANO THER REASON WHY THE NOTICE UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961 AND THE PROCEEDINGS CONSEQUENT THERETO HAD TO BE SE T ASIDE WAS THAT THE PRE-CONDITION OF THERE BEING A FAILURE ON PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL THE MATERI AL PARTICULARS NECESSARY FOR ASSESSMENT HAD NOT BEEN MADE. 14. HONBLE DELHI HIGH COURT IN CASE OF DONALDSON INDIA FILTERS SYSTEMS PVT. LTD. VS. DCIT (SUPRA) WHILE DECIDING THE IDENTICAL FACTS HELD THAT WHEN THERE IS NO DEFAULT ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSED FACTS NECESSA RY FOR FRAMING ASSESSMENT, REOPENING ON GROUND OF EXPENDITURE CLAI MED OR DEDUCTION AMOUNTS TO MERE CHANGE OF OPINION AND I N SUCH CIRCUMSTANCES, REASSESSMENT IS IMPERMISSIBLE AND AS SUCH, REASSESSMENT AND CONSEQUENTIAL PROCEEDINGS ARE NOT VALID BY RETURNING FOLLOWING FINDINGS :- HELD, ALLOWING THE APPEAL, THAT THE REOPENING OF T HE ASSESSMENT FAILED TO PASS MUSTER ON BOTH THE TESTS. THE SATISF ACTION NOTE DID NOT DISCLOSE THE FOUNDATION OF 'REASONS TO BELIEVE' AS IT VAGUELY REFERRED TO THE PERUSAL OF 'THE RECORDS' WITHOUT SP ECIFYING, THE FRESH 'TANGIBLE MATERIAL' THAT HAD COME TO LIGHT GI VING RISE TO A NEED FOR SUCH ACTION. SINCE THE ASSESSMENT HAD EARL IER BEEN CONCLUDED UNDER SECTION 143(3), THE RESTRICTIONS ON THE EXERCISE OF THE POWER OF REASSESSMENT AS CONTAINED IN THE FI RST PROVISO TO SECTION 147 WOULD INHIBIT FURTHER ACTION IN THE ABS ENCE OF MATERIAL SHOWING DEFAULT BY THE ASSESSEE TO FULLY O R TRULY DISCLOSE. HENCE, THE VIEW TAKEN BY THE COMMISSIONER (APPEALS) THAT IT WAS A CASE OF IMPERMISSIBLE CHANGE OF OPINION WAS CORRE CT. TILE ORDER WHEREBY THE PROCEEDINGS HAD BEEN REOPENED FOR ASSES SMENT UNDER SECTION 147/148 THUS, SUFFERED FROM THE JURIS DICTIONAL ERROR. CONSEQUENTLY, THE PROCEEDINGS TAKEN PURSUANT THERETO COULD NOT BE SUSTAINED. ITA NO.4334/DEL./2016 10 15. IN DONALDSON INDIA FILTERS SYSTEMS PVT. LTD. VS. DCIT (SUPRA), THE HONBLE DELHI HIGH COURT HAS DISTINGUI SHED HONDA SIEL POWER PRODUCTS LTD. VS. DCIT (SUPRA) CASE RELIED UPON BY THE LD. DR FOR THE REVENUE. 16. IDENTICAL ISSUE HAS BEEN DECIDED BY HONBLE DEL HI HIGH COURT IN CASE CITED AS LALIT BAGAI VS. DCIT (SUPRA) BY RETURNING FOLLOWING FINDINGS :- REOPENING OF ASSESSMENT-FULL AND TRUE DISCLOSURE O F FACTS-ISSUE OF NOTICE BEYOND FOUR YEARS-VALIDITY- ORIGINAL ASSESSMENT WAS COMPLETED U/S 143(3)-AO ISSUED NOTICE U/S 148 SEEKING TO REOPEN ASSESSMENT AFTER FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR - REASONS FOR REOPENING WERE THAT ASSESSEE HAD NOT SHOWN RECEIPTS IN PROFIT AND LOSS ACCOUNT WHICH HAD APPEARED IN THE16A FORMS AND SECONDLY ASSESSEE HAD NOT DEDUCTED ANY TAX ON A PAYMENT, THEREFORE, PROVISIONS OF SECTION 40(A)(IA) WOULD GET ATTRACTED -AO REJECTED ASSESSEE'S OBJECTIONS-HELD, WITH REGARD TO PROBLEM OF RECONCILIATION BETWEEN RECEIPTS IN PROFI T AND LOSS ACCOUNT AND INCOME AS EVIDENT FROM 16A FORMS, SAME WAS IN CONTEMPLATION OF AO AT TIME OF ORIGINAL ASSESSMENT-FULL REPLY WAS GIVEN BY ASSESSEE'S CA RECONCILING DIFFERENCES POINTED OUT BY AO-IN ASSESSMENT ORDER, AO DID NOT MAKE ADDITIONS AFTER BEING FULLY SATISFIED BY REPLY SUBMITTED ON BEHALF OF ASSESSEE-ALL THESE FACTS WERE FULLY AND TRULY DISCL OSED BEFORE AO AT TIME OF ORIGINAL ASSESSMENT-WITH REGAR D TO NON DEDUCTION OF TAX, PAYMENTS WERE MADE TO ASSESSE E'S OWN EMPLOYEES-HENCE, PAYMENTS WERE NOT COVERED U/S 40(A)(IA)--THEREFORE, THERE WAS NO BASIS FOR SEEKIN G REOPENING OF ASSESSMENT-IMPUGNED NOTICE SET ASIDE- WRIT PETITION ALLOWED. ITA NO.4334/DEL./2016 11 17. MOREOVER, REASONS RECORDED DOES NOT DISCLOSE IF ANY TANGIBLE MATERIAL HAS COME TO THE NOTICE OF AO FOR INITIATIN G THE REASSESSMENT PROCEEDINGS RATHER HE HAS SOUGHT TO RE VIEW THE FACTS ALREADY PERUSED AND DECIDED IN FAVOUR OF THE ASSESS EE HAVING BEEN DULY AND TRULY SHOWN IN THE BALANCE SHEET. SO, WIT HOUT TANGIBLE MATERIAL, THE AO CANNOT BE ALLOWED TO REOPEN THE AS SESSMENT WHICH OTHERWISE AMOUNTS TO CHANGE OF OPINION. 18. IN VIEW OF OUR DISCUSSION IN THE PRECEDING PARA S, WE ARE OF THE CONSIDERED VIEW THAT ARGUMENTS ADDRESSED BY THE LD. DR AND CASE LAWS RELIED UPON IS NOT APPLICABLE TO THE FACT S AND CIRCUMSTANCES OF THE CASE WHICH HAVE BEEN DECIDED I N FAVOUR OF THE ASSESSEE ON THE FACTS THAT THERE WAS OMISSION AND F AILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY MATERIA L FACTS NECESSARY FOR ASSESSMENT, WHEREAS THERE IS NO SUCH FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY MATERIAL FACTS NECESSARY FOR ASSESSMENT, THIS FACT IS CLEAR FROM THE REASONS REC ORDED ITSELF. 19. SO, IN VIEW OF WHAT HAS BEEN DISCUSSED ABOVE, W E ARE OF THE CONSIDERED VIEW THAT WHEN NOTICE U/S 147 READ WITH SECTION 148 OF THE ACT FOR REOPENING OF THE ASSESSMENT WAS ISSUED BEYOND A PERIOD OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT Y EAR U/S 143 (3) OF THE ACT AND UNDISPUTEDLY, THERE WAS NO FAILURE O N THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIAL FACTS FULLY AND T RULY NECESSARY FOR ITA NO.4334/DEL./2016 12 ASSESSMENT AND EXCEPT FOR REVIEWING THE ASSESSMENT RECORD OF THE YEAR UNDER ASSESSMENT, NO TANGIBLE MATERIAL HAS COM E TO THE LIGHT OF THE AO, THE INITIATION OF ASSESSMENT PROCEEDINGS ARE INVALID BEING NOT PERMISSIBLE. ALL THESE FACTS HAVE BEEN D ULY EXAMINED BY LD. CIT (A) IN THE IMPUGNED ORDER, HENCE WE FIND NO ILLEGALITY OR PERVERSITY IN THE IMPUGNED ORDER. CONSEQUENTLY, AP PEAL FILED BY THE REVENUE IS HEREBY DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON THIS 10 TH DAY OF JUNE, 2019. SD/- SD/- (R.K. PANDA) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 10 TH DAY OF JUNE, 2019 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-I, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.