DCIT, New Delhi V. M/s. Jai Parabolic Springs Ltd., New Delhi

ITA 4717/DEL/2014

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 6751 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 28-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Search and seizure; Audit objection; Tangible material; Difference of opinion; Assessment record; Tax effect; Reason to believe; Change of opinion; Reassessment proceedings; Borrowed satisfaction
• Section: 143(3); 148; 12; 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH D, NEW DELHI BEFORE SH. G.D. AGRAWAL, PRESIDENT AND SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 4717/DEL/2014 A.Y.: 2006-07 D CIT CIRCLE-4(1), NEW DELHI VS. JAI PARABOLIC SPRINGS LTD. 2, PARK LANE, BEHIND D-3, VASANT KUNJ, KISHANGARH NEW DELHI PAN : AAACJ1830C PAN : C.O. NO. 189/DEL/2017 ( IN ITA NO. 4717/DEL/2014) JAI PARABOLIC SPRINGS LTD. 2, PARK LANE, BEHIND D-3, VASANT KUNJ, KISHANGARH NEW DELHI PAN : AAACJ1830C VS. DCIT CIRCLE-4(1), NEW DELHI PAN : APPELLANT RESPONDENT ASESSEE BY : SH. SANDEEP SAPRA, ADV., SH. KAMAL KHANNA, CA REVENUE BY : SH. AMIT JAIN, SR. DR. DATE OF HEARING : 24.04.2018 DATE OF PRONOUNCEMENT : 04.07.2018 O R D E R PER BENCH : THIS APPEAL IS FILED BY THE DEPARTMENT AGAINST ORDE R DATED 30.06.2014 PASSED BY THE LD. CIT(APPEALS)-VIII, NEW DELHI FOR 2 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 ASSESSMENT YEAR 2006-07. IN THIS APPEAL THE DEPARTM ENT IS CHALLENGING THE DELETION OF ADDITION OF RS. 6,11,69 ,969/- RELATING TO PRIOR PERIOD INCOME. THE C.O. HAS BEEN FILED BY THE ASSESSEE AND IT CHALLENGES THE ACTION OF THE LD. CIT (A) IN UPHOLDI NG THE RE- ASSESSMENT PROCEEDINGS INITIATED IN THE CASE OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSM ENT IN THIS CASE WAS EARLIER COMPLETED U/S 143(3) OF THE INCOME TAX A CT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) AT A LOSS OF RS. 13,88,562/- AS AGAINST THE RETURNED LOSS OF RS. 2,83,67,849/-. SUB SEQUENTLY RE- ASSESSMENT PROCEEDINGS WERE INITIATED U/S 148 OF TH E ACT ON THE GROUND THAT AS PER THE 3CD REPORT ANNEXED TO THE TA X AUDIT REPORT, THE ASSESSEE HAD PRIOR PERIOD INCOME OF RS. 6,11,69 ,969/-. THE AO WAS OF THE OPINION THAT AS THE ASSESSEE COMPANY WAS F OLLOWING MERCANTILE SYSTEM OF ACCOUNTING, THIS PRIOR PERIOD INCOME SHOULD HAVE BEEN ADDED BACK TO THE INCOME OF THE ASSESSEE. ACCORDINGLY, NOTICE FOR REOPENING WAS ISSUED AND, THEREAFTER, AFT ER TAKING INTO ACCOUNT THE SUBMISSIONS OF THE ASSESSEE, THE RE-ASS ESSMENT WAS COMPLETED AT AN INCOME OF RS. 5,97,81,407/- AFTER M AKING ADDITION OF THE PRIOR PERIOD INCOME OF RS. 6,11,69,969/-. 3 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 2.1 AGGRIEVED, THE ASSESSEE APPROACHED TO LD. CIT ( A) AND CHALLENGED THE RE-ASSESSMENT PROCEEDINGS BY CHALLEN GING THE VALIDITY OF THE RE-ASSESSMENT PROCEEDINGS AND ALSO BY CHALLENGING THE ADDITION ON MERITS. THE LD. CIT (A) DISMISSED T HE ASSESSEE LEGAL GROUND CHALLENGING THE VALIDITY OF REASSESSMENT PRO CEEDINGS BUT DELETED THE ADDITION ON MERITS. NOW, THE DEPARTMENT IS BEFORE THE ITAT AND IS CHALLENGING THE DELETION OF ADDITION BY THE LD. CIT (A) WHEREAS THE ASSESSEE, THROUGH THE CO, IS CHALLENGING THE ACTION OF THE LD. CIT (A) IN UPHOLDING THE VALIDITY OF REASSE SSMENT PROCEEDINGS. THE RESPECTIVE GROUNDS RAISED BY BOTH THE PARTIES ARE AS UNDER:- ITA NO. 4717/DEL/2014 (DEPARTMENTS APPEAL): 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE & IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDI TION OF RS. 6,11,69,969/- OF PRIOR PERIOD INCOME MADE BY T HE A.O.? 2. THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 3. THAT THE GROUNDS OF APPEAL ARE WITHOUT PREJUDICE T O EACH OTHER. 4. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, AME ND 4 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 OR FORGO ANY GROUND(S) OF THE APPEAL EITHER BEFORE OR AT THE TIME OF HEARING OF THE APPEAL. C.O. NO. 189/DEL/2017 (ASSESSEES CO): 1. THAT THE LD. CIT(A) OUGHT TO HAVE QUASHED/ANNULLED THE IMPUGNED REASSESSMENT ORDER PASSED U/S 147/143(3) O F I.T. ACT AS REASSESSMENT PROCEEDINGS INITIATED U/S 147/1 48 OF I.T. ACT AFTER COMPLETION OF THE ORIGINAL ASSESSMENT ORD ER PASSED U/S 143(3) DATED 16/12/2008 WAS ILLEGAL INTER ALIA BECAUSE: (I) REASONS HAVE BEEN RECORDED ON THE BASIS OF AUDIT OBJECTION AND NOT ON THE BASIS OF ANY FRESH TANGIBL E MATERIAL. (II) REASONS HAVE BEEN RECORDED MERELY ON CHANGE OF OPINION WHICH IS NOT PERMISSIBLE UNDER THE LAW. (III) AO HAS NOT APPLIED HIS MIND SO AS TO COME TO AN INDEPENDENT SATISFACTION THAT HE HAD REASON TO BELI EVE THAT INCOME HAS ESCAPED ASSESSMENT AS REASONS HAVE BEEN RECORDED ON BORROWED SATISFACTION WITHOUT MAKING AN Y INDEPENDENT ENQUIRIES. (IV) THE REASONS RECORDED INDICATE THAT THE AO HAS ACTED ON MERE SURMISES AND SUSPICION FOR MAKING FISHING A ND ROVING ENQUIRES. THE REQUIREMENT OF LAW IS REASON TO BELIEVE AND NOT REASON TO SUSPECT. 5 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 (V) THERE IS NO NEXUS BETWEEN THE REASONS RECORDED AND THE ESCAPEMENT OF INCOME. (VI) REASONS DO NOT INDICATE ANY FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS NECESSARY FOR ASSESSMENT WHICH WAS ORIGINALLY COMPL ETED U/S 143(3) OF I.T. ACT VIDE ASSESSMENT ORDER DATED 16/12/2008. 2. THAT THE RESPONDENT ASSESSEE RESERVES ITS RIGHT TO ADD, AMEND/MODIFY THE GROUNDS OF CROSS OBJECTIONS. 3. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT SINCE THE ASSESSEE WAS RAISING A LEGAL GROUND CHALLENGING THE VALIDITY OF RE- ASSESSMENT PROCEEDINGS, THE CO OF THE ASSESSEE SHOU LD BE TAKEN UP FIRST. IT WAS FURTHER SUBMITTED THAT IF THE ASSESSEE SUCCEEDS IN ITS CO THEN THE APPEAL OF THE DEPARTMENT WILL BECOME IN FRUCTUOUS . THE LD. SR. DR HAD NO OBJECTION TO THE REQUEST OF THE L D. AUTHORIZED REPRESENTATIVE. 4. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED TH AT THE DETAILS OF THE PRIOR PERIOD INCOME OF RS. 6,11,69,969/- AS WELL AS RELATED EXPENSES OF RS. 57,70,528/- WERE DULLY REFLECTED IN THE TAX AUDIT REPORT ATTACHED WITH THE RETURN OF INCOME AND, THERE FORE, THIS 6 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 INFORMATION WAS ALREADY BEFORE THE AO AT THE TIME OF THE ORIGINAL ASSESSMENT PROCEEDINGS. IT WAS ALSO SUBMITTED THAT T HE PRIOR PERIOD INCOME OF RS. 6,11,69,969/- INCLUDED AN AMOUNT OF R S. 5,69,80,980/- PERTAINING TO DEFERRED SALES TAX LOAN WRITTEN BACK ON THE NET PRESENT VALUE (NPV) AND THIS FACT WAS DULY D ISCLOSED IN THE AUDITED BALANCE SHEET FOR THE YEAR UNDER CONSIDERAT ION VIDE NOTE NO. 20 UNDER SCHEDULE 19. FURTHER, OUR ATTENTION WAS DRAWN TO PAGES 31 AND 32 OF THE PAPER BOOK WHEREIN THIS NOTE HAD BEEN REPRODUCED. IT WAS FURTHER SUBMITTED THAT THIS PRIOR PERIOD INCOME OF RS. 5,69,80,980/- PERTAINING TO DEFERRED SALES T AX LOAN WAS CREDITED TO THE PROFIT & LOSS A/C UNDER THE HEAD PRIOR PERIOD ADJUSTMENT BELOW THE LINE. THE LD. AR SUBMITTED TH AT THIS WAS EVIDENT FROM THE AUDITED PROFIT & LOSS A/C, A COPY OF WHICH WAS PLACED IN THE PAPER BOOK. THE LD. AUTHORISED REPRES ENTATIVE FURTHER SUBMITTED THAT THIS INCOME WAS ACCEPTED AS N ON-TAXABLE BY THE AO IN THE ORIGINAL ASSESSMENT ON ORDER PASSED U /S 143(3) OF THE ACT. THE LD. AUTHORISED REPRESENTATIVE ARGUED THAT IT WAS EVIDENT FROM THE REASONS RECORDED ON THE ISSUE OF PRIOR PER IOD INCOME THAT THIS INFORMATION WAS ALREADY AVAILABLE IN BALANCE SH EET AS WELL AS TAX AUDIT REPORT FURNISHED ALONG WITH RETURN OF INC OME AND FURTHER 7 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 DETAILS AND DOCUMENTARY EVIDENCES REGARDING THE SAM E WERE ALSO FILED BEFORE THE AO DURING THE COURSE OF ORIGINAL A SSESSMENT PROCEEDINGS. IT WAS SUBMITTED THAT THERE WAS NO FRES H TANGIBLE MATERIAL WHICH HAD COME IN POSSESSION OF THE ASSESSI NG OFFICER IN THIS REGARD SO AS TO JUSTIFY THE INVOCATION OF POWE RS U/S 147 OF THE ACT. THE LD. AUTHORISED REPRESENTATIVE ALSO ARGUED THAT THE REASONS FOR REOPENING WERE BASED ON A MERE CHANGE OF OPINION AND, THEREFORE, THE RE-ASSESSMENT WAS BAD IN LAW AND HAD B EEN WRONGLY UPHELD BY THE LD. CIT (A). RELIANCE WAS PLACED ON TH E JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. (DELHI) REPORTED IN 256 ITR 1 (DELHI) WHI CH WAS AFFIRMED BY THE HONBLE APEX COURT AND REPORTED IN 320 ITR 5 61 (SC) WHEREIN THE HONBLE APEX COURT HAD HELD THAT THE AO HAS THE POWER TO REOPEN A COMPLETED ASSESSMENT PROVIDED THE RE IS TANGIBLE MATERIAL TO COME TO THE CONCLUSION THAT THERE IS ES CAPEMENT OF INCOME. RELIANCE WAS ALSO PLACED ON ANOTHER JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. USH A INTERNATIONAL LTD. REPORTED IN 348 ITR 485 FOR THE PROPOSITION TH AT ASSESSMENT CANNOT BE VALIDLY RE-OPENED EVEN WITHIN FOUR YEARS I F THE ASSESSEE HAD FURNISHED FULL AND TRUE PARTICULARS AT THE TIME OF THE ORIGINAL 8 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 ASSESSMENT WITH REFERENCE TO THE INCOME ALLEGED TO H AVE ESCAPED ASSESSMENT IF THE ORIGINAL ASSESSMENT WAS MADE U/S 1 43(3) OF THE ACT. THE LD. AUTHORISED REPRESENTATIVE PRAYED THAT THE C.O. OF THE ASSESSEE BE ALLOWED. 5. IN RESPONSE, THE LD. SR. DEPARTMENTAL REPRESENTA TIVE DEFENDED THE ACTION OF THE AO IN RESORTING TO RE-ASSESSMENT PROCEEDINGS BY RELYING ON THE FINDINGS OF THE LD. CIT (A) IN THE I MPUGNED ORDER WHEREIN THE LD. CIT (A) HAD UPHELD THE INITIATION OF RE-ASSESSMENT PROCEEDINGS. 6. WE HAVE HEARD THE RIVAL SUBMISSION AND HAVE ALSO PERUSED THE MATERIAL ON RECORD. WE HAVE GONE THROUGH THE REASON S RECORDED FOR THE INITIATION OF RE-ASSESSMENT PROCEEDINGS AND THE SAME ARE REPRODUCED BELOW FOR A READY REFERENCE :- ASSESSMENT IN THIS CASE WAS COMPLETED UNDER SECTIO N 143(3) AT LOSS OF RS. 13,88,560/-. THE SCRUTINY OF ASSESSMENT RECORDS REVEALED THAT AS PER 3CD REPORT ASSESSEE HA D PRIOR PERIOD INCOME OF RS. 6,11,69,969/-. AS THE ASSESSEE COMPANY WAS FOLLOWING MERCANTILE SYSTEM OF ACCOUNTI NG, PRIOR PERIOD INCOME OF RS. 6,11,69,969/- SHOULD HAV E BEEN ADDED BACK TO THE INCOME FO TH ASSESSEE. THE MISTAK E RESULTED IN UNDER ASSESSMENT INCOME OF RS. 5,97,81, 409/- AND INCORRECT CARRY FORWARD LOSS OF RS. 13,88,560/ - INVOLVING 9 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 TAX EFFECT OF RS. 2,72,30,210/-. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE TH AT THE INCOME OF RS. 6,11,69,969/- CHARGEABLE TO TAX HAS E SCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147/148 OF THE INCOME TAX ACT, 1961. 6.1 A PERUSAL OF THE REASONS, AS REPRODUCED IN THE PRECEDING PARAGRAPH, SHOWS THAT THE ONLY REASON FOR INITIATIN G THE RE- ASSESSMENT PROCEEDINGS WAS THE OPINION OF THE AO THA T THE PRIOR PERIOD INCOME OF RS. 6,11,69,969/- SHOULD HAVE BEEN ADDED BACK TO THE INCOME OF THE ASSESSEE AND THAT BY NOT DOING SO DUE TO MISTAKE THERE WAS AN UNDER ASSESSMENT OF INCOME AND INCORREC T CARRY FORWARD OF LOSS. THE AO HAS ALSO MENTIONED THAT THIS INFORMATION WAS AVAILABLE IN THE FORM 3CD REPORT WHICH HAD BEEN F ILED FOR THE ASSESSEE. WE ALSO NOTE THAT IN REPLY TO A QUERY RAI SED BY THE AO, THE ASSESSEE, IN ITS SUBMISSION DATED 06.10.2008 IN PAR AGRAPH 6, HAD SUBMITTED BEFORE THE AO THAT PRIOR PERIOD EXPENSES HAD NOT BEEN CLAIMED BY THE ASSESSEE COMPANY IN ITS RETURN OF IN COME AND AS THE PROFIT / LOSS FOR THE YEAR HAD BEEN CONSIDERED ONLY BEFORE THE CLAIM OF PREVIOUS YEAR EXPENSES, NO DISALLOWANCE WAS NEEDE D IN THE ASSESSMENT PROCEEDINGS. THIS REPLY OF THE ASSESSEE IS PLACED AT 10 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 PAGES 213 TO 219 OF THE PAPER BOOK. WE ALSO NOTE TH AT THE PRIOR PERIOD ADJUSTMENT HAS ALSO BEEN DISCLOSED BY WAY OF A NOTE TO THE AUDITED BALANCE SHEET AND THE SAME APPEARS AT SL. N O. 20 IN THE NOTES ON ACCOUNTS ATTACHED TO THE BALANCE SHEET OF THE COMPANY. THIS NOTE READS AS UNDER:- THE COMPANY IS ENTITLED TO DEFER ITS LIABILITY TO PAY SALES TAX IN RESPECT OF ITS CHENNAI UNIT. DURING THE YEAR , THE COMPANY HAS CHANGED THE METHOD OF ACCOUNTING OF SAL ES TAX DEFER LIABILITY FROM HISTORICAL COST BASIS TO NET P RESENT VALUE BASIS. THE LIABILITY UNDER THE SCHEME AS ON 31 ST MARCH, 2006 ON THE BASIS OF NET PRESENT VALUE IS RS. 838.58 LAC S (PREVIOUS YEAR RS. 569.81 LACS) AS PER HISTORICAL C OST BASIS, AS ON 31 ST MARCH, 2006 THE LIABILITY AGGREGATES TO RS.1612.56 LACS (PREVIOUS YEAR RS.1148.57 LACS). ON CHANGE IN THE METHOD OF ACCOUNTING, THE DIFFERENCE BETWEEN THE HISTORICAL COST BASIS AND NET PRESENT VALUE METHOD AMOUNTING TO RS.204.17 LACS FOR THE YEAR HAS BEEN CONSIDERED AS OTHER INCOME AND THE DIFFERENCE BETWE EN THE HISTORICAL COST BASIS AND NET PRESENT VALUE OF SALE S TAX DEFERRAL LIABILITY ACCRUED UPTO 31 ST MARCH, 2005 AMOUNTING TO RS.569.81 LACS HAS BEEN CONSIDERED AS PRIOR PERIOD ADJUSTMENTS. 11 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 6.2 WE ALSO NOTE THAT THIS SALES TAX DEFERMENT IS ALSO DISCLOSED IN THE COMPUTATION OF INCOME OF THE ASSESSEE WHICH WAS F ILED ALONG WITH RETURN OF INCOME. THUS, IT IS VERY MUCH EVIDENT THAT ALL THIS INFORMATION WAS BEFORE THE AO AT THE TIME OF THE ORI GINAL ASSESSMENT PROCEEDINGS. THEREFORE, IN VIEW OF THE FA CTS, IT IS OUR CONSIDERED OPINION THAT THERE WAS NO FRESH TANGIBLE MATERIAL WHICH HAD COME IN POSSESSION OF THE AO WITH REGARD TO THE PRIOR PERIOD INCOME SO AS TO WARRANT INITIATION OF REASSESSMENT P ROCEEDINGS IN THE CASE OF THE ASSESSEE. WE HOLD THAT THE REASSESS MENT WAS BASED ON A MERE CHANGE OF OPINION BY THE AO WHICH, UNDER L AW, HE WAS NOT ENTITLED TO DO. ADMITTEDLY, THE REOPENING IS WIT HIN 4 YEARS, HOWEVER, THE ISSUE IS SQUARELY COVERED IN FAVOUR O F THE ASSESSEE BY THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. REPORTED IN 320 ITR 561 (S C). THE RELEVANT OBSERVATIONS OF THE HONBLE APEX COURT ARE AS UNDER :- ON GOING THROUGH THE CHANGES, QUOTED ABOVE, MADE T O SECTION 147 OF THE ACT, WE FIND THAT, PRIOR TO DIRE CT TAX LAWS (AMENDMENT) ACT, 1987, RE-OPENING COULD BE DON E UNDER ABOVE TWO CONDITIONS AND FULFILLMENT OF THE S AID CONDITIONS ALONE CONFERRED JURISDICTION ON THE ASSE SSING OFFICER TO MAKE A BACK ASSESSMENT, BUT IN SECTION 1 47 OF 12 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 THE ACT [WITH EFFECT FROM 1ST APRIL, 1989], THEY AR E GIVEN A GO-BY AND ONLY ONE CONDITION HAS REMAINED, VIZ., TH AT WHERE THE ASSESSING OFFICER HAS REASON TO BELIEVE T HAT INCOME HAS ESCAPED ASSESSMENT, CONFERS JURISDICTION TO RE- OPEN THE ASSESSMENT. THEREFORE, POST-1 ST APRIL, 19 89, POWER TO RE-OPEN IS MUCH WIDER. HOWEVER, ONE NEEDS TO GIVE A SCHEMATIC INTERPRETATION TO THE WORDS REASO N TO BELIEVE FAILING WHICH, WE ARE AFRAID, SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO R EOPEN ASSESSMENTS ON THE BASIS OF MERE CHANGE OF OPINION , WHICH CANNOT BE PER SE REASON TO RE-OPEN. WE MUST A LSO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWE R TO REVIEW AND POWER TO REASSESS. THE ASSESSING OFFICER HAS NO POWER TO REVIEW; HE HAS THE POWER TO RE-ASSESS. BUT REASSESSMENT HAS TO BE BASED ON FULFILLMENT OF CERT AIN 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 WO ULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF CHANGE O F OPINION AS AN IN-BUILT TEST TO CHECK ABUSE OF POWE R BY THE ASSESSING OFFICER. HENCE, AFTER 1ST APRIL, 1989, AS SESSING OFFICER HAS POWER TO RE-OPEN, PROVIDED THERE IS TA NGIBLE 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 . 13 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 6.3 THUS, THE HONBLE APEX COURT HAS LAID DOWN THAT THERE IS A COMPLETE DIFFERENCE BETWEEN THE POWER TO REVIEW AND POWER TO REASSESS AND, FURTHER, ALTHOUGH, THE AO HAS THE POWE R TO REASSESS, HE HAS NO POWER TO REVIEW. SIMILARLY, THE HONBLE DE LHI HIGH COURT IN THE CASE OF CIT VS. USHA INTERNATIONAL LTD. REPO RTED IN 348 ITR 485 (DELHI) HAS ALSO HELD THAT REOPENING WILL NOT BE VALID IF THE ASSESSEE HAS DISCLOSED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT WITH REFERENCE TO THE INCOME ALL EGED TO HAVE ESCAPED ASSESSMENT IF THE ORIGINAL ASSESSMENT WAS MA DE U/S 143(3) OF THE ACT. THE RELEVANT OBSERVATIONS OF THE HONBL E DELHI HIGH COURT ARE AS UNDER:- ASSESSMENT CANNOT BE VALIDLY REOPENED UNDER SECTIO N 147 OF THE ACT EVEN WITHIN FOUR YEARS, IF AN ASSESS EE HAD FURNISHED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT WITH REFERENCE TO THE INCOME ALLEGED TO HAVE ESCAPED ASSESSMENT, IF THE ORIGINAL ASSESSMENT WAS MADE UNDER SECTION 143(3). SO LONG AS THE ASSESSEE HAS F URNISHED FULL AND TRUE PARTICULARS AT THE TIME OF ORIGINAL A SSESSMENT AND SO LONG AS THE ASSESSMENT ORDER IS FRAMED UNDER SECTION 143(3) OF THE ACT, IT MATTERS LITTLE THAT THE ASSES SING OFFICER DID NOT ASK ANY QUESTION OR QUERY WITH RESPECT TO O NE ENTRY OR NOTE BUT HAD RAISED QUERIES AND QUESTIONS IN OTHER ASPECTS. 14 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 6.4 THEREFORE, IN VIEW THE RATIO OF THE JUDGMENTS OF THE HONBLE APEX COURT AS WELL AS THE HONBLE DELHI HIGH COURT, WHICH IS THE JURISDICTIONAL HIGH COURT FOR THE ASSESSEE, AND AFT ER DUE CONSIDERATION OF THE FACTUAL MATRIX OF THE CASE, IT IS OUR CONSIDERED OPINION THAT THE REOPENING WAS BAD IN LAW IN VIEW OF N O TANGIBLE MATERIAL HAVING COME IN POSSESSION OF THE AO SUBSEQ UENT TO THE ORIGINAL ASSESSMENT PROCEEDINGS AND RELATING TO THE PRIOR PERIOD INCOME. THUS, IT IS A CASE OF MERE CHANGE OF OPINIO N BY THE AO WHICH AMOUNTS TO REVIEW OF HIS EARLIER ORDER AND THE SAME CANNOT BE UPHELD. THEREFORE, THE ORDER OF THE LD. CIT (A) IS SET ASIDE AND THE REASSESSMENT PROCEEDINGS U/S 147/148 OF THE ACT ARE QUASHED AS BEING V OID AB INITIO. 6.5 IN VIEW THE REASSESSMENT PROCEEDINGS BEING QUASHED, WE DO NOT DEEM IT NECESSARY TO GO INTO THE MERITS OF THE ADDITION AS THE SAME HAVE BECOME ACADEMIC IN NATURE. 7. IN THE RESULT, THE C.O. OF THE ASSESSEE STANDS ALLOWED. 8. SINCE WE HAVE ALREADY QUASHED THE REASSESSMENT B Y ALLOWING THE ASSESSEES C.O., THE APPEAL FILED BY THE DEPART MENT BECOMES IN FRUCTUOUS AND THE SAME IS DISMISSED. 15 ITA NO.4717/DEL/2014, C.O. NO. 189/D/17 9. IN THE FINAL RESULT, THE C.O. OF THE ASSESSEE IS ALLOWED AND THE APPEAL OF THE DEPARTMENT IS DISMISSED. (ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH JULY, 2018). SD/- SD/- (G.D.AGARWAL) (SUDHANSHU SRIVASTAVA ) PRESIDENT JUDICIAL MEMBER DATE: 04.07.2018 BINITA COPY OF ORDER TO: - 1) THE APPELLANT; 2) THE RESPONDENT; 3) THE CIT; 4) THE CIT(A)-, NEW DELHI; 5) THE DR, I.T.A.T., NEW DELHI; TRUE COPY BY ORDER ITAT, NEW DELHI