DCIT, New Delhi V. M/s BSES Rajdhani Power Ltd., New Delhi

ITA 486/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58557 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-01-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 05-01-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 28-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H L DHIYANA
• Keywords: Depreciation; Difference of opinion; Assessment record; Capital receipt; Reason to believe; Change of opinion; Revenue expenditure; Reassessment proceedings; Capital expenditure
• Section: 143(3); 14A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE-PRESIDENT AND SHRI I.P. BANSAL, JUDICIAL MEMBER ITA NOS. 488 & 489/DEL/2011 ASSESSMENT YEARS: 2003-04 & 2004-05 DCIT, CIRCLE 3(1), NEW DELHI. VS. BSES YAMUNA POWER LTD., SHAKTI KIRAN BUILDING, KARKARDOOMA, NEW DELHI. AABCC8569N (APPELLANT) (RESPONDENT) ITA NOS. 486 & 487/DEL/2011 ASSESSMENT YEARS: 2003-04 & 2004-05 DCIT, CIRCLE 3(1), NEW DELHI. VS. BSES RAJDHANI POWER LTD., SHAKTI KIRAN BUILDING, KARKARDOOMA, NEW DELHI. AAGCH3187H (APPELLANT) (RESPONDENT) APPELLANT BY : SH. H.L. DHIYANA, CIT(DR) RESPONDENT BY : S/SHRI JITENDRA SANGHAVI & SURENDER KUMAR, CA O R D E R PER BENCH: ALL THESE APPEALS ARE FILED BY THE REVENUE AND ARE DIRECTED AGAINST TWO SEPARATE ORDERS DATED 10.12.2010 AND 25.11.10 PASSE D BY THE CIT(A) FOR EACH ASSESSEE IN RESPECT OF ASSESSMENT YEARS 2003-0 4 AND 2004-05 RESPECTIVELY. 2. IN ALL THESE APPEALS REVENUE HAS RAISED COMMON I SSUE. GROUNDS OF APPEAL IN ALL THE FOUR APPEALS ARE ALSO IDENTICAL A ND READ AS UNDER: - ITA NOS.486 TO 489/DEL/2011 2 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW I N ANNULLING THE ORDER U/S 143(3)/147 OF THE I.T. ACT WHILE HOLDING INVALID THE REOPENING U/S 147, IGNORING THAT WHERE TRANSACTION ITSELF, ON THE BASIS OF SUBSEQUENT INFORMATION IS FOUND TO BE BOGU S TRANSACTION, MERE DISCLOSURE OF THAT TRANSACTION AT TIME OF ORIG INAL ASSESSMENT PROCEEDINGS CANNOT BE SAID TO BE A DISCL OSURE OF THE TRUE AND FULL FACTS IN THE CASE AND ITO WOULD H AVE JURISDICTION TO REOPEN CONCLUDED ASSESSMENT IN SUCH A CASE. REL IANCE IS PLACED ON THE DECISION OF THE HONBLE SUPREME COURT IN PHOOL CHAND BAJRANG LAL VS. ITO (1993) 203 ITR 456 (SC); BAWA ABHAI SINGH VS. DCIT 253 ITR 83 (DEL); 142 CTE (DEL) 272 & 225 ITR 496; RAM PRASAD VS. ITO (1995) 82 TAXMAN 199 (ALL); ESS ESS KAY ENGG. CO. (P) LIMITED VS. CIT 124 TAXMAN 481 (S C). 2. THE APPELLANT CRAVES LEAVE FOR RESERVING THE RIG HT TO AMEND, MODIFY, ALTER, ADD OR FOREGO ANY GROUNDS OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF THIS APPEAL. 3. ALL THESE APPEALS WERE ARGUED TOGETHER BY BOTH T HE PARTIES HENCE FOR THE SAKE OF CONVENIENCE ALL OF THEM ARE BEING DISPO SED OF BY THIS SINGLE ORDER. 4. IN ALL THE FOUR APPEALS LD. CIT(A) HAS STRUCK DO WN THE VALIDITY OF REASSESSMENT PROCEEDING ON THE BASIS OF CHANGE OF OPINION. IN ITA NO. 488/DEL/2011 THE VALIDITY OF REASSESSMENT PROCEEDIN G HAS ALSO BEEN STRUCK DOWN ON THE BASIS OF APPLICABILITY OF PROVISO TO SE C. 147 AS IT IS FOUND THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS REQUIRED TO ASSESS INCOME. 5. FOR ITA NO.488/DEL/2011, TO CONSIDER THE ISSUE R EGARDING APPLICABILITY OF PROVISO TO SEC. 147 IT WILL BE NECESSARY TO MENTION FEW FACTS. THE ORIGINAL RETURN WAS FILED AT LOSS OF RS. 1689482456/- ON 2.1 2.2003 WHICH WAS PROCESSED U/S 143(1) ON 11.03.2004. ORIGINAL INCOM E TAX ASSESSMENT WAS FRAMED VIDE ORDER DATED 28.03.2006, WHEREBY THE LOS S OF THE ASSESSEE WAS ASSESSED AT RS. 168939094/-. NOTICE U/S 148 WAS IS SUED ON 17 TH SEPTEMBER, 2008 IN RESPONSE TO WHICH RETURN WAS FILED ON 21 ST OCTOBER, 2008 DECLARING LOSS OF RS. 177,85,12,752/-. THE VALIDITY OF REASS ESSMENT WAS AGITATED ON THE GROUND THAT IT IS TIME BARRED UNDER PROVISO TO SEC. 147 AND ALSO ON THE GROUND THAT IT IS BASED ON CHANGE OF OPINION. THE ONLY ADDITION WHICH IS MADE IN ITA NOS.486 TO 489/DEL/2011 3 THE REASSESSMENT ORDER IS A SUM OF RS. 6,82,00,000/ - WHICH IS DISALLOWED ON ACCOUNT OF SERVICE LINE DEPOSITS. IT WAS NOTICED B Y THE AO THAT DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE COMPANY HAD R ECEIVED A SUM OF RS. 10,23,00,000/- AS SERVICE LINE DEPOSITS FROM ITS C USTOMERS WHICH WAS REFLECTED IN THE LIABILITY SIDE OF THE BALANCE SHEE T UNDER THE HEAD LOAN AND ADVANCES. OUT OF THE AFOREMENTIONED SECURITY DEPO SIT A SUM OF RS. 3,41,00,000/-, BEING 1/3 RD OF THE TOTAL AMOUNT, WAS TRANSFERRED TO PROFIT AND LOSS ACCOUNT AS REVENUE RECEIPT AND THE BALANCE SUM OF RS. 6,82,00,000/- WAS SHOWN AS LIABILITY. THE AO IS OF THE VIEW THAT T HE SAID AMOUNT WAS A RECEIPT OF THE ASSESSEE WHICH WAS NON-REFUNDABLE AND THE CO MPANY ITSELF HAS RECOGNIZED 1/3 RD OF THE TOTAL RECEIPT IN THE NATURE OF REVENUE RECE IPT, HENCE ENTIRE RECEIPTS ARE CHARGEABLE TO TAX BEING REVENUE RECEIPT. ACCORDINGLY, A SUM OF RS. 6,82,00,000/- IS ADDED TO THE INCOME OF THE ASSESSEE AND THE LOSS OF THE ASSESSEE IS REDUCED TO RS. 162,11,09,994/- A GAINST THE ASSESSED LOSS OF RS. 168,93,09,994/- ASSESSED AS PER ORIGINAL ASSESS MENT ORDER DATED 28.03.2006. 6. THE ASSESSEE OBJECTED TO THE REASSESSMENT PROCEE DING ON THE GROUND THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCE EDINGS, VIDE ANNEXURE 2 ANNEXED TO LETTER DATED 19.12.2005, THE ASSESSEE HA D FILED A DETAILED NOTE ON SERVICE LINE DEPOSITS RECEIVED BY THE ASSESSEE FROM ITS CUSTOMERS WHICH WERE ACCOUNTED FOR AS INCOME OVER THE PERIOD OF THREE YE ARS. THE SAID REPLY WAS DULY CONSIDERED BY THE AO AND IT WAS DISCUSSED WITH HIM AND THE AO WAS CONVINCED WITH THE SUBMISSIONS MADE BY THE ASSESSEE . THEREFORE, NO ADDITION WAS MADE IN THE ORIGINAL ASSESSMENT ORDER FRAMED U/ S 143(3) AND SUBSEQUENT ISSUE OF NOTICE U/S 148 IS BASED ON CHANGE OF OPIN ION. IT WAS CLAIMED THAT THE INITIATION OF REASSESSMENT PROCEEDINGS IS ALSO BARRED BY LIMITATION AS THE SAME IS AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND THERE IS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR THE ASSESSMENT. THE AO REJECTED THE ASSESSEES OBJECTION FOR REOPENING OF THE ASSESSMENT VIDE ORDER DATED 27.11.2009 AND REASSESSMENT ORDER WAS P ASSED ON 09.12.2009. ITA NOS.486 TO 489/DEL/2011 4 7. BEFORE CIT(A) IT WAS CLAIMED THAT ASSESSING OFFI CER, VIDE QUESTIONNAIRE ISSUED ON 16.11.2005, HAD RAISED THE FOLLOWING QUER Y: IN THE AUDIT REPORT FURNISHED ALONG WITH THE RETUR N IT IS STATED THAT THE SERVICE LINE DEPOSITS RECEIVED FROM THE CO NSUMERS ARE ACCOUNTED FOR AS INCOME OVER THREE YEARS PERIOD. P LEASE EXPLAIN WHY THE SAME SHOULD NOT BE ACCOUNTED IN THE CURRENT YEAR ITSELF SINCE THE ASSESSEE COMPANY HAS RECEIVED THE RECEIPT S IN THE CURRENT YEAR. 8. IT IS FOUND BY LD. CIT(A) THAT ASSESSEE HAD FILE D A REPLY DATED 19.12.2005, WHEREBY A NOTE ON THE SERVICE LINE DEPO SITS WAS FILED AND, THEREFORE, SHE HELD THAT IT IS EVIDENT THAT THE ISS UE FOR WHICH THE CASE HAS BEEN REOPENED WAS SUBJECT MATTER OF SCRUTINY ASSESS MENT WHICH WAS COMPLETED ON 29.12.2006. ALL THE RELEVANT MATERIAL WAS FILED BEFORE THE AO. SHE HELD THAT REASSESSMENT PROCEEDINGS ARE INITIATE D ON PERUSAL OF THE ASSESSMENT RECORD. SHE ALSO HELD THAT IT IS NOT T HE CASE OF THE AO THAT ANY NEW INFORMATION HAD COME TO HIS NOTICE WHICH COULD LAID TO THE FORMATION OF BELIEF THAT THE INCOME HAS ESCAPED ASSESSMENT. THE ASSESSMENT IS REOPENED ON THE BASIS OF SAME MATERIAL WHICH WAS AVAILABLE A T THE TIME OF ORIGINAL ASSESSMENT PROCEEDING AND THUS, TAKING A DIFFERENT VIEW AT A LATER STAGE WILL BE MERELY A CASE OF CHANGE OF OPINION. RELYING O N THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD., 320 ITR 561 (SC) AND ALSO THE DECISION OF HONBLE DELHI HIGH COURT I N THE CASE OF SATNAM OVERSEAS LTD. VS. ADDL. CIT, 188 TAXMAN 172, SHE HE LD THAT THE PROVISO TO SEC. 147 IS APPLICABLE HENCE THE INITIATION OF REAS SESSMENT PROCEEDINGS IS TIME BARRED. IT WAS NOT ESTABLISHED BY THE AO THAT THE INCOME HAD ESCAPED ASSESSMENT BECAUSE OF THE FAILURE ON THE PART OF TH E ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSE SSMENT OF THE ASSESSEE. THUS, THE LD. CIT(A) HAS STRUCK DOWN THE VALIDITY O F REASSESSMENT PROCEEDINGS ON THE BASIS OF CHANGE OF OPINION AS WELL AS ON T HE GROUND OF APPLICABILITY OF PROVISO TO SEC. 147. 9. FOR THE SAKE OF COMPLETENESS THE FACTUAL ASPECT IN RESPECT OF ALL THE PRESENT APPEALS IS DESCRIBED AS BELOW:- ITA NOS.486 TO 489/DEL/2011 5 ITA NO. 488/DEL/2011 10. COPY OF REASONS RECORDED FOR REOPENING OF ASSES SMENT IS PLACED AT PAGE 24 OF THE PAPER BOOK AND IT WILL BE RELEVANT T O REPRODUCE THE SAME. M/S BSES YAMUNA POWER LIMITED A.Y. 2003-04 REASONS FOR REOPENING THE CASE U/S 147/148 OF THE I .T. ACT, 1961 RETURN OF INCOME IN THIS CASE WAS FILED ON 2/12/20 03 DECLARING LOSS OF RS. 1689482456/-. THE RETURN WAS PROCESSED U/S 143(1) ON 11/03/2004. THE SCRUTINY ASSESSMENT COMP LETED U/S 143(3) ON 29/12/2006 AT LOSS OF 1689309994/-. ON PERUSAL OF THE ASSESSMENT RECORD OF THE ASSESSEE FOLLOWING DISCREPANCIES HAVE COME TO THE NOTICE; THAT DURING THE YEAR THE ASSESSEE COMPANY RECEIVED A SUM OF RS. 10.23 CRORES FROM CUSTOMERS AS SECURITY LINE DEPOSITS WHICH HAS BEEN REFLECTED IN THE LIABILITY SIDE OF T HE B/S UNDER THE HEAD LOAN & ADVANCES. OUT OF THIS SECURITY DEPOSIT S A SUM OF RS. 3.41 CRORES, AS 1/3 RD OF THE TOTAL AMOUNT, WAS TRANSFERRED TO P&L ACCOUNT AS REVENUE RECEIPT AND A BALANCE SUM OF RS. 6.82 CRORES HAS BEEN SHOWN AS LIABILITY. THE WHOLE OF THE SECU RITY LINE DEPOSITS ARE IN FACT NOT A LIABILITY OF THE COMPANY BUT ARE REVENUE RECEIPTS ACCRUED/RECEIVED DURING THE RUNNING OF BUS INESS OPERATIONS OF THE COMPANY AND HENCE ARE TAXABLE IN ITS HANDS. SIMILAR TYPE OF ADDITION WAS ALSO MADE IN THE A.Y. 2005-06 THE AO HELD THAT; THE SERVICE LINE DEPOSITS ARE NOT IN THE NATURE OF DEPOSITS SINCE T HEY ARE NON-REFUNDABLE. THE FACT ALSO ADMITTED BY THE ASSESSEE COM. ONCE THESE RECEIPTS HAVE BEEN ACCEPTED AS NON- REFUNDABLE RECEIPTS THEY ARE NO MORE A LIABILITY ON THE COMPANY. HENCE THE TREATMENT GIVEN BY THE ASSESSEE TO SERVICE LINE DEPOSIT BY TREATING THEM AS LOAN FU NDS AND ACCORDINGLY AS LIABILITIES IS ALTOGETHER INCORR ECT. THE FACT THAT THE ASSESSEE COMPANY ITSELF TREATED 1 /3 RD OF THESE RECEIPTS AS REVENUE RECEIPTS, IMPLIEDLY, G OES ON TO SHOW THAT THE COMPANY BELIEVE THAT THEY ARE OF REVENUE NATURE. IN VIEW OF THE FACTS NARRATED ABOVE, I HAVE REASON TO BELIEVE THAT INCOME TO THE TUNE OF RS. 6.82 CRORES HAS ESCA PED ASSESSMENT FOR FAILURE ON THE FACTS OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR TH E ASSESSMENT FOR THE A.Y. 2003-04 AS PER THE PROVISIONS OF SEC. 147 OF THE INCOME TAX ACT,1961. ITA NOS.486 TO 489/DEL/2011 6 11. COPY OF QUESTIONNAIRE RAISED BY THE AO DURING T HE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS VIDE LETTER DATED 16.11.2005 IS FILED AT PAGES 46 TO 48 OF THE PAPER BOOK AND FOLLOWING QUESTION NO. 2 W AS RAISED FOR THE SERVICE LINE DEPOSIT 2. IN THE AUDIT REPORT FURNISHED ALONG WITH THE R ETURN IT IS STATED THAT THE SERVICE LINE DEPOSITS RECEIVED FROM THE CUSTOMERS ARE ACCOUNTED FOR AS INCOME OVER THREE YEARS PERIOD . PLEASE EXPLAIN WHY THE SAME SHOULD NOT BE ACCOUNTED IN THE CURRENT YEAR ITSELF SINCE THE ASSESSEE COMPANY HAS RECEIVED THE RECEIPTS IN THE CURRENT YEAR. 12. THE COPY OF REPLY GIVEN BY THE ASSESSEE IS LETT ER DATED 19.12.2005 COPY OF WHICH IS PLACED AT PAGES 49 TO 51 OF THE PAPER B OOK, THE REPLY OF THE ASSESSEE IN THIS REGARD WAS AS UNDER: - 2. NOTE ON THE SERVICE LINE DEPOSITS RECEIVED FRO M THE CUSTOMER AND ACCOUNTED FOR AS INCOME OVER 3 YEARS PERIOD. (A NNEXURE ANNEXURE ANNEXURE ANNEXURE- -- -2 22 2) 13. COPY OF ANNEXURE 2 FILED WITH LETTER DATED 19 .12.2005 IS ATTACHED AT PAGE 25 & 26 OF THE PAPER BOOK WHICH READ AS UNDER: - ANNEXURE 2 BSES YAMUNA POWER LIMITED ASSESSMENT YEAR 2003-04 NOTE ON THE SERVICE LINE DEPOSITS RECEIVED FROM THE CUSTOMERS AND ACCOUNTED FOR AS INCOME OVER 3 YEARS PERIOD. SERVICE LINE DEPOSITS ARE RECEIVED FROM THE CUSTOME RS FOR THE REQUIRED ELECTRIFICATION OF NEW LINES/AREAS IN THEI R LOCALITY. 1. FOR ELECTRIFYING THE AREAS/LOCALITY, THE ASSESS EE COMPANY HAS TO INCUR HUGE EXPENSES WHICH ARE NORMALLY IN THE NA TURE OF CAPITAL EXPENSES. IN FACT, AS PER ELECTRICITY (SUP PLY) ACT, 1948, SERVICE LINE DEPOSITS RECEIVED FROM THE CUSTOMERS I S NOT THE INCOME BUT IS IN THE NATURE OF CAPITAL RECEIPT TO M EET OUT THE HUGE CAPITAL EXPENDITURE FOR ELECTRIFYING THE AREAS /LOCALITY. 2. IN FACT THE SERVICE LINE DEPOSITS RECEIVED FROM THE CUSTOMERS ARE REQUIRED TO BE REDUCED IN THE CORRESPONDING CAP ITALIZATION OF ASSETS FOR ELECTRIFYING THE CONCERNED AREAS. ACCOR DINGLY, SERVICE LINE DEPOSITS RECEIVED CANNOT BE TREATED AS REVENUE INCOME. THE MOST APPROPRIATE METHOD OF ACCOUNTING OF SERVICE LI NE DEPOSITS IS TO ACCOUNT FOR THE SAME UNDER THE HEAD CURRENT LIA BILITIES AND DEDUCT THE SAME AGAINST THE CAPITAL EXPENDITURE INC URRED THERE AGAINST, THE SAME SHOULD BE THE TREATMENT FOR TAX P URPOSE, I.E. ITA NOS.486 TO 489/DEL/2011 7 DEPRECIATION SHOULD BE ALLOWED AGAINST THE NET FIXE D ASSET COST (I.E. NET OF SERVICE LINE DEPOSIT). 3. IN THE CASES OF NON ELECTRIFIED AREAS IT TAKES A LOT OF TIME SPREADING FROM 2 TO 3 YEARS IN ITS ELECTRIFICATION. AFTER PUTTING THE ASSETS INTO USE, ALL THE EXPENSES INCURRED ON E LECTRIFICATION OF THE AREAS ARE CAPITALIZED AND DEPRECIATION @ 25% PE R ANNUM IS BEING CLAIMED IN INCOME TAX. ACCORDINGLY, FIXED AS SETS (CAPITALIZED DEPENDING UPON THE FINALIZATION OF ELE CTRIFICATION OF AREAS) ARE BEING FULLY DEPRECIATED/ CLAIMED AS REVE NUE EXPENDITURE BY WAY OF DEPRECIATION IN THE NEXT 4 TO 5 YEARS. 4. IN VIEW OF THE ABOVE METHOD, SERVICE LINE DEPOS ITS RECEIVED IS NOT AT ALL THE INCOME OF THE ASSESSEE COMPANY BUT R EQUIRED TO BE DEDUCTED FROM THE CONCERNED FIXED ASSETS AND THEN C LAIMED AS DEPRECIATION ON THE NET CAPITALIZATION @ 25%. HOWE VER, IN THE ABSENCE OF ONE TO ONE LINKING OF SERVICE LINE DEPOS ITS RECEIVED FROM THE CUSTOMERS AND THE EXPENSES INCURRED THERE AGAINST FOR ELECTRIFYING THE CONCERNED AREAS, SERVICE LINE DEPO SITS WHICH ARE IN THE NATURE OF CAPITAL RECEIPT ARE BEING OFFERED AS REVENUE EXPENDITURE OVER 3 YEARS PERIOD. 5. BASED UPON THE ABOVE IT IS SUBMITTED THAT THE S ERVICE LINE DEPOSITS RECEIVED IN THE CURRENT YEAR (2002-03) ITS ELF CANNOT BE TREATED AS THE INCOME OF THE SAME YEAR. IN FACT IT IS NOT THE INCOME AT ALL AND IS REALLY REQUIRED TO BE DEDUCTED FROM THE CORRESPONDING FIXED ASSETS AS AND WHEN CAPITALIZED. THE METHOD FOLLOWED BY THE COMPANY, (THE SERVICE LINE DEPOSITS RECEIVED FROM THE CUSTOMERS) AS INCOME OVER THE INITIAL 3 YE AR PERIOD, RESULTS IN THE ASSESEE OFFERING HIGHER INCOME FOR T AX, MUCH EARLIER THAN WHAT WOULD HAPPENED HAD THE ASSESSEE F OLLOWED THE ALTERNATIVE METHOD OF CLAIMING DEPRECIATION ON THE NET FIXED ASSET COST; OVER A 4-5 YEAR PERIOD, WHICH WOULD BEG IN AT THE END OF THE 2-3 YEAR ASSET INSTALLATION PERIOD. ITA NO. 489/DEL/2011 14. IN THIS CASE THE ORIGINAL ASSESSMENT ORDER IS D ATED 29.12.2006 THE COPY OF WHICH HAS BEEN PLACED AT PAGES 19 TO 22 OF THE P APER BOOK. COPY OF REASONS RECORDED FOR REOPENING IS PLACED AT PAGE 10 8 OF THE PAPER BOOK. IN THIS CASE REASON TO REOPEN APART FROM ISSUE OF SERV ICE LINE DEPOSITS ALSO CONSISTS OF ISSUE REGARDING DEPRECIATION ON ENERGY METERS. ADDITION MADE ON ACCOUNT OF SERVICE LINE DEPOSITS IS TO THE TUNE OF RS. 96,40,00,000/- AND ON ACCOUNT OF DEPRECIATION ON ENERGY METERS IS RS. 9,1 4,71,039/-. THE REASONS RECORDED ARE AS UNDER: - ITA NOS.486 TO 489/DEL/2011 8 M/S BSES YAMUNA POWER LIMITED A.Y. 2004-05 REASONS FOR REOPENING THE CASE U/S 147/14 8 OF THE I.T. ACT, 1961 RETURN OF INCOME IN THIS CASE WAS FILED ON 30/10/2 004 DECLARING LOSS OF RS. 140154360/-. SUBSEQUENTLY THE RETURN W AS REVISED ON 30/03/2000. THE RETURN WAS PROCESSED U/S 143(1) ON 29/12/2006. THE SCRUTINY ASSESSMENT COMPLETED U/S 143(3) ON 29/12/2006 AT LOSS OF RS. 187430602/-. ON PERUSAL OF THE ASSESSMENT RECORD OF THE ASSESSE E FOLLOWING DISCREPANCIES HAVE COME TO THE NOTICE; THAT THE ASSESSEE COMPANY CLAIMED AND WAS ALLOWED DEPRECIATION ON ENERGY METERS @ 80% UNDER THE HEAD PLANT AND MACHINERY INSTEAD OF CORRECT RATE OF 25%. IT IS P ERTINENT TO MENTION HERE THAT EXCESS DEPRECIATION CLAIMED ON AC COUNT OF ENERGY METER HAS ALSO BEEN DISALLOWED IN THE A.Y. 2 005-06. IT WAS HELD IN THE ASSESSMENT ORDER FOR A.Y. 2005-06 T HAT ENERGY METERS INSTALLED BY THE COMPANY ARE MOSTLY MECHANIC AL METERS USED FOR MEASURING ELECTRICAL CONSUMPTION AND ARE N OT ENERGY SAVING DEVISES. IT IS ONLY THE ENERGY METERS WHICH HAVE INHERENT QUALITY OF SAVING ENERGY WHICH QUALITY FOR HIGHER D EPRECIATION OF 80% AS ENVISAGED IN THE CLAUSE 8(IX) OF PLANT AND M ACHINERY DEPRECIATION SCHEDULE OF IT RULES. SINCE THE FACTS ARE SIMILAR IN THIS ASSESSMENT YEAR ALSO, HENCE I HAVE REASON TO B ELIEVE THAT THE ASSESSEE HAS CLAIMED HIGHER DEPRECIATION OR ENE RGY METERS TO WHICH HE WAS NOT ENTITLED. THIS EXCESS CLAIM IS TO THE TUNE OF RS. 91471039/-. THAT DURING THE YEAR THE ASSESSEE COMPANY RECEIVED A SUM OF RS. 161600000/- FROM CUSTOMERS AS SECURITY L INE DEPOSITS WHICH HAS BEEN REFLECTED IN THE LIABILITY SIDE OF THE B/S UNDER THE HEAD LOAN & ADVANCES. OUT OF THIS SECU RITY DEPOSITS A SUM OF RS. 65200000/-, AS 1/3 RD OF THE TOTAL AMOUNT, WAS TRANSFERRED TO P&L ACCOUNT AS REVENUE RECEIPT AND A BALANCE SUM OF RS. 964000000/- HAS BEEN SHOWN AS LIABILITY. THE WHOLE OR THE SECURITY LINE DEPOSITS ARE IN FACT NOT A LIA BILITY OF THE COMPANY BUT ARE REVENUE RECEIPTS ACCRUED/RECEIVED D URING THE RUNNING OF BUSINESS OPERATIONS OF THE COMPANY AND H ENCE ARE TAXABLE IN ITS HANDS. SIMILAR TYPE OF ADDITION ALS O MADE IN THE A.Y. 2005-06. IN VIEW OF THE FACTS NARRATED ABOVE, I HAVE REASON TO BELIEVE THAT INCOME TO THE TUNE OF RUPEES 187871039 /- HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR 2004-05 AS PER PROVISIONS OF SEC. 147 OF THE I.T. ACT, 1961. ACCO RDINGLY NOTICE U/S 148 IS BEING ISSUED. ITA NOS.486 TO 489/DEL/2011 9 15. THE QUESTIONNAIRE ISSUED BY THE AO IS DATED 9.1 0.2006 COPY OF WHICH IS PLACED AT PAGE 139 TO 140 OF THE PAPER BOOK. THE Q UERY REGARDING BOTH THESE ISSUES ARE AS UNDER: - 4. PLEASE GIVE THE LOGIC AND THE REASON FOR ACCOU NTING THE SERVICE LINE DEPOSITS AS INCOME OVER A PERIOD O F THREE YEARS. ..... 8. PLEASE FURNISH THE RELEVANT DOCUMENTARY PROOF F OR CLAIMING DEPRECIATION ON ENERGY METERS @ 80%. 16. COPY OF LETTER VIDE WHICH THE ABOVE MENTIONED Q UERIES WERE REPLIED IS PLACED AT PAGES 37 & 38 OF THE PAPER BOOK WHICH IS LETTER DATED 18.11.2006. THE NOTE RELATING TO SERVICE LINE DEPOSIT WAS REPLI ED VIDE SL. NO. 9 WHICH READ AS UNDER: - 9. NOTE ON THE LOGIC AND REASONS FOR ACCOUNTING T HE SERVICE LINE DEPOSITS AS INCOME OFFERED OVER A PERIOD OF T HREE YEARS ANNEXURE I ANNEXURE I ANNEXURE I ANNEXURE I. 17. THE NOTE REGARDING DEPRECIATION ON ENERGY METER S WAS REPLIED VIDE SL. NO. 13 WHICH READ AS UNDER: - 13. NOTE ON CLAIMING DEPRECIATION ON ENERGY METE RS @ 80% - ANNEXURE M ANNEXURE M ANNEXURE M ANNEXURE M. 18. THE NOTE RELATING TO SERVICE LINE DEPOSIT IS AL MOST SAME AND FOR THE SAKE OF BRAVITY THE SAME IS NOT REPRODUCED. HOWEVER, TH E COPY OF THE SAME IS FILED BY THE ASSESSEE AT PAGES 39 TO 40 OF THE PAPER BOOK . 19. THE REPLY REGARDING CLAIMING OF DEPRECIATION ON ENERGY METERS IN ANNEXURE M PLACED AT PAGE 41 IS AS UNDER: - ANNEXURE ANNEXURE ANNEXURE ANNEXURE- -- -M MM M NOTE ON CLAIMING DEPRECIATION ON ENERGY METERS @ 80% NOTE ON CLAIMING DEPRECIATION ON ENERGY METERS @ 80% NOTE ON CLAIMING DEPRECIATION ON ENERGY METERS @ 80% NOTE ON CLAIMING DEPRECIATION ON ENERGY METERS @ 80% THE ASSESSEE COMPANY IS CLAIMING DEPRECIATION @ 80 % ON ENERGY METERS UNDER CLAUSE (III)(MACHINERY & PLANT) 8(IX) OF PART A TO THE RATES OF DEPRECIATION IN THE APPENDIX TO THE INCOME TAX RULES APPLICABLE FOR THE A.Y. 2004-05, ( ENCLOSED RELEVANT DOCUMENTARY PROOF SPECIFICATION/POS OF ENERGY METER-ANNEXURE M(1), M(2), M(3), M(4) ANNEXURE M(1), M(2), M(3), M(4) ANNEXURE M(1), M(2), M(3), M(4) ANNEXURE M(1), M(2), M(3), M(4). ITA NOS.486 TO 489/DEL/2011 10 ITA NO. 487/DEL/2011 20. THE ORIGINAL ASSESSMENT IN THIS CASE IS FRAMED VIDE ORDER DATED 29.12.2006 AT A LOSS OF RS. 21,91,09,259/- PASSED U /S 143(3) OF THE ACT. 21. COPY OF REASONS RECORDED FOR REOPENING IS FILED AT PAGE 110 OF THE PAPER BOOK. THE REASONS ARE IDENTICAL AS ARE IN IT A NO. 489 AND FOR THE SAKE OF BREVITY THE SAME ARE NOT BEING REPRODUCED. THE ESCAPEMENT WHICH HAS BEEN POINTED OUT IN THE REASONS IS A SUM OF RS. 37, 07,38,484/- ON ACCOUNT OF DIFFERENCE IN DEPRECIATION ON ENERGY METERS AND A S UM OF RS. 15,73,00,000/- ON ACCOUNT OF SECURITY LINE DEPOSITS AND TOTAL ESCA PED INCOME IS COMPUTED IN THE REASONS AT RS. 55,86,09,523/-. COPIES OF QUERI ES RAISED BY THE AO VIDE LETTER DATED 09.12.2006 IS PLACED AT PAGES 140, 141 OF THE PAPER BOOK. THE QUERY RELATING TO SERVICE LINE DEPOSIT IS AT SL. NO . 4 WHICH READ AS UNDER: - 4. PLEASE GIVE THE LOGIC AND THE REASON FOR ACCOU NTING THE SERVICE LINE DEPOSITS AS INCOME OVER A PERIOD O F THREE YEARS. 22. QUERY RELATING TO DEPRECIATION ON ENERGY METER IS AT SL. NO. 8 WHICH READ AS UNDER: - 8. PLEASE FURNISH THE RELEVANT DOCUMENTARY PROOF FOR CLAIMING DEPRECIATION ON ENERGY METERS @ 80%. 23. THE COPY OF THE REPLY TO THE ABOVE QUERIES WAS FURNISHED BY THE LETTER DATED 18.11.2006 (COPY IS FILED AT PAGES 38 & 39 OF THE PAPER BOOK). THE REPLY REGARDING SERVICE LINE DEPOSITS WAS GIVEN VID E SL. NO. 9 WHICH READ AS UNDER: - 9. NOTE ON THE LOGIC AND REASONS FOR ACCOUNTING T HE SERVICE LINE DEPOSITS AS INCOME OFFERED OVER A PERIOD OF T HREE YEARS ANNEXURE I ANNEXURE I ANNEXURE I ANNEXURE I. 24. COPY OF REPLY GIVEN IN RESPECT OF DEPRECIATION ON ENERGY METERS IS AT SL. NO. 13 WHICH READ AS UNDER: - ITA NOS.486 TO 489/DEL/2011 11 13. NOTE ON CLAIMING DEPRECIATION ON ENERGY METE RS @ 80% - ANNEXURE ANNEXURE ANNEXURE ANNEXURE- -- -M MM M. 25. NOTE ON SERVICE LINE DEPOSITS IS ALMOST SAME HE NCE FOR THE SAKE OF BREVITY THE SAME IS NOT BEING REPRODUCED (COPIES PL ACED AT PAGES 40 & 41 OF THE PAPER BOOK). SIMILARLY, COPY OF REPLY REGARDIN G DEPRECIATION OF ENERGY METERS IS PLACED AT PAGE 42 OF THE PAPER BOOK WHICH IS ALSO SIMILAR TO THE EARLIER. THE TECHNICALITIES SPECIFICATIONS WERE AL SO FILED, COPY OF WHICH IS PLACED AT PAGES 44 TO 51 OF THE PAPER BOOK. ITA NO. 486/DEL/2011 26. THE ORIGINAL ASSESSMENT IN THE PRESENT CASE WAS COMPLETED VIDE ORDER DATED 28.03.2006 AT A LOSS OF RS. 173,68,65,747/- P ASSED U/S 143(3) OF THE ACT. THE COPY OF REASONS IS PLACED AT PAGE 23 OF T HE PAPER BOOK. THE ESCAPED INCOME HAS BEEN CONSIDERED IN THE SHAPE OF SECURITY LINE DEPOSITS AND ESCAPED INCOME ON THAT ACCOUNT HAS BEEN FOUND A T RS. 11,66,95,223/-. TOTAL AMOUNT OF SECURITY DEPOSIT RECEIVED BY THE AS SESSEE WAS 17,50,52,829/- OUT OF WHICH A SUM OF RS. 5,83,57,606/- WAS CONSIDE RED BY THE ASSESSEE AS REVENUE RECEIPTS AND BALANCE AMOUNT OF RS. 11,66,95 ,223/- WAS SHOWN AS A LIABILITY AND THE REASON FOR REOPENING ARE THE SAME . THE COPY OF QUESTIONNAIRE ISSUED BY THE AO DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING IS PLACED AT PAGE 46 TO 48 OF THE PAPER BOOK WHICH IS A LETTER DATED 16.11.2005. THE QUERY RELATING TO SERVICE LI NE DEPOSITS IS PLACED AT SL. NO. 2 WHICH READ AS UNDER: - 2. IN THE AUDIT REPORT FURNISHED ALONG WITH THE R ETURN IT IS STATED THAT THE SERVICE LINE DEPOSITS RECEIVED FROM THE CONSUMERS ARE ACCOUNTED FOR AS INCOME OVER THREE YE ARS PERIOD. PLEASE EXPLAIN WHY THE SAME SHOULD NOT BE ACCOUNTED IN THE CURRENT YEAR ITSELF SINCE THE ASSESSEE COMPANY HAS RECEIVED THE RECEIPTS IN THE CURRENT YEAR. 27. THE REPLY OF THE ABOVE QUESTIONNAIRE IS LETTER DATED 20.12.2005 COPY OF WHICH IS PLACED AT PAGES 49 TO 51 OF THE PAPER BOOK . THE REPLY TO THE AFOREMENTIONED QUERY WAS GIVEN VIDE SL. NO. 2 WHICH READ AS UNDER: - ITA NOS.486 TO 489/DEL/2011 12 2. NOTE ON THE SERVICES LINE DEPOSITS RECEIVED FR OM THE CUSTOMER AND ACCOUNTED FOR AS INCOME OVER 3 YEARS P ERIOD. (ANNEXURE ANNEXURE ANNEXURE ANNEXURE- -- -2 22 2). 28. THE COPY OF ANNEXURE 2 IS FILED AT PAGES 24 T O 26 OF THE PAPER BOOK WHICH IS ALMOST THE SAME AS WAS GIVEN IN RESPECT OF OTHER YEARS. 29. THUS, IT IS CLEAR FROM THE ABOVE FACTS THAT QUE RIES ON THE ISSUES ON WHICH REASSESSMENT PROCEEDINGS HAVE BEEN INITIATED WERE RAISED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS AND THE R EPLIES WERE ALSO GIVEN BY THE ASSESSEE WITH REGARD TO THOSE QUERIES. 30. LD. DR AFTER NARRATING THE ABOVE FACTS PLEADED THAT LD. CIT(A) WHILE QUASHING THE INITIATION OF REASSESSMENT PROCEEDINGS HAS FAILED TO CONSIDER EXPLANATION 1 OF SEC. 147, ACCORDING TO WHICH MERE PRODUCTION BEFORE THE AO OF THE ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH M ATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVERED WILL NOT NE CESSARILY AMOUNT TO DISCLOSURE WITHIN THE MEANING OF PROVISO TO SEC.147 . THEREFORE, HE PLEADED THAT LD. CIT(A) HAS WRONGLY APPLIED THE PROVISO TO SEC. 147. MERE RAISING OF A QUERY AND REPLY THEREOF DOES NOT SUBSTANTIATE THE F ACT THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARILY FOR ITS ASSESSMENT. HE SUBMITTED THAT THERE IS ABSOLUTELY NO DISCUSSION WHATSOEVER IN THE ORIGINAL ASSESSMENT OR DER AND THUS, IT CANNOT BE SAID THAT THE REPLY OF THE ASSESSEE WAS CONSIDERED BY THE AO AND AO HAD APPLIED HIS MIND. HE SUBMITTED THAT ACCORDING TO T HE LANGUAGE OF EXPLANATION 1 MERE SUBMISSION OF FACTS IS NOT SUFFI CIENT. HE ALSO PLEADED THAT IT IS NOT A CASE OF MERE CHANGE OF OPINION AS AO HAS NOT APPLIED HIS MIND ON THE ISSUES ON WHICH THE REASSESSMENT PROCEEDINGS HA VE BEEN INITIATED. TO SUPPORT HIS ARGUMENTS LD. DR REFERRED TO THE FOLLOW ING DECISIONS:- I) M/S HONDA SIEL POWER PRODUCTS LTD. VS. DCIT (201 1) 197 TAXMAN 415 (DEL.) : IN THIS CASE, IT WAS HELD BY THE HONBLE HIGH COURT THAT THE TERM FAILURE ON THE PART OF THE ASSESSEE IS NOT RESTRI CTED ONLY TO INCOME TAX RETURN AND COLUMNS OF INCOME TAX RETURNS OR THE TAX AUDIT REPORT; EXPRESSION FAILURE TO FULLY AND TRULY DISCLOSE MATERIAL FACTS ALSO RELATES TO THE STAGE OF ITA NOS.486 TO 489/DEL/2011 13 ASSESSMENT PROCEEDINGS. IT WAS HELD THAT MATERIAL PARTICULAR REFERRED TO IN THE FIRST PROVISO TO SEC. 147 NOT ONLY REFERS TO TH E DETAILS IN RETURN BUT ALSO TO EXPLANATIONS AND DETAILS FURNISHED DURING THE COURS E OF ASSESSMENT PROCEEDINGS. THEREFORE, IT WAS HELD THAT MERELY BE CAUSE MATERIAL LIES EMBEDDED IN MATERIAL OR EVIDENCE, WHICH AO COULD HA VE UNCOVERED BUT DID NOT UNCOVER, IS NOT A GOOD GROUND TO DENY OR STRIKE DOWN A NOTICE FOR REASSESSMENT. THEREFORE, IT IS THE CONTENTION OF L D. DR THAT EXPLANATION 1 IS FULLY APPLICABLE, HENCE CIT(A) IS NOT RIGHT IN HOLD ING THAT THERE WAS NO FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND T RULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT. HE SUBMITTED THAT THIS D ECISION OF THE HONBLE DELHI HIGH COURT HAS BEEN CONFIRMED BY THE HONBLE SUPREME COURT VIDE DECISION DATED 29 TH JULY, 2011 IN CIVIL NO. 19085/2011. HE HAS ALSO S UBMITTED COPY THEREOF IN WHICH THEIR LORDSHIPS OF HONBLE SU PREME COURT HAVE UPHELD THE VALIDITY OF INITIATION OF REASSESSMENT PROCEEDI NG WITH THE FOLLOWING OBSERVATIONS IN OUR VIEW, THE REOPENING OF THE ASS ESSMENT IS FULLY JUSTIFIED ON THE FACTS AND CIRCUMSTANCES OF THE CASE. II) M/S DALMIA P. LTD. VS. CIT WRIT PETITION (CIVIL ) NO. 6205 OF 2010 ORDER DT. 26 TH SEPT., 2011: IN THIS CASE, ON FACTS, IT WAS FOUND THAT THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO SUBMIT DETAILS IN RESPECT OF SUNDRY CREDITORS AMOUNTING TO ` 1,66,37,402/- AND DESPITE VARIOUS QU ERIES RAISED BY THE ASSESSING OFFICER DURING THE COURSE OF ORIGINAL ASS ESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED DETAILS OR CONFIRMATIONS ONLY TO THE EXTENT OF ` 1,13,53,344/- AND IT WAS HELD BY HONBLE HIGH COURT THAT IN RESPECT OF SUNDRY CREDITORS REGARDING WHICH NO DETAILS OR CONFIRMATIO NS WERE FILED THE REOPENING WAS VALID. III) M/S ORIENTAL INSURANCE CO. LTD. VS. ACIT ITA N O. 3910/DEL/2007 ORDER AT 22 ND JULY, 2011: TO CONTEND THAT IN A CASE WHEN AN ASSE SSMENT ORDER WAS PASSED U/S 143(3) A GENERAL PRESUMPTION CANNOT BE R AISED THAT SUCH AN ORDER WAS PASSED AFTER AN APPLICATION OF MIND AND IN ABSE NCE OF ANY DISCUSSION THE CASE WILL NOT FALL WITHIN THE SCOPE OF CHANGE OF O PINION AS NO OPINION WHATSOEVER HAS BEEN FORMED BY THE AO ON THAT ISSUE. ITA NOS.486 TO 489/DEL/2011 14 IV) M/S ANKITA DEPOSITS & ADVANCES (P) LTD. VS. CIT (2010) 193 TAXMAN 36 (HP) JUDGMENT DT. 18 TH JUNE, 2011: IN THIS CASE, IT IS HELD THAT POWER OF THE AO TO REOPEN THE ASSESSMENT ARE VERY WIDE. THE TERM REASON TO BELIEVE DOES NOT MEAN THE MERE CHANGE OF OPINION. IN A CASE W HERE NO OPINION HAS BEEN EXPRESSED, THEN WHATEVER BE THE REASON, AS LONG AS THEY PRIMA-FACIE SATISFY THE CONSCIENCE OF THE COURT, THE COURT WOULD NOT IN TERFERE WITH THE ISSUANCE OF A NOTICE. IT WAS FOUND THAT NO REASONED FINDINGS W ERE GIVEN ON THE RETURN FILED BY THE ASSESSEE FOR THE THREE PREVIOUS YEARS. THE RETURNS WERE ACCEPTED AS A MATTER OF COURSE. THE RETURNS FILED BY THE AS SESSEE ARE GENERALLY ACCEPTED TO BE CORRECT AND SCRUTINY IS DONE IN A FE W CASES ONLY. LATER ON IT WAS FOUND THAT THE ASSESSEE WAS EVADING TAX BY CLAI MING THE INCOME FROM THE SALE OF SHARES TO BE LONG TERM CAPITAL GAIN. T HUS, THE AO HAD REASONED TO BELIEVE THAT ASSESSEE WAS CAUSING LOSS TO THE REVEN UE AND HIS ACTION WAS DETRIMENTAL TO THE INTEREST OF REVENUE. THE REASON FOR THAT PRIMA-FACIE OPINION WAS THAT WHEN LOSSES WERE BEING INCURRED ON THE SALE OF SHARES, THE ASSESSEE CLAIM THOSE LOSSES UNDER THE HEAD BUSINES S INCOME AND PRIOR TO A.Y. 1999-2000, THE ASSESSEE HAD BEEN SHOWING INVES TMENT IN THOSE VERY SHARES AS A TRADING INVESTMENT AND NOT A LONG TERM CAPITAL INVESTMENT. THUS, THE INITIATION OF REASSESSMENT PROCEEDING WAS HELD VALID. V) CIT VS. RINKU CHAKRABORTHY & OTHERS (KARNATAKA H IGH COURT JUDGMENT DT. 6 TH JANUARY, 2011 IN ITA NO.2781 OF 2005): TO CONTEND THAT NO OPINION HAVING BEEN FORMED BY THE AO DURING THE COURSE OF O RIGINAL ASSESSMENT, THE AO WAS EMPOWERED TO REOPEN THE CASE AS THE TAX PAYE R SHOULD NOT BE ALLOWED TO TAKE ADVANTAGE OF AN OVERSIGHT OR MISTAK E COMMITTED BY THE TAXING AUTHORITY. 31. REFERRING TO ABOVE DECISION, IT IS THE CASE OF LD. DR THAT IN THE FACTS OF THE PRESENT CASE, THE AO HAVING NOT FORMED ANY OPIN ION, THE CASE CANNOT FALL UNDER THE PURVIEW OF CHANGE OF OPINION. HE SUBMI TTED THAT IT HAS ALREADY POINTED OUT THAT THOUGH THE QUERIES WERE RAISED BY THE AO AND REPLIES HAVE BEEN GIVEN BY THE ASSESSEE, THERE IS NO DISCUSSION IN THE ASSESSMENT ORDER. ITA NOS.486 TO 489/DEL/2011 15 HENCE, IT IS A CASE WHERE THE AO HAS NOT APPLIED HI S MIND EITHER INADVERTENTLY OR BY OVERSIGHT. THUS, HE PLEADED THAT RELIEF HAS WRONGLY BEEN GIVEN BY THE LD. CIT(A) AND HIS ORDER SHOULD BE SET ASIDE AND TH AT OF AO BE RESTORED. 32. ON THE OTHER HAND, IT WAS SUBMITTED BY LD. AR T HAT IT HAS BEEN SHOWN THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCE EDINGS, THE QUERIES WERE RAISED BY THE AO AND REPLIES WERE GIVEN BY THE ASSE SSEE. HE SUBMITTED THAT NON DISCUSSION OF THE ISSUES IN THE ASSESSMENT ORDE R CANNOT BE VIEWED AGAINST THE ASSESSEE. HE SUBMITTED THAT ACCORDING TO WELL ESTABLISHED LAW EVEN WHEN THE CONCEPT OF CHANGE OF OPINION STANDS OBLITERATED W.E.F. 1 ST APRIL, 1989 I.E. AFTER SUBSTANTIATION OF SEC. 147 O F THE ACT BY DIRECT TAX LAWS AMENDMENT ACT, 1987, THE CONCEPT WILL PREVAIL AS IF THE SAID CONCEPT IS REMOVED, IT WOULD VEST ARBITRARY POWERS IN THE ASSE SSING OFFICER. REFERENCE WAS MADE TO THE DECISION OF HONBLE SUPREME COURT I N THE CASE OF CIT VS. KELVINATOR OF INDIA 320 ITR 561. IT WAS SUBMITTED THAT IN THE SAID CASE THE HONBLE SUPREME COURT HAD ALSO DECIDED DEPARTMENTAL APPEAL IN THE CASE OF CIT VS. EICHER LTD. 294 ITR 310 (DEL) AND THE DEPAR TMENTAL APPEAL WAS DISMISSED WHICH MEANS THAT THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. EICHER LTD. WAS UPHELD. HE SUBMITT ED THAT IN THE CASE OF CIT VS. EICHER LTD. IT WAS HELD THAT IF THE ENTIRE MATE RIAL WAS PLACED BY THE ASSESSEE BEFORE THE AO AT THE TIME WHEN THE ORIGINA L ASSESSMENT WAS MADE AND THE AO APPLIED HIS MIND TO THAT MATERIAL AND AC CEPTED THE VIEW CANVASSED BY THE ASSESSEE, THEN MERELY BECAUSE HE D ID NOT EXPRESS THIS IN THE ASSESSMENT ORDER, THAT BY ITSELF WOULD NOT GIVE HIM A GROUND TO CONCLUDE THAT INCOME HAS ESCAPED ASSESSMENT. THE ASSESSEE H AS NO CONTROL OVER THE WAY AN ASSESSMENT ORDER IS DRAFTED. GENERALLY, ISS UES WHICH ARE ACCEPTED BY THE AO DO NOT FIND MENTIONED IN THE ASSESSMENT ORDE R AND ONLY SUCH POINTS ARE TAKEN NOTE ON WHICH THE ASSESSEES EXPLANATIONS ARE REJECTED AND ADDITIONS/DISALLOWANCES ARE MADE. IT WAS FURTHER P LEADED THAT IT IS NOT A DISPUTED POSITION THAT DURING THE COURSE OF ORIGINA L ASSESSMENT PROCEEDINGS, THE AO HAD RAISED THE QUERIES AND ASSESSEE HAD FURN ISHED ALL THE FACTS AND MATERIALS RELATING TO THAT ISSUE AND NO ADDITION WA S MADE IN THE ORIGINAL ASSESSMENT ORDER. HE SUBMITTED THAT EVEN ACCORDING TO REASONS NO NEW ITA NOS.486 TO 489/DEL/2011 16 MATERIAL HAS COME TO THE NOTICE OF THE AO. WHATEVE R HAS BEEN MENTIONED BY THE AO IN THE REASONS IS TAKEN FROM THE FACTS AND M ATERIALS DISCLOSED BY THE ASSESSEE DURING THE COURSE OF ORIGINAL ASSESSMENT P ROCEEDINGS. THUS, IT WAS PLEADED BY HIM THAT LD. CIT(A) AFTER CONSIDERING TH E AVAILABLE POSITION OF LAW HAS RIGHTLY DECIDED THE ISSUE IN FAVOUR OF THE ASSE SSEE AND HIS ORDER SHOULD BE UPHELD. 33. LD. AR RELIED UPON THE FOLLOWING DECISIONS: - I) RRB CONSULTANTS & ENGINEERS PVT. LTD. VS. DCIT D ECISION OF HONBLE DELHI HIGH COURT DATED 08.12.2011 IN WRIT PETITION (CIVIL) NO. 7313/2010 COPY OF DECISION IS PLACED AT PAGE 1 TO 5 OF THE PAPER B OOK. IT WAS HELD BY THE HONBLE HIGH COURT THAT ASSESSEE HAS NOT FAILED OR OMITTED TO DISCLOSE MATERIAL FACTS EITHER DELIBERATELY OR INTENTIONALLY . ON THE OTHER HAND, FULL AND TRUE INFORMATION AND DETAILS WERE FURNISHED AND GIV EN DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS. THE RELEVANT AND GERMANE FACTS WERE TRULY AND FULLY DISCLOSED. AS PER THE CASE OF THE REVEN UE, THE AO MADE AN ERROR OF JUDGMENT AND DID NOT FORM A PROPER LEGAL OPINION. A WRONG LEGAL INFERENCE WAS DRAWN FROM THE FACTS STATED BY THE ASSESSEE AND ON RECORD. IT WAS HELD THAT ONCE PRIMARY FACTS HAVE BEEN DISCLOSED, THEN, IT IS FOR THE AO TO DRAW PROPER LEGAL CONCLUSION AND APPLY THE PROVISIONS AN D THE STATUTE. IT WAS FOUND THAT IT WAS NOT ALLEGED THAT ANY FACT OR FACT UAL DETAIL WAS EMBEDDED IN THE EVIDENCE/BOOKS OF ACCOUNT WHICH THE AO COULD HA VE UNCOVERED BUT HAD FAILED TO DO SO. THE LETTER WRITTEN BY THE ASSESSE E DATED 10.01.2006, SPELT OUT AND IN CATEGORICAL TERMS HAD STATED TRULY AND F ULLY THE MATERIAL FACTS. NOTING REMAINED TO BE DISCOVERED OR UNEARTHED. THU S, IT WAS HELD THAT THE JURISDICTION PRECONDITIONS REQUIRED FOR REOPENING O F THE ASSESSMENT ORDER WAS NOT SATISFIED. II) M/S ATMA RAM PROPERTIES P. LTD. VS. DCIT DECISI ON DATED 11.11.2011 2011-TIOL-824-HC-DELHI-IT A COPY PLACED AT PAGES 6 TO 17 OF THE PAPER BOOK. IN THIS CASE, THE HONBLE HIGH COURT HAS DISCUSSED THE SCOPE OF EXPLANATION 1 TO SEC. 147 AND IT HAS BEEN HELD THAT IN A CASE WHE RE THE AO DID NOT EXAMINE AND GONE INTO THE QUESTION THAT WHETHER OR NOT PROV ISIONS OF SEC. 2(22)(E) ITA NOS.486 TO 489/DEL/2011 17 WERE ATTRACTED TO THE ASSESSEES CASE CAN BE A VALI D GROUND FOR INITIATION OF REASSESSMENT PROCEEDINGS AND IT WAS FOUND THAT AO A T THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS HAD GONE INTO THE QUESTION O F LOANS AND ADVANCES FROM THE SISTER CONCERN. FIGURES AND DETAILS WERE F URNISHED AND GIVEN ALONG WITH AN ANNEXURE WHICH HAD PARTICULARS LIKE OPENING AND CLOSING BALANCE SHEET AS WELL AS THE ENTRIES/TRANSACTIONS DURING TH E YEAR UNDER THE QUESTION. ACCOUNT OF THE ATMA RAM BUILDERS P. LTD. WAS ENCLOS ED. IT WAS THE CASE OF THE REVENUE THAT AO HAD NOT EXAMINED AND GONE INTO THE QUESTION WHETHER OR NOT PROVISIONS OF SEC. 2(22)(E) OF THE ACT WERE ATT RACTED TO THE PRESENT CASE, THEREFORE, REASSESSMENT PROCEEDINGS ARE VALIDLY INI TIATED. IT WAS FOUND BY THE HONBLE HIGH COURT THAT SEC. 2(22)(E) OF THE ACT WA S NOT MENTIONED IN THE ORDER SHEET OR IN THE ASSESSMENT ORDER BUT THAT FAC T DOES NOT HELP THE CASE OF THE REVENUE FOR THE REASON THAT ASSESSEE CANNOT BE FAULTED. IF THE AO HAD FAILED TO APPLY LEGAL PROVISIONS/SECTIONS OF THE AC T, THE FAULT CANNOT BE ATTRIBUTED TO THE ASSESSEE. THE REQUIREMENT OF THE PROVISO IS THAT ASSESSEE SHOULD NOT FAIL OR OMIT TO MAKE FULL AND TRUE DISCL OSURE OF MATERIAL FACTS. THE ASSESSEE IS NOT REQUIRED TO DISCLOSE, STATE OR EXPL AIN THE LAW AND IT WAS HELD THAT INITIATION OF REASSESSMENT PROCEEDINGS WAS NOT VALID. III) SIEMENS INFORMATION VS. ACIT 295 ITR 303 COP Y PLACED AT PAGES 124 TO 132 TO CONTEND THAT MERE CHANGE OF OPINION NOT SU FFICIENT. IV) CIT VS. FEATHER FOAM ENTERPRISES PVT. LTD. 29 6 ITR 342 (DEL) (COPY FILED AT PAGES 116 TO 119 PAPER BOOK), WHEREIN IT HAS BEE N HELD THAT FACTS WHICH COULD HAVE BEEN DISCOVERED BY THE AO BUT WERE NOT D ISCOVERED AT THE TIME OF ORIGINAL ASSESSMENT, WILL NOT CONSTITUTE NEW INFORM ATION. WHERE NO NEW MATERIAL HAS COME ON RECORD NOR NEW INFORMATION REC EIVED, IT WOULD MERELY BE A CASE OF FRESH APPLICATION OF MIND BY THE AO TO THE SAME SET OF FACTS AND IN SUCH A SITUATION, IT WOULD BE A CASE OF MERE CH ANGE OF OPINION WHICH DOES NOT PROVIDE JUSTIFICATION TO THE AO TO INITIAT E PROCEEDINGS U/S 147 OF THE ACT. ITA NOS.486 TO 489/DEL/2011 18 V) M.J. PHARMACEUTICALS LTD. 297 ITR 119 (BOM.) (COPY PLACED AT PAGES 133 TO 137 OF THE PAPER BOOK), WHEREIN IT HAS BEEN HELD THAT REASSESSMENT IS NOT VALID WHERE REASSESSMENT IS BASED ON CHANGE OF OPIN ION. THE EXPLANATION OF THE ASSESSEE WAS ACCEPTED IN THE ORIGINAL ASSESSMEN T. REJECTION OF EXPLANATION IN THE REASSESSMENT PROCEEDINGS SUBSEQU ENTLY IS NOT PERMISSIBLE. 33.1 THUS, IT WAS PLEADED BY LD. AR THAT LD. CIT (A) HAS RIGHTLY GIVEN THE RELIEF TO THE ASSESSEE AND HIS ORDER IN ALL THESE F OUR APPEALS SHOULD BE UPHELD. 34. HE FURTHER POINTED OUT THAT THE APPEALS FILED B Y THE REVENUE STATES OF BOGUS TRANSACTIONS. HE SUBMITTED THAT IT IS NOT EVEN THE CASE OF THE ASSESSING OFFICER THAT THESE ARE BOGUS TRANSACTIONS , THEREFORE, THE ISSUE RAISED BY THE REVENUE BY STATING THESE TRANSACTIONS AS BOGUS TRANSACTIONS IS MISCONCEIVED. LD. AR SUBMITTED THAT THE CASE LAWS R ELIED UPON BY LD. DR ARE DISTINGUISHABLE ON FACTS HENCE CANNOT BE APPLIED TO THE FACTS OF THE PRESENT CASE. 35. IN THE REJOINDER IT WAS SUBMITTED BY THE LD. DR THAT IT HAS ALREADY BEEN POINTED OUT BY HIM THAT THERE IS NO DISCUSSION IN T HE ASSESSMENT ORDER ON THE ISSUES ON WHICH THE REASSESSMENT PROCEEDINGS HAVE B EEN INITIATED. HE SUBMITTED THAT AO DID NOT APPLY HIS MIND. HE SUBMI TTED THAT ASSESSEE ITSELF HAD ACCEPTED THE NATURE OF THE RECEIPT AS REVENUE A S 1/3 RD OF THE RECEIPTS WAS DECLARED BY THE ASSESSEE AS REVENUE RECEIPT AND NO REASON WAS SUBMITTED THAT WHY 2/3 RD PORTION OF THE RECEIPT WAS LEFT TO BE CONSIDERED A S REVENUE RECEIPT. THE SUBSEQUENT DECISION OF HONBLE SUPREM E COURT IN THE CASE OF HONDA SIEL SHOULD BE APPLIED. 36. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS IN THE LIGHT OF MATERIAL PLACED BEFORE US. IT IS THE CASE OF THE R EVENUE THAT THOUGH THE QUERIES WERE RAISED BY THE AO IN SUPPORT OF THE ISS UES WHICH ARE SUBJECT MATTER OF REASSESSMENT AND REPLIES WERE ALSO GIVEN BY THE ASSESSEE BUT THERE IS A COMPLETE ABSENCE OF DISCUSSION OF THESE ISSUES IN THE ASSESSMENT ORDER WHICH MEANS THAT THE AO DID NOT APPLY HIS MIN D ON THESE ISSUES, THEREFORE, IT IS NOT THE CASE OF CHANGE OF OPINION . THE NON APPLICATION OF ITA NOS.486 TO 489/DEL/2011 19 MIND BY THE AO ON THESE ISSUES GIVE AN AUTHORITY TO THE AO TO REOPEN THE ASSESSMENT AND FOR RAISING SUCH CONTENTION RELIANCE HAS BEEN PLACED ON SEVERAL DECISIONS WHICH HAVE BEEN DISCUSSED IN THE EARLIER PART OF THIS ORDER. THUS, IT IS ADMITTED FACT THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS THESE ISSUES WERE RAISED BY THE AO AND REPLIES WERE GIVEN BY THE ASSESSEE AND THERE IS NO DISCUSSION IN THE ASSESSME NT ORDER ON THESE ISSUES. WHERE ASSESSEE IS ABLE TO DEMONSTRATE THAT THE ISSU ES WERE DELIBERATED UPON DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING S, ABSENCE OF DISCUSSION IN THE ASSESSMENT ORDER CANNOT LEAD TO A PRESUMPTIO N THAT AO DID NOT APPLY HIS MIND. UPHOLDING SUCH PROPOSITION WOULD BE CONT RARY TO THE JUDICIAL PRONOUNCEMENT OF THE HONBLE JURISDICTION HIGH COUR T IN THE CASE OF CIT VS. EICHER MOTORS (SUPRA) AND IT WILL BE RELEVANT TO RE PRODUCE THE FOLLOWING OBSERVATIONS FROM THE SAID DECISION: IN HARI IRON TRADING CO. VS. CIT [2003] 263 ITR 4 37, A DIVISION BENCH OF THE PUNJAB AND HARYANA HIGH COU RT OBSERVED THAT AN ASSESSEE HAS NO CONTROL OVER THE WAY AN ASS ESSMENT ORDER IS DRAFTED. IT WAS OBSERVED THAT GENERALLY, THE ISSUES WHICH ARE ACCEPTED BY THE AO DO NOT FIND MENTION IN THE A SSESSMENT ORDER AND ONLY SUCH POINTS ARE TAKEN NOTE OF ON WHI CH THE ASSESSEES EXPLANATIONS ARE REJECTED AND ADDITIONS/ DISALLOWANCES ARE MADE. WE AGREE. APPLYING THE PRINCIPLES LAID DOWN BY THE FULL BENC H OF THIS COURT AS WELL AS THE OBSERVATIONS OF THE PUNJA B & HARYANA HIGH COURT, WE FIND THAT IF THE ENTIRE MATERIAL HAD BEEN PLACED BY THE ASSESSEE BEFORE THE AO AT THE TIME WHEN THE ORI GINAL ASSESSMENT WAS MADE AND THE AO APPLIED HIS MIND TO THAT MATERIAL AND ACCEPTED THE VIEW CANVASSED BY THE ASS ESSEE, THEN MERELY BECAUSE HE DID NOT EXPRESS THIS IN THE ASSES SMENT ORDER, THAT BY ITSELF WOULD NOT GIVE HIM A GROUND TO CONCL UDE THAT INCOME HAS ESCAPED ASSESSMENT AND, THEREFORE, THE A SSESSMENT NEEDED TO BE REOPENED. ON THE OTHER HAND, IF THE A O DID NOT APPLY HIS MIND AND COMMITTED A LAPSE, THERE IS NO R EASON WHY THE ASSESSEE SHOULD BE MADE TO SUFFER THE CONSEQUEN CES OF THAT LAPSE. IN SO FAR AS THE PRESENT APPEAL IS CONCERNED, WE F IND THAT THE ASSESSEE HAD PLACED ALL THE MATERIAL BEFOR E THE AO AND WHERE THERE WAS A DOUBT, EVEN THAT WAS CLARIFIED BY THE ASSESSEE IN ITS LETTER DATED NOVEMBER 8, 1995. IF THE AO, W HILE PASSING THE ORIGINAL ASSESSMENT ORDER, CHOSE NOT TO GIVE AN Y FINDING IN THIS REGARD, THAT CANNOT GIVE HIM OR HIS SUCCESSOR IN OFFICE A REASON TO REOPEN THE ASSESSMENT OF THE ASSESSEE OR TO CONTEND ITA NOS.486 TO 489/DEL/2011 20 THAT BECAUSE THE FACTS WERE NOT CONSIDERED IN THE A SSESSMENT ORDER, A FULL AND TRUE DISCLOSURE WAS NOT MADE. SI NCE THE FACTS WERE BEFORE THE AO AT THE TIME OF FRAMING THE ORIGI NAL ASSESSMENT, AND LATER A DIFFERENT VIEW WAS TAKEN BY HIM OR HIS SUCCESSOR ON THE SAME FACTS, IT CLEARLY AMOUNTS TO A CHANGE OF OPINION. THIS CANNOT FORM THE BASIS FOR PERMITTING THE AO OR HIS SUCCESSOR TO REOPEN THE ASSESSMENT OF THE ASSESSEE. IN SUM AND SUBSTANCE, THIS WAS THE DECISION RENDERED BY THE TRIBUNAL AND WE DO NOT FIND ANY FAU LT IN THE VIEW TAKEN. CONSEQUENTLY, WE ARE OF THE VIEW THAT SINCE THE CASE IS ONE OF A MERE CHANGE OF OPINION THAT DOES NOT JUSTI FY THE AOS REOPENING THE ASSESSMENT OF THE ASSESSEE. 37. THEREFORE, ACCORDING TO THE DECISION OF JURISDI CTION HIGH COURT MANDATE OF LAW IS THAT WHERE THERE IS A MATERIAL EXISTING O N RECORD ACCORDING TO WHICH THE ISSUES WERE RAISED BY THE REVENUE AND REPLIES W ERE GIVEN BY THE ASSESSEE THEN IT CANNOT BE PRESUMED THAT AO DID NOT APPLY HI S MIND AND EVEN IF THERE IS LAPSE ON THE PART OF THE AO THAT POSITION CANNO T GO TO THE DISADVANTAGE TO THE ASSESSEE. THIS DECISION OF HONBLE DELHI HIGH C OURT HAS BEEN CONFIRMED BY THE HONBLE SUPREME COURT IN THE CASE OF ( I) CI T VS. KELVINATOR OF INDIA LTD. & (II) CIT VS. EICHER LTD. 320 ITR 561. 38. NOW, IT IS THE CASE OF THE REVENUE THAT LATER O N LEGAL POSITION HAS BEEN CHANGED BY THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF HONDA SIEL (SUPRA). WE FIND NO FORCE IN SUCH CONTENTION OF TH E DEPARTMENT. THE FACTS IN THE CASE OF HONDA SIEL POWERS ARE DISCUSSED IN DETA IL IN THE DECISION OF HONBLE DELHI HIGH COURT. FROM THE FACTS, IT IS CL EAR THAT NO QUERY WHATSOEVER WAS RAISED BY THE DEPARTMENT DURING THE COURSE OF O RIGINAL ASSESSMENT PROCEEDINGS AND NO REPLIES WERE GIVEN BY THE ASSESS EE ON THAT ISSUE. THE ISSUE INVOLVED WAS DISALLOWANCE TO BE MADE U/S 14A, WHICH WAS INTRODUCED IN THE STATUTE BY THE FINANCE ACT, 2001. THE ASSESSEE FILED ITS RETURN OF INCOME ON 30.11.2000 I.E. PRIOR TO INSERTION OF SEC. 14A A ND IT WAS THE CASE OF THE ASSESSEE THAT IT WAS NOT UNDER AN OBLIGATION TO DIS CLOSE ANY FACT IN RESPECT OF THE EXPENDITURE INCURRED TO EARN EXEMPTED/TAX FREE INCOME AND THUS, IT WAS THE CONTENTION OF THE ASSESSEE THAT THERE IS NO FAI LURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL F ACTS IN RESPECT OF EXPENDITURE INCURRED FOR EARNING TAX FREE INCOME, THEREFORE, RE OPENING OF THE ASSESSEE ITA NOS.486 TO 489/DEL/2011 21 WAS WITHOUT JURISDICTION. ON THESE FACTS, IT WAS H ELD BY THE HONBLE HIGH COURT THAT AS THE ASSESSMENT ORDER WAS PASSED ON 17 .03.2003 THE FAILURE OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERI AL FACTS CAN BE ENVISAGED AT THE STAGE OF ASSESSMENT. THEREFORE, IT WAS HELD TH AT THERE WAS AN OMISSION AND FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS W HICH CULMINATED AFTER THE INTRODUCTION OF SEC. 14A. THUS, THE FACTS OF T HAT CASE ARE ENTIRELY DIFFERENT. THE LAW IS WELL SETTLED THAT A JUDGMENT MUST BE READ AS A WHOLE AND THE OBSERVATIONS FROM THE JUDGMENT HAVE TO BE C ONSIDERED IN THE LIGHT OF THE QUESTIONS WHICH WERE BEFORE THE COURT. DECISIO N OF THE COURT TAKE ITS COLOUR FROM THE QUESTIONS INVOLVED IN THE CASE IN W HICH IT IS RENDERED AND WHILE APPLYING THE DECISION TO A LATER CASE, THE CO URTS MUST CAREFULLY CONSIDER THE PRINCIPLE LAID DOWN BY THE DECISION OF THE COUR T AND NOT TO PICK OUT WORDS AND SENTENCES FROM THE JUDGMENT, DIVERSE FROM THE C ONTEXT OF THE QUESTIONS UNDER CONSIDERATION BY THE COURT, TO SUPPORT THEIR REASONING AND REFERENCE IN THIS REGARD CAN BE MADE TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. SUN ENGINEERING WORKS P. LTD , 198 ITR 2 97 (SC). THEREFORE, THE CONTEXT IN WHICH THE DECISION IN THE CASE OF HONDA SIEL POWER PRODUCTS LTD. VS. ACIT WAS RENDERED ARE ENTIRELY DIFFERENT FROM T HE CONTEXT OF THE PRESENT CASE. SIMILARLY, THE OTHER CASES ARE RELIED UPON B Y THE LD. AR ARE NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. WE AR E BOUND BY THE DECISION OF JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. EI CHER MOTORS (SUPRA) WHICH IS FULLY APPLICABLE TO THE FACTS OF THE CASE OF THE AS SESSEE. THEREFORE, WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) VIDE WHICH IT HAS BEEN HELD THAT INITIATION OF REASSESSMENT PROCEEDING IS BASED MERELY ON CHAN GE OF OPINION. 39. FOR ITA NO. 488 WE FOUND THAT THE INITIATION OF REASSESSMENT PROCEEDING IS ALSO BAD ON ACCOUNT OF APPLICABILITY OF PROVISO TO SEC. 147 AND WE HOLD THAT LD. CIT(A) HAS RIGHTLY HELD THAT THE INITIATION OF REASSESSMENT PROCEEDING WAS BAD ALSO ON ACCOUNT OF APPLICABILITY OF PROVISO TO SEC. 147. 40. IN VIEW OF ABOVE DISCUSSION, WE FIND NO MERIT I N AFOREMENTIONED DEPARTMENTAL APPEALS WHICH ARE DISMISSED. ITA NOS.486 TO 489/DEL/2011 22 41. IN THE RESULT, THE APPEALS ARE DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 27 .01.2 012. SD/- SD/- (G.D. AGRAWAL) VICE PRESIDENT (I.P. BANSAL) JUDICIAL MEMBER DATED: 27.01.2012. DK COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, NEW DELHI. TRUE COPY BY ORDER DEPUTY REGISTRAR