LANDMARK EDUCATION INDIA, MUMBAI V. ITO (E) II (1), MUMBAI

ITA 4871/MUM/2014

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5010 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 2 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 23-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NITIN WAGHMODEDR
• Assessee Lawyers: J D MISTRI; S I MOGU
• Keywords: Reopening of assessment; Depreciation; Transfer pricing; Search and seizure; Audit objection; International transaction; Tangible material; Difference of opinion; Scheme of amalgamation; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 37(1); 12A; 194C; 147; 148; 11; 15; 139

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A , MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NO.4871/MUM/2014 ASSESSMENT YEAR 2008-09 LANDMARK EDUCATION INDIA, B-206, BHAVESHWAR PLAZA, LBS MARG, GHATKOPAR (W), MUMBAI 400086 / VS. INCOME TAX OFFICER (EXEMPTION)-II(1), PIRAMAL CHAMBERS, LALBAUG, PAREL, MUMBAI-400012 ( ! /ASSESSEE) ( ' / REVENUE) P.A. NO. AAATL0059L ! / ASSESSEE BY SHRI J.D. MISTRI & SHRI S.I. MOGU ' / REVENUE BY SHRI NITIN WAGHMODE-DR # '$ % !& / DATE OF HEARING : 04/10/2018 % !& / DATE OF PRONOUNCEMENT 09/10/2018 ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 04/03/2014 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. THE FIRST GROUND RAISED BY THE ASSESSEE PER TAINS TO CONFIRMING THE ACTION OF THE LD. ASSESSING OFFIC ER HOLDING THAT REOPENING OF ASSESSMENT UNDER SECTION 147/148 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) AS VALID , WITHOUT APPRECIATING THE FACT THAT DETAILS WERE ALREADY MAD E AVAILABLE TO THE LD. ASSESSING OFFICER AND THUS THE ORDER WAS PASSED MERELY ON CHANGE OF OPINION ON THE SAM E FACTS. 2. DURING HEARING, THE LD. SR. ADVOCATE, SHRI J. D . MISTRI AND SHRI S.I. MOGU, LD. COUNSEL FOR THE ASSE SSEE, INVITED OUR ATTENTION TO THE NOTICE ISSUED TO THE A SSESSEE FOR REOPENING THE ASSESSMENT (PAGE-49 OF THE PAPER BOOK ) BY CLAIMING THAT THERE WAS NO NEW TANGIBLE MATERIAL WI TH THE ASSESSING OFFICER AND THE ASSESSMENT FRAMED UNDER S ECTION 143(3) OF THE ACT WAS REOPENED MERELY ON THE BASIS OF CHANGE OF OPINION. OUR ATTENTION WAS FURTHER INVITE D TO ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 3 PAGES 6, 21, 24, 30, 31 AND 33 OF THE PAPER BOOK. R ELIANCE WAS PLACED UPON THE DECISION IN CIT VS KELVINATOR O F INDIA LTD. (2010) 320 ITR 561 (SUPREME COURT), CIT VS ICI CI BANK LTD. [2012] 349 ITR 482(BOM.) NYK LINE (INDIA) LTD. [2012] 346 ITR 361(BOM) AND NDT SYSTEMS AND ANOTHER VS INCOME TAX OFFICER & ORS. [2014] 363 ITR 603(BOM.). 2.1. ON THE OTHER HAND, SHRI NITIN WAGHMODE, LD. DR, DEFENDED THE REOPENING OF ASSESSMENT BY PLACIN G RELIANCE UPON THE DECISION IN THE CASE OF DR. AMIN S PATHOLOGY LABORATORY VS. JOINT. COMMISSIONER OF INC OME- TAX (NO. 1) (2001) 252 ITR 673(BOM). IT WAS ARGUED THAT THE ISSUE BEFORE THE LD. ASSESSING OFFICER WAS WHET HER THE EXEMPTION UNDER SECTION 11 OF THE ACT WAS ALLOWABLE OR NOT, THUS, THERE IS NO CHANGE OF OPINION BY THE LD. ASSE SSING OFFICER AND REASONS WERE DULY RECORDED AND THE SAME WERE ACCEPTED BY THE ASSESSEE. THE CLAIM OF BUSINESS INC OME WAS DISALLOWED AND ORDER WAS PASSED IN 2016, WHICH WAS BASED UPON THE ORDER OF THE TRIBUNAL. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE AD VERTING ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 4 FURTHER, IT IS OUR BOUNDED DUTY TO EXAMINED THE PRO VISION OF SECTION 147 OF THE ACT, WHICH IS REPRODUCED HEREUND ER:- 147. IF THE ASSESSING OFFICER HAS REASON TO BELIEV E THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 TO 153, ASSESS OR REASSESS SUCH INC OME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS E SCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENT LY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, O R RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT Y EAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTION S 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT Y EAR) : PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR TH E RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THI S SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REAS ON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A R ETURN 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 MATERIAL FACTS NECESSARY FOR HI S ASSESSMENT, FOR THAT ASSESSMENT YEAR: PROVIDED FURTHER THAT NOTHING CONTAINED IN THE FIRS T PROVISO SHALL APPLY IN A CASE WHERE ANY INCOME IN RELATION TO ANY ASSET (INCLUDING FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE INDIA, CHARGEABLE TO TAX, HAS ESCAPED ASSES SMENT FOR ANY ASSESSMENT YEAR: PROVIDED ALSO THAT THE ASSESSING OFFICER MAY ASSESS OR REASSESS SUCH INCOME, OTHER THAN THE INCOME INVOLVI NG MATTERS WHICH ARE THE SUBJECT MATTERS OF ANY APPEAL , REFERENCE OR REVISION, WHICH IS CHARGEABLE TO TAX A ND HAS ESCAPED ASSESSMENT. EXPLANATION 1. PRODUCTION BEFORE THE ASSESSING OFFICER OF ACCOUNT BOOKS OR OTHER EVIDENCE FROM WHICH MATERIAL EVIDENCE COULD WITH DUE DILIGENCE HAVE BEEN DISCOVE RED BY THE ASSESSING OFFICER WILL NOT NECESSARILY AMOUNT T O DISCLOSURE WITHIN THE MEANING OF THE FOREGOING PROVISO. EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, THE FOLLOWING SHALL ALSO BE DEEMED TO BE CASES WHERE INCOME CHARG EABLE TO TAX HAS ESCAPED ASSESSMENT, NAMELY : ( A ) WHERE NO RETURN OF INCOME HAS BEEN FURNISHED BY THE ASSESSEE ALTHOUGH HIS TOTAL INCOME OR THE TOTAL INC OME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE U NDER THIS ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 5 ACT DURING THE PREVIOUS YEAR EXCEEDED THE MAXIMUM A MOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX ; ( B ) WHERE A RETURN OF INCOME HAS BEEN FURNISHED BY T HE ASSESSEE BUT NO ASSESSMENT HAS BEEN MADE AND IT IS NOTICED B Y THE ASSESSING OFFICER THAT THE ASSESSEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOSS, DEDUCTION, AL LOWANCE OR RELIEF IN THE RETURN ; ( BA ) WHERE THE ASSESSEE HAS FAILED TO FURNISH A REPOR T IN RESPECT OF ANY INTERNATIONAL TRANSACTION WHICH HE WAS SO RE QUIRED UNDER SECTION 92E; ( C ) WHERE AN ASSESSMENT HAS BEEN MADE, BUT ( I ) INCOME CHARGEABLE TO TAX HAS BEEN UNDERASSESSED ; OR ( II ) SUCH INCOME HAS BEEN ASSESSED AT TOO LOW A RATE ; OR ( III ) SUCH INCOME HAS BEEN MADE THE SUBJECT OF EXCESSI VE RELIEF UNDER THIS ACT ; OR ( IV ) EXCESSIVE LOSS OR DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE UNDER THIS ACT HAS BEEN COMPUTED; 4 [( CA ) WHERE A RETURN OF INCOME HAS NOT BEEN FURNISHED B Y THE ASSESSEE OR A RETURN OF INCOME HAS BEEN FURNISHED B Y HIM AND ON THE BASIS OF INFORMATION OR DOCUMENT RECEIVED FR OM THE PRESCRIBED INCOME-TAX AUTHORITY, UNDER SUB-SECTION (2) OF SECTION 133C, IT IS NOTICED BY THE ASSESSING OFF ICER THAT THE INCOME OF THE ASSESSEE EXCEEDS THE MAXIMUM AMOUNT N OT CHARGEABLE TO TAX, OR AS THE CASE MAY BE, THE ASSES SEE HAS UNDERSTATED THE INCOME OR HAS CLAIMED EXCESSIVE LOS S, DEDUCTION, ALLOWANCE OR RELIEF IN THE RETURN;] ( D ) WHERE A PERSON IS FOUND TO HAVE ANY ASSET (INCLU DING FINANCIAL INTEREST IN ANY ENTITY) LOCATED OUTSIDE I NDIA. EXPLANATION 3. FOR THE PURPOSE OF ASSESSMENT OR REASSESSMENT UNDER THIS SECTION, THE ASSESSING OFFI CER MAY ASSESS OR REASSESS THE INCOME IN RESPECT OF ANY ISS UE, WHICH HAS ESCAPED ASSESSMENT, AND SUCH ISSUE COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION, NOTWITHSTANDING THAT THE REASONS FOR SUCH ISSUE HAVE NOT BEEN INCLUDED IN THE REASONS RECORDED UNDER SUB -SECTION (2) OF SECTION 148. EXPLANATION 4. FOR THE REMOVAL OF DOUBTS, IT IS HEREBY CLARIFIED THAT THE PROVISIONS OF THIS SECTION, AS A MENDED BY THE FINANCE ACT, 2012, SHALL ALSO BE APPLICABLE FOR ANY ASSESSMENT YEAR BEGINNING ON OR BEFORE THE 1ST DAY OF APRIL, 2 012. 2.3. SO FAR AS, REOPENING IS CONCERNED, THERE IS N O DISPUTE THAT THE NOTICE OF REOPENING UNDER SECTION 148 OF THE ACT (PAGE-49 OF THE PAPER BOOK) WAS ISSUED WITH IN FOUR ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 6 YEARS (AS EXPLAINED BY THE LD. SR. ADVOCATE ALSO), THEREFORE, NOW, WE SHALL EXAMINE WHETHER REOPENING WAS DONE ME RELY ON THE BASIS OF CHANGE OF OPINION, AS HAS BEEN CL AIMED BY THE ASSESSEE. WE HAVE PERUSED THE RECORD AND FOUND THAT THE ORIGINAL ASSESSMENT WAS FRAMED UNDER SECTION 14 3(3) ON 19/11/2010, ASSESSING THE TOTAL TAXABLE INCOME A T RS.2,30,72,774/-. SUBSEQUENTLY, ON PERUSAL OF RECOR D, IT WAS FOUND BY THE LD. ASSESSING OFFICER THAT TAXABLE INCOME, IN VIEW OF INCORRECT CLAIM OF DEDUCTION UNDER SECTI ON 35DDA OF THE ACT, HAD ESCAPED ASSESSMENT, CONSEQUEN TLY, PROCEEDINGS UNDER SECTION 147/148 OF THE ACT WERE INITIATED AFTER RECORDING THE REASONS AND THEREFORE NOTICE UNDER SECTION 148 OF THE ACT WAS ISSUED ON 01/03/20 12 AFTER OBTAINING APPROVAL OF ADDITIONAL DIT(E), RANG E-II, MUMBAI AND THE NOTICE WAS DULY SERVED UPON THE ASSE SSEE. THE ASSESSEE IN ITS INCOME AND EXPENDITURE ACCOUNT DEBITED AN AMOUNT OF RS.3,53,71,733/- TOWARDS SALAR Y WHICH INCLUDES AN AMOUNT OF RS.1,74,51,505/- PAID A S VOLUNTARY RETIREMENT SCHEME (VRS). THE LD. ASSESSI NG OFFICER CONSIDERED SECTION 35DDA(1) OF THE ACT WHIC H IS AS UNDER:- ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 7 35DDA. (1) WHERE AN ASSESSEE INCURS ANY EXPENDITUR E IN ANY PREVIOUS YEAR BY WAY OF PAYMENT OF ANY SUM TO A N EMPLOYEE IN CONNECTION WITH HIS VOLUNTARY RETIREMEN T, IN ACCORDANCE WITH ANY SCHEME OR SCHEMES OF VOLUNTARY RETIREMENT, ONE-FIFTH OF THE AMOUNT SO PAID SHALL B E DEDUCTED IN COMPUTING THE PROFITS AND GAINS OF THE BUSINESS FOR THAT PREVIOUS YEAR, AND THE BALANCE SHALL BE DE DUCTED IN EQUAL INSTALMENTS FOR EACH OF THE FOUR IMMEDIATELY SUCCEEDING PREVIOUS YEARS. (2) WHERE THE ASSESSEE, BEING AN INDIAN COMPANY, IS ENTITLED TO THE DEDUCTION UNDER SUB-SECTION (1) AND THE UNDERTAKING OF SUCH INDIAN COMPANY ENTITLED TO THE DEDUCTION UNDER SUB-SECTION (1) IS TRANSFERRED, BEF ORE THE EXPIRY OF THE PERIOD SPECIFIED IN THAT SUB-SECTION, TO ANOTHER INDIAN COMPANY IN A SCHEME OF AMALGAMATION, THE PROVISIONS OF THIS SECTION SHALL, AS FAR AS MAY BE, APPLY TO THE AMALGAMATED COMPANY AS THEY WOULD HAVE APPLIED TO THE AMALGAMATING COMPANY IF THE AMALGAMATION HAD NO T TAKEN PLACE. (3) WHERE THE UNDERTAKING OF AN INDIAN COMPANY ENTI TLED TO THE DEDUCTION UNDER SUB-SECTION (1) IS TRANSFERRED, BEFORE THE EXPIRY OF THE PERIOD SPECIFIED IN THAT SUB-SECT ION, TO ANOTHER COMPANY IN A SCHEME OF DEMERGER, THE PROVIS IONS OF THIS SECTION SHALL, AS FAR AS MAY BE, APPLY TO THE RESULTING COMPANY, AS THEY WOULD HAVE APPLIED TO THE DEMERGED COMPANY, IF THE DEMERGER HAD NOT TAKEN PLACE. (4) WHERE THERE HAS BEEN REORGANISATION OF BUSINESS , WHEREBY A FIRM IS SUCCEEDED BY A COMPANY FULFILLING THE CONDITIONS LAID DOWN IN CLAUSE ( XIII ) OF SECTION 47 OR A PROPRIETARY CONCERN IS SUCCEEDED BY A COMPANY FULFI LLING THE CONDITIONS LAID DOWN IN CLAUSE ( XIV ) OF SECTION 47 , THE PROVISIONS OF THIS SECTION SHALL, AS FAR AS MAY BE, APPLY TO THE SUCCESSOR COMPANY, AS THEY WOULD HAVE APPLIED T O THE FIRM OR THE PROPRIETARY CONCERN, IF REORGANISATION OF BUSINESS HAD NOT TAKEN PLACE. (4A) WHERE THERE HAS BEEN REORGANISATION OF BUSINES S, WHEREBY A PRIVATE COMPANY OR UNLISTED PUBLIC COMPAN Y IS SUCCEEDED BY A LIMITED LIABILITY PARTNERSHIP FULFIL LING THE CONDITIONS LAID DOWN IN THE PROVISO TO CLAUSE ( XIIIB ) OF SECTION 47 , THE PROVISIONS OF THIS SECTION SHALL, AS FAR AS M AY BE, APPLY TO THE SUCCESSOR LIMITED LIABILITY PARTNERSHI P, AS THEY WOULD HAVE APPLIED TO THE SAID COMPANY, IF REORGANI SATION OF BUSINESS HAD NOT TAKEN PLACE. (5) NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF THE EXPENDITURE MENTIONED IN SUB-SECTION (1) IN THE CAS E OF THE AMALGAMATING COMPANY REFERRED TO IN SUB-SECTION (2) , IN THE CASE OF DEMERGED COMPANY REFERRED TO IN SUB-SECTION (3), IN THE CASE OF A FIRM OR PROPRIETARY CONCERN REFERRED TO IN SUB- SECTION (4) AND IN THE CASE OF A COMPANY REFERRED T O IN SUB- ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 8 SECTION (4A) OF THIS SECTION, FOR THE PREVIOUS YEAR IN WHICH AMALGAMATION, DEMERGER OR SUCCESSION, AS THE CASE M AY BE, TAKES PLACE. (6) NO DEDUCTION SHALL BE ALLOWED IN RESPECT OF THE EXPENDITURE MENTIONED IN SUB-SECTION (1) UNDER ANY OTHER PROVISION OF THIS ACT. 2.4. IF THE AFORESAID PROVISION OF SECTION 35DDA O F THE ACT WHICH DEALS WITH AMORTIZATION OF EXPENDITURE IN CURRED UNDER VRS, IT SAYS WHERE AN ASSESSEE INCURS ANY EXPENDITURE IN ANY PREVIOUS YEAR BY WAY OF PAYMENT OF ANY SUM TO ANY EMPLOYEE (IN CONNECTION WITH HIS VOLUNTA RY RETIREMENT) IN ACCORDANCE WITH ANY SCHEME OR SCHEME S OR VOLUNTARILY RETIREMENT, ONE FIFTH OF THE AMOUNT SO PAID SHALL BE DEDUCTED IN COMPUTING THE PROFIT AND GAINS OF TH E BUSINESS FOR THAT PREVIOUS YEAR AND THE BALANCE SHA LL BE DEDUCTED IN EQUAL INSTALLMENTS FOR EACH OF THE FOUR IMMEDIATELY SUCCEEDING PREVIOUS YEARS. SECTION 35DD A WAS INSERTED BY THE FINANCE ACT, 2001 (WITH EFFECT FROM 01/04/2001 AND SCOPE AND EFFECT OF SUCH INSERTION W AS ELABORATED IN THE DEPARTMENT CIRCULAR NO.14 OF 2001 . FURTHER, THE SCOPE AND THE EFFECT HAVE BEEN ELABORA TED IN DEPARTMENTAL CIRCULAR NO.8 OF 2002 DATED 27/08/2002 . IT IS FURTHER NOTED THAT BY FINANCE ACT, 2005, SOME AMENDMENT WAS EFFECTED, WHICH HAS BEEN ELABORATED I N ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 9 DEPARTMENTAL CIRCULAR NO.3 OF 2006, AS PER WHICH TH E EMPLOYER WAS ALLOWED ENTIRE EXPENDITURE INCURRED ON IMPLEMENTING VRS AND SUCH SCHEME IS IN ACCORDANCE W ITH THE GUIDELINES PRESCRIBED UNDER CLAUSE (10C) OF SEC TION 10, THEN 1/5 TH OF THE AMOUNT SO PAID IS DEDUCTED IN COMPUTING THE PROFIT & GAINS OF THE BUSINESS FOR THAT PREVIOU S YEAR AND THE BALANCE IS DEDUCTED IN EQUAL INSTALLMENTS IN EA CH OF FOUR SUCCEEDING PREVIOUS YEARS. THE EXISTING PROVIS ION OF SECTION 35DDA DO NOT PROVIDE FOR DEDUCTION OF THE E NTIRE AMOUNT PAID IN MORE THAN ONE INSTALLMENT. THE FINAN CE ACT, 2005, HAS, THEREFORE, AMENDED THE AFORESAID SU B- SECTION (1) SO AS TO ALLOW THE WHOLE EXPENDITURE IN CURRED BY THE ASSESSEE EMPLOYER IN MAKING PAYMENT TO THE EMPL OYEE IN CONNECTION WITH HIS VOLUNTARY RETIREMENT EITHER IN THE YEAR OF RETIREMENT OR ANY SUBSEQUENT YEAR AS DEDUCT ION. THUS, THE AMENDMENT WOULD FACILITATE DEDUCTION OF E ACH PART PAYMENT IN FIVE EQUAL INSTALLMENTS BEGINNING F ROM THE YEAR IN WHICH SUCH PART PAYMENT IS MADE TO THE EMPL OYEE. THE PRESENT ASSESSMENT YEAR BEFORE US, IS ASSESSMEN T YEAR 2008-09, THUS, THE DEPARTMENT CIRCULAR NO.3 OF 2006 DATED 27/02/2006 WILL BE APPLICABLE TO THE FACTS OF THE P RESENT ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 10 APPEAL AND NOT THE ORIGINAL SECTION, WHICH WAS INSE RTED BY THE FINANCE ACT, 2001, (W.E.F. 01/04/2001), WHICH W AS APPLIED BY THE LD. ASSESSING OFFICER. IT IS FURTHE R NOTED THAT PRIOR TO INSERTION OF SECTION 35DDA (W.E.F. 01/04/2001) BY THE FINANCE ACT, 2001 (14 OF 2001), THE ASSESSEE WAS HELD TO BE ENTITLED TO CLAIM TOTAL EXP ENSES IN RELATION TO VRS, IN ONE YEAR, I.E. ASSESSMENT YEAR 1996-97 UNDER SECTION 37(1) OF THE ACT. CIT VS BHORE INDUST RIES LTD. (2003) 264 ITR 180(BOM.), CIT VS HERO AUTO LTD. 343 ITR 342 (DEL.) AND CIT VS O.E. N. INDIA LTD. (2012) 349 ITR 554 (KERALA). WE FURTHER NOTE THAT THE LAW RELATING TO COMPULSORY RETIREMENT, WHICH HAS BEEN CRYSTALLIZED INTO DEFINITE PRINCIPLES, HAS BEEN SUMMARIZED IN STATE O F GUJARAT VS UMEDHBHAI M. PATEL (2010) 3 SCC 314, 320 . 2.5. IN THE LIGHT ABOVE PROPOSITION OF LAW, NOW, W E SHALL ANALYZE VARIOUS CASE LAWS WHETHER THE ASSESSM ENT FRAMED UNDER SECTION 143(3) OF THE ACT CAN BE REOPE NED MERELY ON THE BASIS OF CHANGE OF OPINION. THE EXP RESSION CHANGE OF OPINION POSTULATES FORMATION OF OPINION AND THEN A CHANGE THEREOF. IN THE CONTEXT OF ASSESSMENT ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 11 PROCEEDINGS, IT MEANS FORMATION OF BELIEF BY AN ASS ESSING OFFICER RESULTING FROM WHAT HE THINKS ON A PARTICUL AR QUESTION. IT IS A RESULT OF UNDERSTANDING, EXPERIEN CE AND REFLECTION. A DISTINCTION MUST BE DRAWN BETWEEN ERR ONEOUS APPLICATION/ INTERPRETATION/ UNDERSTANDING OF LAW A ND CASES WHERE FRESH OR NEW FACTUAL INFORMATION COMES TO THE KNOWLEDGE OF THE ASSESSING OFFICER SUBSEQUENT TO TH E PASSING OF THE ASSESSMENT ORDER. IF NEW FACTS, MATE RIAL OR INFORMATION COMES TO THE KNOWLEDGE OF THE ASSESSING OFFICER, WHICH WAS NOT ON RECORD OR NOT MADE AVAILA BLE BY THE ASSESSEE, DURING ASSESSMENT PROCEEDINGS, THE PR INCIPLE OF CHANGE OF OPINION WILL NOT APPLY. THE REASON I S THAT OPINION IS FORMED ON FACTS. OPINION FORMED OR B ASED ON WRONG AND INCORRECT FACTS OR WHICH ARE BELIED AND U NTRUE DO NOT GET PROTECTION AND COVER UNDER THE PRINCIPLE OF CHANGE OF OPINION. FACTUAL INFORMATION OR MATERIA L WHICH WAS INCORRECT OR WAS NOT AVAILABLE WITH THE ASSESSI NG OFFICER AT THE TIME OF ORIGINAL ASSESSMENT WOULD JU STIFY INITIATION OF REASSESSMENT PROCEEDINGS. THE REQUIRE MENT IN SUCH CASES IS THAT THE INFORMATION OR MATERIAL AVAI LABLE SHOULD RELATE TO MATERIAL FACTS. THE EXPRESSION MA TERIAL ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 12 FACTS MEANS THOSE FACTS WHICH IF TAKEN INTO ACCOUN T WOULD HAVE AN ADVERSE EFFECT ON THE ASSESSEE BY A HIGHER ASSESSMENT OF INCOME THAN THE ONE ACTUALLY MADE. TH EY SHOULD BE PROXIMATE AND NOT HAVE A REMOTE BEARING O N THE ASSESSMENT. THE OMISSION TO DISCLOSE MAY BE DELIBER ATE OR INADVERTENT. THE QUESTION OF CONCEALMENT IS NOT REL EVANT AND IS NOT A PRECONDITION WHICH CONFERS JURISDICTIO N TO REOPEN THE ASSESSMENT. CORRECT MATERIAL FACTS CAN B E ASCERTAINED FROM THE ASSESSMENT RECORDS ALSO AND IT IS NOT NECESSARY THAT THE SAME COME FROM A THIRD PERSON OR SOURCE, I.E., FROM SOURCE OTHER THAN THE ASSESSMENT RECORDS. HOWEVER, IN SUCH CASES, THE ONUS WILL BE O N THE REVENUE TO SHOW THAT THE ASSESSEE HAD STATED INCORR ECT AND WRONG MATERIAL FACTS RESULTING IN THE ASSESSMENT PROCEEDINGS ON THE BASIS OF FACTS, WHICH ARE INCORR ECT AND WRONG. THE REASONS RECORDED AND THE DOCUMENTS ON RE CORD ARE OF PARAMOUNT IMPORTANCE AND WILL HAVE TO BE EXA MINED TO DETERMINE WHETHER THE STAND OF THE REVENUE IS CO RRECT. IF A SUBJECT-MATTER, ENTRY OR CLAIM/DEDUCTION IS NOT E XAMINED BY AN ASSESSING OFFICER, IT CANNOT BE PRESUMED THAT HE MUST HAVE EXAMINED THE CLAIM/DEDUCTION OR THE ENTRY , AND, ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 13 THEREFORE, IT IS A CASE OF CHANGE OF OPINION. WHE N AT THE FIRST INSTANCE, IN THE ORIGINAL ASSESSMENT PROCEEDI NGS, NO OPINION IS FORMED, THE PRINCIPLE OF CHANGE OF OPIN ION CANNOT AND DOES NOT APPLY. THERE IS A DIFFERENCE BE TWEEN CHANGE OF OPINION AND FAILURE OR OMISSION OF TH E ASSESSING OFFICER TO FORM AN OPINION ON A SUBJECT-M ATTER, ENTRY, CLAIM, DEDUCTION, ETC. WHEN THE ASSESSING OF FICER FAILS TO EXAMINE A SUBJECT-MATTER, ENTRY, CLAIM OR DEDUCTION, HE FORMS NO OPINION. IT IS A CASE OF NO OPINION. WH ETHER OR NOT THE ASSESSING OFFICER HAD APPLIED HIS MIND AND EXAMINED THE SUBJECT-MATTER, CLAIM, ETC., DEPENDS U PON FACTUAL MATRIX OF EACH CASE. THE ASSESSING OFFICER CAN EXAMINE A CLAIM OR SUBJECT-MATTER EVEN WITHOUT RAIS ING A WRITTEN QUERY. THERE CAN BE CASES WHERE AN ASPECT O R QUESTION IS TOO APPARENT OR OBVIOUS TO HOLD THAT TH E ASSESSING-OFFICER DID NOT EXAMINE A PARTICULAR SUBJ ECT- MATTER, CLAIM, ETC. THE STAND AND SUBSTANCE OF THE ASSESSEE AND THE ASSESSING OFFICER IN SUCH CASES ARE RELEVAN T. 2.6. SECTION 114 OF THE EVIDENCE ACT, 1872, IS PERMISSIVE AND NOT A MANDATORY PROVISION. NINE SITU ATIONS ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 14 BY WAY OF ILLUSTRATIONS ARE STATED. THESE ARE BY WA Y OF EXAMPLE OR GUIDELINES. AS A PERMISSIVE PROVISION IT ENABLES TO JUDGE TO SUPPORT HIS JUDGMENT BUT THERE IS NO SC OPE OF PRESUMPTION WHEN FACTS ARE KNOWN. PRESUMPTION OF FA CTS UNDER SECTION 114 IS REBUTTABLE. THE PRESUMPTION RA ISED UNDER ILLUSTRATION (E) TO SECTION 114 OF THE ACT ME ANS THAT WHEN AN OFFICIAL ACT IS PROVED TO HAVE BEEN DONE, I T WILL BE PRESUMED TO HAVE BEEN REGULARLY DONE BUT IT DOES NO T RAISE ANY PRESUMPTION THAT AN ACT WAS DONE FOR WHICH THER E IS NO EVIDENCE OR PROOF. (I) ASSESSMENTS CANNOT BE VALIDLY REOPENED UNDER S ECTION 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 THAT TIME OF ORIGINAL ASSESSMENT AND SO LONG AS THE ASSESSMENT ORDER IS FRAMED UNDER SECTION 143(3) OF THE ACT, IT MATTERS LITTLE THAT T HE ASSESSING OFFICER DID NOT ASK ANY QUESTION OR QUERY WITH RESP ECT TO ONE ENTRY OR NOTE BUT HAD RAISED QUERIES AND QUESTI ONS ON OTHER ASPECTS. ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 15 (II) SECTION 114(E) OF THE ACT CAN BE APPLIED TO AN ASSESSMENT ORDER FRAMED UNDER SECTION 143(3) OF THE ACT, PROVIDED THERE HAS BEEN A FULL AND TRUE DISCLOSURE OF ALL MATERIAL AND PRIMARY FACTS AT THE TIME OF ORIGINAL ASSESSMENT. IN SUCH A CASE IF THE ASSESSMENT IS REO PENED IN RESPECT OF A MATTER COVERED BY THE DISCLOSURE, I T WOULD AMOUNT TO CHANGE OF OPINION. THE RATIO LAID DOWN IN THE FOLLOWING CASES USEFULLY THROW LIGHTS ON THE ISSUE IN HAND:- A. L. A. FIRM V. CIT [1976] 102 ITR 622 (MAD) (PARA 9) A. L. A. FIRM V. CIT [1991] 189 ITR 285 (SC) (PARAS 32, 60, 61) ANANDJI HARIDAS AND CO. P. LTD. V. KUSHARE (S. P.), STO [1968] 21 STC 326 (SC) (PARA 35) BANKIPUR CLUB LTD. V. CIT [1971] 82 ITR 831 (SC) (PA RA 34) BARIUM CHEMICALS LTD. V. CLB [1966] 36 COMP CAS 639 (SC) (PARA 56) BLB LTD. V. ASST. CIT [2012] 343 ITR 129 (DELHI) (PAR A 14) CALCUTTA DISCOUNT CO. LTD. V. ITO [1961] 41 ITR 191 (SC) (PARA 45) CIT V. A. RAMAN AND CO. [1968] 67 ITR 11 (SC) (PARAS 9, 34) CIT V. CHASE BRIGHT STEEL LTD. (NO. 1) [1989] 177 ITR 124 (BOM) (PARA 21) CIT V. DLF POWER LTD. [2012] 345 ITR 446 (DELHI) (PAR A 14) CIT V. EICHER LTD. [2007] 294 ITR 310 (DELHI) (PARAS 1 0, 28) CIT V. KELVINATOR OF INDIA LTD. [2002] 256 ITR 1 (DE LHI) [FB] (PARAS 2, 12, 20, 48) CIT V. KELVINATOR OF INDIA LTD. [2010] 320 ITR 561 ( SC) (PARAS 2, 28) CIT V. KHEMCHAND RAMDAS [1938] 6 ITR 414 (PC) (PARA 50) CIT V. P. V. S. BEEDIES P. LTD. [1999] 237 ITR 13 (S C) (PARA 18) CIT (ASST.) V. RAJESH JHAVERI STOCK BROKERS P. LTD. [2 007] 291 ITR 500 (SC) (PARAS 4, 12) CIT V. SHARMA (H. P.) [1980] 122 ITR 675 (DELHI) (PARA 9) CONSOLIDATED PHOTO AND FINVEST LTD. V. ASST.CIT [200 6] 281 ITR 394 (DELHI) (PARAS 9, 11) DALMIA P. LTD. V. CIT [2012] 348 ITR 469 (DELHI) (PAR A 17) G. R. RAMACHARI AND CO. V. CIT [1961] 41 ITR 142 (MAD) (PARAS 38, 61) HARI IRON TRADING CO. V. CIT [2003] 263 ITR 437 (P&H ) (PARA 10) ITO V. HABIBULLAH (S. K.) [1962] 44 ITR 809 (SC) (PAR A 50) INDIAN AND EASTERN NEWSPAPER SOCIETY V. CIT [1979] 119 ITR 996 (SC) (PARAS 34, 35) INDIAN HUME PIPE CO. LTD. V. ASST. CIT [2012] 348 I TR 439 (BOM) (PARA 17) ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 16 3I INFOTECH LTD. V. ASST. CIT [2010] 329 ITR 257 (BOM ) (PARA 26) INTERNATIONAL WOOLLEN MILLS V. STANDARD WOOL (U. K. ) LTD. [2001] 5 SCC 265 (PARA 30) KALYANJI MAVJI AND CO. V. CIT [1976] 102 ITR 287 (SC ) (PARAS 9, 33, 34, 35) KLM ROYAL DUTCH AIRLINES V. ASST. DIRECTOR OF I. T. [ 2007] 292 ITR 49 (DELHI) (PARA 12) KUNHAYAMMED V. STATE OF KERALA [2000] 245 ITR 360 (SC ) (PARA 31) MAHARAJ KUMAR KAMAL SINGH V. CIT [1959] 35 ITR 1 (SC) (PARA 34) MUTHUKRISHNA REDDIAR V. CIT [1973] 90 ITR 503 (KER) (P ARA 9) NEW LIGHT TRADING CO. V. CIT [2002] 256 ITR 391 (DEL HI) (PARA 18) PRAFUL CHUNILAL PATEL V. MAKWANA (M. J.)/ASST. CIT [ 1999] 236 ITR 832 (GUJ) (PARA 21) SNOWCEM INDIA LTD. V. DEPUTY CIT [2009] 313 ITR 170 (BOM) (PARA 31) SRI KRISHNA P. LTD. V. ITO [1996] 221 ITR 538 (SC) (P ARAS 56, 58) SURESH BUDHARMAL KALANI V. STATE OF MAHARASHTRA [1998] 7 SCC 337 (PARA 29) UNION OF INDIA V. SURESH C. BASKEY [1996] AIR 1996 SC 849 (PARA 20) UNITED MERCANTILE CO. LTD. V. CIT [1967] 64 ITR 218 (KER) (PARA 9) '(I) WHAT IS MEANT BY THE TERM 'CHANGE OF OPINION' ? (II) WHETHER ASSESSMENT PROCEEDINGS CAN BE VALIDLY REOPENED UNDER SECTION 147 OF THE ACT, EVEN WITHIN FOUR YEARS, IF AN ASSESSEE HAS FURNISHED FULL AND TRUE P ARTICULARS AT THE TIME OF ORIGINAL ASSESSMENT WITH REFERENCE T O INCOME ALLEGED TO HAVE ESCAPED ASSESSMENT AND WHETH ER AND WHEN IN SUCH CASES REOPENING IS VALID OR INVALI D ON THE GROUND OF CHANGE OF OPINION ? (III) WHETHER THE BAR OR PROHIBITION UNDER THE PRINCIPLE 'CHANGE OF OPINION' WILL APPLY EVEN WHEN THE ASSESS ING OFFICER HAS NOT ASKED ANY QUESTION OR QUERY WITH RE SPECT TO AN ENTRY/NOTE, BUT THERE IS EVIDENCE AND MATERIAL T O SHOW THAT THE ASSESSING OFFICER HAD RAISED QUERIES AND Q UESTIONS ON OTHER ASPECTS ? (IV) WHETHER AND IN WHAT CIRCUMSTANCES SECTION 114( E) OF THE EVIDENCE ACT CAN BE APPLIED AND IT CAN BE HELD THAT IT IS A CASE OF CHANGE OF OPINION ?' ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 17 2.7. FOR REOPENING AN ASSESSMENT MADE UNDER SECTION 143(3) OF THE ACT, THE FOLLOWING CONDITIONS ARE REQUIRED TO BE SATISFIED:- (I) THE ASSESSING OFFICER MUST FORM A TENTATIVE OR PRIMA FACIE OPINION ON THE BASIS OF MATERIAL THAT THERE IS UNDERASSESSMENT OR ESCAPEMENT OF INCOME ; (II) HE MUST RECORD THE PRIMA FACIE OPINION INTO WR ITING ; (III) THE OPINION FORMED IS SUBJECTIVE BUT THE REAS ONS RECORDED OR THE INFORMATION AVAILABLE ON RECORD MUST SHOW TH AT THE OPINION IS NOT A MERE SUSPICION. (IV) REASONS RECORDED AND/OR THE DOCUMENTS AVAILAB LE ON RECORD MUST SHOW A NEXUS OR THAT IN FACT THEY ARE G ERMANE AND RELEVANT TO THE SUBJECTIVE OPINION FORMED BY TH E ASSESSING OFFICER REGARDING ESCAPEMENT OF INCOME. (V) IN CASES WHERE THE FIRST PROVISO APPLIES, THERE IS AN ADDITIONAL REQUIREMENT THAT THERE SHOULD BE FAILURE OR OMISSION ON THE PART OF THE ASSESSEE IN DISCLOSING FULL AND TRUE MATERIAL FACTS. THE EXPLANATION TO THE SECTION STIP ULATES THAT MERE PRODUCTION OF BOOKS OF ACCOUNT OR OTHER DOCUME NTS FROM WHICH THE ASSESSING OFFICER COULD HAVE, WITH D UE DILIGENCE, INFERRED MATERIAL FACTS, DOES NOT AMOUNT TO 'FULL AND TRUE DISCLOSURE OF MATERIAL FACTS' (THE PROVISO IS NOT APPLICABLE WHERE REASONS TO BELIEVE FOR ISSUE OF NO TICE ARE RECORDED AND NOTICE IS ISSUED WITHIN FOUR YEARS FRO M THE END OF ASSESSMENT YEAR). 2.8. THE EXPRESSION 'CHANGE OF OPINION' POSTULATES FORMATION OF OPINION AND THEN A CHANGE THEREOF. IN THE CONTEXT OF SECTION 147 OF THE ACT IT IMPLIES THAT T HE ASSESSING OFFICER SHOULD HAVE FORMED AN OPINION AT THE FIRST INSTANCE, I.E., IN THE PROCEEDINGS UNDER SECTION 14 3(3) AND ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 18 THEREAFTER, WITH THE INITIATION OF THE REASSESSMENT PROCEEDING, THE ASSESSING OFFICER PROPOSES OR WANTS TO TAKE A DIFFERENT VIEW. THE WORD 'OPINION' IS DERIVED FR OM THE LATIN WORD 'OPINARI' WHICH MEANS 'TO BELIEVE', 'TO THINK'. THE WORD 'OPINION' AS PER THE BLACK'S LAW DICTIONAR Y MEANS A STATEMENT BY A JUDGE OR A COURT OF A DECISI ON REACHED BY HIM INCORPORATING CAUSE TRIED OR ARGUED BEFORE THEM, EXPOUNDING THE LAW AS APPLIED TO THE CASE AND , DETAILING THE REASONS UPON WHICH THE JUDGMENT IS BA SED. ADVANCED LAW LEXICON BY P. RAMANATHA AIYAR (THIRD EDITION) EXPLAINS THE TERM 'OPINION' TO MEAN 'SOMET HING MORE THAN MERE RETAINING OF GOSSIP OR HEARSAY; IT M EANS JUDGMENT OR BELIEF, THAT IS, A BELIEF OR A CONVICTI ON RESULTING FROM WHAT ONE THINKS ON A PARTICULAR QUESTION . . . AN OPINION IS A CONVICTION BASED ON TESTIMONY . . . TH EY ARE AS A RESULT OF READING, EXPERIENCE AND REFLECTION'. 2.9. IN THE CONTEXT OF ASSESSMENT PROCEEDINGS, IT MEANS FORMATION OF BELIEF BY AN ASSESSING OFFICER R ESULTING FROM WHAT HE THINKS ON A PARTICULAR QUESTION. IT IS A RESULT OF UNDERSTANDING, EXPERIENCE AND REFLECTION TO USE THE ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 19 WORDS IN LAW LEXICON BY P. RAMANATHA AIYAR. THE QUE STION OF CHANGE OF OPINION ARISE WHEN AN ASSESSING OFFICE R FORMS AN OPINION AND DECIDES NOT TO MAKE AN ADDITION OR H OLDS THAT THE ASSESSEE IS CORRECT AND ACCEPTS HIS POSITI ON OR STAND. IN HARI IRON TRADING CO. V. CIT [2003] 263 I TR 437 (P&H), A DIVISION BENCH OF THE HONBLE PUNJAB AND H ARYANA HIGH COURT OBSERVED THAT AN ASSESSEE HAS NO CONTROL OVER THE WAY AN ASSESSMENT ORDER IS DRAFTED. IT WAS OBSE RVED THAT, GENERALLY, THE ISSUES WHICH ARE ACCEPTED BY T HE ASSESSING OFFICER DO NOT FIND MENTION IN THE ASSESS MENT ORDER AND ONLY SUCH POINTS ARE TAKEN NOTE OF ON WHI CH THE ASSESSEE'S EXPLANATIONS ARE REJECTED AND ADDITIONS/DISALLOWANCES ARE MADE. APPLYING THE PRI NCIPLES LAID DOWN BY THE FULL BENCH OF THIS COURT AS WELL A S THE OBSERVATIONS OF THE PUNJAB AND HARYANA HIGH COURT, WE FIND THAT IF THE ENTIRE MATERIAL HAD BEEN PLACED ON RECORD BY THE ASSESSEE BEFORE THE ASSESSING OFFICER AT THE TI ME WHEN THE ORIGINAL ASSESSMENT WAS MADE AND THE ASSESSING OFFICER APPLIED HIS MIND TO THAT MATERIAL AND ACCEPTED/REJECTED THE VIEW CANVASSED BY THE ASSESSE E, THEN MERELY BECAUSE HE DID EXPRESS THIS IN THE ASSESSMEN T ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 20 ORDER, THAT BY ITSELF WOULD NOT GIVE HIM A GROUND T O CONCLUDE THAT INCOME HAS ESCAPED ASSESSMENT AND, THEREFORE, THE ASSESSMENT NEEDED TO BE REOPENED. ON THE OTHER HAND, IF THE ASSESSING OFFICER DID NOT APPLY HIS MIND AND COMMITTED A LAPSE, THERE IS NO REASON WHY THE A SSESSEE SHOULD BE MADE TO SUFFER THE CONSEQUENCES OF HIS LA PSES. 2.10. THE HONBLE DELHI HIGH COURT IN CONSOLIDATE D PHOTO AND FINVEST LTD. [2006] 281 ITR 394 (DELHI) H ELD AS UNDER: ' IN THE LIGHT OF THE AUTHORITATIVE PRONOUNCEMENTS OF THE SUPREME COURT REFERRED TO ABOVE, WHICH ARE BINDING UPON US AND THE OBSERVATIONS MADE BY THE HIGH COURT OF GUJA RAT WITH WHICH WE FIND OURSELVES IN RESPECTFUL AGREEMENT, TH E ACTION INITIATED BY THE ASSESSING OFFICER FOR REOPENING TH E ASSESSMENT CANNOT BE SAID TO BE EITHER INCOMPETENT OR OTHERWISE IMPROPER TO CALL FOR INTERFERENCE BY A WR IT COURT. THE ASSESSING OFFICER HAS IN THE REASONED ORDER PAS SED BY HIM INDICATED THE BASIS ON WHICH INCOME EXIGIBLE TO TAX HAD IN HIS OPINION ESCAPED ASSESSMENT. THE ARGUMENT THA T THE PROPOSED REOPENING OF ASSESSMENT WAS BASED ONLY UPO N A CHANGE OF OPINION HAS NOT IMPRESSED US. THE ASSESSM ENT ORDER DID NOT ADMITTEDLY ADDRESS ITSELF TO THE QUES TION WHICH THE ASSESSING OFFICER PROPOSES TO EXAMINE IN THE CO URSE OF REASSESSMENT PROCEEDINGS. THE SUBMISSION OF MR. VOH RA THAT EVEN WHEN THE ORDER OF ASSESSMENT DID NOT RECORD AN Y EXPLICIT OPINION ON THE ASPECTS NOW SOUGHT TO BE EX AMINED, IT MUST BE PRESUMED THAT THOSE ASPECTS WERE PRESENT TO THE MIND OF THE ASSESSING OFFICER AND HAD BEEN HELD IN FAVOUR OF THE ASSESSEE IS TOO FAR-FETCHED A PROPOSITION TO ME RIT ACCEPTANCE. THERE MAY INDEED BE A PRESUMPTION THAT THE ASSESSMENT PROCEEDINGS HAVE BEEN REGULARLY CONDUCTE D, BUT ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 21 THERE CAN BE NO PRESUMPTION THAT EVEN WHEN THE ORDE R OF ASSESSMENT IS SILENT, ALL POSSIBLE ANGLES AND ASPEC TS OF A CONTROVERSY HAD BEEN EXAMINED AND DETERMINED BY THE ASSESSING OFFICER. IT IS TRITE THAT A MATTER IN ISS UE CAN BE VALIDLY DETERMINED ONLY UPON APPLICATION OF MIND BY THE AUTHORITY DETERMINING THE SAME. APPLICATION OF MIND IS, IN TURN, BEST DEMONSTRATED BY DISCLOSURE OF MIND, WHIC H IS BEST DONE BY GIVING REASONS FOR THE VIEW WHICH THE AUTHO RITY IS TAKING. IN CASES WHERE THE ORDER PASSED BY A STATUT ORY AUTHORITY IS SILENT AS TO THE REASONS FOR THE CONCL USION IT HAS DRAWN, IT CAN WELL BE SAID THAT THE AUTHORITY HAS N OT APPLIED ITS MIND TO THE ISSUE BEFORE IT NOR FORMED ANY OPIN ION. THE PRINCIPLE THAT A MERE CHANGE OF OPINION CANNOT BE A BASIS FOR REOPENING COMPLETED ASSESSMENTS WOULD BE APPLICABLE ONLY TO SITUATIONS WHERE THE ASSESSING OFFICER HAS APPLI ED HIS MIND AND TAKEN A CONSCIOUS DECISION ON A PARTICULAR MATTER IN ISSUE. IT WILL HAVE NO APPLICATION WHERE THE ORD ER OF ASSESSMENT DOES NOT ADDRESS ITSELF TO THE ASPECT WH ICH IS THE BASIS FOR REOPENING OF THE ASSESSMENT, AS IS THE PO SITION IN THE PRESENT CASE. IT IS IN THAT VIEW INCONSEQUENTIAL WH ETHER OR NOT THE MATERIAL NECESSARY FOR TAKING A DECISION WA S AVAILABLE TO THE ASSESSING OFFICER EITHER GENERALLY OR IN THE FORM OF A REPLY TO THE QUESTIONNAIRE SERVED UPON TH E ASSESSEE. WHAT IS IMPORTANT IS WHETHER THE ASSESSIN G OFFICER HAD BASED ON THE MATERIAL AVAILABLE TO HIM TAKEN A VIEW. IF HE HAD NOT DONE SO, THE PROPOSED REOPENING CANNOT B E ASSAILED ON THE GROUND THAT THE SAME IS BASED ONLY ON A CHANGE OF OPINION.' 2.11. HON'BLE JURISDICTIONAL HIGH COURT IN CIT VS ICICI BANK LTD. (2012) 349 ITR 482(BOM.), VIDE ORDER DATE D 09/07/2012 HELD AS UNDER:- IN THIS CASE THE ASSESSMENT IS REOPENED WITHIN A PE RIO D OF 4 YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. IN SUCH CASES IT IS SETTLED LAW THAT THE POWER OF THE ASSESSING OFFICER TO REOPEN THE ASSESS MENT IS NOT SUBJECT TO THE LIMITATION PROVIDED IN THE PROVISO TO SECTION 147 N AMELY FAILURE ON THE PART O F THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATE RIAL FACTS NECESSARY FOR ASSESSMENT. ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 22 CONSEQUENTLY, EVEN WHERE AN ASSESSEE HAS DISCLOSED ALL FACTS FULLY AND TRULY FOR THE PURPOSE OF ASSESSMENT, THE ASSESSING OFFICE R WOULD STILL HAVE JURISDICTION TO REOPEN THE ASSESSMENT, IF HE HAS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. HO WEVER, THIS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAP ED ASSESSMENT EVEN WITHIN A PERIOD OF FOUR YEARS FROM THE END OF THE R ELEVAN T ASSESSMENT YEAR, HAS TO ARISE NOT ON ACCOUNT OF A MERE CHANGE OF OPI NION BUT ON THE BASIS OF SOME TANGIBLE MATERIAL. [PARA 7] THEREFORE THE SINE QUA NON TO ISSUE A NOTICE FOR REOPENING OF ASSESSMENTS EVEN WITHIN A PERIOD OF LESS THAN 4 YEARS FROM TH E END OF THE ASSESSMENT YEAR, IS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT AND THIS REASON TO BELIEVE SHOULD BE ON THE BASIS OF TANGIBL E MATERIAL, OTHERWISE THE EXERCISE OF POWER TO REOPEN WOULD BE A REVIEW OF TH E ASSESSMENT ORDER. [PARA 7] IN THE INSTANT CASE, THE IMPUGNED NOTICE WAS BASED ON THE GROUND THAT THE INCOME EARNED FROM THE NON- FUND BASED ACTIVITIES OF THE RESPONDENT HAD BEEN INCLUDED IN THE FUND BASED INCOME SO AS TO CLA IM EXCESS DEDUCTION UNDER SECTION 36(1)( VIII ). THE REASONS ONLY PROVIDE A CONCLUSION AND GIVE NO MATERIAL PARTICULARS OF INFORMATION OBTAINED DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 1998 - 99. THEREFORE THE REASONS RECORDED DO NOT INDICATE ANY TANGIBLE MATER IAL WHICH HAS LED TO A REASONABLE BELIEF THAT INCOME HAS ESCAPED ASSESSMEN T. FURTHER CASE OF THE DEPARTMENT IS THAT EXPENSES ATT RIBUTABLE TO NON- FUND BASED ACTIVITY SHOULD BE 10 PER CENT AND NOT 20.1 P ER CENT AS CLAIMED BY THE RESPONDENT. CONSEQUENTLY THE EXPENSES ATTRIBUTABLE TO F UND BASED ACTIVITY WOULD BE 90 PER CENT AND NOT 79.99 PER CENT RESULTI NG IN LESS PROFIT FROM FUND BASED ACTIVITY (LONG TERM FINANCE). THE ASSESSEE HAD ALLOCATED ITS EXPENDITURE BETWEEN FUND BASED AND NON- FUND BASED ACTIVITY ON THE BASIS OF THE RATIO O F THE INCOME EARNED BETWEEN FUND AND NON - FUND BASED ACTIVITY. THEREFORE THERE WAS SOME BASIS FOR DISTRIBUTING THE EXPENSES. NEITHER THE REASONS NOR THE ORDER OF THE ASSESSING OFFICER INDICATE THE BASIS ON WHICH 10% OF EXPENDIT URE IS ALONE ATTRIBUTABLE TO NON-FUND ACTIVITY. THIS AGAIN ESTABLISHES ABSENCE OF ANY TANGIBLE MATE RIAL OBTAINED DURING PROCEEDING FOR ASSESSMENT YEAR 1998 - 99 TO FORM A REASONABLE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. IN THE CIRCUMSTANCES THE EXERCISE OF POWERS UNDER SECTION 148 IS UNWARRANTED. [PARA 8] FURTHER, THE ASSESSING OFFICER WHILE REASSESSING TH E ASSESSEE HAS IN FACT TAKEN A GROUND DIFFERENT FROM THE GROUNDS IN THE RE ASONS RECORDED FOR REOPENING THE ASSESSMENT UNDER SECTION 148. THE REA SONS FURNISHED FOR REOPENING THE ASSESSMENT ALLEGED THAT NON- FUND INCOME HAD BEEN SHOWN IN FUND BASED INCOME SO AS TO AVAIL OF A HIGHER DEDUCT ION. HOWEVER, THE BASIS OF THE REASSESSMENT ORDER WAS TH AT 20.1 PER CENT OUT OF THE GROSS EXPENSES ATTRIBUTED TO NON-FUND INCOME WA S EXC ESSIVE AND OUGHT ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 23 TO BE RESTRICTED TO ONLY 10 PER CENT. THUS, THE BAS IS OF THE ORDER WAS COMPLETELY DIFFERENT FROM THE REASONS RECORDED FOR REOPENING THE ASSESSMENT. [PARA 13] IN VIEW OF THE ABOVE, THE TRIBUNAL WAS CORRECT IN T AKING THE VIEW THAT THE REOPENING OF ASSESSMENT WAS NOT SUSTAINABLE IN LAW. [PARA 14] 2.12. IN ANOTHER CASE OF NYK LINE (INDIA) LTD. VS DCIT (2012) 346 ITR 361(BOM.), ORDER DATED 10/02/2012 HE LD AS UNDER:- INITIATION OF REASSESSMENT PROCEEDINGS ON BASIS OF ASSESSMENT FOR SUBSEQUENT ASSESSMENT YEAR UNDOUBTEDLY AN ORDER OF ASSESSMENT WHICH HAS BEEN P ASSED FOR A SUBSEQUENT ASSESSMENT YEAR MAY FURNISH A FOUNDATION TO REOPEN AN ASSESSMENT FOR AN EARLIER ASSESSMENT YEAR. HOWEVER, THERE MUST BE SOME NEW FACTS WHICH COME TO LIGHT IN THE COURSE OF ASSE SSMENT FOR THE SUBSEQUENT ASSESSMENT YEAR WHICH EMERGE IN THE ORDE R OF ASSESSMENT. OTHERWISE, A MERE CHANGE OF OPINION ON THE PART OF THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT FOR A SUBSEQUENT ASSESS MENT YEAR WOULD NOT BY ITSELF LEGITIMISE THE REOPENING OF AN ASSESSMENT FO R AN EARLIER YEAR. [PARA 14] WHETHER REASSESSMENT PROCEEDINGS WERE RIGHTLY INITI ATED IN ASSESSEE'S CASE THE ASSESSEE IN THE INSTANT CASE HAD MADE A DISCLOS URE IN THE NOTES FORMING PART OF THE ACCOUNTS OF THE NATURE OF PAYME NTS REQUIRED TO BE MADE TO THE FOREIGN PRINCIPAL ON ACCOUNT OF CONTAIN ER DETENTION CHARGES. THE ASSESSING OFFICER SPECIFICALLY DISCUSSED IN THE COURSE OF THE ASSESSMENT ORDER THE MATTERS IN RESPECT OF WHICH HE HAD MADE A DISALLOWANCE EITHER FULLY OR IN PART. SINCE THE ASS ESSING OFFICER DID NOT FIND ANY JUSTIFICATION TO REJECT THE CLAIM OF THE A SSESSEE IN RESPECT OF THE ISSUE OF CONTAINER DETENTION CHARGES, THERE WAS NO SPECIFIC DISCUSSION IN THE COURSE OF ORDER. [PARA 17] CONSEQUENTLY AND IN THIS BACKGROUND THE MERE FACT T HAT THE ASSESSING OFFICER FOR ASSESSMENT YEAR 2007-08 HAD COME TO A D IFFERENT CONCLUSION WOULD NOT JUSTIFY THE REOPENING OF THE ASSESSMENT F OR ASSESSMENT YEAR 2006-07. [PARA 18] 2.13. THE HON'BLE JURISDICTIONAL HIGH COURT IN NDT SYSTEMS & ANOTHERS VS INCOME TAX OFFICER (2014) 363 ITR 603(BOM.) HELD AS UNDER:- ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 24 THIS PETITION UNDER ARTICLE 226 OF THE CONSTITUTI ON OF INDIA SEEKS TO QUASH A NOTICE DATED MARCH 20, 2012, ISSUED UNDER SECTION 148 OF THE INCOME-TAX ACT, 1961 ('THE ACT'). THE IMPUGNED NOTICE SEEKS TO REOPEN THE ASSESSMENT FOR THE ASSESSMENT YEAR 2007-08 ON THE G ROUND THAT THE ASSESSING OFFICER HAS REASONS TO BELIEVE THAT INCOM E CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 14 7 OF THE ACT. 2. AT THE REQUEST OF THE ADVOCATES FOR THE PETITIONER AND THE RESPONDENT THE PETITION IS TAKEN UP FOR FINAL DISPOSAL AT THE STAG E OF ADMISSION ITSELF. 3. BRIEF FACTS LEADING TO THIS PETITION ARE AS FOLLOW S : ( A ) AT ALL TIMES RELEVANT TO THIS PETITION, THE PETITIO NER FIRM WAS ENGAGED IN NON- DESTRUCTIVE TESTING BUSINESS WHICH INCLUDES TESTING OF THE BLASTING CONTENTS OF THE PLANT AND MACHINERY ALONG WITH BUILDING WHIC H ARE BEING INSTALLED BY ITS CLIENTS. THIS ACTIVITY OF TESTING WAS MAINLY SU PERVISED AND CONTROL LED BY THE GUIDELINES ISSUED BY THE BHABHA ATOMIC RESEARCH CENTRE (BARC) AS IT INVOLVES THE USE OF RADIO ACTIVE MATERIAL. ( B ) ON OCTOBER 21, 2007, THE PETITIONER FILED ITS RETUR N OF INCOME FOR THE ASSESSMENT YEAR 2007-08 DECLARING A TOTAL INCOME OF RS. 7.06 LAKHS. THEREAFTER, NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED TO THE PETITIONER BY THE ASSESSING OFFICER. DURING THE COU RSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER FOUND THAT THE LA BOUR CHARGES AND RADIOGRAPHY CHARGES WHICH WERE DEBITED AS EXPENSES BY THE PETITIONER HAD NOT SUFFERED TAX DEDUCTION AT SOURCE. CONSEQUENTLY, THE PETITIONER WAS CALLED UPON TO EXPLAIN WHY THE RADIOGRAPHY AND LABOUR CHAR GES PAID BY THEM AND DEBITED AS EXPENSES SHOULD NOT BE DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT WHILE COMPUTING ITS PROFITS. ( C ) IN RESPONSE TO THE ABOVE QUERY, THE PETITIONER SUBM ITTED COMPLETE DETAILS OF RADIOGRAPHY AND LABOUR CHARGES PAID BY IT INDICATIN G THE NAME AND ADDRESS OF THE RECIPIENTS. THE PETITIONER, INTER ALIA, POIN TED OUT T HAT THE JOB OF TESTING CARRIED OUT BY IT, IS MAINLY SUPERVISED BY THE BARC , AS IT INVOLVES USE OF RADIO ACTIVE MATERIAL. THE PETITIONER ALSO POINTED OUT THAT THE PERSONS ENGAGED BY THEM FOR RADIOGRAPHY ARE GENERALLY SKILL ED PERSONNEL WHILE THOSE FOR LABOUR CHARGES WERE GENERALLY UNSKILLED PERSONNEL. HOWEVER , ACCORDING TO THE PETITIONER, NO DEDUCTION OF TAX AT SOURCE IS REQUIRED TO BE MADE AS THE PAYMENT MADE TO THEM WERE IN FACT IN TH E NATURE OF WAGES AND SALARIES. THEREFORE, THE PROVISIONS OF TAX DEDUCTIO N AT SOURCE UNDER SECTION 194C OF THE ACT WOULD NOT APPLY AND, CONSEQUENTLY, NO OCCASION TO INVOKE SECTION 40(A)(IA) OF THE ACT CAN ARISE. THE ASSESSI NG OFFICER, AFTER CONSIDERING THE PETITIONER'S RESPONSE IN THE ASSESS MENT ORDER, DID NOT ACCEPT THE SAME AN D HELD THAT THE TAX DEDUCTION AT SOURCE WAS REQUIRE D TO BE DONE BY THE PETITIONER IN RESPECT OF RADIOGRAPHY AND LAB OUR CHARGES PAID UNDER SECTION 194C OF THE ACT. IN THE CIRCUMSTANCES, THE AMOUNT OF RS. 4.08 LAKHS WHICH WAS CLAIMED TOWARDS THE LABOUR CHARG ES AND RADIOGRAPHY CHARGES WAS DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT AND A DDED TO THE TOTAL INCOME OF THE PETITIONERS. IN THE RESULT, THE ASSESSMENT O RDER DATED DECEMBER 11, 2009, ASSESSED THE PETITIONER TO A TOTAL INCOME OF RS. 12.05 LAKHS. ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 25 ( D ) ON MARCH 28, 2012, THE ASSESSING OFFICER ISSUED THE IMPUGNED NOTICE UNDER SECTION 148 OF THE ACT TO THE PETITIONER. BY THE IMPUGNED NOTICE THE PETITIONER WAS INFORMED BY THE ASSESSING OFFICER TH AT HE PROPOSES TO REASSESS THE PETITIONER FOR THE ASSESSMENT YEAR 200 7- 08, AS HE HAS REASON TO BELIEVE THAT THE INCOME ASSESSABLE TO TAX HAS ESCAP ED ASSESSMENT. IN RESPONSE TO THE ABOVE, THE PETITIONER SOUGHT A COPY OF REASONS RECORDED FOR ISSUING THE IMPUGNED NOTICE UNDER SECTION 148 OF TH E ACT. ( E ) ON JULY 23, 2012, THE ASSESSING OFFICER COMMUNICATED THE REASON S FOR REOPENING THE ASSESSMENT FOR THE ASSESSMENT YEAR 20 07- 08 TO THE PETITIONER AS UNDER: 'REASONS FOR ISSUE OF NOTICE UNDER SECTION 148 OF T HE INCOME- TAX ACT, 1961 : THE ASSESSEE-FIRM FILED ITS RETURN OF INCOME FOR TH E ASSESSMENT YEAR 2007- 08 DECLARING A TOTAL INCOME AT RS. 7,06,948. THE ASSES SEE RECEIVED TESTING CHARGES OF RS. 2.49 CRORES ON WHICH EXPENSES ON ACC OUNT OF RADIOGRAPHY AND LABOUR CHARGES WERE CLAIMED. THE CASE WAS SELEC TED FOR SCRUT INY AND ASSESSMENT WAS COMPLETED UNDER SECTION 143(3) ON DE CEMBER 11, 2009, ASSESSING THE TOTAL INCOME AT RS. 12,05,020 AFTER D ISALLOWING THE CONTRACT PAYMENTS MADE IN EXCESS OF RS. 50,000 DURING THE YE AR. ON VERIFICATION, IT IS NOTICED THAT THE PAYMEN TS TOWARDS RADIOGRAPHY CHARGES AND LABOUR CHARGES, ARE IN THE NATURE OF CONTRACT P AYMENTS AND DISALLOWED THESE EXPENSES AS PER THE PROVISIONS OF SECTION 40( A)(IA), VIDE ORDER DATED DECEMBER 11, 2000, AND THE ITEMS CONSIDERED FOR DIS ALLOWANCE ARE PAYMENTS M ADE IN EXCESS OF RS. 50,000 IN THE RELEVANT FINANCI AL YEAR. THESE PAYMENTS WOULD ACTUALLY FALL UNDER THE HEAD 'FEES F OR PROFESSIONAL OR TECHNICAL SERVICES' AND, ACCORDINGLY, ALL THE PAYME NTS MADE IN EXCESS OF RS. 20,000 ARE LIABLE FOR DEDUCTION OF TAX AT S OURCE. THEREFORE, THE TOTAL DISALLOWANCE AS PER THE PROVISIONS OF SECTION 40(A) (IA) OF THE ACT, 1961 ARE RS. 94,93,977 INSTEAD OF RS. 4,08,433. THEREFORE, I HAVE REASONS TO BELIEVE THAT INCOME TO THE TUNE OF RS. 90,84,844 HAS ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR 2007-08.' ( F ) BY LETTERS DATED AUGUST 23, 2012, AND OCTOBER 4, 20 12, THE PETITIONER OBJECTED TO THE REOPENING OF THE ASSESSMENT UNDER S ECTION 147 AND 148 OF THE ACT FOR THE ASSESSMENT YEAR 2007- 08. THE PETITIONER POINTED OUT THAT THERE IS NO WARRANT TO REASSESS THE PETITIONER FOR THE ASSESSMENT YEAR 2007- 08, PARTICULARLY BECAUSE THE ENTIRE PAYMENT MADE BY THEM AS LABOUR CHARGES AND RADIOGRAPHY CHARGES WERE SCRUTINIZED AND CONSID ERED BY THE ASSESSING OFFICER AT THE TIME OF REGULAR ASSESS MENT. BESIDES THE PETITIONER POINTED OUT THAT THE LABOUR CHARGES WERE PAID FOR PERFORMING LA BOUR JOBS LIKE DUCTING, LAYING OF PIPES AND OTHER RELATED LABOUR JOBS. THER EFORE, THE SAME CANNOT BE CLASSIFIED AS PROFESSIONAL JOB WORK. ( G ) ON OCTOBER 15, 2012 , THE ASSESSING OFFICER REJECTED THE PETITIONER'S OBJECTION DATED AUGUST 23, 2012, AND OCTOBER 4, 201 2, TO REOPEN THE ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 26 ASSESSMENT FOR THE ASSESSMENT YEAR 2007- 08 UNDER SECTION 147 AND SECTION 148 OF THE ACT. THE ASSESSING OFFICER DISPOSES OF T HE OBJECTIONS OF THE PETITIONER TO THE PROPOSED REOPENING OF ASSESSMENT FOR THE ASSESSMENT YEAR 2007-08 AS UNDER : 'IN THIS CASE, THIS IS TO INFORM YOU THAT YOUR OBJE CTIONS IN RESPECT OF ONGOING ASSESSMENT PROCEEDINGS HAVE BEEN CAREFULLY CONSIDER ED BY THE UNDERSIGNE D. THE FOLLOWING FACTS LEAD TO INITIATION OF PROCEEDIN GS UNDER SECTION 147 : ( A ) THERE IS DIFFERENCE OF RS. 21,61,168 ON ACCOUNT OF PAYMENTS RECEIVED BY YOU AND AS PER THE IDS CERTIFICATES ISSUED BY YOU F ROM THE FOLLOWING PARTIES, IN THE FINANCIAL YEAR 2006-07 RELEVANT TO THE ASSES SMENT YEAR 2007-08 ; S.NO. DEDUCTOR'S NAME DIFFERENCE AMT. IN RS. 1. HINDALCO INDUSTRIES LTD. 62,835.00 2. IFFCO, ALLAHABAD 70,328.00 3. ONSHORE CONST. CO. PVT. LTD. 1,51,943.00 4. PERRON ENGG. CONST. LTD. 25,416.00 5. POWER MECH PROJECTS P. LTD. 22,189.00 6. RELIANCE INDUSTRIES, JAMNAGAR 5,36,577.00 7. TULASIDHARAN BHASKARAN METAL CRAFTS, SURAT 7,31,493.00 8. UB ENGG. LTD. PUNE, 5,26,647.00 9. UNITED CONSTRUCTION CO. 33,743.00 ( B ) THE TOTAL DIFFERENCE OF RS. 21,61,168 HAD LED TO UN DERASSESSMENT OF INCOME. ( C ) THE PAYMENTS MADE UNDER THE HEAD RADIOGRAPHY CHARGE S AND LABOUR CHARGES AGGREGATING TO RS. 17,23,647 AND 77,69,630 WERE MAD E TO VARIOUS PERSONS LIKE SR. TECHNICIAN, ASSTT. R. T. TECHNI CIAN, JR. TECHNICIAN, SR. ASSTT. RADIOLOGIST, ETC., AS IS EVIDENT FROM THE CHART OF SUCH PAYMENTS SUBMITTED BY YOU IN THE EARLIER ASSESSMENT PROCEEDINGS. THUS, ALL SUCH PAYMENTS, UNAMBIGUOUSLY, FALL IN THE CATEGORY OF PAYMENTS MAD E FOR RECEIVING TECHNICAL SERVICES, ATTRACTING THE PROVISIONS OF SECTION 194J AND SECTION 194C. THUS, FOR THE PURPOSES OF CHAPTER XVII- B, THE THRESHOLD LIMIT OF RS. 20,000 WOULD BE APPLICABLE INSTEAD OF RS. 50,000. ( D ) AS NO TDS WAS DEDUCTED FROM THE PAYMENTS WHICH EXCE EDED THE THRESHOLD LIMIT OF RS. 20,000 THE EXPENSES WERE LIABLE FOR DI SALLOWANCE UNDER SECTION 40(A)(IA) OF THE INCOME-TAX ACT. ( E ) AT NO STAGE OF THE EARLIER ASSESSMENT PROCEEDINGS Y OU ESTABLISHED THE FACT THAT THE PAYEES WERE NOT QUALIFIED PROFESSIONAL. EV EN I N THE PRESENT ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 27 PROCEEDINGS YOU HAVE FAILED TO ESTABLISH THE SAME W ITH DOCUMENTARY EVIDENCE. ( F ) THE LENIENCY SOUGHT BY YOU, IN THE LIGHT OF DEATH O F ONE OF THE PARTNERS, EVEN THOUGH UNFORTUNATE, IS IRRELEVANT TO THE PRESE NT PROCEEDINGS. ( G ) THE ABOVE FACTS WERE NOT CONSIDERED BY THE THEN ASSESSING OFF ICER. THUS, LEADING TO ESCAPEMENT AND UNDERASSESSMENT OF INCOME BY RS. 1,12,46,012. IN VIEW OF THE ABOVE FACTS, I AM CONVINCED THAT THE REOPENED ASSESSMENT PROCEEDINGS, FOR THE ASSESSMENT YEAR 2007-08 ARE VALID AND THE NOTICE ISSUED UNDER SECTION 148 IS IN ACCORDANCE WITH THE PROVISI ONS OF LAW. HENCE, YOUR OBJECTION TO THE PRESENT PROCEEDINGS UNDER SECTION 147 AND THAT IN RESPECT OF ISSUE OF NOTICE UNDER SECTION 148 ARE WITHOUT ANY B ASIS AND, ACCORDINGL Y, THE SAME IS REJECTED. ACCORDINGLY, YOUR OBJECTION STAND S DISPOSED OF. YOU ARE REQUESTED TO FILE REQUISITE DETAILS AS PER THE QUES TIONNAIRE DATED JULY 23, 2012.' ( H ) THE RESPONDENT HAS FILED AN AFFIDAVIT-IN- REPLY DATED NOVEMBER 20, 2012, IN SUPPORT OF THE IMPUGNED NOTICE. IN ITS REPLY THE RESPONDENT HA VE ANNEXED A COMMUNICATION DATED MARCH 14, 2012, ADDRESSED BY TH E ASSESSING OFFICER TO THE JOINT COMMISSIONER OF INCOME- TAX SEEKING HIS APPROVAL TO REASSESS THE PETITIONER FOR THE ASSESSMENT YEAR 2007-08. IN THAT COMMUNICATION THE ASSESSING OFFICER HAS REFERRED TO THE OBJECTION RAI SED BY THE INTERNAL AUDITOR OF THE DEPARTMENT TO ASSESSMENT ORDER ALLOWING THE EXPENSES ON ACCOUNT OF RADIOGRAPHY AND LABOUR CHARGES HOLDING THEM TO BE C ONTRACT PAYMENTS FOR THE DEDUCTION OF SOURCE. MS. AASIFA KHAN, COUNSEL APPEARING FOR THE PETITION ER IN SUPPORT OF THE PETITION SUBMITS AS UNDER : ( A ) EVEN WHERE THE IMPUGNED NOTICE DATED MARCH 28, 2012 , UNDER SECTION 148 OF THE ACT HAS BEEN ISSUED WITHIN A PERIOD OF FOUR Y EARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS THE JURISDICTION TO REOPE N AN ASSESSMENT CANNOT BE EXERCISED MERELY ON ACCOUNT OF CHANGE OF OPINION ; ( B ) ALL MATERIAL FACTS WITH REGARD TO THE ASSESSMENT YE AR 2007- 08 HAD BEEN DISCLOSED BY THE PETITION ER TO THE ASSESSING OFFICER DURING THE ORIGINAL ASSESSMENT PROCEEDINGS LEADING TO ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT DATED DECEMBER 11, 2009. THERE IS NO NEW MA TERIAL FACT WHICH HAS COME TO THE NOTICE OF THE ASSESSING OFFICER THAT CO ULD LEAD TO HIS REASONABLE BELIEF THAT INCOME HAS ESCAPED ASSESSMENT. IN FACT, THE REASONS PROVIDED ONLY INDICATE A DIFFERENT OPINION ON THE SAME FACTS DULY CONSIDERED IN THE ASSESSMENT ORDER DATED DECEMBER 11, 2003, PASSED UN DER SECTION 143(3) OF THE ACT ; ( C ) THE REASONS FOR REOPENING AS COMMUNICATED TO THE PE TITIONER DOES NOT INDICATE AS ONE OF THE REASONS THAT AMOUNT OF RS. 2 1.61 LAKHS BEING THE DIFFERENCE BETWEEN THE AMOUNT RECEIVED BY THE PETIT IONER AND THE TAX DEDUCTION AT SOURCE CERTIFICATE ISSUED BY THE PAYER. HOWEVER, THE AFORESAID GROUND IS INDICATED AS A REASON FOR REJECTING THE O BJECTION TO REOPENING THE ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 28 ASSESSMENT FOR THE ASSESSMENT YEAR 2007- 08 UNDER SECTION 148 OF THE ACT. THIS ACCORDING TO HER IS CLEARLY NOT PERMISSIBLE ; AND ( D ) THE IMPUGNED N OTICE HAS BEEN ISSUED BY THE ASSESSING OFFICER AT T HE INSTANCE OF THE INTERNAL AUDIT REPORT AND NOT ON IN DEPENDENT APPLICATION OF MIND ON THE PART OF THE ASSESSING OFFICER. IN SUPPO RT SHE INVITES OUR ATTENTION TO THE AFFIDAVIT-IN-REPLY AND IN PARTICUL AR LE TTER DATED MARCH 14, 2012, ADDRESSED BY THE ASSESSING OFFICER TO THE JOI NT COMMISSIONER FOR APPROVAL TO REOPEN ASSESSMENT. IN THE AFORESAID LET TER SEEKING SANCTION TO REOPEN ASSESSMENT, MENTION IS MADE OF OBJECTION RAI SED BY THE INTERNAL AUDIT DEPARTMENT. THIS IS CLEARLY NOT PERMISSIBLE. IN VIEW OF THE ABO VE, THE PETITION BE ALLOWED AND THE IMPUGNED NOTICE BE QUAS HED AND SET ASIDE. 4. AS AGAINST THE ABOVE, MR. ARVIND PINTO, COUNSEL AP PEARING FOR THE REVENUE SUBMITS AS UNDER : ( A ) THE IMPUGNED NOTICE HAS BEEN ISSUED WITHIN FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR AND, THEREFORE, CANNOT BE FAULTED ; ( B ) THE REOPENING OF THE ASSESSMENT BY A NOTICE DATED M ARCH 20, 2012, UNDER SECTION 148 OF THE ACT IS VALID AND PROPER AS INCOME HAD ESCAPED ASSESSMENT FOR THE ASSESSMENT YEAR 2007- 08 INASMUCH AS THE PETITIONER HAD CLAIMED DEDUCTION OF PAYMENT MAD E ON ACCOUNT OF LABOUR CHARGES AND RADIOGRAPHY CHARGES WITHOUT H AVING DISCLOSED THE FACT THAT SUCH PAYMENT HAVE BEEN MADE TO SKILLED PERSONS. THEREFORE, PROFESSIONAL PAYMENTS ; ( C ) THE PAYMENT MADE TO SKILLED PERSONNEL ARE IN THE NA TURE OF TECHNICAL FEES LIABLE TO TAX DEDUCTION AT SOURCE UN DER SECTION 194J OF THE ACT AND NOT SECTION 194C OF THE ACT AS DONE IN THE ASSESSMENT ORDER DATED DECEMBER 11, 20 09. CONSEQUENTLY, ANY FEES PAID FOR TECHNICAL SERVICES IN EXCESS OF RS. 2 0,000 HAS TO BEAR TAX DEDUCTION AT SOURCE. THEREFORE, THE ASSESSING O FFICER HAS REASON TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMEN T FOR THE ASSESSMENT YEAR 2007-08 ; AND ( D ) NO PR EJUDICE WOULD BE CAUSED TO THE PETITIONER IF IT SUB JECTS ITSELF TO REASSESSMENT PROCEEDINGS. THIS IS BECAUSE ALL TH E PLEAS OF THE PETITIONER WITH REGARD TO THE INAPPLICABILITY OF SE CTION 194C OF THE ACT WOULD BE EXAMINED DURING THE REASSESSMENT PROCE EDING. 5. IN VIEW OF THE ABOVE, MR. PINTO SUBMITS THAT THE P ETITION BE DISMISSED. WE HAVE CONSIDERED THE SUBMISSIONS. WE FIND THAT TH E NOTICE DATED MARCH 20, 2012, UNDER SECTION 148 OF THE ACT HAS BEEN ISS UED WITHIN A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, I.E., 2007-08. IN SUCH CIRCUMSTANCES, THE PROVISO TO SECTION 147 OF T HE ACT IS CLEARLY NOT APPLICABLE. THEREFORE, IT IS NOT NECESSARY FOR THE REVENUE TO PRIMA FACIE ESTABLISH THAT THERE HAS BEEN A FAILURE ON THE PART OF THE PETITIONER TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR ASSESSMENT, WHILE ISSUING A NOTICE REOPENING A COMPLETED ASSESSMENT. HOWEVER, EVEN IN CASE ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 29 OF REOPENING OF ASSESSMENT WITHIN A PERIOD OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR THE ASSESSING OFFICER HAS TO HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED A SSESSMENT ON THE BASIS OF TANGIBLE MATERIAL. THE WORDS 'REASON TO BELIEVE' HAS BEEN CONSTRUED BY THE SUPREME COURT IN THE MATTER OF CIT V. KELVINATOR OF INDIA LTD . [2010] 320 ITR 561/187 TAXMAN 312 ; WHEREIN THE COURT HAS OBSERVED: 'HOWEVER ONE NEEDS TO GIVE SCHEMATIC INTERPRETATION TO THE WORDS 'REASON TO BELIEVE' FAILING WHICH WE ARE AFRAID SECTION 147 WOULD GIVE ARBITRARY POWERS TO THE ASSESSING OFFICER TO REOPEN ASSESSMEN T ON THE BASIS OF 'MERE CHANGE OF OPINION' WHICH CANNOT BE PER SE REASON TO REOPEN. WE MUST ALSO KEEP IN MIND THE CONCEPTUAL DIFFERENCE BETWEEN POWE R TO REVIEW AND POWER TO REASSESS. THE ASSESSING OFFICER HAS NO POW ER TO REVIEW ; HE HAS POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON FULFILMENT OF CERTAIN PRECONDITIONS AND IF THE CONCEPT OF 'CHANGE OF OPINION' IS REMOVED AS CONTENDED BY THE DEPARTMENT THEN IN THE GARB OF REOPENING THE ASSESSMENT REVIEW WOULD TAKE PLACE.' 6. THE AFORESAID OBSERVATIONS OF THE APEX COURT MAKE IT CLEAR THAT SANCTITY MUST BE ATTACHED TO THE ASSESSMENT ORDERS AND IT CA NNOT BE DISTURBED MERELY ON ACCOUNT OF CHANGE OF OPINION THIS SANCTIT Y TO ASSESSMENT ORDERS IS NOT BASED ON THE BASIS OF THE TIME THAT HAS LAPS ED FROM THE ASSESSMENT ORDER PASSED IN THE REGULAR PROCEEDINGS TO THE ISSU E OF NOTICE FOR REOPENING AN ASSESSMENT. 7. THEREFORE, WHERE ALL MATERIAL FACTS NECESSARY FOR DETERMINATION OF THE INCOME HAVE BEEN DISCLOSED BY THE ASSESSEE AND THE ASSESSING OFFICER HAS TAKEN A PARTICULAR VIEW ON THOSE DISCLOSED FACTS AS REFLECTED IN THE ASSESSMENT ORDER PASSED IN REGULAR PROCEEDINGS, THE N WITHOUT ANYTHING MORE, IT WOULD NOT BE OPEN TO REOPEN THOSE ASSESSME NT PROCEEDINGS. FOR IN SUCH A CASE IT IS A CLEAR CASE OF CHANGE OF OPINION . IN THE PRESENT FACTS IT IS VERY CLEAR THAT DURING THE ASSESSMENT PROCEEDINGS L EADING TO THE ASSESSMENT ORDER DATED NOVEMBER 11, 2009, THE PETIT IONER HAD DISCLOSED ALL FACTS WITH REGARD TO DEDUCTION BEING CLAIMED ON ACCOUNT OF LABOUR CHARGES AND RADIOGRAPHY CHARGES. IN FACT, THE ASSES SMENT ORDER DATED DECEMBER 11, 2009, RECORDS THE FACT THAT A NOTICE W AS ISSUED TO THE PETITIONER TO EXPLAIN WHY THE EXPENSES ON ACCOUNT O F LABOUR AND RADIOGRAPHY CHARGES SHOULD NOT BE DISALLOWED UNDER SECTION 40(A)(IA) OF THE ACT. THE PETITIONER EXPLAINED ITS VIEW POINT AN D THE ASSESSING OFFICER ON CONSIDERATION OF THOSE FACTS IN HIS ORDER OF ASS ESSMENT DATED DECEMBER 11, 2009, CONCLUDED THAT THESE PAYMENTS ON ACCOUNT OF RADIOGRAPHY CHARGES AND LABOUR CHARGES ARE TAX DEDUCTIBLE AT SO URCE IN TERMS OF SECTION 194C OF THE ACT. FURTHER, THE OBLIGATION ON THE PAR T OF THE ASSESSEE IS ONLY TO MAKE A FULL DISCLOSURE OF PRIMARY FACTS AND THE INFERENCES TO BE DRAWN THEREFROM AND THE APPLICATION OF LAW THEREON IS THE JOB OF THE ASSESSING OFFICER. THE PETITIONER HAS DISCLOSED ALL PRIMARY F ACTS AND ON CONSIDERATION OF THOSE FACTS AS REFLECTED IN THE ASSESSMENT ORDER DATED DECEMBER 11, 2003, THE AMOUNT OF INCOME HAS BEEN COMPUTED AFTER HOLDING THAT IDS HAS TO BE DEDUCTED UNDER SECTION 194C OF THE ACT. ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 30 8. THEREFORE, THE IMPUGNED NOTICE AND THE REASONS IN SUPPORT THEREOF CLEARLY INDICATES THAT IT HAS BEEN ISSUED MERELY ON THE BASIS OF CHANGE OF OPINION AND WOULD AMOUNT TO A REVIEW OF THE ASSESSM ENT ORDER DATED DECEMBER 11, 2003. FURTHER, THE REASONS FOR REOPENI NG AS COMMUNICATED BY THE PETITIONER IS NOT ON THE BASIS OF ANY TANGIB LE MATERIAL BUT MERELY ON VERIFICATION OF THE MATERIAL AND PRIMARY FACTS ALRE ADY ON RECORD THAT THE ASSESSING OFFICER HAS DULY CONSIDERED WHILE PASSING THE ORDER DATED DECEMBER 11, 2003, FOR THE ASSESSMENT YEAR 2007-08. THERE IS NO FRESH TANGIBLE MATERIAL WHICH WOULD WARRANT TAKING A VIEW DIFFERENT FROM THE ONE TAKEN DURING THE REGULAR ASSESSMENT PROCEEDINGS . IN FACT EVEN THE ORDER DATED OCTOBER 15, 2012 DISPOSING OF THE OBJEC TIONS CLEARLY RECORDS THAT RADIOGRAPHY CHARGES AND LABOUR CHARGES WERE MA DE TO VARIOUS PERSONS LIKE SENIOR TECHNICIANS, SENIOR RADIOGRAPHER AND JR . TECHNICIANS, ETC., FROM THE CHART SUBMITTED IN THE REGULAR ASSESSMENT PROCE EDING LEADING TO ORDER DATED DECEMBER 11, 2009. THEREFORE, IT IS VERY CLEA R THAT THE IMPUGNED NOTICE FOR REASSESSING THE ASSESSMENT YEAR 2007-08 HAS BEEN ISSUED MERELY ON CHANGE OF OPINION AND IN FACT SEEKS TO REVIEW TH E ASSESSMENT WHICH IS ALREADY COMPLETED. 9. ONE MORE ASPECT OF THE MATTER MUST BE ADVERTED TO AND THAT IS IN THE ORDER DATED OCTOBER 15, 2012, REJECTING THE OBJECTI ONS FILED BY THE PETITIONER WITH REGARD TO REASSESSMENT PROCEEDINGS FOR THE ASSESSMENT YEAR 2007-08 A COMPLETELY NEW GROUND HAS BEEN ADDED. IN ITS ORDER DATED OCTOBER 15, 2012, THE ADDITIONAL GROUND TO REOPEN A SSESSMENT IS THE LACK OF CO-RELATION BETWEEN THE PAYMENT RECEIVED BY THE PETITIONER AND THE TDS CERTIFICATE ISSUED BY THE PERSONS MAKING PAYMENT TO IT DURING THE ASSESSMENT YEAR 2007-08. THIS, ACCORDING TO THE ORD ER DATED OCTOBER 15, 2012, RESULTED IN UNDERASSESSMENT OF INCOME TO THE EXTENT OF RS. 21.61 LAKHS. THE AFORESAID ISSUE WAS NOT ONE OF THE GROUN DS SPECIFIED IN THE REASONS COMMUNICATED TO THE PETITIONER ON JULY 23, 2012, FOR THE PURPOSE OF REOPENING THE ASSESSMENT FOR THE ASSESSMENT YEAR 2007-08. OUR COURT IN THE MATTER OF HINDUSTAN LEVER LTD . V. R. B. WADKAR, ASSTT. CIT (NO.1) [2004] 268 ITR 332/137 TAXMAN 479 (BOM.) HAS HELD THAT FOR THE PURPOSE OF EXAMINING THE JURISDICTION TO REOPEN A COMPLETED ASSESSMENT ONE IS ONLY CONCERNED WITH THE REASONS R ECORDED AT THE TIME OF ISSUING NOTICE UNDER SECTION 148 OF THE ACT. THESE REASONS CANNOT BE SUPPLEMENTED/IMPROVED UPON LATER. THEREFORE, THE OR DER DATED OCTOBER 15, 2012, DISPOSING OF THE OBJECTION ALSO CANNOT BE SUS TAINED. SO FAR AS THE GROUND URGED BY MS. KHAN THAT REOPENING OF ASSESSME NT HAS BEEN DONE ON THE BASIS OF AUDIT OBJECTION, THE SAME IS NOT BEING EXAMINED. THIS IS FOR THE REASON THAT EVEN OTHERWISE, THE IMPUGNED NOTICE IS NOT SUSTAINABLE. 10. IN VIEW OF THE ABOVE, WE FIND THAT THE IMPUGNED NO TICE DATED MARCH 28, 2012, IS BAD IN LAW AS THE SAME HAS BEEN ISSUED MERELY ON ACCOUNT OF CHANGE OF OPINION AND AMOUNTS TO REVIEW OF THE ASSE SSMENT ORDER DATED DECEMBER 11, 2009. IN THE CIRCUMSTANCES, THE PETITI ON IS ALLOWED AND THE NOTICE DATED MARCH 28, 2012, ISSUED UNDER SECTION 1 48 OF THE ACT IS QUASHED AND SET ASIDE. 11. THE PETITION ALLOWED. NO ORDER AS TO COSTS. ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 31 2.14. FROM THE FOREGOING DISCUSSION, THE CLEAR PO SITION EMERGES AS UNDER: (1) REASSESSMENT PROCEEDINGS CAN BE VALIDLY INITIATE D IN CASE RETURN OF INCOME IS PROCESSED UNDER SECTION 143(1) AND NO SCR UTINY ASSESSMENT IS UNDERTAKEN. IN SUCH CASES THERE IS NO CHANGE OF OPINIO N. (2) REASSESSMENT PROCEEDINGS WILL BE INVALID IN CASE THE ASSESSMENT ORDER ITSELF RECORDS THAT THE ISSUE WAS RAISED AND IS DECIDED IN FAVOUR OF THE ASSESSEE. REASSESSMENT PROCEEDINGS IN THE SAID CAS ES WILL BE HIT BY THE PRINCIPLE OF 'CHANGE OF OPINION'. (3) REASSESSMENT PROCEEDINGS WILL BE INVALID IN CASE AN ISSUE OR QUERY IS RAISED AND ANSWERED BY THE ASSESSEE IN ORIGINAL A SSESSMENT PROCEEDINGS BUT THEREAFTER THE ASSESSING OFFICER DOE S NOT MAKE ANY ADDITION IN THE ASSESSMENT ORDER. IN SUCH SITUATIONS IT SHOULD BE ACCEPTED THAT THE ISSUE WAS EXAMINED BUT THE ASSESSI NG OFFICER DID NOT FIND ANY GROUND OR REASON TO MAKE ADDITION OR REJEC T THE STAND OF THE ASSESSEE. HE FORMS AN OPINION. THE REASSESSMENT WILL BE INVALID BECAUSE THE ASSESSING OFFICER HAD FORMED AN OPINION IN THE ORI GINAL ASSESSMENT, THOUGH HE HAD NOT RECORDED HIS REASONS. 2.15. THUS, WHERE AN ASSESSING OFFICER INCORRECTL Y OR ERRONEOUSLY APPLIES LAW OR COMES TO A WRONG CONCLUS ION AND INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT , RESORT MAY BE MADE THROUGH SECTION 263 OF THE ACT. BUT INITIATION OF REASSESSMENT PROCEEDINGS WILL BE INVA LID ON THE GROUND OF CHANGE OF OPINION. HERE A DISTINCTION HA S TO BE DRAWN BETWEEN ERRONEOUS APPLICATION/INTERPRETATION/ UNDERSTANDING OF LAW AND CASES WHERE FRESH OR NEW F ACTUAL INFORMATION COMES TO THE KNOWLEDGE OF THE ASSESSING OFFICER SUBSEQUENT TO THE PASSING OF THE ASSESSMENT ORDER. IF NEW FACTS, MATERIAL OR INFORMATION COMES TO THE ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 32 KNOWLEDGE OF THE ASSESSING OFFICER, WHICH WAS NOT O N RECORD AND AVAILABLE AT THE TIME OF THE ASSESSMENT ORDER, THE PRINCIPLE OF 'CHANGE OF OPINION' WILL NOT APPLY . THE REASON IS THAT 'OPINION' IS FORMED ON FACTS. 'OPINI ON' FORMED OR BASED ON WRONG AND INCORRECT FACTS OR WHI CH ARE BELIED AND UNTRUE DO NOT GET PROTECTION AND COVER U NDER THE PRINCIPLE OF 'CHANGE OF OPINION'. FACTUAL INFORMATI ON OR MATERIAL WHICH WAS INCORRECT OR WAS NOT AVAILABLE W ITH THE ASSESSING OFFICER AT THE TIME OF ORIGINAL ASSESSMEN T WOULD JUSTIFY INITIATION OF REASSESSMENT PROCEEDINGS. THE REQUIREMENT IN SUCH CASES IS THAT THE INFORMATION O R MATERIAL AVAILABLE SHOULD RELATE TO MATERIAL FACTS. THE EXPRESSION 'MATERIAL FACTS' MEANS THOSE FACTS WHICH IF TAKEN INTO ACCOUNT WOULD HAVE AN ADVERSE EFFECT ON THE ASSESSEE BY A HIGHER ASSESSMENT OF INCOME THAN THE ONE ACTUALLY MADE. CORRECT MATERIAL FACTS CAN BE ASCER TAINED FROM THE ASSESSMENT RECORDS ALSO AND IT IS NOT NECE SSARY THAT THE SAME MAY COME FROM A THIRD PERSON OR SOURC E, I.E., FROM SOURCE OTHER THAN THE ASSESSMENT RECORDS. HOWE VER, IN SUCH CASES, THE ONUS WILL BE ON THE REVENUE TO S HOW THAT THE ASSESSEE HAD STATED INCORRECT AND WRONG MATERIA L FACTS ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 33 RESULTING IN THE ASSESSING OFFICERS PROCEEDING ON THE BASIS OF FACTS, WHICH ARE INCORRECT AND WRONG. THE REASON S RECORDED AND THE DOCUMENTS ON RECORD ARE OF PARAMOU NT IMPORTANCE AND WILL HAVE TO BE EXAMINED TO DETERMIN E WHETHER THE STAND OF THE REVENUE IS CORRECT. A DECI SION FROM HONBLE DELHI HIGH COURT DATED SEPTEMBER 26, 2 011 IN DALMIA P. LTD. V. CIT [2012] 348 ITR 469 (DELHI) AND ANOTHER DECISION FROM HONBLE JURISDICTIONAL HIGH C OURT DATED NOVEMBER 8, 2011, IN INDIAN HUME PIPE CO. LTD . V. ASST. CIT [2012] 348 ITR 439 (BOM.) ARE TWO SUCH CA SES, WHICH THROW LIGHT ON THE ISSUE. IF THE AFORESAID JUDICIAL PRONOUNCEMENTS ARE KEPT IN JUXTAPOSITION WITH THE F ACTS OF THE PRESENT APPEAL, ADMITTEDLY, THE ASSESSEE FURNIS HED AUDITED FINANCIAL STATEMENT FOR THE YEAR ENDING 31/03/2008, COMPUTATION OF TOTAL INCOME AND OTHER RELEVANT MATERIAL FOR MAKING ITS CLAIM. IT IS NOT T HE CASE THAT ANY NEW TANGIBLE MATERIAL CAME TO THE NOTICE O F THE LD. ASSESSING OFFICER AT THE LATER STAGE. RATHER, IT IS A CASE, WHERE THE LD. ASSESSING OFFICER INCORRECTLY APPLIED THE PROVISION OF THE ACT, THEREFORE, ON THE SAME SET OF FACTS/CLAIM, MERELY ON THE BASIS OF CHANGE OF OPIN ION, THE ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 34 COMPLETED ASSESSMENT UNDER SECTION 143(3) OF THE AC T IS NOT PERMISSIBLE. IT IS NOTEWORTHY THAT AT THE RELEV ANT TIME, THE ASSESSEE WAS ENTITLED TO BENEFIT OF SECTION 12A OF THE ACT, THEREFORE, FROM THIS ANGLE ALSO, THE LD. ASSES SING OFFICER WAS NOT WITHIN THE LEGAL PARAMETERS TO REOP EN THE COMPLETED ASSESSMENT. THUS, SO FAR AS, REOPENING IS CONCERNED, WE ARE OF THE VIEW THAT IT WAS WRONGLY R EOPENED, CONSEQUENTLY, THIS GROUND OF THE ASSESSEE IS ALLOWE D. FINALLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 04/10/2018. SD/- (G. MANJUNATHA) SD/- (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER # $ MUMBAI; + DATED : 09/10/2018 F{X~{T? P.S/. . . , !%$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 22 # 3! , ( ,- ) / THE CIT, MUMBAI. ITA. NO.4871/MUM/2014 LANDMARK EDUCATION INDIA 35 4. 22 # 3! / CIT(A)- , MUMBAI 5. 5'60! , 2,-&,) , # / DR, ITAT, MUMBAI 6. 78 / GUARD FILE. ! / BY ORDER, / (DY./ASSTT. REGISTRAR)8 , # / ITAT, MUMBAI