ACIT, New Delhi V. M/s. Star Finvest Pvt. Ltd., New Delhi

ITA 4923/DEL/2012

• Counselvise Citation: 492320114 RSA 2012
• Duration Of Justice: 1 year(s) 4 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 18-12-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 17-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RENUKA JAIN GUPTA
• Assessee Lawyers: RANU JA IN; V MOHAN C AS
• Keywords: Reopening of assessment; Source of fund; Retrospective amendment; Question of law; Tangible material; Difference of opinion; Change of opinion; Reassessment proceedings
• Section: 143(3); 14A; 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G NEW DELHI BEFORE SHRI R.P. TOLANI AND SHRI S.V. MEHROTRA ITA NO. 4923/DEL/2012 ASSTT. YR: 2005-06 ACIT, CIR. 9(1), VS. M/S STAR FINVEST PVT. LTD. , NEW DELHI. 311, ARUNACHAL BUILDING, 19, BARAKHAMBA ROAD, NEW DELHI. PAN: AAFCS 0581 E ( APPELLANT ) ( RESPONDENT ) APPELLANT BY : SMT. RENUKA JAIN GUPTA SR. DR RESPONDENT BY : SMT. RANU JAIN & SHRI V. MOHAN C AS O R D E R PER R.P. TOLANI, J.M: : THIS IS REVENUES APPEAL AGAINST THE ORDER OF CIT (A)-XII, NEW DELHI DATED 01-06-2012 RELATING TO A.Y. 2005-06. FOLLOWIN G GROUNDS ARE RAISED: 1. THAT ON THE FACTS OF FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED ON FACTS AND IN LAW IN QUASHIN G THE REASSESSMENT UNDER SECTION 147/148 OF THE I.T. ACT. THAT ON THE FACTS OF FACTS AND CIRCUMSTANCES OF THE CASE THE LD. CIT(A) ERRED BOTH ON FACTS AND IN LAW IN DELETING T HE ADDITION UNDER SECTION 14A ON ACCOUNT OF PROPORTIONATE MANAG EMENT EXPENSES AMOUNTING TO RS. 51,08,274/- 2. BRIEF FACTS ARE: THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF SHARES; SECURITIES AND INVESTMENT ACTIVITIES AND IS A MEMBER OF NATIONAL STOCK EXCHANGE. THE ASSESSEES RETURN OF INCOME WAS FIRST PROCESSED U/S ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 2 143(1) VIDE INTIMATION DATED 23-05-2006 AND SUBSEQU ENTLY THE ASSESSMENT WAS COMPLETED U/S 143(3) VIDE ORDER DATED 13-3-2007 . ACCORDING TO ASSESSEE ALL MATERIAL FACTS IN RESPECT OF CLAIM OF INCOME AN D EXPENDITURE WERE FULLY AND TRULY DISCLOSED DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE ASSESSMENT U/S 143(3) WAS ACCORDINGLY COMPLETED. 2.1. AFTER ASSESSMENT, ASSESSING OFFICER ISSUED A N OTICE DATED 20-4-2009 U/S 154 PROPOSING TO DISALLOW AN AMOUNT OF RS. 51, 08,274/- U/S 14A OF THE ACT. ASSESSEE OBJECTED TO SAME AND FILED A DETAILED REPLY DATED 19-5-2009 WHICH REMAINS TO BE DECIDED. WITHOUT PROCEEDING FUR THER IN THE MATTER U/S 154 THE ASSESSING OFFICER AGAIN ISSUED A NOTICE U/S 148 DATED 23-3-2011 ON THE SAME REASONS FOR WHICH 154 NOTICE WAS ISSUED. A SSESSEE CHALLENGED THIS NOTICE U/S 148 ALSO AND REASSESSMENT PROCEEDINGS V IDE ITS REPLY DATED 13-4- 2011. ASSESSING OFFICER, HOWEVER, PASSED THE IMPUGN ED REASSESSMENT ORDER DATED 1-12-2011 U/S 147/143(3) OF THE I.T. ACT AND DISALLOWED AN AMOUNT OF RS. 51,08,274/- U/S 14A OF THE ACT. 2.2. AGGRIEVED, ASSESSEE PREFERRED FIRST APPEAL BEF ORE THE CIT(A) CHALLENGING THE LEGALITY OF 148 PROCEEDINGS AND MER ITS OF DISALLOWANCE, WHO OBSERVED AS UNDER: (I) IN THE REASONS RECORDED FOR REOPENING OF ASSESSMENT ASSESSING OFFICER HAS NO WHERE ALLEGED THAT THERE WAS ANY FAI LURE ON THE PART ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 3 OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL REL EVANT FACTS. UNDER THE MAIN PROVISO TO SEC. 147, THE 148 NOTICE COULD HAVE BEEN ISSUED BY 31-3-2010. IN THE ABSENCE OF ANY ALLEGATION ABOU T NON- DISCLOSURE OF FULLY AND TRULY ALL MATERIAL FACTS, THE NOTICE U/S 148 ISSUED ON 23-3-2011 WAS BEYOND THE PRESCRIBED TIME LIMIT OF 4 YEARS AND THEREFORE THE PROCEEDINGS WERE BAD IN LAW . (II) ASSESSING OFFICER HAD ALSO ISSUED A NOTICE U/S 154 ON 20-4-2009. THUS, IT WAS PROPOSED THAT IT WAS A RECTIFIABLE MIS TAKE, APPARENT FROM THE RECORD. IMPLYING THEREBY, THAT ALL THE NEC ESSARY MATERIAL WAS ON THE RECORD ON THE BASIS OF WHICH IT MAY BE R ECTIFIED. (III) IN THE REASONS RECORDED U/S 148 THERE IS NO REFEREN CE TO ANY NEW INFORMATION OR MATERIAL COMING IN THE POSSESSION OF THE ASSESSING OFFICER TO SUGGEST ESCAPEMENT OF ANY INCOME. THIS A MOUNTED TO ONLY CHANGE OF OPINION OF ASSESSING OFFICER. 2.3. WITH THESE OBSERVATIONS AND RELYING ON FOLLOWI NG JUDGMENTS, THE CIT(A) QUASHED THE REASSESSMENT PROCEEDINGS UNDERTA KEN U/S 147/148. - MERCURY TRAVELS LTD. 133 TAXMAN 238 (CAL.); - CIT VS. PUROLATOR INDIA LTD. 343 ITR 155 (DEL.); - ATMA RAM PROPERTIES PVT. LTD. VS. DCIT 343 ITR 141 (DEL.) - BLB LTD. VS. ACIT 343 ITR 129 (DEL.) ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 4 2.4. LD. CIT(A) THUS ALLOWED THE APPEAL OF THE ASSE SSEE BY FOLLOWING CONCLUDING OBSERVATIONS: IN VIEW OF THE ABOVE FACTS AND CASE LAWS CITED ABO VE AS WELL AS THE PROVISO TO SECTION 147 MENTIONED ABOVE THE REAS SESSMENT PROCEEDINGS U/S 147/148 ARE HERBY QUASHED. HENCE TH ERE IS NO NEED TO GO INTO THE MERIT OF THE CASE RAHUL KUMAR B AJAJ (PUNE BENCH) ITAT. THEREFORE, OTHER GROUNDS DO NOT NEED A NY ADJUDICATION. 2.5. AGGRIEVED, REVENUE IS BEFORE US. 3. LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER AND CONTENDS THAT THE ASSESSING OFFICER WAS FULLY JUSTIFIED IN RECOURSE T O NOTICE U/S 148 AS THE ITAT MUMBAI SPECIAL BENCH IN THE CASE OF DAGA INVESTMEN TS HAD HELD THAT RULE 8D IS CLARIFICATORY IN NATURE AND THEREFORE IS APPL ICABLE FROM RETROSPECTIVE EFFECT. MERELY BECAUSE ASSESSEE PRODUCED BOOKS OF A /CS IT DOES NOT IMPLY THAT ASSESSEE MADE FULL AND TRUE DISCLOSURE IN THE RETURN OF INCOME. RELIANCE IS PLACED ON THE HONBLE SUPREME COURT JUDGMENT IN THE CASE OF KALYANJI MAWAJI 102 ITR 287 AND THE HONBLE SUPREME COURT J UDGMENT IN THE CASE OF PHOOL CHAND BAJRANGLAL 203 ITR 456 FOR THE PROPO SITION THAT SUFFICIENCY OF REASONS CANNOT BE EXAMINED AT THE TIME OF ISSUE OF NOTICE. 4. LD. COUNSEL FOR THE ASSESSEE IN REPLY DREW OUR A TTENTION TO THE COMPUTATION OF INCOME IN WHICH ALL THE RELEVANT DET AILS ABOUT COMPUTATION OF THE INCOME INCLUDING CAPITAL GAINS AND CLAIM OF EXE MPTION U/S 10(36) AND 10(38) ARE MENTIONED. DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 5 U/S 143(3) VIDE NOTICE DATED 21-2-2007 PLACED ON PB 14, ASSESSING OFFICER SPECIFICALLY ASKED FOR ALL THE DETAILS OF INVESTMEN T MADE IN MUTUAL FUNDS DURING THE PERIOD 1-4-2004 TO 31-3-2005 ALONG WITH EVIDENCE OF SOURCE OF FUNDS USED FOR INVESTMENT. COMPLETE INFORMATION WAS SPECIFICALLY CALLED FOR. VIDE LETTER DATED 27-2-2007 PLACED ON PB 15, ASSESS EE FILED RELEVANT REPLY AS UNDER: 3. THAT INVESTMENT BEING THE PART OF MAIN ACTIVITI ES OF THE SAID COMPANY, THE SURPLUS FUND AVAILABLE WERE INVES TED IN THE MUTUAL FUNDS IN VIEW OF THE SURGE IN THE CAPITAL MA RKET. 4. THAT ALL THESE INVESTMENT WERE FOR A VERY SHORT TERM PERIOD AND WERE INITIALLY MADE OUT OF ITS OWN SOURC ES AND BY WAY OF REINVESTMENT ON REDEMPTION OF THE SAME INVES TMENTS AS EVIDENCED BY THE COPY OF LEDGER ACCOUNTS OF PRINCI PAL MUTUAL FUND AND ING VYASA LIQUID FUND ENCLOSED. 5. THAT THE COPY OF LEDGER ACCOUNTS COMPRISING DETA ILS OF ALL THE INVESTMENT MADE DURING THE YEAR UNDER SECURITY I.E. NATURE OF INVESTMENT, MODE OF PAYMENT, DATE OF ACQUISITION AND REDEMPTION ETC. IS ENCLOSED ALONG WITH STATEMENTS O F ACCOUNTS ISSUED BY ING VYASA MUTUAL FUND AND PRINCIPAL MUTUA L FUND DEPICTING ALL THE TRANSACTIONS MADE DURING THE YEAR UNDER REFERENCE. 6. THAT ALL THE INVESTMENTS HAVE BEEN MADE THROUGH PROPER BANKING CHANNEL AS SUBSTANTIATED BY THE DOCUMENTARY EVIDENCE QUOT4ED ABOVE. THE UNDERSIGNED SHALL BE GLAD TO FURNISH FURTHER CL ARIFICATION, IF ANY, AS DESIRED BY YOUR GOODSELF. ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 6 4.1. ALL THE ENCLOSURES WITH THIS LETTER ARE PLACED ON PAPER BOOK. THE SOURCES OF THE INVESTMENTS WERE FILED WHICH ARE MEN TIONED AT PAGE 17 OF THE PAPER BOOK. OUR ATTENTION IS DRAWN TO IMPUGNED ASSE SSMENT ORDER U/S 143(3) IN WHICH ASSESSING OFFICER WHILE ACCEPTING THE EXEM PT INCOME HAS SPECIFICALLY MENTIONED AS UNDER: NOTICE U/S 143(2) ALONG WITH LETTER ASKING FOR INF ORMATION IN RESPECT OF INVESTMENTS MADE IN MUTUAL FUNDS AND THE IR SOURCE THERE OF WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO THIS NOTICE, SHRI ANUJ GOYAL, CA, ATTENDED AND FILED DETAILS WHI CH WERE VERIFIED. AFTER CONSIDERING THE DETAILS FILED, ASSESSMENT IS COMPLETED AT THE RETURNED INCOME OF S. 2,36,34,790/-. ISSUE NEC ESSARY FORMS. 4.2. THE VOLUME OF EVIDENCE IN RESPECT OF QUESTIONN AIRE, ASSESSEES REPLIES AND ENCLOSURES CLEARLY DEMONSTRATE THAT THE ISSUE A BOUT MUTUAL FUND INCOME, SOURCES, BOOKS OF ACCOUNTS AND EXPENDITURE WERE DUL Y VERIFIED, EXAMINED AND CONSIDERED IN ORIGINAL ASSESSMENT. 4.3. THEREAFTER, IN REPLY TO NOTICE U/S 148, THE AS SESSEE SUBMITTED AS UNDER: THE ASSESSEE COMPANY WHILE FURNISHING THE RETURN O F INCOME U/S 139(1) OF THE ACT FOR A.Y. 2005-06 VIDE ACKNOWL EDGEMENT NO. 9100000321 DATED 24-10-2005 HAD ALREADY FULLY D ISCLOSED ALL THE MATERIAL FACTS NECESSARY FOR ASSESSMENT. H OWEVER, IN CASE THE DEPARTMENT AHS COME ACROSS ANY INFORMATION WHICH HAS LED TO BELIEVE THAT INCOME HAS ESCAPED ASSESSME NT, THE REASONS AND THE SPECIFIC INFORMATION FORMING THE SA ID BELIEF MAY PLEASE BE COMMUNICATED IN WRITING AND COPY OF T HE ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 7 MATERIAL/ DOCUMENTS, IF ANY, BE SUPPLIED TO THE ASS ESSEE COMPANY FOR TAKING FURTHER NECESSARY ACTION IN THE MATTER. 4.4. THE ASSESSING OFFICER, HOWEVER, REJECTED THE S AME BY FOLLOWING OBSERVATIONS: NOTICE U/S 148 WAS ISSUED IN THIS CASE ON 23/03/20 11. IN RESPONSE THE ASSESSEE FILED A LETTER DATED 13/04/20 11 STATING THAT: PLEASE REFER TO YOUR NOTICE DATED 23-03-2011 ISSUE D U/S 148 OF THE ACT IN THE CASE REFERRED TO HEREINABOVE. IN THIS CONNECTION, IT IS HUMBLY SUBMITTED THAT THE SAID NO TICE IS INVALID AND BARRED BY LIMITATION OF TIME IN VIEW OF THE FIRST PROVISO TO SECTION 147 OF THE INCOME TAX ACT, 1961. HOWEVER, FOR THE SAKE OF COMPLIANCE, THE RETURN OF INCOME ALREADY FILED BY THE ASSESSEE COMPANY U/S 13 9(1) VIDE YOUR ACKNOWLEDGEMENT NO. 9100000321 DATED 24/10/2005 (COPY ENCLOSED) BE TREATED AS A RETURN F ILED IN COMPLIANCE TO NOTICE U/S 148 OF THE ACT. THE OBJECTION FILED BY THE ASSESSEE HAS BEEN CAREFU LLY CONSIDERED. THE OBJECTION RAISED BY THE ASSESSEE IS NOT ACCEPTABLE AS THE NOTICE U/S 148 FOR RE-OPENING THE ASSESSMENT WAS ISSUED AFTER COMPLYING THE PROVISIONS OF SECTIO N 151 OF THE CT AND THEREFORE, ISSUANCE OF NOTICE WAS VALID AND WITHIN TIME. THEREFORE, THE OBJECTION RAISED BY THE ASSESSEE IS REJECTED AND REQUIRED TO COMPLY WITH THE NOTICES ISSUED. NOTICE U/S 142)(1) OF THE ACT IS ENCLOSED FOR NECESSARY COMPLIANCE. 4.5. THUS, THOUGH ASSESSEE BROUGHT TO THE NOTICE OF ASSESSING OFFICER THAT ALL THE RELEVANT PARTICULARS OF INCOME WERE FULLY A ND TRULY DISCLOSED IN THE RETURN AND ORIGINAL ASSESSMENT. THEREFORE, THE NOT ICE ISSUED AFTER EXPIRY OF FOUR YEARS FROM THE END OF ASSESSMENT YEAR, WAS TIM E BARRED IN TERMS OF SEC. ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 8 147. THE ASSESSING OFFICER WITHOUT ADVERTING TO THE ISSUE OF TIME LIMIT, IGNORING THE SPECIFIC PROVISION; WITHOUT APPRECIATI NG THE BINDING CASE LAWS AND IN A GENERALIZE MANNER HELD THAT THE 148 NOTI CE WAS ISSUED COMPLYING WITH THE PROVISIONS OF SEC. 151. 4.5. LD. COUNSEL FURTHER CONTENDS THAT NO WHERE IN THE REASONS RECORDED THE ASSESSING OFFICER HAS REFERRED TO DAGA INVESTME NT OR PROSPECTIVE APPLICABILITY OF RULE 8D. IT IS A SETTLED LAW THAT FRESH REASONS CANNOT BE READ INTO WHAT IS RECORDED BY ASSESSING OFFICER. BESIDES RULE 8D HAS BEEN HELD TO BE ONLY PROSPECTIVE IN NATURE, THUS DURING THIS PE RIOD THE PROVISIONS OF RULE 8D WERE NOT APPLICABLE AT ALL. 4.6. IN THE BACKGROUND OF THESE FACTS, LD. COUNSEL MAKES FOLLOWING PROPOSITIONS: (I) THE RECORD BY IT SELF SHOWS THAT ALL THE NECESSARY PARTICULARS IN RESPECT OF EARNING OF INCOME FROM MUTUAL FUNDS WERE DULY FURNISHED BEFORE ASSESSING OFFICER, DISCUSSED WITH HIM AND THEREAFTER THE ASSESSMENT U/S 143(3) WAS PASSED ALL OWING THE CLAIM OF EXPENDITURE. THUS THE ISSUE ABOUT CONSIDERATION OF PROVISIONS OF SEC. 14A ARE CLEARLY INBUILT IN THE PROCEEDINGS. (II) IN THE REASONS RECORDED BY THE ASSESSING OFFICER TH ERE IS NO WHISPER ABOUT THE FACT THAT THE ASSESSEE HAS FAILED TO PROV IDE FULL AND TRUE PARTICULARS OF ITS INCOME NECESSARY FOR ASSESSMENT. IN THE ABSENCE OF SUCH SPECIFIC INTENTION, THE EXTENDED TIME OF SI X YEARS IS NOT APPLICABLE TO ASSESSEES CASE. RELIANCE IS PLACED O N HONBLE DELHI ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 9 HIGH COURT JUDGMENT IN THE CASE OF HARYANA ACRYLIC MANUFACTURING CO. VS. CIT & ANR. (2009) 308 ITR 38 (DEL.), WHICH HAS SPECIFICALLY HELD THAT UNLESS THE ESCAPE MENT OF INCOME ARISES DUE TO THE FAILURE ON THE PART OF THE ASSESS EE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS, NECESSARY FOR HIS ASS ESSMENT, THEN NO ACTION U/S 147 CAN BE TAKEN AFTER FOUR YEARS FROM T HE END OF THE RELEVANT ASSESSMENT YEAR. THUS, THE CIT(A) WAS PERF ECTLY JUSTIFIED IN APPLYING THE HONBLE DELHI HIGH COURT JUDGMENT I N THE CASE OF CIT VS. PUROLATOR INDIA LTD. (SUPRA) FOR HOLDING TH E REASSESSMENT TO BE BAD IN LAW AND ON FACTS IN THESE CIRCUMSTANCE S. (III) IT IS FURTHER PLEADED THAT ALL THE RELEVANT DETAILS WERE BEFORE THE ASSESSING OFFICER AND ON THE BASIS THEREOF FIRST AC TION UNDER SEC. 154 WAS PROPOSED TO BE TAKEN TREATING THE ISSUE TO BE A MISTAKE APPARENT FROM THE RECORD. WITHOUT DECIDING THE SAME , NOTICE U/S 148 HAS BEEN GIVEN CLAIMING IT TO BE ESCAPEMENT OF INCOME. THERE IS NO MENTION WHATSOEVER IN THE REASONS RECORDED F OR REOPENING THAT ANY NEW MATERIAL CAME INTO THE POSSESSION OF A SSESSING OFFICER AFTER ASSESSMENT. THE CONSPECTUS OF FACTS CLEARLY D EMONSTRATE THAT WHAT ASSESSING OFFICER PROPOSED IN THE GARB OF REAS SESSMENT IS ONLY CHANGE OF OPINION ABOUT THE DECIDED ISSUE. ASSESSIN G OFFICER CANNOT REVIEW HIS OWN DECISION IN THE PRETEXT OF RE ASSESSMENT. RELIANCE IS PLACED ON THE HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF CIT VS. ORIENT CRAFT LTD. 354 ITR 536 ( DEL.) WHICH HAS CONSIDERED THE HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. 256 ITR 1 (DEL.), WHICH HAS BEEN FURTHER CONFORMED BY THE HONBLE SUPREME COURT IN T HE CASE OF ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 10 CIT VS. KELVINATOR OF INDIA LTD.320 ITR 561 (SC) AN D HELD AS UNDER: THERE WAS NO FRESH MATERIAL WHICH CAME TO THE NOTI CE OF THE ASSESSING OFFICER AFTER THE ORIGINAL RETURN WAS PROCESSED UNDER SECTION 143(1) AND HAVING REGARD TO THE ORDERS OF THE TRIBUNAL(SUPRA) AND THE INSTRUCTION O F THE CBDT DATED 23RD FEBRUARY, 1998 REGARDING THE TREATMENT TO BE GIVEN TO THE PREMIUM RECEIVED ON TR ANSFER OF QUOTAS, THERE WAS NO ESCAPEMENT OF INCOME AND THUS THE NOTICE WAS WITHOUT JURISDICTION. AS DECIDED IN CIT VS. KELVINATOR OF INDIA LTD.{2010 (1) TMI 11 - SUPREME COURT OF INDIA] AO HAS NO POWER TO REVIEW, HE HAS THE POWER TO REASSESS. BUT REASSESSMENT HAS TO BE BASED ON FULFILLMENT OF CERT AIN PRECONDITIONS AND IF THE CONCEPT OF 'CHANGE OF OPIN ION' IS REMOVED, AS CONTENDED ON BEHALF OF THE DEPARTMENT, THEN, IN THE GARB OF REOPENING THE ASSESSMENT, REVI EW WOULD TAKE PLACE. ONE MUST TREAT THE CONCEPT OF 'CHANGE OF OPINION' AS AN IN-BUILT TEST TO CHECK AB USE OF POWER BY THE ASSESSING OFFICER. THE REASONS TO BELI EVE MUST HAVE A MATERIAL BEARING ON THE QUESTION ON ESCAPEMENT OF INCOME. IT DOES NOT MEAN A PURELY SUBJECTIVE SATISFACTION OF THE ASSESSING AUTHORITY; THE REASON BE HELD IN GOOD FAITH AND CANNOT MERELY BE A PRETENCE. THE REASONS DISCLOSE THAT THE AO REACHED THE BELIEF THAT THERE WAS ESCAPEMENT OF INCOME 'ON GOING THROUGH TH E RETURN OF INCOME' FILED BY THE ASSESSEE AFTER HE AC CEPTED THE RETURN UNDER SECTION 143(1) WITHOUT SCRUTINY, A ND NOTHING MORE. THIS IS NOTHING BUT A REVIEW OF THE E ARLIER PROCEEDINGS AND AN ABUSE OF POWER BY THE AO BOTH STRONGLY DEPRECATED BY THE SUPREME COURT IN CIT VS. KELVINATOR (SUPRA). THE REASONS RECORDED BY THE AO IN THE PRESENT CASE DO CONFIRM APPREHENSION ABOUT THE HARM THAT A LESS STRICT INTERPRETATION OF THE WORDS 'REA SON TO BELIEVE' VIS-A-VIS AN INTIMATION ISSUED UNDER SECTI ON ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 11 143(1) CAN CAUSE TO THE TAX REGIME. THERE IS NO WHI SPER IN THE REASONS RECORDED, OF ANY TANGIBLE MATERIAL W HICH CAME TO THE POSSESSION OF THE ASSESSING OFFICER SUBSEQUENT TO THE ISSUE OF THE INTIMATION. IT REFLE CTS AN ARBITRARY EXERCISE OF THE POWER CONFERRED UNDER SEC TION 147 - SUBSTANTIAL QUESTION OF LAW ANSWERED IN FAVOU R OF THE ASSESSEE.' 4.7. FURTHER RELIANCE IS PLACED ON FOLLOWING DECISI ONS: - SH. GOPI G. NAMBIAR VS. JCIT 2013 (11) TMI 567 ITAT DEL. - DCIT VS. BINANI INDUSTRIES LTD. 2013 (11) TMI 1323 ITAT KOLKATA - ITA NO. 2933, 2935/DEL/201 & ITA NO. 1763/DEL/2012 DATED 26-11- 2013. - 4.8. IN VIEW THEREOF IT IS PLEADED THAT THE ORDER O F CIT(A) IS FULLY JUSTIFIED AND CONFORMS TO THE MANDATE OF HONBLE DELHI HIGH C OURT AND THE HONBLE SUPREME COURT. HIS ORDER IS RELIED ON. 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. FROM THE RECORD IT CLEARLY EMERGES THAT THE ASSESSEES ORIGINAL RETURN WAS PROCESSED U/S 143(1). THEREAFTER, REGULAR SCRUT INY ASSESSMEMT PROCEEDINGS U/S 143(3) WERE CARRIED OUT. FROM THE Q UESTIONNAIRE, CORRESPONDENCE UNDERTAKEN DURING THE COURSE OF ORIG INAL ASSESSMENT PROCEEDINGS, IT EMERGES THAT THE ISSUE ABOUT INCOME FROM MUTUAL FUNDS, SOURCE OF INVESTMENT AND RELATED ISSUES WERE TAKEN INTO CONSIDERATION WHICH FIND A MENTION IN THE ASSESSMENT ORDER ALSO. IT IS NOT DISPUTED THAT NO NEW MATERIAL FACTS CAME IN POSSESSION OF THE ASSESSING OFFICER. ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 12 5.1. THEREAFTER ASSESSING OFFICER ISSUED NOTICE U/S 154 FRAMING STAND OR OPINION THAT IT AMOUNTS TO A MISTAKE APPARENT FROM RECORD. ASSESSEE OBJECTED TO IT AND PROCEEDINGS HAVE NOT BEEN DISPOSED OF BY AO. 5.2. WITHOUT BRINGING THE 154 PROCEEDINGS TO ANY LO GICAL CONCLUSION THE ASSESSING OFFICER ON THE SAME SET OF FACTS AND WITH OUT THERE BEING ANY NEW INFORMATION FRAMED ANOTHER SATISFACTION THAT IT AMO UNTS TO ESCAPEMENT OF INCOME AND ISSUED NOTICE U/S 148 ALBEIT AFTER EXPIR Y OF 4 YEARS FROM THE END OF THE ASSESSMENT YEAR. IN THE REASONS RECORDED THE RE IS NO ALLEGATION OR WHISPER THAT THERE WAS ANY FAILURE ON THE PART OF T HE ASSESSEE TO DISCLOSE FULLY AND TRULY MATERIAL FACTS RELEVANT FOR ASSESSMENT OF HIS INCOME. FROM THE RECORD IT CANNOT BE DISCOVERED THAT ASSESS EE DID NOT DISCLOSE TRULY AND FULLY MATERIAL FACTS NECESSARY FOR COMPUTATION OF ITS INCOME. APART FROM ACCOUNT BOOKS VARIOUS OTHER INFORMATION WAS SUBMITT ED BY ASSESSEE CONSEQUENT TO QUESTIONNAIRE. 5.3. THOUGH LD. DR HAS REFERRED TO THE ITAT MUMBAI SPECIAL BENCH DECISION IN THE CASE OF DAGA INVESTMENTS, AS A REAS ON WHICH COULD HAVE PROMPTED THE ASSESSING OFFICER TO RECOURSE TO REOPE NING OF ASSESSMENT U/S 147/148. WE ARE UNABLE TO AGREE WITH IT AS THIS FAC T DOES NOT FIND ANY MENTION IN THE REASONS RECORDED. THUS THE PROPOSITI ON OF LD. DR IS ONLY WISHFUL THINKING. IN THESE FACTS AND CIRCUMSTANCES, CIT(A) HAS RIGHTLY ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 13 OBSERVED BY RELYING ON JURISDICTIONAL HIGH COURT OF DELHI DECISION AND THAT OF HONBLE SUPREME COURT JUDGMENT IN THE CASE OF C IT VS. KELVINATOR OF INDIA LTD. (SUPRA) HOLDING THE REOPENING OF ASSESSM ENT TO BE BAD IN LAW ON TWO COUNTS (I) NOTICE U/S 148 WAS ISSUED AFTER TH E TIME LIMIT OF 4 YEARS WHICH WAS NOT PERMISSIBLE; (II) THERE WAS NO ALLEG ATION IN THE REASONS RECORDED ABOUT THE ASSESSEE HAVING NOT FURNISHED AN Y TRUE AND FULL PARTICULARS OF HIS INCOME (III) THE ACTION U/S 148 WAS TAKEN ON THE SAME SET OF FACTS AND EVIDENCE ON RECORD, WITHOUT ANY NEW INFORMATION OR EVIDENCE TO SUSTAIN A NEW BELIEF IT AMOUNTS TO CHANGE OF OPINION. WE FIND NO MERIT IN THE CASE LAWS CITED BY THE LD. DR I.E. KALYANJI MAWAJI & PHO OL CHAND BAJRANGLAL (SUPRA) AS THE SUFFICIENCY OF REASONS IS NOT IN QUE STION AT ALL BEFORE US. THE CRUCIAL QUESTION IS WHETHER ASSESSING OFFICER WAS E LIGIBLE TO INITIATE THIS ACTION WITHIN THE TIME LIMIT BEYOND 4 YEARS AND WH ETHER THE REASONS RECORDED AMOUNTED TO CHANGE OF OPINION. THEREFORE, THE CASE LAWS CITED BY LD. DR ARE OF NO HELP TO THE REVENUE. IN OUR CONSID ERED VIEW CIT(A) HAS RIGHTLY TAKEN A CORRECT VIEW WHICH IS FURTHER FORTI FIED BY HONBLE DELHI HIGH COURT JUDGMENT IN THE CASE OF ORIENT CRAFT LTD. (SU PRA); JAI HOTELS CO. LTD. VS. ADIT 184 TAXMAN 1; AND HARYANA ACRYLIC MANUFACT URING CO. (SUPRA). ITA 4923/DEL/2002 ACIT VS. M/S STAR FINVEST PVT. LTD. 14 5.4. IN VIEW THEREOF WE FIND NO INFIRMITY IN THE OR DER OF CIT(A) HOLDING 148 PROCEEDINGS TO BE BAD IN LAW. IN VIEW THEREOF W E UPHOLD THE ORDER OF CIT(A). 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 31-01-2014. SD/- SD/- ( S.V. MEHROTRA ) ( R.P. TOLANI ) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 31-01-2014. MP COPY TO : 1. ASSESSEE 2. AO 3. CIT 4. CIT(A) 5. DR