HV TRANSMISSIONS LTD, MUMBAI V. ASST. CIT 2(1), MUMBAI

ITA 5345/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62186 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 12-01-2012
• Assessment Year: 2004-2005
• Appeal Filed On: 30-06-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: GOLI SRINIVASA RAO
• Assessee Lawyers: DINESH VYAS
• Keywords: Reopening of assessment; Depreciation; Tangible material; Difference of opinion; Revised return; Reason to believe; Unabsorbed depreciation; Change of opinion; Reassessment proceedings
• Section: 143(3); 115JB; 147; 148; 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H, MUMBAI BEFORE SHRI J. SUDHAKAR REDDY, A.M. AND SHRI V. DUR GA RAO, J.M. ITA NOS. 5344 & 5345/MUM/2010 ASSESSMENT YEARS : 2004-05 HV TRANSMISSIONS LTD., APPELLANT 3 RD FLOOR, NANAVATI MAHALAYA, 18, HOMI MODI STREET, HUTATMA CHOWK, MUMBAI 400 001. (PAN - AABCH7626Q) VS. ASSTT. COMMISSIONER OF INCOME TAX(OSD)-2(1), R ESPONDENT AAYAKAR BHAVAN, M.K. MARG, MUMBAI 400 020. APPELLANT BY : MR. DINESH VYAS RESPONDENT BY : MR. GOLI SRINIVASA RAO DATE OF HEARING : 12/01/2012 DATE OF PRONOUNCEMENT : 11/04/201 2 ORDER PER V. DURGA RAO, J.M.: BOTH THESE APPEALS FILED BY THE ASSESSEE ARE DIRE CTED AGAINST THE ORDERS OF CIT(A)- 4, MUMBAI, FOR THE ASSESSMEN T YEARS 2004-05 & 2005-06. SINCE COMMON ISSUES ARE INVOLVED IN THESE APPEALS, THEY WERE HEARD TOGETHER AND, THEREFORE, A COMMON ORDER IS PASSED FOR THE SAKE OF CONVENIENCE. 2. THE FACTS ARE IN BRIEF THAT THE ASSESSEE IS A CO MPANY ENGAGED IN THE BUSINESS OF MANUFACTURING HEAVY GEAR BOXES. THE RETURN OF INCOME FOR AY 2004-05 ORIGINALLY FILED ON 29/10/04 DECLARI NG NIL TOTAL INCOME AFTER SET OFF OF BROUGHT FORWARD LOSSES AND UNABSORBED DEPRECIATION AGGREGATING TO 28,06,32,513/- UNDER NO RMAL COMPUTATION AND BOOK PROFIT OF RS. 8,66,38,942/- U/S 115JB OF T HE IT ACT. ITA NO. 5344 & 5345/MUM/10 HV TRANSMISSION LTD. 2 ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT, 0N 16/10/2006 ASSESSING THE TOTAL INCOME AT NIL AFTER SETTING O FF OF BROUGHT FORWARD BUSINESS LOSSES AND UNABSORBED DEPRECIATION AGGREGA TING TO RS. 30,27,98,901/- AND ACCEPTING BOOK PROFIT OF RS. 8,6 6,38,942/- U/S 115JB OF THE ACT. SUBSEQUENTLY, THE AO ISSUED NOTIC E U/S 148 OF THE ACT ON 26/03/08 ALONG WITH REASONS FOR REOPENING. F OR THE SAKE OF CLARITY, THE REASONS FOR REOPENING ARE EXTRACTED BE LOW:- 1) PROVISION FOR DEFERRED TAX HAD NOT BEEN ADDED BA CK FOR THE PURPOSE OF BOOK PROFIT COMPUTATION U/S 115JB IN THE ASSESSMENT U/S 143(3). 2) HIGHER UNABSORBED DEPRECIATION FOR AY 2001-02 CA RRIED FORWARD IN THE ASSESSMENT U/S 143(3). 3. IN RESPONSE TO THE NOTICE ISSUED BY THE AO, THE ASSESSEE HAS EXPLAINED BEFORE THE AO VIDE LETTER DATED 28/11/08 AS UNDER:- 1) PROVISION FOR DEFERRED TAX :- WE SUBMIT THAT THIS ISSUE HAD BEEN RAISED SPECIFICALLY BY THE AO DURING THE COURS E OF ASSESSMENT PROCEEDINGS U/S 143(3), IN RESPONSE TO W HICH WE HAD GIVEN OUR DETAILED REPLY (COPY ATTACHED ALONG WITH COVERING LETTER DATED 7.9.06). THE AO ACCEPTED OUR EXPLANATION AND HAD NOT ADDED BACK THE PROVISION FOR DEFERRED TAX FOR THE P URPOSE OF BOOK PROFIT COMPUTATION U/S 115JB. WE ALSO SUBMIT THAT YOUR PROPOSED ACTION TO REASSES S THE INCOME BY RESORTING TO REASSESSMENT PROCEEDINGS BASED ON T HE SAME SET OF FACTS AND MATERIAL ON RECORD AMOUNT TO CHANGE OF OPINION WHICH IS BEYOND THE SCOPE OF SECTION 147 OF THE ACT . 2) UNABSORBED DEPRECIATION FOR AY 2001-02 :- THE AO RECOGNIZED BROUGHT FORWARD UNABSORBED DEPRECIATION OF RS. 60,5 5,23,989/- PERTAINING TO AY 2001-02 AS CLAIMED BY THE ASSESSEE . AS PER ASSESSMENT ORDER OF AY 2004-05 AN AMOUNT OF RS. 14,61,85,331/- WAS SET OFF AGAINST THE INCOME OF AY 2004-05 AND THE BALANCE AMOUNT OF RS. 45,93,38,658/- WERE ALLOW ED TO BE CARRIED FORWARD. THE DETAIL OF BROUGHT FORWARD UNABSORBED DEPRECIATI ON FOR AY 2001-02 WERE VERIFIED BY SCRUTINIZING THE ASSESSME NT ORDER OF AY 2001-02. IT IS OBSERVED THAT ASSESSEE HAD FILED A REVISED ITA NO. 5344 & 5345/MUM/10 HV TRANSMISSION LTD. 3 RETURN FOR AY 2001-02ON 27/3/2003 AND A FRESH ASSES SMENT U/S 147 WAS DONE ON 27/12/2006. ACCORDING TO THE ASSESSMENT ORDER DATED 27/12/2006 U/S 147 FOR AY 2001-02, THE DEPRECIATION ALLOWED TO BE CARR IED FORWARD AMOUNTED TO RS. 38,76,30,842/- ONLY. THUS THERE WAS A DIFFERENCE OF RS. 21,78,93,147/- IN THE ABSORBED DE PRECIATION ALLOWED TO THE ASSESSEE IN THE AY 2004-05. THIS NEE DS TO BE RECTIFIED. IN CONNECTION WITH ABOVE, WE SUBMIT THAT HIGHER DEP RECIATION HAD NOT BEEN ALLOWED TO BE CARRIED FORWARD ORDER IN THE ASSESSMENT ORDER U/S 143(3) FOR AY 2004-05 IN VIEW OF THE FACT THAT THE ASSESSMENT U/S 143(3) FOR AY 2004-05. THIS IS EVIDE NT EVEN FROM THE REOPENING REASONS GIVEN BY YOU WHEREIN ALSO IT IS CLEARLY MENTIONED THAT THE ASSESSMENT ORDER U/S 147 FOR AY 2001-02 HAD BEEN PASSED ON 27/12/06, WHEREAS ASSESSMENT ORD ER U/S 143(3) FOR AY 2004-05 HAD BEEN PASSED ON 16/10/06. SINCE THE ASSESSMENT ORDER DATED 16/10/06 U/S 143(3 ) FOR AY 2004-05 HAD BEEN PASSED PRIOR TO ASSESSMENT ORDER D ATED 27/12/06 U/S 147 FOR AY 2001-02, THE QUESTION OF AL LOWING HIGHER DEPRECIATION IN THE ASSESSMENT ORDER U/S 143 93) FOR AY 2004-05 DOES NOT ARISE. 4. HOWEVER, THE AO HAD NOT ACCEPTED THE SUBMISSIONS OF THE ASSESSEE AND OBSERVED THAT IN ACCORDANCE WITH THE P ROVISIONS CONTAINED IN SECTION 115JB AND AS PER THE EXPLANATI ON BELOW TO SECTION 115JB OF THE ACT, PROVISION FOR TAXATION IS ONE OF THE ITEMS REQUIRED TO BE ADDED FOR ARRIVING AT THE BOOK PROFI T AND THAT DEFERRED TAX LIABILITY AMOUNTING TO RS. 11,19,45,000/- WAS T HEREFORE REQUIRED TO BE ADDED. ACCORDINGLY, AO ADDED RS. 11,19,45,000 /- TO THE TOTAL INCOME OF THE ASSESSEE. AS REGARDS UNABSORBED DEPR ECIATION, THE AO HAD OBSERVED THAT IN THE COMPUTATION OF TOTAL INCOM E, THE ASSESSEE HAD CONSIDERED BROUGHT FORWARD UNABSORBED DEPRECIAT ION OF AY 2001- 02 OF RS. 60,55,23,989/- AND ALSO SET OFF OF RS. 14 ,61,85,331/- AGAINST THE INCOME OF AY 2004-05. HOWEVER, ON VERIF ICATION DETAILS OF AY 2001-02, IT WAS NOTICED THAT THE ASSESSMENT WAS COMPLETED U/S 143 READ WITH SECTION 147 OF THE ACT. ON 27/12/06 ON THE BASIS OF ITA NO. 5344 & 5345/MUM/10 HV TRANSMISSION LTD. 4 REVISED RETURN OF INCOME AND THE UNABSORBED DEPRECI ATION AMOUNTING TO RS. 38,76,30,842/- WAS ALLOWED TO BE CARRIED FOR WARD AS AGAINST THE UNABSORBED DEPRECIATION QUANTIFIED AT RS. 60,55 ,23,989/- ORIGINALLY. IT WAS FURTHER OBSERVED THAT IT IS AN ADMITTED POSITION THAT UNABSORBED DEPRECIATION ALLOWED TO BE CARRIED FORWA RD IN AY 2001-02 WAS REVISED SUBSEQUENTLY BECAUSE ASSESSMENT COMPLET ED U/S 147 OF THE ACT. UNDER THESE CIRCUMSTANCES, THESE LATEST AS SESSED FIGURES OF UNABSORBED DEPRECIATION OF AY 2001-02 ARE BEING CON SIDERED FOR SET OFF AGAINST THE INCOME OF THIS YEAR AND ACCORDINGL Y COMPUTED THE TOTAL INCOME OF THE ASSESSEE. AGAINST THE ORDER OF THE AO, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). 5. BEFORE THE CIT(A), THE ASSESSEE SUBMITTED THAT A LL THE DETAILS WERE FILED BEFORE THE AO DURING THE COURSE OF ORIGI NAL ASSESSMENT PROCEEDINGS AND AFTER CONSIDERING THE DETAILS ORIGI NAL ASSESSMENT WAS PASSED. HE CONTENDED THAT BASED ON THE SAME INFORMA TION NO REOPENING CAN BE MADE AND IT IS AMOUNTING TO CHANGE OF OPINION, WHICH IS BEYOND THE SCOPE OF SECTION 147. THE LEARN ED CIT(A) DID NOT ACCEPT THE EXPLANATION OFFERED BY THE ASSESSEE ON T HE GROUND THAT UNDER THE AMENDMENT TO SECTION 147, THE AO IS EMPOW ERED TO REOPEN THE ASSESSMENT IF HE FINDS THAT THERE IS ANY ESCAPE MENT OF INCOME AND OBSERVED THAT IN THIS CASE THE AO HAS NOTED THAT TH E AMOUNT OF DEFERRED TAX LIABILITY HAS NOT BEEN ADDED BACK TO T HE BOOK PROFIT TO THAT EXTENT THERE IS AN ESCAPEMENT OF INCOME, THERE FORE, TOTAL INCOME HAS TO BE COMPUTED U/S 115JB ALSO. THE CIT(A) HELD THAT SINCE THE NORMAL COMPUTATION OF INCOME IS LESS THAN THE BOOK PROFIT, THE AO IS JUSTIFIED IN REOPENING OF THE ASSESSMENT AND REASSE SSED THE BOOK PROFIT U/S 115JB. STILL AGGRIEVED BY THE ORDER OF T HE CIT(A), THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE TR IBUNAL. ITA NO. 5344 & 5345/MUM/10 HV TRANSMISSION LTD. 5 6. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING S U/S 143 OF THE ACT, THE ISSUE WITH REGARD TO DEFERRED TAX LIABILIT Y WAS RAISED BY THE AO AND THE ASSESSEE FILED A DETAILED NOTE BEFORE TH E AO ON 7 TH SEPTEMBER, 2006 VIDE PAGE NOS. 6,7 & 8 OF THE PAPER BOOK. IT IS SUBMITTED THAT THE AO AFTER EXAMINING THE SAID DETA ILED NOTE, PASSED THE ASSESSMENT ORDER U/S 143(3) OF THE ACT. IT IS F URTHER SUBMITTED THAT THE AO BASED ON THE MATERIAL AVAILABLE ON RECO RD FRAMED AN OPINION AND PASSED ASSESSMENT ORDER, THEREFORE, BAS ED ON THE SAME MATERIAL HE CANNOT CHANGE THE OPINION, WHICH HE HAS ALREADY FORMED AND MADE THE ASSESSMENT ORDER AND THE SAME CANNOT B E PERMITTED U/S 147 OF THE ACT. HE, THEREFORE, CONTENDED THAT R EOPENING U/S 147 MADE BY THE AO IS BAD IN LAW. FOR THIS PROPOSITION THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON THE FOLLOWING DECISIONS:- 1. CIT VS. KELVINATOR OF INDIA LTD., [2010] 320 ITR 56 1(SC) 2. ASTEROIDS TRADING & INVESTMENTS P. LTD. VS. DCIT, [ 2009] 308 ITR 190(BOM). 3. ASIAN PAINTS LTD. VS. DCIT AND ANOTHER, [2009] 308 ITR 195 (BOM.) 4. BHAVESH DEVELOPERS VS. AO AND OTHERS, [2010] 329 IT R 249 (BOM.) 7. ALTERNATIVELY WITHOUT PREJUDICE TO THE ABOVE, TH E LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT NOTICE U/S 148 DATE D 26/03/08 ISSUED PRIOR TO THE ENACTMENT OF THE FINANCE BILL, 2008 IS INVALID AND BAD IN LAW. THEREFORE, NO ADJUSTMENT CAN BE MADE BY WAY OF REASSESSMENT PROCEEDINGS PURSUANT THEREOF IN RESPEC T OF PROPOSAL, WHICH BECAME A LAW ONLY AFTER FINANCE BILL, 2008 IS PASSED. HE FURTHER SUBMITTED THAT CLAUSE (H) OF THE EXPLANATIO N TO SECTION 115JB, WHICH WAS PROPOSED IN THE FINANCE BILL, 2008 HAD BE COME A LAW ONLY AFTER FINANCE BILL, 2008 IS ENACTED. THEREFORE, NOT ICE DATED 26/03/08 ISSUED PRIOR TO THE DATE OF ENACTMENT OF FINANCE BI LL, 2008 I.E. PRIOR TO ITA NO. 5344 & 5345/MUM/10 HV TRANSMISSION LTD. 6 10/05/2008 IS INVALID AND BAD IN LAW. IN SUPPORT OF HIS SUBMISSIONS, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED UPON TH E DECISION IN THE CASE OF RALLIES INDIA LTD. VS. ACIT, [2010] 323 ITR 54 (BOM.) 8. IN SO FAR AS UNABSORBED DEPRECIATION IS CONCERNE D, THE LEARNED COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT REOPENI NG WAS MADE ON THE BASIS OF ASSESSMENT ORDER FOR AY 2001-02 AND TH E SAME WAS CHALLENGED BEFORE THE TRIBUNAL IN ITA NO. 2203/MUM/ 09 FOR AY 2001- 02 AND VIDE ORDER DATED 7 TH OCTOBER, 2011 THE TRIBUNAL QUASHED THE VERY REOPENING ITSELF. THEREFORE, THE REASON FOR RE OPENING DOES NOT SURVIVE FOR AY 2004-05, WHICH IS THE YEAR UNDER CON SIDERATION. 9. ON THE OTHER HAND, THE LEARNED DR HAS STRONGLY S UPPORTED REOPENING ORDER PASSED BY THE AO AND RELIED UPON TH E FOLLOWING DECISIONS:- 1. MULTISCREEN INDIA PVT. LTD. VS. UNION OF INDIA A ND OTHERS, 324 ITR 54 2. IOT INFRASTRUCTURE & ENERGY SERVICES PVT. LTD., 332 ITR 57 3. CONSOLIDATED PHOTO FUND INVESTMENT LTD. VS. ACI T, 10. IN THE REJOINDER, THE LEARNED COUNSEL FOR THE A SSESSEE SUBMITTED THAT THE CASE LAWS RELIED UPON BY THE LEARNED DR DO NOT APPLY TO THE FACTS OF THE CASE OF THE ASSESSEE AS THEY ARE DISTI NGUISHABLE ON FACTS. 11. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUS ED THE RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELO W AS WELL AS THE DECISIONS CITED. IT IS OBSERVED THAT THE AO REOPENE D THE ASSESSMENT U/S 147 OF THE ACT FOR THE REASONS THAT I) PROVISIO N FOR DEFERRED TAX HAD NOT BEEN ADDED BACK FOR THE PURPOSE OF BOOK PR OFIT COMPUTATION U/S 115JB IN THE ASSESSMENT U/S 143(3) AND II) HIGH ER UNABSORBED DEPRECIATION FOR AY 2001-02 CARRIED FORWARD IN THE ASSESSMENT U/S ITA NO. 5344 & 5345/MUM/10 HV TRANSMISSION LTD. 7 143(3). IN THIS CONNECTION, THE EXPLANATION OF THE ASSESSEE WAS THAT THE PROPOSED ACTION TO REASSESS THE INCOME BY RESOR TING TO REASSESSMENT PROCEEDINGS BASED ON THE SAME SET OF F ACTS AND MATERIAL ON RECORD AMOUNT TO CHANGE OF OPINION WHICH IS BEYO ND THE SCOPE OF SECTION 147 OF THE ACT. AS REGARDS THE PROVISION F OR DEFERRED TAX, THE ASSESSEE EXPLAINED THAT THIS ISSUE HAD BEEN RAISED SPECIFICALLY BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3), IN RESPONSE TO WHICH IT HAD GIVEN DETAILED REPLY VIDE LETTER DATED 7.9.06. THE AO ACCEPTED THE EXPLANATION AND HAD NOT ADDED B ACK THE PROVISION FOR DEFERRED TAX FOR THE PURPOSE OF BOOK PROFIT COMPUTATION U/S 115JB. AS REGARDS UNABSORBED DEPRECIATION FOR A Y 2001-02, THE EXPLANATION OF THE ASSESSEE WAS THAT HIGHER DEPRECI ATION HAD NOT BEEN ALLOWED TO BE CARRIED FORWARD IN THE ASSESSMENT OR DER U/S 143(3) IN VIEW OF THE FACT THAT THE ASSESSMENT U/S 143(3) WAS REOPENED LETTER FOR AY 2001-02 AND THIS REOPENING WAS ALSO QUASHED. THIS IS EVIDENT EVEN FROM THE REASONS FOR REOPENING GIVEN BY THE A O, IT IS CLEARLY MENTIONED THAT THE ASSESSMENT ORDER U/S 147 FOR AY 2001-02 HAD BEEN PASSED ON 27/12/06, WHEREAS ASSESSMENT ORDER U /S 143(3) FOR AY 2004-05 HAD BEEN PASSED ON 16/10/06. IT IS AN UN DISPUTED FACT THAT THERE IS NO ADDITIONAL MATERIAL OR NEW MATERIA L THAT CAME INTO EXISTENCE OR TO THE NOTICE OF THE AO, ON THE BASIS OF WHICH BELIEF ABOUT THE ESCAPEMENT OF INCOME WAS ENTERTAINED BY THE AO TO AUTHORIZE TO REOPENING OF THE ASSESSMENT. WE REFER TO THE CASE L AWS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE IN SUPPORT OF ASSESSEES CASE HEREINAFTER. 12. IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. (SUPRA), THE HONBLE APEX COURT HELD THAT THE CONCEPT OF CHANGE OF OPINION ON THE PART OF THE AO TO REOPEN AN ASSESSMENT DOES NOT STA ND OBLITERATED AFTER THE SUBSTITUTION OF SECTION 147 OF THE IT ACT , 1961, BY THE DIRECT TAX LAWS (AMENDMENT) ACTS, 1987 AND 1989. AFTER THE AMENDMENT, ITA NO. 5344 & 5345/MUM/10 HV TRANSMISSION LTD. 8 THE AO HAS TO HAVE REASON TO BELIEVE THAT INCOME HA S ESCAPED ASSESSMENT, BUT DOES NOT IMPLY THAT THE AO CAN REOP EN AN ASSESSMENT ON MERE CHANGE OF OPINION. THE CONCEPT O F CHANGE OF OPINION MUST BE TREATED AS AN IN-BUILT TEST TO CHE CK THE ABUSE OF POWER. HENCE AFTER APRIL 1, 1989, THE AO HAS POWER TO REOPEN AN ASSESSMENT, PROVIDED THERE IS TANGIBLE MATERIAL W HICH COMES TO HIS POSSESSION ON THE BASIS OF WHICH HE COMES TO THE CO NCLUSION THAT THERE WAS ESCAPEMENT OF INCOME FROM ASSESSMENT. REA SON MUST HAVE A LIVE-LINK WITH THE MATERIAL. 13. IN THE CASE OF ASTEROIDS TRADING AND INVESTMENT S P. LTD. (SUPRA), THE HONBLE BOMBAY HIGH COURT HELD THAT THOUGH THE NOTICE U/S 148 WAS ISSUED ON THE GROUND THAT THERE WAS REASON TO B ELIEVE THAT INCOME HAD ESCAPED ASSESSMENT THERE WAS NEITHER ANY CHANGE OF LAW NOR HAD ANY NEW MATERIAL BEEN BROUGHT ON RECORD BETWEEN THE DATE OF THE ASSESSMENT ORDER AND THE DATE OF FORMATION OF OPINI ON BY THE DCIT. IT WAS MERELY A FRESH APPLICATION OF MIND BY THE OFFIC ER TO THE SAME SET OF FACTS AND THE REASSESSMENT PROCEEDINGS WERE INITIAT ED BASED ON THE CHANGE OF OPINION OF THE OFFICER. 14. IN THE CASE OF ASIAN PAINTS LTD. (SUPRA), THE H ONBLE JURISDICTIONAL HIGH COURT HELD THAT WHEN A REGULAR ORDER OF ASSESSMENT IS PASSED IN TERMS OF SECTION 143(3) OF THE ACT, A PRESUMPTION CAN BE RAISED THAT SUCH AN ORDER HAS BE EN PASSED ON APPLICATION OF MIND. IF NON-APPLICATION OF MIND BY THE AO IN PASSING AN ORDER WOULD ITSELF CONFER JURISDICTION UPON THE AO TO REOPEN THE PROCEEDING WITHOUT ANYTHING FURTHER, IT WOULD AMOUN T TO GIVING A PREMIUM TO AN AUTHORITY EXERCISING QUASI-JUDICIAL F UNCTION TO TAKE BENEFIT OF ITS OWN WRONG. THE LEGISLATURE HAS NOT C ONFERRED POWER ON THE AO TO REVIEW HIS OWN ORDER. ITA NO. 5344 & 5345/MUM/10 HV TRANSMISSION LTD. 9 15. IN THE CASE OF BHAVESH DEVELOPERS (SUPRA), THE HONBLE BOMBAY HIGH COURT HELD THAT FAILURE TO DISCLOSE MATERIAL F ACTS ARE NECESSARY ASSESSMENT AND NOTICE ISSUED U/S 147 BASED ON FACTS DISCLOSED IN ORIGINAL ASSESSMENT IS NOT VALID. 16. IN THE CASE OF RALLIS INDIA LTD. (SUPRA), THE H ONBLE BOMBAY HIGH COURT HELD THAT ON THE DATE ON WHICH THE AO PURPORTED TO EXERCISE H IS POWER TO REOPEN THE ASSESSMENT U/S 147, THE LEGISLA TIVE AMENDMENT BY THE INSERTION OF CLAUSE (I) TO EXPLANATION (1) TO S ECTION 115JB HAD NOT BEEN BROUGHT INTO FORCE ON THE STATUTE BOOK. THE OR DER OF THE AO WITH REFERENCE TO THE COMPUTATION OF BOOK PROFITS UNDER SECTION 115JB WAS AT THE LEAST A PROBABLE VIEW AND AS A MATTER OF FAC T THE CORRECT VIEW TO TAKE IN VIEW OF THE DECISION OF THE SUPREME COURT I N CIT VS. HCL COMNET SYSTEMS AND SERVICES LTD. [2008] 305 ITR 409 . IT IS WELL-SETTLED THAT THE LAW LAID DOWN BY THE SUPREME COURT IS DECL ARATORY OF THE POSITION AS IT ALWAYS STOOD. IN ANY EVENT, THE VIEW OF THE AO WAS SUPPORTED BY THE INTERPRETATION PLACED EVEN CONTEMP ORANEOUSLY IN THE JUDGEMENT OF THE COURT IN CIT VS. ECHJAY FORGINGS P . LTD. [2001] 251 ITR 15 AND IN THE JUDGMENTS OF THE DELHI HIGH COURT IN CIT VS. EICHER LTD., [2006] 287 ITR 170 AND CIT VS. HCL COMNET SYS TEMS AND SERVICES LTD., [2007] 292 ITR 299. IN THE CIRCUMSTA NCES, THERE WAS NO WARRANT FOR REOPENING THE ASSESSMENT IN EXERCISE OF THE POWER CONFERRED U/S 147. 17. IT IS AN UNDISPUTED FACT THAT THE AO HAS ALREAD Y CONSIDERED THE MATERIAL FILED BY THE ASSESSEE WHILE PASSING THE O RDER U/S 143(3) OF THE ACT, AND ON THE BASIS OF SAME MATERIAL, HE CHAN GED HIS OPINION AND ISSUED THE NOTICE U/S 147 OF THE ACT, WHICH IS NOT VALID IN THE EYE OF LAW. THE RATIO LAID DOWN BY THE HONBLE COURTS I N THE SAID CASES ARE THAT UNLESS THERE IS SOME NEW MATERIAL COMING TO TH E POSSESSION OF THE AO ON THE BASIS OF WHICH AN OPINION WAS FORMED THAT THE INCOME ITA NO. 5344 & 5345/MUM/10 HV TRANSMISSION LTD. 10 HAD ESCAPED ASSESSMENT, THE NOTICE ISSUED U/S 147 F OR REOPENING OF ASSESSMENT IS NOT VALID. MOREOVER, THE HONBLE BOM BAY HIGH COURT IN THE CASE OF RALLIES INDIA LTD. (SUPRA) HELD THAT WH EN THE LAW WAS NOT BROUGHT ON THE STATUTE BOOK AND ON THE BASIS OF WHI CH, AMENDMENT WAS NOT COME INTO FORCE, REOPENING IS THE LEAST POS SIBLE VIEW. THE ABOVE VIEW OF THE HONBLE HIGH BOMBAY HIGH COURT SU PPORTED THE ARGUMENT RAISED BY THE LEARNED COUNSEL FOR THE ASSE SSEE. IN THE CASE UNDER CONSIDERATION, THERE WAS NO NEW MATERIAL FOUN D BY THE AO TO REOPEN THE ASSESSMENT, THEREFORE, ALL THE CASE LAWS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE SUPPORT THE CASE O F THE ASSESSEE. IN THE PRESENT CASE, THE NOTICE U/S 148 ISSUED ON 26/0 3/2008 PRIOR TO THE ENACTMENT OF THE FINANCE BILL, 2008. THEREFORE, THE AO IS NOT CORRECT IN REOPENING OF THE ASSESSMENT EVEN AS PER THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF RALLIES IN DIA LTD. (SUPRA). ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) CONFIRMING THE REASSESSMENT PROCEEDINGS U/S 147 AND QUASH THE ORDE R PASSED BY THE AO U/S 147 OF THE ACT. 18. IN SO FAR AS UNABSORBED DEPRECIATION IS CONCERN ED, THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2001-02 IN ITA NO. 22 03/MUM/2010 AND 2476/MUM/2010 VIDE ORDER DATED 7 TH OCTOBER, 2011 HELD THAT INITIATION OF REASSESSMENT PROCEEDINGS ITSELF WAS B AD IN LAW AND THE REASSESSMENT COMPLETED IN PURSUANCE THEREOF IS LIAB LE TO BE QUASHED BEING INVALID. IN VIEW OF THE ABOVE ORDER OF THE TR IBUNAL, THE REOPENING OF THE ASSESSMENT, IN THE CASE UNDER CONSIDERATION, CANNOT BE SUSTAINED. 19. IN SO FAR AS THE CASE LAWS RELIED UPON THE LEAR NED DR IS CONCERNED, IN THE CASE OF MULTISCREEN MEDIA PVT. LT D. (SUPRA), THE HONBLE BOMBAY HIGH COURT HAS OBSERVED THAT THE AO DID HAVE TANGIBLE MATERIAL TO REOPEN THE ASSESSMENT U/S 147, WHERE THOUGH THE ITA NO. 5344 & 5345/MUM/10 HV TRANSMISSION LTD. 11 ASSESSMENT HAS BEEN MADE, INCOME CHARGEABLE TO TAX UNDER ASSESSED. IN SUCH A CASE, LAW DEEMS THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, THEREFORE RECOURSE TO THE PROVISIONS OF SECTION ARE VALID. THIS DECISION IS NOT APPLICABLE TO THE CASE OF THE ASESSSEE AS IT IS NOT THE CASE OF THE AO THAT HE IS HAVING TANGIBLE MATER IAL TO REOPEN THE ASSESSMENT. IN THE CASE OF CONSOLIDATED PHOTO & FI NVEST LTD. (SUPRA), THE HONBLE DELHI HIGH COURT OBSERVED THAT WHERE THE AO HAS APPLIED HIS MIND AND TAKEN A CONSCIOUS DECISION ON A PARTIC ULAR MATTER IN ISSUE AND NOT WHERE THE ORDER OF THE ASSESSMENT DOES NOT ADDRESS ITSELF TO THE ASPECT WHICH IS THE BASIS FOR REOPENING OF THE ASSESSMENT. THE AO HAS INDICATED THE BASIS ON WHICH INCOME EXIGIBLE TO TAX HAS IN HIS OPINION ESCAPED ASSESSMENT. WHETHER OR NOT THE MATE RIAL NECESSARY FOR TAKING SUCH DECISION WAS AVAILABLE TO THE AO AT THE TIME OF MAKING THE ORIGINAL ASSESSMENT IS INCONSEQUENTIAL, THEREFORE, REOPENING OF ASSESSMENT WAS JUSTIFIED. IN THE PRESENT CASE, ALL THE MATERIAL WAS BEFORE THE AO AND THE ASSESSMENT WAS COMPLETED U/S 143(3). IT IS AN UNDISPUTED FACT THAT NO NEW MATERIAL HAS INTO EXIST ENCE TO FORM AN OPINION BY THE AO THAT THERE IS AN ESCAPEMENT OF IN COME. THEREFORE, THE ABOVE DECISION HAS NO APPLICATION TO THE CASE O F THE ASSESSEE. 20. SINCE WE HAVE QUASHED THE ORDER PASSED BY THE A O U/S 143(3) READ WITH SECTION 147 ITSELF, THE OTHER GROUNDS REG ARDING ADDITIONS MADE IN THE SAID ASSESSMENT HAVE BECOME INFRUCTUOUS AND THE SAME ARE NOT REQUIRED TO BE ADJUDICATED BY US. 21. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. ITA NO. 5345/MUM/10 22. THIS APPEAL FILED BY THE ASSESSEE IS CONSEQUENT IAL TO THE ORDER PASSED BY THE AO AND CIT(A) AS IT IS AGAINST AN ORD ER PASSED U/S 154 ITA NO. 5344 & 5345/MUM/10 HV TRANSMISSION LTD. 12 IN AN ORDER U/S 143(3) R.W.S. 148 DT. 10/12/2008, W HICH IS QUASHED BY US. THEREFORE, THIS APPEAL IS NOT REQUIRED TO BE ADJUDICATED BY US. THIS APPEAL IS, THEREFORE, DISMISSED AS INFRUCTUOUS . 23. IN THE RESULT, THIS APPEAL IS DISMISSED. 24. TO SUM UP, APPEAL NO. 5344/MUM/10 IS ALLOWED AN D THE APPEAL NO. 5345/MUM/10 IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF APRIL, 2012. SD/- SD/- (J. SUDHAKAR REDDY) (V. DURGA RAO) ACCOUNTANT MEMBER JUDI CIAL MEMBER MUMBAI, DATED: 111 TH APRIL, 2012 KV COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) CONCERNED. 4) THE CIT CONCERNED. 5) THE DEPARTMENTAL REPRESENTATIVE, H BENCH, I.T .A.T., MUMBAI. BY ORDER //TRUE COPY// ASST. REGISTRAR, I.T.A.T., MUMBAI.