POLYGENTA TECHNOLOGIES LTD, MUMBAI V. ACIT 4(3), MUMBAI

ITA 5522/MUM/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4193 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 16-09-2015
• Assessment Year: 2002-2003
• Appeal Filed On: 21-08-2013
• Court: TRIBUNAL
• Department Lawyers: M DAYASAGAR RAVINDRA SINDHU
• Keywords: Reopening of assessment; Depreciation; Reasonable cause; Tangible material; Difference of opinion; Assessment record; Condonation of delay; Change of opinion
• Section: 147; 148; 139

Judgement Text

IN THE INCO ME TAX APPELLATE TRIBUNAL C BENCH, MUMBAI BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER I.T.A. NO.5522/M/2013 (ASSESSMENT YEAR: 2009 - 2010 ) I.T.A. NO.527/M/2014 (ASSESSMENT YEAR: 2005 - 2006 ) POLYGENTA TECHNOLOGIES LIMITED, SOLITAIRE CORPORATE PARK, BUILDING NO.1, 6 TH FLOOR, UNIT NO.2, CHAKALA, ANDHERI (E), MUMBAI 400 093. / VS. ACIT 4(3), 6 TH FLOOR, R.NO.469, AAYAKAR BHAVAN, MUMBAI - 20. ./ PAN : AAACM7390Q ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : SHRI VIJAY MEHTA & MR. DHARMESH SHAH / RESPONDENT BY : SHRI M. DAYASAGAR, RAVINDRA SINDHU, DR / DATE OF HEARING : 24.02.2016 / DATE OF PRONOUNCEMENT : 06 .04 .2016 / O R D E R PER D. KARUNAKARA RAO, AM: THERE ARE TWO APPEALS UNDER CONSIDERATION AND THEY ARE FILED BY THE ASSESSEE INVOLVING THE ASSESSMENT YEARS 2002 - 2003 AND 2005 - 2006. SINCE, THE LEGAL ISSUE RAISED IN THESE APPEALS IS IDENTICAL, THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD TOGETHER A ND DISPOSED OF IN THIS CONSOLIDATED ORDER. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAGRAPHS OF THIS ORDER. ITA NO. 5522/M/2013 (AY 2002 - 2003) 2. THIS APPEAL FILED BY THE ASSESSEE ON 21.8.2013 IS AGAINST THE ORDER OF THE CIT (A) - XIV, MUMBAI DAT ED 23.7.2009 FOR THE ASSESSMENT YEAR 2002 - 2003. 3. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE DETAILS RELATING TO THE DATE OF FILING OF APPEAL AND SUBMITTED THAT THE APPEAL IS FILED BELATEDLY 2 WITH A DELAY OF 1409 DAYS. IN TH IS REGARD, HE BROUGHT OUR ATTENTION TO THE AFFIDAVIT DATED 8.8.2013, WHICH CONTAINS A PRAYER FOR CONDONATION OF DELAY OF 1402 DAYS. FROM THE SAID AFFIDAVIT, LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT THE CIT (A) DISPOSED OF THE APPEAL ON 23.7.2009 AND THE SAME WAS RECEIVED BY THE ASSESSEE ON 13.8.2009. WITH THE INTENTION TO FILE THE BEFORE THE TRIBUNAL, ASSESSEE PAID FEES OF RS. 500/ - ON 01.10.2009 IE WELL BEFORE THE DUE DATE. FURTHER, ASSESSEE PREPARED AN APPEAL MEMO IN TRIPLICATE COPIES AND HANDED OVER THE SAME TO THE PEON (MR. GANESH MAHADIK) FOR FILING THE PAPERS BEFORE THE REGISTRY. HOWEVER, MR. GANESH MAHADIK (PEON) FILED THE APPEAL IN THE DRS OFFICE INSTEAD OF FILING THE SAME BEFORE THE TRIBUNAL. IN SUPPORT OF THE SAME, ASSESSEE FILED AN ACKNOWLEDGEMENT BEARING A STAMP OF THE SECRETARIAT OF THE CONCERNED DR. THIS LAPSE WAS NOT NOTICED TILL THE ASSESSEE WENT FOR DISCUSSION WITH ITS COUNSEL ON 1.8.2013. IMMEDIATELY, T HEREAFTER THE MISTAKE WAS RECTIFIED AND THE PRESENT APPEAL WAS FILED PROPERLY WITH THE REGISTRAR, ITAT ON 8.8.2013. IN SUPPORT OF THE SAME, ASSESSEE FILED A COPY OF THE ACKNOWLEDGEMENT OF THE APPEAL MEMO BEING FILED WITH THE DRS OFFICE. FURTHER, HE BROU GHT OUR ATTENTION TO PAGE 1 OF THE PAPER BOOK - 1 AND SUBMITTED THAT THE SAME CONSTITUTES TAXPAYERS COUNTERFOIL OF THE CHALLAN EVIDENCING THE PAYMENT OF AMOUNT OF RS. 500/ - ON 1.10.2009 FOR THE APPEAL FEES OF THE ASSESSEE FOR THE AY 2002 - 2003. THE CHALLAN WAS GIVEN BY THE HDFC BANK. RELYING ON THIS PAGE 1 OF THE PB - 1, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS AN INTENTION TO FILE THE APPEAL AGAINST THE ORDER OF THE CIT (A) AS EVIDENT FROM THE PAYMENT OF THE APPEAL FEES WHICH IS A PREPARAT ORY EVENT TO THE FILING OF THE APPEAL. FURTHER, HE BROUGHT OUR ATTENTION TO THE COPY OF THE ACKNOWLEDGEMENT FOR FILING THE APPEAL IN FORM NO.36 IN THE OFFICE OF THE CIT - DR. CONSIDERING THE INTENTION OF THE ASSESSEE TO FILE THE APPEAL IN TIME AND RELIANCE OF THE ASSESSEE ON THE SERVICES OF THE OFFICE STAFF, THE DELAY INVOLVED IS TO BE CONDONED AS THERE IS A REASONABLE CAUSE AND THE SAME IS BEYOND THE CONTROL OF THE ASSESSEE. IN SUPPORT OF THE ARGUMENT FOR CONDONATION OF DELAY, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO VARIOUS DECISIONS VIZ., (I) JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF N. BALAKRISHNAN VS. M. KRISHNAMURTHY (7 SCC 123); (II) APEX COURT JUDGMENT IN THE CASE OF COLLECTOR, LAND ACQUUISITON VS. MST. KATIJI AND ORS (167 IT R 471); (III) DECISION OF THE BOMBAY HIGH COURT IN THE CASE OF BABURAO DEORAO WANKHEDE VS. SEWA SAHAKARI SANSTHA (WP NO.1974 OF 1979) 3 DECISION OF THE MADRAS HIGH COURT IN THE CASE OF CIT VS. SANMAC MOTOR FINANCE LTD (322 ITR 309) (HEAD NOTE); (IV) DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN LEVER LTD VS. ACIT (268 ITR 322) AND (V) THE DECISION OF THE HONBLE GUJARAT HIGH COURT IN THE CASE OF MIHIR TEXTILES LTD VS. DCIT (106 TAXMAN 435). BRINGING OUR ATTENTION TO SAID JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF BABURAO DOEORAO WANKHEDE (SUPRA), LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THIS IS A CASE OF DELAY IN FILING THE WRIT PETITION WITH A DELAY OF 10 YEARS AND THE HONBLE HIGH COURT CONDONED THE DELAY CONSIDERING THE SUBSTAN TIAL JUSTICE INVOLVED. 4. ON THE OTHER HAND, LD DR FOR THE REVENUE TOOK STAND AGAINST THE PRAYER OF THE ASSESSEE. 5. ON HEARING BOTH THE PARTIES, WE FIND THERE IS NO DISPUTE ON THE FACT RELATING TO PAYMENT OF APPEAL FEES OF RS. 500/ - WELL IN TIME AND FILIN G OF THE APPEAL IN FORM NO.36 IN A WRONG ADDRESS IE BEFORE THE DRS OFFICE. IN OUR OPINION, THE ABOV E TWO F ACTS DEMONSTRATE THE INTENTION AND EXECUTION OF THE DESIRED EVENTS IN FILING THE APPEAL. ASSESSEE ALSO RECTIFIED THE MISTAKE SOON AFTER IT CAME TO ITS NOTICE BY FILING THE SAME IN PROPER ADDRESS. IN OUR OPINION, IT IS A BONA FIDE REASON FOR THE DELAY OF NOT FILING THE APPEAL BEFORE THE TRIBUNAL WITHIN THE PRESCRIBED TIME AND THE SAME IS ELIGIBLE FOR CONDONE. QUANTUM OF APPEAL, IN OUR OPINION, IS NO T A DECISIVE FACTOR WHEN THE REASON FOR SUCH DELAY IS COMMON AND BONA FIDE ONE. CONSIDERING THE BACKGROUND FACTS ON THE ISSUE OF DELAY, WE FIND, NO NEGLIGENCE CAN BE ATTRIBUTED TO THE ASSESSEE. THEREFORE, CONSIDERING THE SE TTLED NATURE OF THE ISSUE AND TH E PRECEDENTS ON THE SAME, AS LAID DOWN IN THE ABOVE MENTIONED JUDGMENTS THE APEX COURT AS WELL AS THE VARIOUS HIGH COURTS, WE CONDONE THE DELAY AND PROCEED TO DECIDE THE APPEAL ON MERITS. WE FIND IT RELEVANT TO MENTION HERE THAT IN THE PRESENT CASE, THE C ONDONATION OF DELAY IS GRANTED CONSIDERING THE PECULIAR FACTS OF THIS CASE AND IT SHOULD NOT BE TAKEN AS A PRECEDENT. 6. COMING TO THE LEGAL ISSUE RAISED BY THE ASSESSEE REGARDING THE VALIDITY OF THE REOPENING OF THE ASSESSMENT U/S 147 READ WITH SECTION 14 8 OF THE ACT, WE FIND THE ASSESSEE FILED THE RETURN OF INCOME FOR THE AY 2002 - 2003 ON 31.10.2002 DECLARING THE TOTAL LOSS OF RS. 11,66,81,418/ - . AO MADE VARIOUS ADDITIONS IN THE SCRUTINY ASSESSMENT DATED 29.3.2005. SUBSEQUENTLY, NOTICE U/S 148 WAS ISSUED ON 4 23.5.2008, BEYOND 4 YEARS. THEREFORE, THIS IS THE CASE WHERE THE VALIDITY OF THE NOTICE IS REQUIRED TO BE EXAMINED AS PER THE PROVISIONS OF FIRST PROVISO TO SECTION 147 OF THE ACT. ACCORDINGLY, AO IS REQUIRED TO DEMONSTRATE THE FAILURE OF THE ASSESSE E IN MATTERS RELATING TO DISCLOSURE OF FULL AND TRUE MATERIAL FACTS NECESSARY FOR MAKING ASSESSMENT. IN THE BACKGROUND OF THE ABOVE, TO START WITH, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE REASONS RECORDED BY THE AO BEFORE ISSUING OF THE S AID NOTICE U/S 148 OF THE ACT. BRINGING OUR ATTENTION TO PAGE 6 OF THE PAPER BOOK, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAME CONSTITUTES REASONS RECORDED FOR REOPENING OF ASSESSMENT U/S 148 OF THE ACT AND THE SAME RUNS INTO THREE PAGES (PAGES 6 - 8). THE CRUX OF THE REASONS IS GIVEN IN PARA 3 ON PAGE 6 OF THE PAPER BOOK AND THE SAME READS AS UNDER: - DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR AY 2005 - 06 AND ON PERUSAL OF ANNUAL REPORT FOR FY 2003 - 2004 & 2004 - 05 FOUNDED THAT THERE IS A REPOR T F DIRECOTR ON OPERATION & PROJECT OF MURBAD UNIT, POLYESTER (PET) CHIPS PROJECT AND ELECTRONIC DIVISION IN WHICH THE DIRECTOR HAS REPORTED THAT THE UNITS ARE UNDER CLOSURE OR DISCONTINUED AND THEREFORE FOR THE DETAILED REASONING DISCUSSED ON ASSESSMENT ORDER FOR AY 2005 - 06, THE ASSESSEE WAS ASKED AS TO WHY DEPRECIATION CLAIMED THEREON SHOULD NOT BE DISALLOWED. 7. REST OF THE DESCRIPTION IN PARAS 5, 6 AND 7 DEAL WITH THE QUANTUM OF SUCH DEPRECIATION ESCAPED ASSESSMENT . READING THE ABOVE PART OF THE REASONS, LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THE BASIS FOR THE REOPENING ESSENTIALLY INCLUDES THE ANNUAL REPORT , THE REPORT OF DIRECTOR ON OPERATION AND PROJECT OF VARIOUS UNITS. IT IS THE ARGUMENT OF THE LD COUNSEL FOR THE ASSESSEE THAT THE SAID ANNUAL REPORTS AND DIRECTORS REPORT ARE PART OF THE ASSESSMENT RECORDS. THEREFORE, NO TANGIBLE MATERIAL EXISTS THAT WORKS OUT AS A LIVEWIRE FOR SUCCESSFUL REOPENING OF THE ASSESSMENT U/S 147 OF THE ACT. BRINGING OUR ATTENTION TO PAGE 12 OF THE PAPER BOOK, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAME CONSTITUTES DIRECTORS REPORT AND READ OUT THE CONTENTS OF PARA 3 THAT DEALS WITH THE FACTS RELATING TO THE CLOSURE OF MURBAD UNIT; POLYESTER (PET) CHIPS PROJECT ETC. THIS REPORTS RELATES TO THE AY 2004 - 05, WHICH IS PART OF THE ASSESSMENT RECORD. FURTHER, HE BROUGHT OUR ATTENTION TO PAGE 14 OF THE PB, FOR IDENTICAL DIRECTORS REPORT FOR THE PERIOD 2005 - 06. BRINGING OUR ATTENTION TO PAGE 16, WHICH IS RELEVANT FOR THE AY 2002 - 03 AND SO ON, IT IS THE SUBMISSION OF THE ASSESSEE THAT THE ANNUAL REPORTS OR DIRECTORS REPORTS WERE AVAILABLE IN THE RECORDS OF THE RESPECTIVE ASSESSMENT YEARS AND THE ITEM NO.3(A), 3(B) AND 3(C) ARE MORE OR LESS IDENTICALLY WORDED AND THE COMMENTS MENTI ONED IN ALL DIRECTORS REPORTS OF THE AYS 5 UNDER CONSIDERATION CONSISTENTLY REFERRED TO THE CLOSURE OF THE MURBAD UNIT AND PET CHIPS PROJECT. THERE IS NO DISPUTE O N THE FACT THAT NO RELEVANT MATERIAL, WHICH CAN CONSTITUTE TANGIBLE MATERIAL PROCURED BY THE ASSESSING OFFICER BEFORE REASONS ARE RECORDED, WHICH IS A PRE - REQUISITE FOR ISSUING NOTICE U/S 147 OF THE ACT. 8. FURTHER, REFERRING TO THE CONDITIONS SPECIFIED IN THE FIRST PROVISO TO SECTION 147 OF THE ACT, LD COUNSEL FOR THE ASSESSEE READ OUT THE SAI D PROVISO WHICH READS AS UNDER: - .........WHERE AN ASSESSMENT UNDER SUB - SECTION (3) OF SECTION 1 43 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF T HE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN 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 HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR 9. FROM THE ABOVE, LD COUNSEL FOR THE ASSESSEE READ OUT THE EXPRESSIONS UNLESS ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE ............. TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT, FOR THAT ASSESSMENT YEAR . EMPHASISING ON THE ASSESSEES FAILURE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS, LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT NO SUCH FAILURE ON THE PART OF THE ASSESSEE WAS ALLEGED BY THE AO IN THE REASONS RECORDED BY HIM. REFERRING TO VARIOUS BIN DING JUDGMENTS, LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT UNLESS SUCH FAILURE IS CLEARLY EXPRESSED BY THE AO, THE REOPENING OF THE ASSESSMENT BECOMES INVALID. THUS, THIS IS A CASE, WHERE THE AO ISSUED NOTICE U/S 148 OF THE ACT WITHOUT ALLEGING ASSESSEES FAILURE IN MATTERS OF DISCLOSURE OF TRULY AND FULLY ALL THE MATERIAL FACTS NECESSARY FOR MAKING ASSESSEE. IT IS THE LD COUNSELS OPINION THAT THIS IS A CASE OF CHANGE OF OPINION NOT SUPPORTED BY ANY NEW FACTS OR ANY TANGIBLE MATERIAL. REFERRING TO VAR IOUS DOCUMENTS, LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THERE IS NO FAILURE ON THE PART OF THE ASSESSEE AS REQUIRED AS PER THE FIRST PROVISO TO SECTION 147 OF THE ACT. REGARDING THE ABSENCE OF ASSESSEES FAILURE, LD COUNSEL FOR THE ASSESSEE RELIED ON THE JUDGMENT OF THE APEX COURT IN THE CASE OF HINDUSTAN LEVER LTD VS. R.B. WADKAR (268 ITR 332) (BOM); JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF GERMAN REMEDIES LTD VS. DY. CIT [287 ITR 494 (BOM)] AND MANY OTHER DECISIONS. 6 10. IN RESPONSE, LD D R FOR THE REVENUE RELIED HEAVILY ON THE REASONS RECORDED BY THE AO PLACED AT PAGE NO.6 OF THE PAPER BOOK. HOWEVER, THERE IS NO DISPUTE ON THE FACT RELATING TO THE ABSENCE OF TANGIBLE MATERIAL OR ANY OTHER NEW FACTS. LD DR COULD NOT DEMONSTRATE THE EXISTE NCE OF ALLEGATION BY THE AO ABOUT THE ASSESSEES FAILURE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS. 11. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED ON RECORD. WE HAVE AL SO GONE THROUGH THE REASONS RECORDED FOR RE - OPENING OF THE ASSESSMENT BY THE AO AS EVIDENT FROM PAGE 6 OF THE PAPER BOOK. WE HAVE ALSO GONE THROUGH THE CONTENTS OF FIRST PROVISO TO SECTION 147 OF THE ACT. FROM PAGES 12, 14, 16 OF THE PAPER BOO K , WE FIND, THESE ARE THE DIRECTORS REPORTS WHICH ARE PART OF THE RESPECTIVE ANNUAL REPORTS. THESE ARE AVAILABLE IN THE ASSESSMENT RECORDS WITHOUT ANY DISPUTE. IN SUCH CASE, THE BASIS FOR REASONS RECORDED BY THE AO IS ONLY A DOCUMENT ALREADY AVAILABLE TO THE AO DUR ING THE REGULAR ASSESSMENT PROCEEDINGS. IN THAT CASE, THE SAME CANNOT CONSTITUTE TANGIBLE MATERIAL U/S 147 OF THE ACT. THEREFORE, ON THIS GROUND, THE REOPENING OF THE ASSESSMENT U/S 148 OF THE ACT BECOMES INVALID. FURTHER, WE EXAMINED THE LD COUNSEL S ARGUMENTS RELATING TO THE REQUIREMENT OF SPECIFIC ALLEGATION BY THE ASSESSING OFFICER ABOUT THE EXISTENCE OF ASSESSEES FAILURE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR MAKING ASSESSMENT. WE FIND, THE REASONS DO NOT INDICATE ANY SUCH ALLEGATION BY THE AO. THE CONCLUSIONS DRAWN BY THE AO IN THE ABSENCE OF SUCH ALLEGATION BECOMES FATAL TO THE ASSESSMENT PROCEEDINGS. THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN LEVER LTD (SUPRA) SUPPORTS THE ABOVE VIEW. R ELEVANT PARA FROM THE SAID JUDGMENT IS EXTRACTED AS UNDER: - THE REASONS RECORDED BY THE ASSESSING OFFICER NOWHERE STATE THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT OF THAT ASSE SSMENT YEAR. IT IS NEEDLESS TO MENTION THAT THE REASONS ARE REQUIRED TO BE READ AS THEY WERE RECORDED BY THE ASSESSING OFFICER. NO SUBSTITUTION OR DELETION IS PERMISSIBLE. NO ADDITIONS CAN BE MADE TO THOSE REASONS. NO INTERFERENCE CAN BE ALLOWED TO BE DRAWN BASED ON REASONS NOT RECORDED. IT IS FOR THE ASSESSING OFFICER TO DISCLOSE AND OPEN HIS MIND THROUGH REASONS RECORDED BY HIM. HE HAS TO SPEAK THROUGH HIS REASONS. IT IS FOR THE ASSESSING OFFICER TO REACH THE CONCLUSION AS TO WHETHER THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THE CONCERNED AS SESSMENT YEAR. IT IS FOR THE ASSESSING OFFICER TO FORM HIS OPINION. IT IS FOR HIM TO PUT HIS OPINION ON RECORD IN BLACK AND WHITE............... THE REASONS RECORDED MUST BE BASED ON EVIDENCE . THE ASSESSING OFFICER, IN THE EVENT OF CHALLENGE TO THE REASO NS MUST BE ABLE TO JUSTIFY 7 THE SAME BASED ON MATERIAL AVAILABLE ON RECORD. HE MUST DISCLOSE IN THE REASONS AS TO WHICH FACT OR MATERIAL WAS NOT DISCLOSED BY THE ASSESSEE FULLY AND TRULY NECESSARY FOR ASSESSMENT OF THAT ASSESSMENT YEAR, SO AS TO ESTABLISH THE VITAL LINK BETWEEN THE REASONS AND EVIDENCE ......... 12. THUS, THE ABSENCE OF SUCH ALLEGATION BY THE AO AGAINST THE ASSESSEE UNDERLINING THE ASSESSEES FAILURE IN MATTER OF DISCLOSURE OF FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR MAKING ASSESSMENT MAKES THE REOPENING INVALID. THEREFORE, WE ARE OF THE OPINION, ON THIS GROUND THE REOPENING IS REQUIRED TO BE HELD AS LEGALLY UNSUSTAINABLE. IN OUR VIEW, THE AO FAILED TO MEET THE REQUIREMENT OF THE LAW PROVIDED U/S 147 OF THE ACT AND THEREFOR E, THIS LEGAL GROUND RAISED BY THE ASSESSEE REGARDING THE VALIDITY OF THE REOPENING IS ALLOWED. 13. CONSIDERING OUR ABOVE DECISION ON THE LEGAL ISSUE, THE ADJUDICATION OF THE OTHER GROUNDS RAISED ON MERITS BECOMES AN ACADEMIC EXERCISE. ACCORDINGLY, THE GR OUNDS RAISED BY THE ASSESSEE ON MERITS ARE DISMISSED AS ACADEMIC. 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. ITA NO. 527/M/2014 (AY 2005 - 2006) 15. THIS APPEAL FILED BY THE ASSESSEE ON 22.12014 IS AGAINST THE ORDER OF THE CIT (A) - 8, MUMBAI DATED 1.11.2013 FOR THE ASSESSMENT YEAR 2005 - 06. 16. IN THIS APPEAL, ASSESSEE RAISED THE LEGAL GROUND, WHICH IS IDENTICAL TO THE ONE RAISED IN THE APPEAL FOR THE AY 2002 - 03. ON THE LEGAL ISSUE, THE ARGUMENTS OF THE LD COUNSEL FOR THE ASSESSEE REVOLVE ARO UND THE SAME AS DISCUSSED ABOVE IE THIS IS THE CASE OF CHANGE OF OPINION ; ABSENCE OF ALLEGATION BY THE ASSESSING OFFICER AGAINST THE ASSESSEE REGARDING THE ASSESSEES FAILURE TO DISCLOSE FULLY AND TRULY ALL THE MATERIAL FACTS NECESSARY FOR MAKING ASSESSM ENT; APPLICABILITY OF JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF HINDUSTAN LEVER LTD (SUPRA) ETC. 17. ON THE OTHER HAND, LD DR HEAVILY RELIED ON THE REASONS RECORDED BY THE AO EVIDENT FROM PAGE 6 OF THE PAPER. 18. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERI AL PLACED BEFORE US. WE FIND, IT IS THE CASE OF ISSUE OF NOTICE U/S 148 OF THE ACT , DATED 28.3.2012 BEYOND 4 YEARS. REASONS ARE 8 RECORDED BY THE AO BEFO RE THE ISSUE OF THE SA ID NOTICE AND THE SAME ARE EXTRACTED BY THE CIT (A) IN PARA 2.1 OF THE IMPUGNED ORDER, WHICH READ AS UNDER: - 19. FROM THE ABOVE SAID REASONS, LD COUNSEL FOR THE ASSESSEE DEMONSTRATED THAT THE VERY BASIS FOR THE ABOVE REASONS IS RECORDS ALREADY A VAILABLE WITH THE AO WHICH ARE FILED BY THE ASSESSEE DURING THE REGULAR ASSESSMENT PROCEEDINGS. HE ALSO DEMONSTRATED THE ABSENCE OF ALLEGATION BY THE AO REGARDING THE ASSESSEES FAILURE SPECIFIED IN THE FIRST PROVISO TO SECTION 147 OF THE ACT. WE HAVE CO NSIDERED THE LD COUNSELS PRAYER FOR APPLYING THE RATIO OF THE ABOVE REFERRED JUDGMENT IN THE CASE OF HINDUSTAN LEVER LTD (SUPRA) IN THE LIGHT OF THE FACTS BROUGHT TO OUR NOTICE. HE ALSO DEMONSTRATED THE EXISTENCE OF THE DIRECTORS REPORTS AND ANNUAL REPO RTS ETC. WE ALSO FIND THAT THE REASONS ARE ACTUALLY EXTRACTED FROM 23 OF THE PAPER BOOK, ITEM NO.48 IS 9 RELEVANT IN THIS REGARD. THUS, WE ARE CONVINCED THAT THE SOURCE OF THE REASONS RECORDED BY THE AO IS THE DIRECTORS REPORTS ITSELF AND THE FINANCIALS FU RNISHED BY THE ASSESSEE DURING THE REGULAR ASSESSMENT PROCEEDINGS. FURTHER, WE HAVE ALREADY EXTRACTED RELEVANT PARAS FROM THE JUDGMENT OF HONBLE HIGH COURT IN THE CASE OF HINDUSTAN LEVER LTD (SUPRA), WHICH ARE RELEVANT FOR THE PROPOSITION THAT THAT THE A BSENCE OF SUCH ALLEGATION ABOUT THE ASSESSEES FAILURE SPECIFIED IN FIRST PROVISO TO SECTION 147 OF THE ACT, THE REOPENING OF THE ASSESSMENT BECOMES INVALID. WE HAVE TAKEN A SIMILAR VIEW IN THE ASSESSEES OWN CASE FOR THE AY 2002 - 2003 IN THE ABOVE PARAGRA PHS OF THIS ORDER AND HELD THAT NO TANGIBLE MATERIAL AND NEW FACTS ARE BROUGHT INTO BY THE AO AT THE TIME OF REOPENING OF THE ASSESSEE. CONSIDERING THE FACTS OF THIS CASE AND BINDING LEGAL PROPOSITION LAID DOWN BY THE HONBLE HIGH COURT IN THE CASE OF HIN DUSTAN LEVER LTD (SUPRA), WE ARE OF THE OPINION, THE REOPENING OF THE ASSESSMENT FOR THE AY 2005 - 06 IS ALSO INVALID AND UNSUSTA INABLE IN LAW. ACCORDINGLY, THE LEGAL GROUND RAISED BY THE ASSESSEE IS ALLOWED. 20. CONSIDERING OUR ABOVE DECISION ON THE LEGAL ISSUE, THE ADJUDICATION OF THE OTHER GROUNDS RAISED ON MERITS BECOMES AN ACADEMIC EXERCISE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ON MERITS ARE DISMISSED AS ACADEMIC. 21. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOWED. 22. CONCLUSIVELY , BOTH T HE APPEALS OF THE ASSESSEE ARE PARTLY ALLOWED. ORDER PRONOUNCED IN T HE OPEN COURT ON 6 TH APRIL , 2016. SD/ - SD/ - ( PAWAN SINGH ) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 6.4 .2016 . . ./ OKK , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 10 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI