M/S SHREE ARIHANT TRADE LINKS INDIA PRIVATE LIMITED, BHILAI V. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 1(1), BHILAI

ITA 57/RPR/2018

• Counselvise Citation: [2022] 104 COUNSELVISE.COM (IT) 0610 (ITAT-RAIPUR)
• Duration Of Justice: 4 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 02-08-2022
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Search and seizure; Tangible material; Difference of opinion; Reason to believe; Change of opinion
• Section: 68; 148; 139; 143(3); 195; 192

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI RAVISH SOOD, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.57/RPR/2018 Ǔनधा[रण वष[ / Assessment Year : 2009-10 M/s. Shree Arihant Tradelinks India Private Limited 88A, Light Industrial Area, Bhilai (C.G.) PAN :AADCS5056Q .......अपीलाथȸ / Appellant बनाम / V/s. The Deputy Commissioner of Income Tax, Circle-1(1),Bhilai (C.G) ......Ĥ×यथȸ / Respondent आयकर अपील सं. / ITA No. 61/RPR/2018 Ǔनधा[रण वष[ / Assessment Year : 2009-10 The Deputy Commissioner of Income Tax, Circle-1(1),Bhilai (C.G) .......अपीलाथȸ / Appellant बनाम / V/s. M/s. Shree Arihant Tradelinks India Private Limited 07, New Khurshipar Bhilai (C.G.) 2 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 PAN : AADCS5056Q ......Ĥ×यथȸ / Respondent Assessee by :Shri Ravi Agrawal, CA Revenue by :Shri P.K Mishra, CIT-DR स ु नवाई कȧ तारȣख / Date of Hearing :03.08.2022 घोषणा कȧ तारȣख / Date of Pronouncement : 17.10.2022 आदेश / ORDER PER RAVISH SOOD, JM: The present cross-appeals are directed against the order passed by the CIT(Appeals)-II, Raipur, dated 05.02.2018, which in turn arises from the order passed by the A.O u/s.147 r.w.s.143(3) of the Income Tax Act, 1961 (for short ‘the Act’) dated 16.12.2016 for assessment year 2009-10. We shall first take up the appeal filed by the assessee in ITA No.57/RPR/2018 for A.Y. 2009-10, wherein the impugned order has been assailed on the following grounds of appeal before us : “1.That on the facts and in the circumstances of the case, the learned DCIT-1(1), Bhilai, erred in issuing notice u/s.148, as it is without jurisdiction and therefore, the assessment made u/s.147 read with section 143(3) is liable to be quashed. 2. That without prejudice to ground No.1, on the facts and in the circumstances of the case, the ld. CIT(A)-II, Raipur erred in confirming the addition of Rs.75,50,000.00 made by the ld. DCIT- 1(1), Bhilai and therefore, it is liable to be deleted. 3. That the appellant reserves the right to add, alter or amend any ground of appeal.” 3 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 On the other hand the revenue has assailed the impugned order on the following grounds of appeal :- “i. "Whether on points of law and on facts and circumstances of the case, the Ld. CIT(A) has erred in restricting the addition to Rs.75,50,000/- from the aggregate addition of Rs. 3,83,85,000/- made by the AO thereby allowing part relief to the assessee whereas the modus operandi adopted by the assessee to channelise its undisclosed income / unaccounted money in the form of share capital and share premium from so called friends / relatives cannot be held to be partly correct and partly incorrect?". ii. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified in restricting the addition to Rs.75,50,000/- by ignoring the facts as brought out on record by the AO that the assessee company had not submitted any details and documentary evidences regarding share application money received from close relatives and directors whose identity, creditworthiness and genuineness of transaction could be justified in view of the legal provisions u/s 68 of the Act?" iii. "Whether on points of law and on facts & circumstances of the case, the Ld. CIT(A) was justified by giving a finding which is contrary to the evidence on record, as the Ld.CIT(A) has accepted the identity, creditworthiness of the entities investing in the share capital and share premiums of the assessee company as genuine, a finding which is factually incorrect, thereby rendering the decision, which is perverse?" iv. "Whether on points of law and facts & circumstances of the case, the Ld.CIT(A) was justified in giving a decision in favour of the assessee and against the revenue though there is no nexus between the conclusion of fact and primary fact upon which without conclusion is based? v. The order of Ld. CIT(A) is erroneous both in law and on facts". vi. "Any other ground that may be adduced at the time of hearing".” 2. Succinctly stated, the assessee company which is engaged in the business of trading of coal, iron & steel had filed its return of income for 4 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 the assessment year 2009-10 on 26.09.2009, declaring an income of Rs.75,95,590/-. Original assessment was thereafter framed by the A.O vide his order passed u/s. 143(3) of the Act, dated 31.03.2009, determining the income of the assessee company at Rs. 79,40,390/-. 3. The A.O thereafter on a perusal of the “balance sheet” of the assessee company observed that it had during the year under consideration raised an amount of Rs. 3,83,85,000/-, viz. (i). share capital of Rs. 38,38,500/-; and (ii) share premium of Rs.3,45,46,500/- from different persons. The A.O holding a conviction that the share premium raised by the assessee company was disproportionate to its existing capital structure, assets/liabilities and business position, thus, reopened its case u/s. 147 of the Act. Notice u/s.148 of the Act, dated 30.03.2015 was issued and duly served upon the assessee who affected due compliance of the same. Notices u/ss. 143(2)/142(1) of the Act were thereafter issued a/w. query letters by the A.O. 3.1 During the course of the assessment proceedings, it was, inter alia, observed by the A.O that the assessee company had issued shares of a face value of Rs.10/- each at a share premium of Rs.90/- per share, as under: SL NAME ADDRESS AMT RS. 1. Shri Naresh Jain 17/10, Nehru Nagar, West, 12100000/- 5 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 Bhilai 2. Shri Jagdish Prashad Jain 17/10, Nehru Nagar, West, Bhilai 370000/- 3. Smt. Saroj Jain 17/10, Nehru Nagar, West, Bhilai 1890000/- 4. Smt. Bhaskari Jain 17/10, Nehru Nagar, West, Bhilai 1740000 5. Jagdish Prashad Jain HUF 17/10, Nehru Nagar, West, Bhilai 185000 6. Naresh Jain HUF 17/10, Nehru Nagar, West, Bhilai 535000 7. Nimish Jain 17/10, Nehru Nagar, West, Bhilai 200000/- 8. Suresh Kumar Jain HUF 17/10, Nehru Nagar, West, Bhilai 270000/- 9. Shri Shyam Sunder Jain 20/4 Nehru Nagar West Bhilai 1150000/- 10. Smt. Shobha Jain 20/4 Nehru Nagar West Bhilai 1250000/- 11. Smt. Sarita Jain 20/4 Nehru Nagar West Bhilai 1485000/- 12. Sanjay Jain HUF 20/4 Nehru Nagar West Bhilai 215000/- 13. Shri Shyam Sunder Jain HUF 20/4 Nehru Nagar West Bhilai 230000/- 14. Rubal Rohan (P) Trust 37 B Surya Nagar, Nagpur 120000/- 15. Ruche S Jain 37 B Surya Nagar, Nagpur 120000/- 16. Shri Suresh Kumar Jain 37 B Surya Nagar, Nagpur 6425000/- 17. Bhagat Dewangan Behind SoniAataChaki, Naya Para, Durg 600000/- 18. Ghanshyam Das Rajpal Dixit Colony, Durg 300000/- 19. Shri Amar Lal Andani Ganj Para Durg 200000/- 20. Vishal Rajpal Gurunanak Nagar, Durg 300000/- 21. Shri Naresh Trading & Co. Indira Market, Durg 1000000/- 22. Prabhat Sharma Padmanabhpur, Durg 435000/- 6 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 23. Ajay Andani& Sons Sindhi Colony, Durg 200000/- 24. Amit Tejwani Sindhi Colony, Durg 200000/- 25. Shri InderTejwani HUF Sindhi Colony, Durg 200000/- 26. Pawan Godwani HUF Sindhi Colony, Durg 200000/- 27. Sukram Das Andani Sindhi Colony, Durg 200000/- 28. Shri Suresh Tejwani HUF Sindhi Colony, Durg 200000/- 29. Vishal Bajaj Sindhi Colony, Durg 200000/- 30. Sunil Andani Sindhi Colony, Durg 300000/- 31. Sudamlal Manak Lal TiturdihDurg 1000000/- 32. Shri Tulshi Ram Meshram Vaishali Nagar, Bhilai 1000000/- 33. Shri Tulshi Ram Meshram& Sons Vaishali Nagar, Bhilai 1265000/- 34. Shri Sushil Kumar Vaishali Nagar, Bhilai 1530000/- 35. Smt. Radha Jain Vaishali Nagar, Bhilai 570000/- 36. Jagdish Lekwani Village Urlam, Durg 200000/- Total 38385000/- The A.O called upon the assessee to explain the nature and source of the aforesaid credits appearing in its books of account. In reply, it was the claim of the assessee that the book value of its shares was Rs.64/- per share, which however considering the good prospects of its business was issued at a premium of Rs.90/- per share. The assessee in order to substantiate the authenticity of its aforesaid receipt of share capital and 7 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 share premium from the aforementioned persons filed with the A.O complete details, i.e. names and addresses, PAN and their confirmations of the share applicants. The copy of the share applications were also filed by the assessee. The A.O after deliberating at length on the explanation of the assessee was however not persuaded to accept the same. It was observed by the A.O that the claim of the assessee of having received share capital and share premium at 1: 9 ratio was grossly arbitrary and irrational. It was observed by the A.O that on the basis of the details of the alleged shareholders provided by the assessee they could be categorized into two sets of people, viz. (i) Sr. No.1 to 16 were the persons who were related to the promoters and directors of the company; and (ii) Sr. No. 17 to 36 were person who were unrelated persons. It was observed by the A.O. that the assessee had deliberately not filed the copies of the bank statement in respect of both the aforesaid set of share applicants so that necessary verification may not be carried out. It was noticed by the A.O that other details which were furnished by the assessee were the general details from which only the preliminary data about the investors could be gathered. 4. The A.O observed that though the assessee had placed on record PAN, confirmations and copies of the share applications that were filed by the aforesaid share applicants but the same did not suffice the statutory requirement contemplated in Section 68 of the Act. The A.O was of the 8 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 view that the PAN would not conclusively establish either the identity of the person or the genuineness of the transaction in question. The A.O further observed that the copies of the share applications that were filed by the assessee company too not being an unimpeachable document, thus, would not conclusively prove to the hilt the genuineness or authenticity of the transactions under consideration. The A.O was further of the view that as the assessee had failed to place on record copies of the bank statements of Class I shareholders, i.e., the persons who were friends or relatives of the assessee, therefore, necessary verification as regards the source of funds in their hands had remained unproved. As regards the Class II shareholders, i.e., unrelated parties, it was observed by the A.O that it was beyond comprehension as to how they would have approached the assessee company which was a private limited company and for what purpose. Also, it was observed by the A.O that as the bank accounts of the share subscriber were also not furnished, therefore, the source of cash deposits in their bank accounts could not be examined. Apart from that it was observed by the A.O that the copies of the income-tax returns of the aforesaid share subscribers revealed a very nominal income and, in several cases it was shockingly found to be even below the taxable limit. It was observed by the A.O that in almost all cases the share applicants had no exposures about shares of companies, purpose of investment, scheme of investment and basis of premium and reasons for making investment at 9 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 such high premium. The A.O also observed that the share applicants had no idea of receipt of dividend and security of their money. It was further observed by him that it was beyond human probability why a men of no or little means would prefer to make dead investments while better and secure options like deposits/investments in bank, post office, bonds. Mutual funds and listed securities were available, in case they really had spare money. 5. The A.O on the basis of his aforesaid observations was of the view that the assessee in the garb of the aforesaid bogus transactions had in fact laundered its own money through bank account. The A.O, thus, concluded that the entire amount of Rs. 3,83,85,000/- received by the assessee in the garb of share capital and share premium was in fact its own unaccounted money. Accordingly, the A.O made an addition of the entire amount of Rs.3,83,85,000/- u/s.68 of the Act in the hands of the assessee, and vide his order under Sec. 147 r.w.s 143(3), dated 16.12.2016 assessed its income at Rs.4,63,25,390/-. 6. Aggrieved, the assessee carried the matter in appeal before the CIT(Appeals). The CIT(Appeals) after deliberating on the contentions advanced by the assessee though partly accepted its contentions as regards 21 share applicants (out of 36 share applicants) and vacated the corresponding addition of Rs.75.50 lacs, but upheld the addition of the 10 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 balance amount of Rs.3,08,35,000/- pertaining to the remaining 15 share applicants. 7. The assesee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 8. We have heard the ld. authorized representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. 9. As the assesee has assailed the validity of the jurisdiction that was assumed by the A.O for framing the impugned assessment u/s.147 r.w.s.143(3), dated 16.12.2016, therefore, we shall first deal with the same. 10. The Ld. Authorized Representative (for short “A.R”) for the assessee at the very outset of the hearing of appeal submitted that the A.O had grossly erred in law and facts of the case in assuming jurisdiction for reopening the concluded assessment of the assessee company and framing the impugned assessment u/s.147 r.w.s.143(3), dated 16.12.2016. The Ld. AR assailed the validity of the jurisdiction that was assumed by the A.O for reopening the assessee’s case on two-fold grounds, viz. (i) that the A.O had proceeded with the reopened the concluded assessment merely on the basis of a “change of opinion” and not on the basis of any fresh tangible 11 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 material coming to his notice after conclusion of the original assessment that was framed by his predecessor vide order passed u/s. 143(3), dated 31.03.2009; and (ii). that as the original assessment in the case of the assessee company was framed vide order passed u/s.143(3), dated 31.03.2009, therefore, as per the “1 st proviso” to Sec. 147 its concluded assessment could not have been reopened beyond the period of four years from the end of the relevant assessment year i.e A.Y 2009-10, which had expired way back on 31.03.2014. The Ld. AR in order to buttress his aforesaid contentions took us through the copy of the “reasons to believe” on the basis of which the concluded assessment of the assessee company was reopened u/s.147 of the Act, Page 5 of APB. 11. The Ld. AR submitted that a perusal of the “reasons to believe” revealed beyond doubt that the case of the assessee was reopened by the A.O, on the basis of the same facts as were available before his predecessor and not on the basis of any fresh tangible material which had come to his notice after conclusion of the original assessment. The Ld. AR vehemently submitted that the A.O had himself in the “reasons to believe” stated that the case of the assessee was being reopened on the basis of inferences that were gathered on verification of the “balance sheet” vis-à-vis increase in the share capital and share premium during the year under consideration. It was the claim of the Ld. AR that as the A.O had taken recourse to 12 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 reopening of the concluded assessment on the basis of a mere “change of opinion”, therefore, as per the clear mandate of law he had traversed beyond his jurisdiction and framed the impugned assessment u/s.147 r.w.s 143(3), dated 16.12.2016. In order to buttress his aforesaid contention the Ld. AR had drawn support from the judgment of the Hon’ble Supreme Court in the case of Commissioner of Income-Tax Vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC). 12. Alternatively, it was submitted by the Ld. AR that the concluded assessment in the case of the assessee which was earlier framed by the A.O u/s. 143(3) dated 31.03.2009, had in contravention of the “1 st proviso” to Sec. 147 wrongly been reopened beyond a period of four years from the end of the relevant assessment year i.e A.Y 2009-10. The Ld. A.R elaborating on his said contention submitted that reopening of a concluded assessment after expiry of four years from the end of the relevant assessment year in absence of satisfaction either of two conditions contemplated in the “1 st proviso” to section 147 of the Act militates against the mandate of law. It was averred by the ld. A.R that as per the “1 st proviso” to Section 147 of the Act, in a case where assessment was earlier framed under sub-section (3) of Section 143 of the Act, then, no action shall be taken in its case after expiry of four years from the end of the relevant assessment year except for where either of the two conditions 13 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 therein contemplated are satisfied, viz. (i) that the income chargeable to tax has escaped assessment by reason of the failure on the part of the assesee to make a return u/s.139 or in response to notice issued under sub- section (1) of section 142 or section 148 of the Act; or (ii). that the income chargeable to tax has escaped assessment for failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. It was submitted by the Ld. A.R that as neither of the aforesaid two conditions were satisfied in the case of the assessee, therefore, the reopening of its concluded assessment beyond a period of four years from the end of the relevant assessment year i.e A.Y 2009-10 assessment on the said count too was liable to be struck down. 13. Per contra, the Ld. Departmental Representative (for short ‘DR’) relied on the orders of the lower authorities. 14. We have given a thoughtful consideration to the aforesaid issue under consideration, i.e., the validity of the jurisdiction that was assumed by the A.O for reopening the concluded assessment in the case of the assessee. We before proceeding any further deem it fit to cull out the “reasons to believe” on the basis of which the concluded assessment in the case of the assessee was reopened, which reads as under : 14 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 “30.03.2015 The assessee filed its return of income on 26.09.2009 declaring total income of Rs.75,95,590/-. Assessment proceeding u/s.143(3) of the Act was completed on 31.03.2009 on assessed income at Rs.79,40,390/-. On the verification of balance sheet the share capital and share premium has increased as follows: Particulars F.Y.2008-09 F.Y.2007-08 Difference Share capital 1,64,58,500/- 1,26,20,000/- 38,38,500/- Share premium 9,68,56,500/- 6,23,10,000/- 3,45,46,500/- Total 3,83,85,000/-. From the above table, it is seen that there is substantial increase in the share capital and share premium during F.Y.2008- 09 disproportionate to existing capital structure, assets/liability position and business. The face value of share is Rs.100/- per share. As per audited financial statement, the financial position of the assessee works out as mentioned below: Book Value =14.87 EPS = 4.103 ( As mentioned in audit report) In view of the book value, EPS, dividend distribution record, company has issued share on exorbitant premium value which seems to be on higher side. Therefore, I have reason to believe that company has introduced unexplained money amounting to Rs.3,83,85,000/- in the garb of share application money which has escaped assessment. Considering the facts and circumstances, I have reason to believe that the income of the assessee escaped assessment to the extent of Rs.3,83,85,000/- and therefore, the case is required to be re-opened u/s.147 of the I.T Act for assessment of the escaped income. Notice u/s.148 of the Act issued after obtaining prior approval from Commissioner of Income Tax-2, Raipur vide letter F No.CIT-2/RPR/Tech/F-2/148/2014-15 dated 27.03.2015. Sd/- DCIT 1(1), Bhilai” 15 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 Ostensibly, the case of the assessee beyond doubt was reopened by the A.O not on the basis of any fresh tangible material coming to his notice after conclusion of the assessment that was framed by his predecessor vide order passed u/s. 143(3), dated 31.03.2009, but on the basis of same facts as were available before his predecessor at the time of framing of the original assessment. Our aforesaid conviction can safely be gathered from the fact that the A.O in the reasons had categorically observed that the facts forming the very basis for reopening the case of the assessee found its genesis in the verification of the “balance sheet”, which revealed an increase in its share capital/share premium during the year. It was on the basis of the aforesaid observation that the A.O had thereafter, concluded, that considering the book value, EPS, dividend distribution record, it appeared that the assessee company had issued shares on exorbitant premium value which seemed to be on the higher side. On the basis of the aforesaid facts, we are of the considered view that the aforesaid reasons forming the very basis for reopening of the concluded assessment in the case of the assessee reveals beyond doubt that the very exercise carried out by the A.O to reassess the income of the assessee was based on a mere “change of opinion” on the basis of same facts as were available before his predecessor, who had framed the original assessment vide his order passed u/s. 143(3), dated 31.03.2009. As stated by the Ld. AR and, rightly so, the reopening of a concluded assessment merely on the basis of 16 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 “change of opinion” on the same set of facts is not permissible as per the mandate of law. Our aforesaid view is fortified by the judgment of the Hon’ble Supreme Court in the case of Commissioner of Income-Tax Vs. Kelvinator of India Ltd. (2010) 320 ITR 561 (SC). 15. We further find that the Hon'ble High Court of Bombay in the case of Asian Paints Ltd. Vs. DCIT (2008) 308 ITR 195 (Bom) observing, that as no new information/material was received by the A.O, therefore, the fresh application of mind by the A.O to the same set of facts and material which were available on record at the time of framing of the assessment, but had inadvertently remained omitted to be considered would tantamount to review of order, which is not permissible as per law, had therein held as under: "10. It is further to be seen that the legislature has not conferred power on the AO to review its own order. Therefore, the power under s. 147 cannot be used to review the order. In the present case, though the AO has used the phrase "reason to believe", admittedly between the date of the order of assessment sought to be reopened and the date of formation of opinion by the AO, nothing new has happened, therefore, no new material has come on record, no new information has been received; it is merely a fresh application of mind by the same AO to the same set of facts and the reason that has been given is that the some material which was available on record while assessment order was made was inadvertently excluded from consideration. This will, in our opinion, amount to opening of the assessment merely because there is change of opinion. The Full Bench of the Delhi High Court in its judgment in the case of Kelvinator (supra) referred to above, has taken a clear view that reopening of assessment under s. 147 merely because there is a change of opinion cannot be allowed. In our opinion, therefore, in the present case also, it was not permissible for respondent No. 1 to issue notice under s. 148". 16. Also the Hon'ble High Court of Bombay in the case of ICICI Prudential Life Insurance Co. Ltd. Vs. ACIT (2010) 325 ITR 471 (Bom), 17 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 relying on the judgment of the Hon’ble Supreme Court in the case of Kelvinator of India (supra), had held as under: “23. Though the power to reopen an assessment within a period of four years of the expiry of the relevant assessment year is wide, it is still structured by the existence of a reason to believe that income chargeable to tax has escaped assessment. The Supreme Court, in a recent judgment in Kelvinator of India Ltd. (supra) while drawing upon the legislative history of s. 147 held that the expression “reason to believe” needs to be given a schematic interpretation in order to ensure against an arbitrary exercise of power by the AO. The judgment of the Supreme Court emphasises that the power to reopen an assessment is not akin to a power to review the order of assessment and a mere change of opinion would not justify a recourse to the power under s. 147. Unless the AO has tangible material to reopen an assessment, the power cannot be held to be validly exercised. The Supreme Court has held thus : "...Therefore, post-1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words “reason to believe” failing which we are afraid s. 147 would give arbitrary powers to the AO to reopen assessments 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 power to review and power to reassess. The AO has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment of certain precondition and if the concept of “change of opinion‟ is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of “change of opinion” as an inbuilt test to check abuse of power by the AO. Hence, after 1st April, 1989, AO has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a link with the formation of the belief." 24. In the present case, for all the assessment years in question, and a fortiorari for asst. yr. 2004-05, what the AO has purported to do is to reopen the assessment on the basis of a mere change of opinion. That the AO had no tangible material is evident from the circumstance that the reasons which have been disclosed contain a reference to the same basis, namely the existence of a nil surplus/deficit in Form 1 which was drawn to the attention of and was present to the mind of the AO during the assessment proceedings under s. 143(3). Consequently, it is evident that there is an absence of tangible material before the AO". 17. The Hon’ble High Court of jurisdiction in the case of Aventis Pharma Ltd. Vs. Asst. CIT (2010) 323 ITR 570 (Bom), reiterating its aforesaid view 18 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 that reassessment proceedings cannot be permitted on the basis of a “Change of opinion” had held as under:- "There is merit in the submission which has been urged on behalf of the assessee that there was no tangible material before the AO on the basis of which the assessment could have been reopened and what is sought to be done is to propose a reassessment on the basis of a mere change of opinion. This, in view of the settled position of law is impermissible. No tangible material is shown on the basis of which the assessment is sought to be reopened. In the absence of tangible material, what the AO has done while reopening the assessment is only to change the opinion which was formed earlier on the allowability of the deduction. The power to reopen an assessment is conditional on the formation of a reason to believe that income chargeable to tax has escaped assessment. The power is not akin to a review. The existence of tangible material is necessary to ensure against an arbitrary exercise of power. There is no tangible material in the present case.” 18. At this stage, we may herein observe that as per the mandate of law, even where a concluded assessment is sought to be reopened by the A.O within a period of 4 years from the end of the relevant assessment year, it is must that the A.O has fresh material or information with him, that had led to the formation of belief on his part that the income of the assessee chargeable to tax has escaped assessment. Our aforesaid view is fortified by the judgments of the Hon'ble High Court of Bombay in the case of NYK Lime (India) Ltd. Vs. DCIT (No.2) [2012] 346 ITR 361 (Bom) and Purity Tech Textile Pvt. Ltd. Vs. ACIT & Anr. [2010] 325 ITR 459 (Bom). 19. We, thus, on the basis of our aforesaid observations are of the considered view that as the case of the assessee company before us had 19 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 been reopened on the basis of a mere “change of opinion” and not on the basis of any fresh tangible material which had came to the notice of the A.O after framing of the original assessment by his predecessor vide order passed u/s.143(3), dated 31.03.2009, therefore, as the A.O had wrongly assumed jurisdiction and framed the impugned assessment vide his order passed u/s.147 r.w.s. 143(3), dated 16.12.2016, therefore, the same in light of the aforesaid settled position of law cannot be sustained and stated by the ld. A.R and, rightly so, is liable to be struck down. 20. Alternatively, we also find substance in the claim of the Ld. AR that the reopening of the concluded assessment of the assessee after the expiry of four years from the end of the relevant assessment year, in absence of satisfaction of either of the two conditions contemplated in the “1 st proviso” to section 147 of the Act is clearly found to be violative of the mandate of law. As per the “1 st proviso” to Section 147 of the Act, in a case where assessment had earlier been framed under sub-section (3) of Section 143 of the Act, then, no action shall be taken in its case after expiry of four years from the end of the relevant assessment year except for, in a case where either of the two conditions therein contemplated are satisfied, viz. (i). that the income chargeable to tax has escaped assessment by reason of the failure on the part of the assesee to make a return u/s.139 or in response to notice issued under sub-section (1) of section 142 or section 20 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 148 or (ii) that income chargeable to tax has escaped assessment for failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. 21. Admittedly, it is neither the case of the department nor discernible from the record that the assessee had failed to file its return of income u/s.139 or in response to the notice issued under sub-section (1) of Section 142 or 148 of the Act. Admittedly, the assesee in compliance to the notice issued u/s. 148 dated 30.03.2015 had duly complied with the same and filed its return of income, as a result whereof the assessment was framed in its case under 147 r.w.s 143(3), dated 16.12.2016. 22. Adverting to the second condition contemplated in the “1 st proviso” to Section 147 of the Act, it therein contemplates that income of the assessee chargeable tot tax had escaped assessment for the failure on the part of the assessee to disclose fully and truly all material facts which were necessary for its assessment. We are afraid that the assessee also does not satisfy the second condition provided in the "1st proviso” of section 147 of the Act. Clearly the “reasons to believe” reveal that the reopening of the assessee’s case is not for the reason that its income chargeable to tax had escaped assessment, for the reason of failure on the part of the assessee to fully and truly disclose all material facts necessary for its assessment for the year under consideration i.e A.Y 2009-10. Not only the facts in the 21 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 reasons recorded by the A.O reveals any such failure on the part of the assessee to fully and truly disclose all material facts necessary for its assessment for the year under consideration, but in fact it is not even so alleged by the A.O. As observed by us hereinabove, in absence of any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment for the year under consideration i.e. A.Y.2009-10, it would not be permissible to trigger the second limb of the “1 st proviso” to Section 147 of the Act. Admittedly, the case of the assessee was not reopened for the reason that there is any failure on the part of the assessee to disclose fully and truly all material facts necessary for framing of its assessment. In fact, it is observed by the A.O that the reopening of the concluded assessment is being resorted to for the reason that certain facts as are discernible from the “balance sheet” of the assessee company leads him to draw inferences that certain income of the assessee chargeable to tax had escaped assessment. We, thus, in terms of our aforesaid observations are of the considered view that as the case of the assessee does not fall in either of the two conditions contemplated in ‘1 st proviso” to section 147 of the Act, therefore, as claimed by the Ld. A.R and, rightly so, its case could not have been reopened after expiry of a period of four years from the end of the relevant assessment year i.e A.Y 2009-10. Our aforesaid view that the concluded assessment of the assessee company could not have been reopened after expiry of four years from the 22 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 end of the relevant assessment year, inter alia, in the absence of any failure on its part to disclose fully and truly all material facts which were necessary for its assessment for the said year is supported by the judgment of the the Hon’ble Supreme Court in the case of New Delhi Television Ltd. vs Deputy Commissioner of Income Tax, (2020) 116 Taxmann.com 151 (SC). The Hon’ble Apex Court had, inter alia, held, that though the assessee is obligated to disclose the “primary facts”, but it is neither required to disclose the “secondary facts” nor required to give any assistance to the A.O by disclosure of the other facts and it is for the A.O to decide what inferences are to be drawn from the facts before him. In fact, the Hon’ble High Court of Delhi in the case of Haryana Acrylic Manufacturing Company Vs. CIT (2009) 308 ITR 38 (Del), had observed, that where in the “reasons to believe” which formed the very basis for reopening of the concluded assessment of an assessee which was earlier framed u/s 143(3) of the Act, there was no allegation of any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment, then, no notice for reopening of its case could be issued after expiry of four years from the end of the relevant assessment year. Also, a similar view had been taken by the Hon’ble High Court of Punjab & Haryana in the case of Duli Chand Singhania vs Assistant Commissioner of Income (2004) 269 ITR 192 (P& H). The Ld. A.R submitted that in the case of Duli Chand Singhania (supra) the Hon’ble High Court had held 23 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 that in case where an assessment had earlier been made under Section 143(3) of the Act and, action thereafter is sought to be taken for reopening of the case u/s.147 of the Act after the expiry of four years from the end of the relevant assessment year, then, it would be necessary that both the conditions are satisfied, viz. (i) the AO must have reason to believe that income chargeable to tax has escaped assessment; and (ii). he must also have a reason to believe that such escapement had occurred by reason of failure on the part of the assessee for either of the two conditions, viz. (a). to make a return of income under Section 139 or in response to notice issued under Sub-section (1) of Section 142 or Section 148; or (b). to disclose fully and truly all material facts necessary for his assessment for that purpose. Also a similar view had been taken by the ITAT, Mumbai in the case of Aishwarya Rai Bachchan Vs. Pr.CIT-8, ITA No.754/Mum/2021, dated 25.02.2022. We, thus, are of the considered view that as in the present case before us the assessee company had disclosed fully and truly all the material facts which were necessary for its assessment for the year under consideration i.e A.Y 2009-10, therefore, as per the “1 st proviso” of section 147 of the Act its case could not have been reopened after expiry of four years from the end of A.Y 2009-10 i.e latest by 31.03.2014. 23. We, thus, in terms of our aforesaid observations are of a strong conviction that as the reopening of the concluded assessment off the 24 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 assessee after expiry of four years from the end of the relevant assessment year i.e A.Y 2009-10 is in clearly violation of the “1 st proviso” of Sec. 147 of the Act, therefore, as stated by the Ld. A.R and, rightly so, as the A.O had wrongly assumed jurisdiction and reopened the concluded assessment of the assessee, which, was earlier framed by his predecessor vide order passed u/s. 143(3) dated 31.03.2009, and had on the basis of his invalid jurisdiction framed the reassessment vide his order passed u/s.147 r.w.s. 143(3) dated 16.12.2016, therefore, the impugned reassessment order was liable to be quashed on the said count 24. As we have quashed the reassessment framed by the A.O for want of valid assumption of jurisdiction on his part, therefore, we refrain from adverting to and therein adjudicating the other contentions that have been advanced by the Ld. A.R as regards the sustainability of the addition on the merits of the case, which, thus, are left open. 25. In the result, the appeal of the assessee is allowed in terms of our aforesaid observations. ITA No. 61/RPR/2018 A.Y.2009-10 26. As we have quashed the assessment framed by the A.O for want of valid assumption of jurisdiction on his part, therefore, the appeal filed by the revenue assailing the part relief of Rs. 75.50 lac (supra) allowed by the 25 M/s. Shree Arihant Tradelinks India Private Limited Vs. DCIT, CC-1(1) ITA Nos. 57 & 61/RPR/2018 CIT(Appeals) is rendered as merely academic in nature, and, thus, dismissed. 27. In the result, appeal of the revenue in ITA No.61/RPR/2018 is dismissed in terms of our aforesaid observations. 28. Resultantly, the appeal of the assessee is allowed while for the appeal of the revenue is dismissed in terms of our aforesaid observations. Order pronounced under rule 34(4) of the Appellate Tribunal Rules, 1963, by placing the details on the notice board. Sd/- Sd/- ARUN KHODPIA RAVISH SOOD (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायप ु र/ RAIPUR ; Ǒदनांक / Dated : 17 th October, 2022 ***SB आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The CIT(Appeals)-II, Raipur (C.G) 4. The Pr. CIT-II, Raipur (C.G) 5. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायप ु र बɅच, रायप ु र / DR, ITAT, Raipur Bench, Raipur. 6. गाड[ फ़ाइल / Guard File. आदेशान ु सार / BY ORDER, // True Copy // Ǔनजी सͬचव / Private Secretary आयकर अपीलȣय अͬधकरण, रायप ु र / ITAT, Raipur.