GOLDEN TOBACCO LTD ( FORMERLY GTC INDUSTRIES LTD), MUMBAI V. JT CIT (OSD) 8(1), MUMBAI

ITA 5859/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2878 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 23-04-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 25-09-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S C GUPTA
• Keywords: Reopening of assessment; Business income; Depreciation; Retrospective amendment; Question of law; Tangible material; Difference of opinion; Assessment record; Condonation of delay; Unabsorbed depreciation; Change of opinion; Reassessment proceedings
• Section: 143(3); 147; 148; 11; 139

Judgement Text

, G , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI BEFORE SHRI SAKTIJIT DEY, JM AND SHRI ASHWANI TANEJ A, AM ITA NO.5858/MUM/2012 : ASST.YEAR 2005-2006 ITA NO.5859/MUM/2012 : ASST.YEAR 2006-2007 M/S.GOLDEN TOBACCO LIMITED (FORMERLY GTC INDUSTRIES LIMITED) TOBACCO HOUSE, S.V.ROAD VILE PARLE, MUMBAI 400 056. PAN : AAACG1421A. / VS. THE JT.COMMISSIONER OF INCOME-TAX (OSD) 8(1) MUMBAI. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI S.C.GUPTA (AR) /RESPONDENT BY : SHRI VACHASPATI TRIPATHI (DR) ! / DATE OF HEARING : 14.10.2015 ! / DATE OF PRONOUNCEMENT :28. 10.2015. / O R D E R PER ASHWANI TANEJA (AM) : ITA NO.5858/MUM/2012 : ASST. YEAR 2005-2006 THIS APPEAL IS FILED BY THE ASSESSEE-COMPANY AGAINS T THE ORDER OF LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) (IN SHORT CIT (A)) DATED 28.06.2012, PASSED AGAINST THE ASSESSMENT ORDER U/S 143(3) R.W. S. 147 DATED 23.12.2011 FOR ASSESSMENT YEAR 2005-2006. THE ASSESSEE-COMPANY HAS FILED NUMEROUS GROUNDS. HOWEVER, DURING THE COURSE OF HEARING, THE LEARNED COUNSEL APPEARING ON BEHALF OF THE ASSESSEE-COMPANY, EMPHASIZED THAT THIS CASE IS COVERED IN FAVOUR OF THE ASSESSEE ON THE LEGAL GROUND ITSELF. THEREFORE, WE SHALL FIRST DISPOSE THE LEGAL GROUND RAISED BY THE ASSESSEE. 2 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. 2. AT THE OUTSET, IT WAS POINTED OUT BY THE LEARNED C OUNSEL THAT THERE WAS A DELAY ON THE PART OF THE ASSESSEE IN FILING OF THE APPEAL BY 16 DAYS. THE LEARNED COUNSEL HAS DRAWN OUR ATTENTION ON THE PETITION FOR CONDONATION OF DELAY IN FILING OF APPEAL AND AFFIDAVIT FILED ALONG WITH THAT. 3. WE HAVE HEARD BOTH THE PARTIES ON THIS ISSUE. NO S ERIOUS OBJECTION HAS BEEN RAISED BY THE LEARNED DEPARTMENTAL REPRESENTAT IVE FOR GRANTING CONDONATION OF DELAY IN FILING OF APPEAL BY THE ASSESSEE. IT IS FURTHER NOTED BY US THAT THE ASSESSEE HAS BEEN ABLE TO DEMONSTRATE SUFFICIENT CA USE IN EXPLAINING THE DELAY OF 16 DAYS. THEREFORE, IN THE INTEREST OF JUSTICE, RELYING UPON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR, LAN D ACQUISITION V. MST.KATIJI & ORS. [(1987) 167 ITR 471 (SC)], WE FIND IT APPROPRI ATE TO ADMIT THIS APPEAL, AND THEREFORE, THE APPEAL IS ADMITTED FOR ADJUDICATION ON ITS MERITS. 4. IN GROUND NO.1 , THE ASSESSEE-COMPANY HAS CHALLENGED THE REOPENING OF THE ASSESSMENT. IT HAS BEEN ARGUED THAT IN THIS CAS E ORIGINAL ASSESSMENT WAS DONE U/S 143(3) OF THE INCOME-TAX ACT, 1961 (IN SHO RT THE ACT). SUBSEQUENTLY, NOTICE HAS BEEN ISSUED U/S 148, AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. IT IS SUBMITTED THAT THERE IS NO A LLEGATION IN THE REASONS ABOUT ANY FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSU RE OF MATERIAL FACTS, AND THUS, THE CASE OF THE ASSESSEE IS PROTECTED BY THE PROVIS O TO SECTION 147 OF THE ACT. IT HAS BEEN SUBMITTED THAT THE PROVISO TO SECTION 147 PUTS AN EMBARGO OF TIME LIMIT OF FOUR YEARS. IT IS FURTHER SUBMITTED THAT APART F ROM THE ABOVE THE REOPENING IS INVALID, ALSO ON THE GROUND THAT THERE IS NO FRESH TANGIBLE MATERIAL COMING IN THE POSSESSION OF THE ASSESSING OFFICER AT THE TIME OF RECORDING OF REASONS, AND THEREFORE, IN THE ABSENCE OF THE SAME, NO REASONS C AN BE RECORDED FOR REOPENING 3 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. OF THE ASSESSMENT. RELIANCE HAS BEEN PLACED; IN THI S CASE, ON THE JUDGMENT OF MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF MOTILAL R.TODI AND VARIOUS CASES DISCUSSED AND RELIED IN THE SAID JUDGMENT. FOR THE PURPOSE OF TAKING BENEFIT OF FIRST PROVISO TO SECTION 147, RELIANCE HAS BEEN PLA CED BY THE LEARNED COUNSEL ON THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN TH E CASE OF TITANOR COMPONENTS LIMITED IN WRIT PETITION NO.71 OF 2005, ORDER DATED 9 TH JUNE, 2011, HINDUSTAN LEVER LTD. V. ACIT 268 ITR 332 (BOM.), CI T V. SHRI SHAILESH S.SHAH IN ITA NO.1913 OF 2013, ORDER DATED 30 TH SEPTEMBER, 2015 (BOMBAY HIGH COURT), AND ON THE JUDGMENT OF THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT V. AVADH TRANSFORMERS (P.) LTD. 51 TAXMANN.COM 369 (SC ), WHEREIN THE JUDGMENT OF THE HONBLE ALLAHABAD HIGH COURT REPORTED AT 33 TAXMANN.COM 24 WAS UPHELD BY THE HONBLE SUPREME COURT. 5. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPR ESENTATIVE HAS SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES AND R EQUESTED THAT THE REOPENING SHOULD BE HELD AS VALID. IN RESPONSE TO OUR QUERY T HAT WHETHER THERE WAS ANY FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSURE O F MATERIAL FACTS OR WHETHER THERE WAS ANY FRESH MATERIAL COMING INTO THE POSSESSION O F THE ASSESSING OFFICER, THE LEARNED DEPARTMENTAL REPRESENTATIVE WAS NOT ABLE TO PUT FORTH ANY FACTUAL MATERIAL TO CONTROVERT THE ARGUMENTS OF THE LEARNED COUNSEL OF THE ASSESSEE. 6. WE HAVE CONSIDERED THE FACTS AND CIRCUMSTANCES O F THE CASE AS WELL AS JUDGMENTS RELIED UPON BY THE LEARNED COUNSEL AND GO NE THROUGH THE ORDERS OF THE LOWER AUTHORITIES. THE BRIEF FACTS ARE THAT IN THIS CASE ORIGINAL ASSESSMENT PROCEEDINGS WERE DONE U/S 143(3) VIDE ORDER DATED 2 8.12.2007 DETERMINING THE TOTAL INCOME AT NIL, AFTER SET OFF OF BROUGHT FORWA RD BUSINESS LOSS OF RS.7,82,88,126 4 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. AND BROUGHT FORWARD UNABSORBED DEPRECIATION OF RS.6 3,64,593. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED NOTICE U/S 148 DATED 31.3. 2011. IN RESPONSE TO THE SAME, THE ASSESSEE-COMPANY FILED ITS RETURN OF INCO ME AND ASKED FOR THE `REASONS FOR REOPENING OF THE ASSESSMENT, WHICH WA S FURNISHED BY THE AO TO THE ASSESSEE. FOR THE SAKE OF READY REFERENCE THESE REA SONS ARE REPRODUCED HERE UNDER:- IN THIS CASE, THE ASSESSEE FILED RETURN OF INCOME FOR THE A.Y. 2005-06 ON 28/10/2005, DECLARING TOTAL INCOME AT RS.1811/-. A SSESSMENT U/S. 143(3) WAS COMPLETED ON 28/12/2007, DETERMINING TOTAL INCO ME AT NIL AFTER SET OFF OF BROUGHT FORWARD UNABSORBED BUSINESS LOSSES A ND DEPRECIATION. I. IRREGULAR ALLOWANCE OF DEPRECIATION : IT IS SEEN FROM DEPRECIATION STATEMENT AS PER INCOM E TAX ACT, THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS.76,83,991/- ON TIME SHARING UNIT PROPERTY. THE PROPERTY IS ON LEASE FOR A PER IOD OF 99 YEARS AND ALSO THE RIGHT TO PROPERTY IS ACQUIRED PRIOR TO 01/04/19 98, AS SUCH, THE ASSESSEE IS NOT ELIGIBLE FOR DEPRECIATION EITHER UN DER THE CATEGORY OF INTANGIBLE ASSETS OR OTHER. OMISSION TO DISALLOW T HE SAME HAS RESULTED INTO UNDER ASSESSMENT OF RS.76,83,991/-. II. INCORRECT COMPUTATION OF TAXABLE INCOME : WHILE COMPUTING THE TAXABLE INCOME, THE ASSESSEE HA D TAKEN PROFIT AS PER PROFIT & LOSS ACCOUNT AT RS.30,39,015/0 WHICH INCLU DED INCOME ON ACCOUNT OF EXCEPTIONAL ITEMS OF RS.6,09,98,126/-. THE EXCEPTIONAL ITEMS (NET) COMPRISED OF ADJUSTMENT OF ACCOUNT OF LIABILI TIES, NO LONGER REQUIRED AND EXPENSES ON ACCOUNT OF LOANS & ADVANCES AND SUN DRY DEBTORS. FURTHER, IT IS SEEN THAT IN COMPUTATION STATEMENT, THE ASSESSEE HAD REDUCED INCOME OF RS.10,72,88,467/- CHARGEABLE U/S. 41(1) FOR CONSIDERING IT SEPARATELY. IT HAS ALSO REDUCED AN AMOUNT OF RS.119470524/-, CHARGEABLE U/S. 41(1) BECAUSE THE S AME WAS DISALLOWED U/S. 43B, AND AS SUCH, NOT CLAIMED AS EXPENDITURE I N EARLIER ASSESSMENT. THE NET IMPACT OF THE ABOVE ADJUSTMENT IN THE COMPU TATION IS AS FOLLOWS: PARTICULARS AMOUNT (RS) EXCEPTIONAL ITEMS INCLUDED IN THE P & L A/C. 6,09,98,126 LESS (I)INCOME CHARGEABLE U/S. 41(1) CONSIDERED SEPARATELY 107288467 5 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. (II)CONCESSION IN INTEREST ON BANK BORROWINGS / DEBENTURES, ETC. WRITTEN BACK CONSEQUENT TO SETTLEMENT REACHED AS THE SAME WAS DISALLOWED U/S. 43B, AND AS SUCH, NOT CLAIMED AS EXPENDITURE IN EARLIER ASSESSMENT (CONSIDERED BY STATUTORY AUDITOR WHILE COMPUTING INCOME CHARGEABLE U/S. 41(1) 11,94,70,524 ADD INCOME CHA RGEABLE U/S. 41(1) ON ACCOUNT OF CONCESSION IN INTEREST ON BANK BORROWINGS / DEBENTURES ETC., WRITTEN BACK CONSEQUENT TO SETTLEMENT REACHED, AS THE SAME WAS CLAIMED AS EXPENDITURE IN EARLIER ASSESSMENT. 10,72,88,467 EFFECT OF ADJUSTMENTS ON ACCOUNT OF EXCEPTIONAL ITEMS AND INCOME U/S. 41(1) 5,84,72,398 LIABILITIES IN RESPECT OF PRINCIPAL AMOUNT OF LOANS AND INTEREST THEREON NO LONGER PAYABLE WRITTEN BACK ON THEIR NEGOTIATED SETTLEMENTS 15,44,01,003/ - ADD: LIABILITIES IN RESPECT OF LUXURY TAX WRITTEN BACK: UNDER AMNESTY SCHEME IN TERMS OF SUPREME COURT JUDGMENT 1,58,39,988/- 5,65,18,000/- TOTAL 22,67,58,991/ - LESS: OLD SUNDRY DEBTORS AND LOANS & ADVANCES WRITTEN OFF (NET) 16,57,60,865/ - EXCEPTIONAL ITEMS 6,09,98,126/ - FROM THE ABOVE, IT IS CLEAR THAT THE ASSESSEE HAD R EDUCED AN AMOUNT OF RS.5,84,72,398/- FROM PROFIT INSTEAD OF MAKING AN A DDITION OF RS.10,72,88,467/- U/S. 41(1) TO IT, AS QUANTIFIED B Y STATUTORY AUDITOR. THE SAME IS ACCEPTED BY THE DEPARTMENT. THE MISTAKE RE SULTED IN UNDER ASSESSMENT OF INCOME OF RS.16,57,60,865/- (5,84,72, 398 + 10,72,88,467). ALTERNATIVELY, IT IS SEENT THAT EXCEPTIONAL ITEMS ( NET) OF RS.6,09,98,126/- IN THE PROFIT & LOSS ACCOUNT IS ARRIVED AS FOLLOWS: THE EXCEPTIONAL ITEMS OF RS.6,09,98,126/- IS ARRIVE D AFTER REDUCING OLD SUNDRY DEBTORS AND LOANS & ADVANCES (NET) OF RS.165 760865/- FROM THE LIABILITIES WHICH ARE WRITTEN BACK ON ACCOUNT OF SE TTLEMENT /AMNESTY ETC. AS THE EXPENSES DEBITED ON ACCOUNT OF LOANS & ADVANCES AND SUNDRY DEBTORS ARE EITHER CAPITAL OR INADMISSIBLE EXPENDITURE, THE SAME IS REQUIRED TO BE DISALLOWED. OMISSION TO DISALLOW THE SAME HAS RESU LTED INTO UNDER ASSESSMENT OF R.16,57,60,865/- IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE THA T, ON THE ABOVE TWO ISSUES, THE INCOME AMOUNTING TO RS.17,34,44,856/- ( RS.76,83,991 + 16,57,60,865), CHARGEABLE TO TAX, HAS ESCAPEMENT WI THIN THE MEANING OF 6 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. SECTION 147 OF THE I.T. ACT. THEREFORE, THE CASE I S RE-OPENED BY ISSUE OF NOTICE U/S. 148 OF THE I.T. ACT, AFTER OBTAINING TH E PRIOR APPROVAL FROM THE HONBLE CIT 8, MUMBAI VIDE HER OFFICE LETTER DATE D 31.03.2011. ISSUE NOTICE U/S. 148 OF THE I.T.ACT, 1961. 6.1 THE ASSESSEE HAS CHALLENGED THE AFORESAID `REASONS ON TWO COUNTS, I.E., ONE - THERE IS NO FRESH MATERIAL COMING INTO THE PO SSESSION OF THE AO AT THE TIME OF RECORDING OF THE REASONS, AND TWO - THE REOPENIN G HAS BEEN DONE AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR; AND THERE IS NO ALLEGATION IN THE `REASONS ABOUT FAILURE ON THE PART OF THE ASSE SSEE IN DISCLOSURE OF MATERIAL FACTS. 6.2 WE SHALL NOW DEAL WITH BOTH THE ARGUMENTS ONE BY O NE : 6.3 NO FRESH TANGIBLE MATERIAL : A PERUSAL OF THE AFORESAID `REASONS WOULD CLEARLY REVEAL THAT THESE HAVE BEEN RECORDED BY THE AO ON THE BASIS OF EXAMINATION DONE BY THE AO OF THE EXISTING ASSESSMENT RECORDS OF THE ASSESSEE-COMPANY . ON NONE OF THE ISSUES WE COULD FIND REFERENCE TO ANY FRESH TANGIBLE MATERIAL IN THE POSSESSION OF THE AO TO MAKE A BELIEF ABOUT ESCAPEMENT OF INCOME. IN OUR CO NSIDERED VIEW, THE LAW IN THIS REGARD IS NOW WELL SETTLED. AS RELIED UPON BY THE LEARNED COUNSEL ALSO, RECENTLY HONBLE MUMBAI BENCH OF THE TRIBUNAL IN TH E CASE OF MOTILAL R.TODI (ITA NO.2910/MUM/2013, ORDER DATED 22.09.2015) HAS ANALYZED THE ENTIRE LAW AVAILABLE ON THIS ISSUE, AND THEREAFTER IT WAS HELD BY THE HONBLE BENCH THAT REOPENING WAS INVALID IN THE ABSENCE OF FRESH TANGI BLE MATERIAL. THE HONBLE BENCH HAS RELIED UPON THE JUDGMENT OF THE HONBLE B OMBAY HIGH COURT IN THE CASE OF BOMBAY STOCK EXCHANGE LIMITED, WRIT PETITIO N NO.2468 DATED 12.06.2014 REPORTED AT 89 CCH 118 AND JUDGMENT OF HONBLE DELH I HIGH COURT IN THE CASE OF 7 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. PR.CIT V. TUPPERWARE INDIA PVT. LTD. (ITA NO.415 OF 2015, ORDER DATED 10.08.2015). THE RELEVANT PARTS OF THIS JUDGMENT AR E REPRODUCED HERE UNDER FOR THE SAKE OF READY REFERENCE :- 6.6 . IN THE PRESENT CASE, IT WAS NOTICED BY US TH AT THE CASE OF THE ASSESSE IS THAT THERE WAS NO FRESH TANGIBLE MATERIAL IN THE POSSESSION OF AO AT THE TI ME OF RECORDING OF IMPUGNED REASONS. A PERUSAL OF THE REASONS RECORDED BY THE AO IN THIS CASE REVEALS T HAT AT THE TIME OF RECORDING OF THESE REASONS THE AO HAD EXAMINED ORIGINAL ASSESSMENT RECORDS ONLY AND NO FRESH MATERIAL HAD COME IN THE POSSESSION OF THE AO . IN RESPONSE TO OUR SPECIFIC QUERY ALSO, LD DR COULD NOT POINT OUT ANY FRESH MATERIAL AVAILABLE WITH THE AO AT THE TIME OF REOPENING OF THE CASE OF THE ASSESSE E. THUS, ASSERTION OF THE ASSESSEE THAT THERE WAS NO FRESH MATERIAL WITH AO FOR REOPENING OF THIS CASE, REMAINED UNCONTROVERTED. 6.7. UNDER THESE FACTS AND CIRCUMSTANCES, LET US NO W EXAMINE SETTLED POSITION OF LAW ON THIS ISSUE. IT H AS BEEN HELD IN VARIOUS JUDGMENTS COMING FROM VARIOUS COURTS THAT AVAILABILITY OF FRESH TANGIBLE MATERIAL IN THE POSSESSION OF AO AT THE TIME OF RECORDING OF IMPUGN ED REASONS IS A SINE QUA NONE , BEFORE THE AO CAN RECORD REASONS FOR REOPENING OF THE CASE. WE BEGIN WITH TH E JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CI T VS. KELVINATOR INDIA LTD. 320 ITR 561 (SC), LAYING DOWN THAT FOR REOPENING OF THE ASSESSMENT, THE AO SHOULD HAVE IN ITS POSSESSION TANGIBLE MATERIAL. THE TERM TANGIBLE MATERIAL HAS BEEN UNDERSTOOD AND EXPLAINED BY VARIOUS COURTS SUBSEQUENTLY. THERE HAS BEEN UNANIMITY OF THE COURTS ON THIS ISSUE THAT IN ABSENCE OF FRESH MATERIAL INDICATING ESCAPED INCOME , THE AO CANNOT ASSUME JURISDICTION TO REOPEN ALREADY CONCLUDED ASSESSMENT. 6.8. RECENTLY, HONBLE DELHI HIGH COURT IN THE CASE OF PR. CIT VS TUPPERWARE INDIA PVT. LTD. , IN ITS ORDER DT 10-8-15 (ITA NO 415/2015 ) GOT AN OCCASION TO ANALYS E LATEST POSITION OF LAW ON THIS ISSUE. AFTER DISCUSS ING 8 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. MANY JUDGMENTS ON THIS ISSUE, IT WAS HELD THAT EVEN IN THE CASE OF ORIGINAL ASSESSMENT ORDER HAVING BEE N PASSED U/S 143(1), IT IS MANDATORY FOR THE AO TO HA VE IN ITS POSSESSION, FRESH TANGIBLE MATERIAL BEFORE REOPENING OF THE CASE. 6.9 IN THE CASE OF BOMBAY STOCK EXCHANGE LTD. (WRIT PETITION NO.2468 DT. 12.06.2014) (89 CCH 118), HONBLE BOMBAY HIGH COURT OBSERVED AS UNDER: 5. IT IS PERTINENT TO NOTE THAT RESPONDENT NO.1 HA S NOT SET OUT IN THE REASONS WHICH FACT OR OTHER MATERIAL WAS NOT DISCLO SED BY THE PETITIONER THAT LED TO INCOME ESCAPING ASSESSMENT. IN FACT, ON GOING THROUGH THE REASONS, WE FIND THAT RESPONDENT NO.1 HAS COME TO T HE CONCLUSION/BELIEF THAT INCOME HAD ESCAPED ASSESSMENT ON THE BASIS OF THE MATERIAL ALREADY BEFORE HIM AND NO NEW TANGIBLE MATERIAL HAS BEEN RELIED UPON BY RESPONDENT NO.1 TO COME THE SAID CONCLUSION/BELIEF. THIS IS CLEAR FROM THE USE OF THE WORDS ON PERUSAL OF THE RECORDS IT IS NOTICED........, FURTHER PERUSAL OF STATEMENT 2 ENCLOSED WITH THE COMPUTATIO N OF INCOME SHOWS....... AND IT IS FURTHER NOTICED...... IN THE IMPUGNED NOTICE. 6.10. IN THE CASE OF CIT VS. ORIENT CRAFT LTD. 354 ITR 536, IT WAS OBSERVED BY HONBLE DELHI HIGH COURT THAT IN THE SAID CASE , REASONS FOR REASSESSMENT DISCLOSED THAT AO REACHED BELIEF THAT THERE WAS ESCAPEMENT OF INCOME 'ON GOING THROUGH THE RETURN OF INCOME' FILE D BY ASSESSEE AFTER HE ACCEPTED RETURN U/S. 143(1) WITHOUT SCRUTINY, AND NOTHING MORE. IN THESE FACTS, IT WAS HELD BY THE HONBLE HIGH COURT THAT IT WAS NOTHING BUT REVIEW OF EARLIER PROCEEDINGS AND ABUSE OF POWER BY AO. IT WAS FURTHER HELD THAT SINCE THERE W AS NO WHISPER IN REASONS RECORDED, OF ANY TANGIBLE MATERIAL WHICH CAME TO POSSESSION OF AO SUBSEQUENT TO ISSUE OF INTIMATION, THEREFORE, IT WAS AN ARBITR ARY EXERCISE OF POWER CONFERRED U/S 147. THUS, REOPENIN G WAS HELD TO BE INVALID ON THIS GROUND ITSELF. 6.11. IN THE CASE OF MOHAN GUPTA (HUF) VS. CIT 366 ITR 115, SAME VIEW HAS BEEN FOLLOWED BY HONBLE DELHI HIGH COURT. 9 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. 6.12. FURTHER, IN THE CASE OF CIT VS. K. L. ARORA IN ITA 118/2014 DATED 21-04-2014, HONBLE DELHI HIGH COURT OBSERVED AS UNDER: THIS COURT IS OF THE OPINION THAT NO FAULT CAN B E FOUND WITH THE TRIBUNALS ORDER. IT IS WELL SETTLED THAT IN ORDER TO ISSUE A VALID REASSESSMENT NOTICE, THE AO HAS TO BE SATISFIED ON THE BASIS OF TANGIBLE MATERIAL OR INFORMATION SUBSEQUENTLY AVAILABLE TO HIM THAT THE ASSESSEE HAD NOT MADE FULL AND TRUE DISCLOSURE WHIC H LED TO INCOME ESCAPING ASSESSMENT AT THE STAGE WHEN THE ORIGINAL ASSESSMENT WAS COMPLETED. SHORT OF THA T A RE-APPRECIATION OF THE EXISTING MATERIALS WHICH REALLY AMOUNTS TO REVIEW IS IMPERMISSIBLE. THE TRIBUNAL, I N THE CIRCUMSTANCES OF THIS CASE WAS JUSTIFIED IN CONCLUDING THAT RE-ASSESSMENT PROCEEDINGS THEMSELVE S WERE NOT IN ACCORDANCE WITH LAW AND CONSEQUENTLY DISMISSING THE REVENUES APPEAL. NO QUESTION OF LAW ARISES FOR CONSIDERATION. 6.13. IN THE CASE OF CIT VS. SHRI ATUL KUMAR SWAMI IN ITA NO. 112/2014 DATED 18-03-2014 REPORTED AT 52 TAXMANN.COM 47, HONBLE DELHI HIGH COURT OBSERVED AS UNDER: ..REOPENING OF ASSESSMENT IS VALID IF IT IS BASED ON TANGIBLE MATERIAL TO JUSTIFY CONCLUSION THAT THERE WAS ESCAPEMENT OF INCOMEIN INSTANT CASE NOTE FORMING PART OF RETURN CLEARLY MENTIONED AND DESCRIBED NATU RE OF THE RECEIPT UNDER A NON-COMPETE AGREEMENT REASONS FOR ISSUANCE OF NOTICE U/S 147 NOWHERE MENTIONED THAT REVENUE CAME UP WITH ANY OTHER FRESH MATERIAL WARRANTING REOPENING OF ASSESSMENTMERE CONCLUSION OF PROCEEDINGS U/S 143(1) IPSO FACTO DOE S NOT BRING INVOCATION OF POWERS FOR REOPENING ASSESSMENTREOPENING OF ASSESSMENT WAS UNJUSTIFIEDREVENUES APPEAL DISMISSED. 6.14. FURTHER RELIANCE CAN BE PLACED ON THE DETAILE D JUDGMENT IN THE CASE OF MADHUKAR KHOSLA VS. ACIT 367 ITR 165 (DELHI), WHEREIN IT HAS BEEN HELD THAT THE REOPENING IS NOT PERMITTED UNDER THE LAW UNLESS IT IS BASED ON FRESH TANGIBLE MATERIAL AND THAT IF THE REASONS TO BELIEVE ARE NOT BASED ON NEW, TANGIBLE 10 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. MATERIALS , THE REOPENING AMOUNTS TO AN IMPERMISSIBLE REVIEW . IT HAS BEEN FURTHER OBSERVED THAT : THE FOUNDATION OF THE AOS JURISDICTION AND THE RA ISON DETRE OF A REASSESSMENT NOTICE ARE THE REASONS TO BELIEVE. NOW THIS SHOULD HAVE A RELATION OR A LINK WITH AN OBJECTIVE FACT, IN THE FORM OF INFORMATION OR FA CTS EXTERNAL TO THE MATERIALS ON THE RECORD. SUCH EXTER NAL FACTS OR MATERIAL CONSTITUTE THE DRIVER, OR THE KEY WHICH ENABLES THE AUTHORITY TO LEGITIMATELY RE-OPEN THE COMPLETED ASSESSMENT. IN ABSENCE OF THIS OBJECTIVE TRIGGER, THE AO DOES NOT POSSESS JURISDICTION TO REOPEN THE ASSESSMENT. IT IS AT THE NEXT STAGE THAT THE QUESTION, WHETHER THE RE-OPENING OF ASSESSMENT AMOUNTS TO REVIEW OR CHANGE OF OPINION ARISES. IN OTHER WORDS, IF THERE ARE NO REASONS TO BELIEVE B ASED ON NEW, TANGIBLE MATERIALS, THEN THE REOPENING AMOUNTS TO AN IMPERMISSIBLE REVIEW. HERE, THERE IS NOTHING TO SHOW WHAT TRIGGERED THE ISSUANCE OF NOTI CE OF REASSESSMENT NO INFORMATION OR NEW FACTS WHICH LE D THE AO TO BELIEVE THAT FULL DISCLOSURE HAD NOT BEEN MADE ( KELVINATOR OF INDIA LTD [(2010)320 ITR 561 (SC)] AND ORIENT CRAFT LTD [(2003)354 ITR 536 (DELHI)] FOLLOWED, USHA INTERNATIONAL [(2012)348 ITR 485 (DEL) (FB)] REFERRED) 6.15. IN THE CASE OF CIT VS JYOTI DEVI 218 CTR 264, HONBLE RAJASTHAN HIGH COURT HELD THAT SINCE REVENUE COULD NOT POINT OUT ANY INFORMATION OR MATERIAL WHICH HAD SUBSEQUENTLY COME TO THE NOTICE OF THE AO TO ENABLE HIM TO FORM THE REQUISITE BELIEF T HAT ANY INCOME LIABLE TO BE ASSESSED HAD ESCAPED ASSESSMENT, THEREFORE, THE INITIATION OF REASSESSME NT PROCEEDINGS WAS NOT VALID. 6.16. HONBLE MADRAS HIGH COURT IN THE CASE OF BAPALAL & CO. EXPORTS 289 ITR 37, HELD THAT IN THE ABSENCE OF ANY NEW MATERIAL, THE AO IS NOT EMPOWERE D TO REOPEN AN ASSESSMENT IRRESPECTIVE OF THE FACT WHETHER IT WAS MADE UNDER S. 143(1) OR S. 143(3). 11 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. 6.17. RECENTLY, MUMBAI BENCH OF ITAT IN THE CASE HV TRANSMISSIONS LTD. IN I.T.A NO. 2230/MUM/2010 HELD THAT EVEN THOUGH ORIGINAL ASSESSMENT WAS MADE UNDER S. 143(1) AND NOT UNDER S. 143(3), ASSESSEE HAVING MADE FULL DISCLOSURE OF ITS INCOME, AO WAS N OT JUSTIFIED IN REOPENING THE ASSESSMENT IN THE ABSENC E OF ANY NEW MATERIAL. HONBLE BENCH HAS RELIED UPON THIRD MEMBER JUDGMENT FROM MUMBAI BENCH OF ITAT IN THE CASE TELCO DADAJEE DHACKJEE LTD VS DCIT ( ITA NO 4613/MUMBAI/2013 DT 12-5-2010), IN SUPPORT OF THIS VIEW. 6.18. SIMILAR VIEW HAS BEEN EXPRESSED BY HONBLE DELHI BENCH OF ITAT IN THE CASE OF M/S NEXGEN SCHOOL OF BUSINESS VS. DEPUTY COMMISSIONER OF INCOME TAX, [ITA NO. 5609/DEL/2010] HOLDING THAT THE ASSESSING OFFICER WAS NOT JUSTIFIED TO INITIATE THE REOPENING PROCEEDINGS IN ABSENCE OF ANY NEW INFORMATION OR MATERIAL ON RECORD SINCE THE DATE OF FILLING AND PROCESSING OF THE RETURN OF INCOME. 6.19. IN THE PRESENT CASE, IT HAS ALREADY BEEN DISCUSSED THAT ADMITTED FACTS ARE THAT THERE WAS NO FRESH MATERIAL COMING INTO THE POSSESSION OF THE AO , AT THE TIME OF RECORDING OF THE REASONS. THESE FA CTS HAVE NOT BEEN REBUTTED BY LD DR ALSO. THE CASE LAW RELIED UPON BY LD DR IN THE CASE OF DR. AMINS PATHOLOGY, SUPRA IS NOT APPLICABLE ON THE ISSUE BEI NG DECIDED HERE. THE ISSUE THAT IN ABSENCE OF ANY FRES H MATERIAL, WHETHER AO CAN PROCEED TO RECORD REASONS, WAS NOT BEFORE HONBLE HIGH COURT, THEREFORE HONBL E HIGH COURT HAD DECIDED THE ISSUE OF CHANGE OF OPINI ON IN THAT CASE. IN THE CASE BEFORE US, AS DISCUSSED ABOVE, WE ARE NOT GOING INTO THAT ISSUE. IN OUR CONSIDERED OPINION, AT THIS STAGE, WE NEED NOT GO I NTO THE OTHER ASPECT I.E. WHETHER THERE WAS CHANGE OF OPINION OR NOT. THIS ISSUE HAS BEEN APTLY CLARIFIED BY HONBLE HIGH COURT IN THE CASE OF MADHUKAR KHOSLA, (SUPRA), WHEREIN IT HAS BEEN HELD BY THEIR LORDSHIP S THAT EXTERNAL FACTS OR MATERIAL CONSTITUTE THE DRIV ER, OR THE KEY WHICH ENABLES THE AO TO LEGITIMATELY REOPEN THE COMPLETED ASSESSMENT AND IN ABSENCE OF THIS OBJECTIVE TRIGGER, THE AO DOES NOT POSSESS 12 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. JURISDICTION TO REOPEN THE ASSESSMENT. FURTHER, MOS T IMPORTANTLY, IT WAS HELD BY THE HONBLE HIGH COURT THAT IT IS AT THE NEXT STAGE WHEN THE QUESTION, WHE THER THE REOPENING OF ASSESSMENT AMOUNTS TO REVIEW OR CHANGE OF OPINION ARISES. IN OTHER WORDS, IF THER E ARE NO NEW TANGIBLE MATERIALS, THEN THERE WOULD BE NO REASONS TO BELIEVE, AND CONSEQUENTLY REOPENING WOULD BE AN IMPERMISSIBLE REVIEW. UNDER THESE CIRCUMSTANCES THERE WOULD NOT ARISE ANY NEED TO GO THE NEXT STAGE TO EXAMINE THE NEXT QUESTION, I.E., WHETHER THERE WAS REVIEW OR CHANGE OF OPINION. THE CONDITION WITH RESPECT TO AVAILABILITY OF NEW TANG IBLE MATERIAL IS STEP ANTERIOR TO THE CONDITION OF NO CHANGE OF OPINION OR REVIEW. 6.20 THUS, IN VIEW OF JUDGMENTS DIRECTLY ON THE ISSUE UNDER CONSIDERATION, AS DISCUSSED IN PARAS 6.7 TO 6.18, ABOVE, REOPENING DONE BY LD. AO IN THE ABSENCE OF FRESH TANGIBLE MATERIAL, IS INVALID AND BAD IN LAW. THEREFORE, THE INITIATION OF REASSESSMENT PROCEEDINGS WAS NOT VALID. THUS, RE-ASSESSMENT ORDER FRAMED IN PURSUANCE TO INVALID REOPENING IS ILLEGAL; THE SAME IS HEREBY QUASHED. SINCE ASSESSMENT ORDER HAS BEEN QUASHED ON JURISDICTIONAL GROUND ITSELF, OTHER GROUNDS ARE NOT BEING ADJUDICATED. 6.4 IN VIEW OF THE ABOVE DISCUSSION BY THE HONBLE BEN CH, WE FIND THAT THE ISSUE STANDS SQUARELY COVERED WITH THE JUDGMENT OF HONBLE BOMBAY HIGH COURT, HONBLE DELHI HIGH COURT AND OTHER COURTS. T HEREFORE, REOPENING IS HELD INVALID FOR WANT OF AVAILABILITY OF REQUISITE CONDITIONS FOR EXERCISING THE JURISDICTION OF REOPENING BY THE ASSESSING OFFICER. 7. THE OTHER ARGUMENT TAKEN UP BY THE LEARNED COUNSEL WAS THAT THERE WAS NO ALLEGATION IN THE `REASONS ABOUT FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSURE OF MATERIAL FACTS. AGAIN, THE PERUSAL OF AFORESAID `REASONS SHALL 13 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. REVEAL THAT THE AO HAS NOWHERE MENTIONED ABOUT ANY FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSURE OF MATERIAL FACTS. RATHE R WHAT HAS BEEN MENTIONED IN THE `REASONS IS ABOUT THE OMISSION OR MISTAKE COMMITTED BY THE AO HIMSELF. IN OUR CONSIDERED VIEW, THE LAW DOE S NOT GIVE POWERS TO THE AO TO REOPEN AN ASSESSMENT CARRIED OUT U/S 143(3) A FTER THE EXPIRY OF FOUR YEARS UNLESS THE AO IS ABLE TO DEMONSTRATE THAT THE RE WAS FAILURE ON THE PART OF THE ASSESSEE IN DISCLOSURE OF MATERIAL FACTS. IN THIS REGARD, WE FEEL IT APPROPRIATE TO REPRODUCE HEREUNDER THE FIRST PROVIS O TO SECTION 147 OF THE ACT:- PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB-SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION SHALL BE TAKEN UNDER THI S SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR, UNLESS ANY INCOME CHARGEABLE TO TA X HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY 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: IT MAY BE NOTED THAT THE READING OF THE `REASONS, AS REPRODUCED IN EARLIER PART OF THIS ORDER, THAT NEITHER THERE IS A NY ALLEGATION OF `FAILURE AND DISCLOSURE OF MATERIAL FACTS NOR AO HAS MADE OUT A NY CASE OF ANY FAILURE ON THE PART OF ASSESSEE IN DISCLOSURE OF MATERIAL FACT S. THUS THESE `REASONS ARE APPARENTLY CONTRARY TO LAW. 14 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. 7.1.8 FURTHER, AS HAS BEEN RIGHTLY CONTENDED BY THE LEAR NED AR THAT THIS ISSUE IS NO MORE RES INTEGRA. HONBLE BOMBAY HIGH COURT IN MANY JUDGMENTS HAS HELD THAT IN THOSE CASES WHERE THE FIRST PROVIS O TO SECTION 147 IS APPLICABLE, THE REOPENING CANNOT BE DONE UNLESS THE RE IS ALLEGATION IN THE REASONS THAT THERE WAS FAILURE ON THE PART OF THE A SSESSEE IN DISCLOSURE OF MATERIAL FACTS. WE PLACE OUR FIRST RELIANCE UPON TH E JUDGMENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF TATA BUSINESS SUPPORT SERVICES LTD. V. DCIT 232 TAXMAN 702. RELEVANT PARA IS REPRODUCED HERE UNDER:- IN THE PRESENT CASE, WHEN THE REVENUE ALLEGES FAIL URE TO MAKE FULL AND TRUE DISCLOSURE OF MATERIAL FACTS, THEN, T HE TERM FAILURE HAS SOME SPECIFIC LEGAL CONNOTATION. HERE, MATERIAL FACTS ARE PERTAINING TO THE EXPENSES UNDER THE HEAD MANAGEME NT FEES. IT IS APPARENT THAT THE WORDS EMPLOYED ARE MATERIAL FACTS. IT IS NOT JUST FACTS BUT MATERIAL FACTS. THE WORD MATERI AL IN THE CONTEXT MEANS IMPORTANT, ESSENTIAL, RELEVANT CONCE RNED WITH THE MATTER, NOT THE FORM OF REASONING (SEE OXFORD DICT IONARY CONCISE EIGHTH EDITION). JUST AS DISCLOSURE OF EVER Y FACT WOULD NOT SUFFICE BUT FOR PROCEEDING UNDER SECTION 147 NO N DISCLOSURE OUGHT TO BE OF A MATERIAL FACT. 7.2 WE ALSO RELY UPON THE JUDGMENT OF THE HONBLE BOMB AY HIGH COURT IN THE CASE OF TITANOR COMPONENTS LIMITED, SUPRA, AND CIT V. SHRI SHAILESH S.SHAH , SUPRA. FURTHER, RELIANCE IS PLACED BY US ON THE J UDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT V. AVADH TRANSFORMERS (P.) LTD. 51 TAXMANN.COM 369 , WHEREIN THE HONBLE SUPREME COURT HAS UPHELD THE JUDGMENT OF THE ALLAHABAD HIGH COURT, WHEREIN IT WA S HELD BY THE HONBLE HIGH COURT THAT IN ABSENCE OF FAILURE ON THE PART O F THE ASSESSEE IN DISCLOSURE OF MATERIAL FACTS, THE REASSESSMENT PROCEEDINGS COU LD NOT BE INITIATED AFTER 15 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSES SMENT YEAR MERELY ON THE GROUND THAT IN VIEW OF THE RETROSPECTIVE AMENDMENT TO PROVISIONS OF SECTION 80IA, THE ASSESSEE WAS NOT ENTITLED TO DEDUCTION GR ANTED EARLIER UNDER SAID SECTION. THUS, EVEN IN SUCH CASES, WHEN THERE WAS A RETROSPECTIVE AMENDMENT IN THE LAW, THE HONBLE SUPREME COURT HAS APPROVED THE ORDER OF THE HONBLE HIGH COURT, UPHOLDING THE VIEW THAT NO REOPENING CAN BE DONE AFTER THE EXPIRY OF FOUR YEARS UNLESS THERE WAS FAI LURE ON THE PART OF THE ASSESSEE IN DISCLOSURE OF MATERIAL FACTS. IT IS NOT ED THAT THE PRESENT CASE STANDS ON A BETTER FOOTING. 7.3 BEFORE WE PART WITH, IT IS FOUND APPROPRIATE TO REF ER TO A RECENT JUDGMENT OF HONBLE DELHI HIGH COURT IN THE CASE OF PR.CIT V. SAMCOR GLASS LTD. (ITA NO.768/2015 DATED 12.10.2015), WHEREIN HONBLE HIGH COURT CAME DOWN HEAVILY UPON THE INCOME TAX DEPARTMENT FO R REOPENING OF THE ASSESSMENTS OF THE TAX PAYERS, IN A CASUAL MANNER A ND WITHOUT COMPLYING WITH MANDATORY CONDITIONS OF LAW. RELEVANT PORTION OF THE JUDGMENT IS REPRODUCED BELOW:- 4. ALTHOUGH THE ASSESSEES IN BOTH THE APPEALS ARE DIFFERENT, THE ISSUE INVOLVED IN BOTH CASES IS SIMILAR, I.E., WHETHER THE REOPENING OF THE ASSESSMENT UNDER SECTION 147/148 O F THE ACT IS VALID? 5. APART FROM THE FACT THAT THE IMPUGNED ORDER OF THE ITAT SUFFERS FROM NO LEGAL INFIRMITY, THE COURT IS OF TH E VIEW THAT ON THE FACE OF IT, THE REASONS FOR REOPENING OF THE ASSESS MENT IN BOTH THE CASES DID NOT SATISFY THE BASIC REQUIREMENT OF THE LAW, IN AT LEAST IN TWO ASPECTS. ONE WAS THAT THE REOPENING WA S OF ASSESSMENT BEYOND FOUR YEARS AFTER THE AY FOR WHICH THE ORIGINAL ASSESSMENT WAS FRAMED AND YET THE REASONS FOR 16 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. REOPENING DID NOT CATEGORICALLY STATE THAT THERE WA S A FAILURE BY THE ASSESSEES TO DISCLOSE ANY MATERIAL PARTICULARS ON THE BASIS OF WHICH THERE WERE REASONS TO BELIEVE THAT THE INC OME HAS ESCAPED ASSESSMENT. THIS COURT HAS RECENTLY, IN A D ECISION DATED 22 ND SEPTEMBER 2015 IN ITA NO.356 OF 2013 (CIT V. MULTIPLEX TRADING & INDUSTRIAL CO. LTD.), CLEARLY S TATED IN CASES WHERE REOPENING OF ASSESSMENT IS BEYOND FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR THE CONDITION THAT THERE HAS BEEN A FAILURE ON THE PART OF THE ASSESSEE TO T RULY AND FULLY DISCLOSE ALL MATERIAL FACTS MUST BE CONCLUDED WITH CERTAIN LEVEL OF CERTAINTY. 6. SECONDLY, THE COURT FINDS THAT AT LEASE IN RESP ECT OF ONE OF THE ISSUES, VIZ., PAYMENT OF INTEREST ON FIXED DEPO SITS, THE ASSESSEES DREW THE ATTENTION OF THE ASSESSING OFFIC ER (`AO) TO THE FACT THAT THE AMOUNT HAS ALREADY BEEN OFFERED T O TAX AND TAX HAD BEEN PAID AND YET, IN THE ORDER DISPOSING OF TH E OBJECTIONS, THE AO IS COMPLETELY SILENT AS REGARDS THIS OBJECTI ON. 7. THE COURT IS OF THE VIEW THAT NOTWITHSTANDING S EVERAL DECISIONS OF THE SUPREME COURT AS WELL AS THIS COUR T CLEARLY ENUNCIATING THE LEGAL POSITION UNDER SECTION 147/14 8 OF THE ACT, THE REOPENING OF ASSESSMENT IN CASES LIKE THE ONE O N HAND GIVE THE IMPRESSION THAT REOPENING OF ASSESSMENT IS BEIN G DONE MECHANICALLY AND CASUALLY RESULTING IN UNNECESSARY HARASSMENT OF THE ASSESSEE. 8. THE COURT WOULD HAVE BEEN INCLINED TO IMPOSE HE AVY COSTS ON THE REVENUE FOR FILING SUCH FRIVOLOUS APPE ALS BUT DECLINES TO DO SO SINCE THE APPEALS ARE BEING DISMI SSED EX PARTE. HOWEVER, THE COURT DIRECTS THE REVENUE THROU GH THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX (PR CIT) TO ISSUE INSTRUCTIONS TO THE AOS TO STRICTLY ADHERE TO THE L AW EXPLAINED IN VARIOUS DECISIONS OF THE SUPREME COURT AND THE HIGH COURT IN REGARD TO SECTIONS 147/148 OF THE ACT AND MAKE IT M ANDATORY FOR THEM TO ENSURE THAT AN ORDER FOR REOPENING OF AN AS SESSMENT CLEARLY RECORDS THE COMPLIANCE WITH EACH OF THE LEG AL REQUIREMENTS. SECONDLY, THE AOS MUST BE DIRECTED TO STRICTLY 17 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. COMPLY WITH THE LAW EXPLAINED BY THE SUPREME COURT IN GKN DRIVESHAFTS (INDIA) LTD V. INCOME TAX OFFICER (2003 ) 259 ITR 19 (SC) AS REGARDS THE DISPOSAL OF THE OBJECTIONS RAIS ED BY THE ASSESSEE TO THE REOPENING OF THE ASSESSMENT. 7.4 THUS, IN OUR CONSIDERED VIEW, THIS ISSUE IS SQUARE LY COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGMENTS OF THE HONBLE JUR ISDICTIONAL HIGH COURT AND HONBLE SUPREME COURT OF INDIA, AND THEREFORE, REOP ENING IS HELD TO BE INVALID ON THIS GROUND AS WELL. 7.5 THUS, GROUND WITH REGARD TO REOPENING IS ALLOWED A ND REASSESSMENT ORDER IS QUASHED, AND THEREFORE, OTHER GROUNDS WITH RESPECT TO MERITS AND OTHER LEGAL ISSUES ARE NOT BEING ADJUDICATED. ITA NO.5859/MUM/2012 : ASST.YEAR 2006-2007 8 . IN THIS APPEAL, THERE IS DELAY OF 16 DAYS IN FILI NG OF APPEAL BY THE ASSESSEE, SIMILAR TO THAT IN A.Y. 2005-06. WE FOLLOW OUR ORDE R FOR A.Y.2005-06, AS PER OUR OBSERVATIONS GIVEN IN PARA 2 AND 3 OF THIS ORDE R, AND CONDONE THE DELAY, AND ADMIT THIS APPEAL FOR ADJUDICATION, AFTER TAKIN G CONSENT OF THE PARTIES. 8.1 IN THIS APPEAL ALSO, THE LEARNED COUNSEL HAS CHALL ENGED VALIDITY OF REOPENING OF THE ASSESSMENT. IN THIS CASE ALSO THE FACTS ARE SIMILAR. THE ORIGINAL ASSESSMENT PROCEEDINGS WAS DONE U/S 143(3) VIDE ORDER DATED 30.12.2008, SUBSEQUENTLY, A NOTICE WAS ISSUED U/S 1 48 DATED 31.03.2011, I.E., WITHIN FOUR YEARS FROM THE EXPIRY OF THE RELE VANT ASSESSMENT YEAR. THUS, THE ONLY DIFFERENCE IS THAT THIS CASE HAS BEEN REOP ENED WITHIN THE PERIOD OF FOUR YEARS, AND THEREFORE, THE ASSESSEE SHALL NOT G ET THE BENEFIT OF PROVISO TO SECTION 147 OF THE ACT. 9 . THE `REASONS RECORDED BY THE AO ARE REPRODUCED H ERE UNDER FOR THE SAKE OF READY REFERENCE :- 18 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. IN THIS CASE, THE ASSESSEE FILED RETURN OF INCOME FOR THE A.Y. 20906-07 ON 28/11/2006, DECLARING TOTAL INCOME AT R S.8,31,753/- ASSESSMENT U/S 143(3) WAS COMPLETED ON 30/12/2008, DETERMINING TOTAL INCOME AT RS.8,30,050/-, BEING LO NG TERM CAPITAL GAIN, AFTER SET OFF BUSINESS LOSS AND DEPRE CIATION AGAINST THE CURRENT YEARS BUSINESS INCOME. IRREGULAR ALLOWANCE OF DEPRECIATION : IT IS SEEN FROM DEPRECIATION STATEMENT AS PER INCO ME TAX ACT, THE ASSESSEE HAS CLAIMED DEPRECIATION OF RS.57,62,9 93/- ON `TIME SHARING UNIT PROPERTY. THE PROPERTY IS ON LE ASE FOR A PERIOD OF 99 YEARS AND ALSO THE RIGHT TO PROPERTY I S ACQUIRED PRIOR TO 01/04/1998, AS SUCH, THE ASSESSEE IS NOT ELIGIBL E FOR DEPRECIATION EITHER UNDER THE CATEGORY OF INTANGIBL E ASSETS OR OTHER. OMISSION TO DISALLOW THE SAME HAS RESULTED I NTO UNDER- ASSESSMENT OF RS.57,62,993/-. IN VIEW OF THE ABOVE, I HAVE REASONS TO BELIEVE TH AT, ON THE ABOVE ISSUE, THE INCOME CHARGEABLE TO TAX OF RS.57, 62,993/- ON ACCOUNT OF DEPRECIATION, HAS ESCAPEMENT ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE I.T.ACT. THEREFORE, T HE CASE IS REOPENED BY ISSUE OF NOTICE U/S 148 OF THE INCOME T AX ACT, AFTER GETTING APPROVAL FROM THE HONBLE CIT-8, MUMBAI. IS SUE NOTICE U/S 148 OF THE I.T.ACT. 10 . THE PERUSAL OF THESE `REASONS WOULD SHOW THAT, A GAIN, THESE `REASONS HAVE BEEN RECORDED BY THE AO BY MAKING EX AMINATION OF RECORDS, WHICH ARE PART OF THE EXISTING ASSESSMENT RECORDS, WHICH WERE AVAILABLE WITH AO SINCE THE TIME OF THE FRAMING OF THE ORIGINAL AS SESSMENT ORDER U/S 143(3). IT IS NOTED THAT IN THIS CASE ALSO, NO FRESH MATERI AL HAS COME INTO THE POSSESSION OF THE AO. THEREFORE, FOLLOWING OUR ORDE R OF ASSESSMENT YEAR 2005-2006, WE HOLD THAT THE `REASONS ARE NOT VALID IN THE EYES OF LAW ON THIS GROUND, I.E., THE `REASONS HAVE BEEN RECORDED WITH OUT THERE BEING ANY FRESH 19 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. TANGIBLE MATERIAL COMING INTO THE POSSESSION OF THE AO AFTER THE FRAMING OF THE ORIGINAL ASSESSMENT U/S 143(3). 11 . FURTHER, THE LEARNED COUNSEL HAS TAKEN ONE MORE A RGUMENT, I.E., IN THIS CASE THE REOPENING HAS BEEN DONE ON THE BASIS OF CH ANGE OF OPINION BY THE AO. IT WAS ARGUED BY HIM THAT THE ISSUE OF DEPRECIA TION ON TIME SHARING UNIT PROPERTY, WHICH HAS BEEN RAISED IN THE AFORESAID `R EASONS, CAME UP FOR CONSIDERATION BEFORE THE AO IN ASSESSMENT YEAR 2003 -2004, WHEREIN IT WAS ALLOWED BY THE ASSESSING OFFICER, AFTER TAKING PROP ER DETAILS AND DOCUMENTARY EVIDENCES FROM THE ASSESSEE. OUR ATTENT ION HAS BEEN DRAWN ON VARIOUS PAGES OF THE PAPER BOOK, WHEREIN THE AO HAD RAISED QUERY ON THIS VERY ISSUE IN THE ASSESSMENT PROCEEDINGS OF ASSESSM ENT YEAR 2003-2004, REPLIES WERE SUBMITTED BY THE ASSESSEE, GIVING FULL DETAILS AND JUSTIFICATION, THESE WERE CONSIDERED BY THE AO, AND THEREAFTER ONL Y AFTER CONSIDERATION OF THESE REPLIES AND DETAILS / DOCUMENTS OF THE ASSESS EE, THE AO PASSED ORDER U/S 143(3), WHEREIN CLAIM OF THE ASSESSEE WAS ALLOW ED AND NO DISALLOWANCE WAS MADE OF THE DEPRECIATION ON TIME SHARING UNIT P ROPERTY. IT WAS, THUS, ARGUED THAT IT IS A CASE OF CHANGE OF OPINION ON TH E PART OF THE AO. RELIANCE WAS PLACED ON THE JUDGMENT OF THE HONBLE BOMBAY HI GH COURT IN THE CASE OF DIT V. HSBC ASSET MANAGEMENT INDIA PVT. LTD. (IT A PPEAL NO.254 OF 2012, DATED 18 TH JUNE, 2014) FOR THE PROPOSITION THAT IF DEPRECIATION IS ALLOWED IN FIRST YEAR, THEN IN SUBSEQUENT YEARS IT BECOMES PART OF BLOCK OF ASSETS, AND THEREFORE, THE DEPRECIATION IS ALLOWED ON BLOCK OF ASSETS AND NOT ON THE INDIVIDUAL ASSETS, AND THEREFORE, THE SAME C ANNOT BE DISALLOWED. WE HAVE CONSIDERED THIS ASPECT ALSO VERY CAREFULLY. WE FIND FORCE IN THE ARGUMENT OF THE LEARNED COUNSEL. IT IS NOTED THAT T HIS ISSUE HAS ALREADY BEEN 20 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. EXAMINED BY THE ASSESSING OFFICER HIMSELF IN THE AS SESSMENT YEAR 2003- 2004. THIS ISSUE WAS AGAIN EXAMINED BY THE ASSESSIN G OFFICER IN THE ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) OF THE IMPUGNED A SSESSMENT YEAR. THEREFORE, REOPENING THE SAME, NOW ON THIS VERY ISS UE, WHICH HAS ALREADY BEEN EXAMINED BY THE ASSESSING OFFICER, AMOUNTS TO REVIEW OR CHANGE OF OPINION ON THE PART OF THE ASSESSING OFFICER. IT IS SETTLED LAW THAT `REASONS CANNOT BE RECORDED, AS PER LAW, ON THE BASIS OF CHA NGE OF OPINION BY THE ASSESSING OFFICER. THEREFORE, VIEWED FROM THIS ANGL E ALSO, IMPUGNED `REASONS ARE INVALID IN THE EYES OF LAW, AND THERE FORE, REOPENING OF THE CASE AND RESULTANT REASSESSMENT ORDER BECOMES BAD IN LAW , AND THEREFORE, THE SAME IS HEREBY QUASHED. 12 . SINCE THE APPEAL HAS BEEN ALLOWED ON THE LEGAL GR OUNDS ITSELF, WE REFRAIN FROM ADJUDICATING OTHER GROUNDS RAISED BY T HE ASSESSEE ON MERITS. 13 . IN THE RESULT, BOTH THE APPEALS ARE ALLOWED, ON T HE GROUNDS AS DISCUSSED ABOVE. ORDER PRONOUNCED ON THIS 28 TH DAY OF OCTOBER, 2015. '( 28.10.2015 SD/- SD/- ( SAKTIJIT DEY ) ( ASHWANI TANEJA ) * + / JUDICIAL MEMBER ! + / ACCOUNTANT MEMBER MUMBAI; ' DATED : 28 TH OCTOBER, 2015. DEVDAS* 21 ITA NOS.5858 & 5859/MUM/2012 M/S.GOLDEN TOBACCO LIMITED. * ,- .- / COPY OF THE ORDER FORWARDED TO : / BY ORDER, - * //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 2 ( ) / THE CIT, MUMBAI. 4. 2 / CIT(A) - 16, MUMBAI 5. -3 * * , , / DR, ITAT, MUMBAI 6. 45 / GUARD FILE.