The Kadiyan Coop. L&C Society Ltd., Panipat V. ACIT, Circle Panipat, Panipat

ITA 667/DEL/2018

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2423 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2007-2008
• Appeal Filed On: 29-01-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: K C ANEJA
• Keywords: Difference of opinion; Revised return; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 43B; 142(1); 147; 145; 148; 263; 144; 154; 15; 139

Judgement Text

PAGE | 1 INCOME TAX APPELLATE TRIBUNAL DELHI BENCH F : NEW DELHI BEFORE SHRI AMIT SHUKLA , JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO. 667/DEL/2018 (ASSESSMENT YEAR: 2007 - 08 ) THE KADIYAN COOP L&C SOCIETY LTD, V&PO SEWAH, PANIPAT, HARYANA PAN: AAALT0541R VS. ACIT, CIRCLE PANIPAT (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.C. ANEJA, ADV REVENUE BY: SHRI N.K. BANSAL, SR. DR DATE OF HEARING 23/08 / 2018 DATE OF PRONOUNCEMENT 1 3 / 1 1 / 2018 O R D E R PER PRASHANT MAHARISHI , A. M. 1 . THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD CIT ( A), KARNAL DATED 01.12.2017 FOR THE ASSESSMENT YEAR 2007 - 08. 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE PROCEEDINGS SOUGHT TO BE INITIATED U/S 148 OF THE IT ACT 1961 ARE ABINITIO VOID AND DESERVE TO BE QUASHED. 2. THAT THERE WAS NO REGULAR ASSESSMENT U/S 143 OR 144 OF THE INCOME TAX ACT, 1961. THE ALLEGED ASSESSMENT MADE U/S 143(1) OF THE INCOME TAX ACT ARE WRONG AND ILLEGAL AND CONSEQUENTLY ASSESSMENT MADE U/S 148 IS ILLEGAL AND THE LD CIT(A) ERRED IN CONFIRMING TH E SAME. 3. THAT TWO PARALLEL PROCEEDINGS CONDUCTED U/S 154 & 148 OF THE IT ACT 1961 ARE NOT WARRANTED BY LAW AND ARE WRONG AND ILLEGAL. 4. THAT THE APPELLANT A COOPERATIVE SOCIETY IS LIABLE TO EXEMPTIONS U/S 80P(2) VI OF THE INCOME TAX ACT, 1961 TO INVOK E FOR MUTUAL INTEREST OF EMPLOYMENT. 3 . THE APPELLANT ASSESSEE IS A COOPERATIVE SOCIETY, WHICH IS PRIMARILY HAVING OBJECT OF PROMOTING THE ECONOMIC INTEREST OF MANUAL LABOURERS BY PROVIDING SUITABLE AND PROFITABLE EMPLOYMENT TO THEM BY OBTAINING PAGE | 2 CONTRACT WO RK FROM GOVERNMENT OR PRIVATE. THE ASSESSEE FILED ITS RETURN OF INCOME ON 21 6 2007 CLAIMING DEDUCTION UNDER SECTION 80 P (2) OF THE INCOME TAX ACT, 1961. THE RETURN OF INCOME WAS ACCEPTED AS IT IS WIDE ORDER UNDER SECTION 143 (1) (A) OF THE ACT ON 19/11/2 007. 4 . SUBSEQUENTLY SHOW CAUSE NOTICE UNDER SECTION 154/155 WAS ISSUED ON 21/8/2009 OF THE INCOME TAX ACT TO DISALLOW DEDUCTION OF 5 40639/ CLAIMED UNDER SECTION 80P (2) OF THE ACT OUT OF THE TOTAL INCOME OF 590639/ . ONCE AGAIN, NOTICE UNDER SECTION 15 4 READ WITH SECTION 155 WAS ISSUED ON 25/11/2010 AND SUCH PROCEEDINGS WERE NOT FINALIZED . 5 . MEANWHILE FURTHER NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT WAS ISSUED ON 25/3/2011 AND SERVED UPON THE ASSESSEE TO WITHDRAW DEDUCTION AMOUNTING TO 5 90639/ C LAIMED UNDER SECTION 80P (2) (A) (VI) OF THE ACT. CONSEQUENTLY, THE ASSESSMENT ORDER UNDER SECTION 147 READ WITH SECTION 148 WAS PASSED ON 18/11/2011 WHEREIN THE DEDUCTION CLAIMED BY THE ASSESSEE WAS WITHDRAWN. 6 . THE ASSESSEE CHALLENGED THE ORDER OF THE ASSE SSING OFFICER BEFORE THE COMMISSIONER OF INCOME TAX APPEALS KARNAL WHO WIDE ORDER DATED 1/12/2017 DISMISSED THE APPEAL OF THE ASSESSEE ON THE ISSUE THAT THE NOTICE UNDER SECTION 148 OF THE ACT WAS VALID AS THE PROCEEDINGS UNDER SECTION 154 OF THE ACT WAS D ROPPED. HE FURTHER UPHELD THE ADDITION MADE BY THE LEARNED ASSESSING OFFICER SINCE THE PROVISIONS OF SECTION 80P OF THE INCOME TAX ACT IN THE SENSE OF EXPENSES CLAIM SOLELY ON THE COLLECTIVE DISPOSAL OF THE LABOUR OF ITS MEMBERS HAS NOT BEEN PROVED BY THE APPELLANT. THEREFORE, ASSESSEE AGGRIEVED BY THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX APPEALS HAS PREFERRED AN APPEAL BEFORE US. 7 . WE HAVE HEARD THE RIVAL PARTIES AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES. WITH RESPECT TO THE FIRST OBJECTION OF THE ASSESSEE THAT THE 154 PROCEEDINGS HAVE NOT BEEN CONCLUDED AND THEREFORE THE NOTICE UNDER SECTION 148 OF THE INCOME TAX ACT CANNOT BE ISSUED AS THE TWO PARALLEL PROCEEDINGS CANNOT RUN CONCURRENTLY. IN THIS REGARD THE LEARNED ASSESSING OFFI CER HAS SHOWN THAT THE PROCEEDINGS INITIATED UNDER SECTION 154 OF THE INCOME TAX ACT HAS ALREADY BEEN DROPPED BY THE LEARNED ASSESSING OFFICER THEREFORE THERE IS NO CONCURRENT PROCEEDINGS RUNNING. THE ASSESSEE HAS PAGE | 3 RELIED UPON THE DECISION OF THE HONOURABLE CALCUTTA HIGH COURT IN CASE OF BERGER PAINTS INDIA LTD VERSUS ASSISTANT COMMISSIONER OF INCOME TAX (2010) 322 ITR 369 OF HONOURABLE CALCUTTA HIGH COURT WHICH IS DECIDED ON THE IDENTICAL FACTS AND CIRCUMSTANCES OF THE CASE SETTING ASIDE THE NOTICE ISSUED U NDER SECTION 148 OF THE INCOME TAX ACT AS UNDER - 2. ON DECEMBER 28, 1999, THE PETITIONER SUBMITTED A RETURN OF ITS INCOME FOR THE ASSESSMENT YEAR 1999 - 2000 UNDER SECTION 139 OF THE INCOME - TAX ACT, DISCLOSING TOTAL INCOME OF RS. 6,76,22,600. THE PETITIONER LATER FILED A REVISED RETURN ON MARCH 29, 2001, DISCLOSING AN INCOME OF RS. 3,48,84,790. 3. THE REDUCTION OF INCOME WAS, ACCORDING TO THE PETITIONER, BY REASON OF DECREASE IN THE VALUE OF THE STOCK - IN - TRADE OF RAJDOOT PAINTS LTD., WHICH HAD BEEN AMALGAMAT ED WITH THE PETITIONER, UPON CHANGE IN THE ACCOUNTING METHOD AND ADOPTION OF THE ACCEPTED METHOD OF VALUATION OF STOCKS, FOLLOWED BY THE PETITIONER. 4. THE ASSESSING OFFICER DID NOT ISSUE ANY NOTICE OF INQUIRY IN RESPECT OF THE RETURN UNDER SECTION 142(1) OF THE INCOME - TAX ACT. NOR DID THE ASSESSING OFFICER ISSUE ANY NOTICE UNDER SECTION 143(2) OF THE INCOME - TAX ACT CALLING UPON THE PETITIONER TO SUBSTANTIATE ANY CLAIM IN THE RETURN OF ANY LOSS, EXEMPTION, DEDUCTION, ALLOWANCE OR RELIEF. 5. THE ASSESSING OF FICER ISSUED AN INTIMATION UNDER SECTION 143(1) OF THE INCOME - TAX ACT ON NOVEMBER 20, 2001, ACCEPTING THE ORIGINAL RETURN FILED BY THE PETITIONER AND INFORMING THE PETITIONER THAT RS. 2,61,50,812 WAS REFUNDABLE TO THE PETITIONER ALONG WITH INTEREST OF RS. 79,75,994 AFTER GIVING CREDIT FOR ADVANCE TAX PAID AND TAXES DEDUCTED AT SOURCE. 6. ON OR ABOUT JANUARY 3, 2003, THE PETITIONER RECEIVED A NOTICE UNDER SECTION 154 OF THE INCOME - TAX ACT DATED DECEMBER 24, 2002, WHEREBY THE ASSESSING OFFICER PROPOSED TO REC TIFY MISTAKES WHICH HAD ALLEGEDLY OCCURRED IN AN INTIMATION ISSUED UNDER SECTION 143(1) DATED MARCH 27, 2002. 7. ACCORDING TO THE PETITIONER, THE PETITIONER HAD NOT, TILL THEN BEEN SERVED WITH ANY INTIMATION DATED MARCH 27, 2002, UNDER SECTION 143(1) OF TH E INCOME - TAX ACT. PAGE | 4 8. AFTER RECEIPT OF THE SAID NOTICE DATED DECEMBER 24, 2002, THE PETITIONER MADE ENQUIRIES AND CAME TO LEARN THAT THE ASSESSING OFFICER HAD ISSUED A REVISED INTIMATION DATED MARCH 27, 2002, ACCEPTING THE REVISED RETURN FILED BY THE PETITI ONER ON MARCH 29, 2001. 9. THE ALLEGED REASONS FOR RECTIFICATION OF THE INTIMATION DATED MARCH 27, 2002, AS DISCLOSED IN THE NOTICE, ARE AS FOLLOWS : ( I )THE DIFFERENCE OF UNPAID CUSTOMS AND EXCISE DUTY OF RS. 307.56 LAKHS BETWEEN OPENING AND CLOSING STOCK, AT THE END OF THE ACCOUNTING YEAR WAS NOT DEDUCTIBLE. ( II )DEDUCTION OF RS. 25.97 LAKHS TOWARDS SALES TAX LIABILITY WAS INADMISSIBLE. ( III )TAXABLE INCOME OF RS. 30 LAKHS WAS SUPPRESSED BY INADMISSIBLE DEBITS IN THE PROFIT AND LOSS ACCOUNT. ( IV ) THE REDUCTION IN INCOME OF RS. 327.38 LAKHS, ON ACCOUNT OF THE ALLEGED CHANGE IN THE ACCOUNTING POLICY WAS LIABLE TO BE DISALLOWED. 10. BY A LETTER DATED JULY 28, 2003, THE PETITIONER SUBMITTED A DETAILED REPLY TO THE RECTIFICATION NOTICE DATED DECEMBER 24 , 2002, DEALING WITH ALL THE ALLEGATIONS/CONTENTIONS THEREIN. 11. THE ASSESSING OFFICER DID NOT PASS ANY ORDER UNDER SECTION 154 OF THE INCOME - TAX ACT AND THE PROCEEDINGS FOR RECTIFICATION WERE DROPPED. IN OTHER WORDS, THE ASSESSING OFFICER, AFTER CONSIDER ING THE SUBMISSIONS OF THE PETITIONER, IN THE REPLY TO THE SHOW CAUSE, WAS OF THE VIEW THAT RECTIFICATION OF THE ASSESSMENT ORDER WAS NOT CALLED FOR. 12. HOWEVER, THE SAME OFFICER ISSUED THE IMPUGNED NOTICE DATED AUGUST 28, 2003, UNDER SECTION 148 OF THE I NCOME - TAX ACT FOR REASSESSMENT OF INCOME FOR THE YEAR IN QUESTION UNDER SECTION 147 OF THE SAID ACT, AND CALLED UPON THE PETITIONER TO FILE A REVISED RETURN. THE IMPUGNED NOTICE DOES NOT DISCLOSE THE REASONS FOR THE BELIEF THAT INCOME HAD ESCAPED ASSESSMEN T. PAGE | 5 13. BY A LETTER DATED SEPTEMBER 26, 2003, THE PETITIONER REQUESTED THE ASSESSING OFFICER TO WITHDRAW THE NOTICE, INTER ALIA , CONTENDING THAT NO INCOME OF THE PETITIONER HAD ESCAPED ASSESSMENT. THE PETITIONER ALSO CALLED UPON THE ASSESSING OFFICER TO FUR NISH REASONS TO THE PETITIONER FOR THE DECISION TO REASSESS INCOME UNDER SECTION 147 OF THE INCOME - TAX ACT. 14. ON SEPTEMBER 30, 2003, THE PETITIONER FILED ITS REVISED RETURN UNDER PRO TEST, PURSUANT TO THE IMPUGNED NOTICE UNDER SECTION 148. 15. THE PETITIONER WAS LATER FURNISHED WITH REASONS FOR REOPENING ASSESSMENT, WHICH ARE PRACTICALLY THE SAME AS THE REASONS FOR THE NOTICE UNDER SECTION 154 OF THE INCOME - TAX ACT, FOR RECTIFICATION OF THE ALLEGED MISTAKES IN THE REVISED ASSESSMENT ORDER. THE RECTI FICATION NOTICE HAD BEEN DROPPED BY THE SAME ASSESSING OFFICER. 16. IN BRIEF, THE REASONS WERE AS FOLLOWS : ( I ) THE DIFFERENCE OF RS. 307.56 LAKHS BETWEEN UNPAID CUSTOMS AND EXCISE DUTY ON OPENING STOCK AT THE BEGINNING OF THE ACCOUNTING YEAR AND CLOSING STOCK AT THE END OF THE ACCOUNTING YEAR, WAS NOT ALLOWABLE IN VIEW OF SECTION 43B OF THE INCOME - TAX ACT. THE DEPARTMENT CONTENDED THAT THE ISSUE WAS SQUARELY COVERED BY THE DECISION OF THIS COURT IN CIT V. BERGER PAINTS ( INDIA ) LTD. ( NO. 1 )REPORTED IN [2002] 254 ITR 498 . ( II ) THE CLAIM OF THE PETITIONER TO REDUCTION OF INCOME BY RS. 3,27,37,810, ON ACCOUNT OF DIFFERENCE IN VALUATION OF THE STOCK - IN - TRADE OF RAJDOOT PAINTS LTD. NOT DEBITED TO THE PROFIT AND LOSS ACCOUNT, ALLEGEDLY UPON CHANGE IN ACCOUNTING PROCEDURE AND ADOPTION OF THE PROCEDURE FOLLOWED BY THE PETITIONER, AFTER AMALGAMATION OF RAJDOOT PAINTS LTD. WITH THE PETITIONER. IT WAS ALLEGED THAT THE ACCOUNTI NG PROCEDURE FOLLOWED BY RAJDOOT PAINTS LTD. HAD NOT BEEN DISCLOSED, AND THE DEDUCTION WAS IN VIOLATION OF SECTION 145 OF THE INCOME - TAX ACT. ( III ) DEDUCTION OF RS. 12.50 CRORES UNDER SECTION 80 - IA OF THE INCOME - TAX ACT, SHOWING THE SAME TO BE INCOME OF THE PONDICHERRY UNIT, COULD NOT BE ALLOWED AS THE PROFIT OF THE PONDICHERRY UNIT HAD BEEN INFLATED BY MANIPULATING ALLOCATION OF EXPENSES. ( IV ) THE ALLOWABLE DEDUCTION FROM INCOME FROM TECHNICAL SERVICES BEING 50 PER CENT, OF THE NET INCOME, DEDUCTION OF RS. 10.25 CRORES, WHICH WAS 50 PER CENT, OF THE GROSS CONSULTANCY CHARGES IN CONVERTIBLE FOREIGN EXCHANGE, COULD NOT BE ALLOWED. ( V ) DEBIT OF RS. 194.6 LAKHS ON ACCOUNT OF PAYMENT OF SALES TAX IN PAGE | 6 THE PROFIT AND LOSS ACCOUNT WITHOUT CORRESPONDING CREDIT OF SALES TAX RECEIPTS RESULTED IN EXCESSIVE DEDUCTION AND UNDERSTATEMENT OF INCOME, WHICH COULD NOT BE ALLOWED. ( VI ) DEDUCTION OF RS. 25.97 LAKHS CREDITED IN THE PROFIT AND LOSS ACCOUNT ON ACCOUNT OF CESSATION OF SALES TAX LIABILITY, COULD NOT BE ALLOWED, AS THE CONTENTION OF THE PETITIONER THAT THE AMOUNT HAD ALREADY BEEN DISALLOWED UNDER SECTION 43B IN THE RESPECTIVE YEAR WAS INCORRECT. IT IS ALLEGED THAT THE SAID AMOUNT OF RS. 25.97 LAKHS WAS PAID BY THE ASSESSEE AND ALLOWED AS DEDUCTION IN THE YEAR OF PAYMENT. ( VII ) INCOME OF RS. 30 LAKHS HAD ESCAPED ASSESSMENT BY REASON OF INADMISSIBLE DEBITS IN THE PROFIT AND LOSS ACCOUNT. 17. THE PETITIONER SUBMITTED A DETAILED REPRESENTATION DEALING WITH EACH OF THE GROUNDS DISCLOSED BY THE ASSESSING OFFICER FOR THE IMPUGNED NOTICE UNDER SECTION 148 OF THE INCOME - TAX ACT. 18. DR. DEBI PRASAD PAL APPEARING ON BEHALF OF THE PETITIONER SUBMITTED THAT THE GROUNDS DISCLOSED BY THE RESPONDENTS WERE MISCONCEIVED, AGAINST THE SETTLED PRINCIPLES OF LAW AND NO G ROUNDS IN LAW FOR REOPENING ASSESSMENT. 19. AS POINTED OUT BY DR. PAL, THE FIRST GROUND, OF THE DIFFERENCE BETWEEN THE UNPAID EXCISE AND CUSTOMS DUTY ON THE OPENING STOCK AT THE START OF THE ACCOUNTING YEAR AND THE CLOSING STOCK AT THE END OF THE ACCOUNTIN G YEAR, NOT BEING DEDUCTIBLE WAS ALSO THE FIRST GROUND FOR THE RECTIFICATION NOTICE DATED DECEMBER 24, 2002, UNDER SECTION 154 OF THE INCOME - TAX ACT, WHICH HAD BEEN DROPPED. MOREOVER, THE DECISION OF THIS COURT IN CIT V. BERGER PAINTS ( INDIA ) LTD. ( NO. 1 ) [2002] 254 ITR 498 ON WHICH THIS GROUND IS BASED, HAS BEEN REVERSED BY THE SUPREME COURT IN BERGER PAINTS ( INDIA ) LTD. V. CIT REPORTED IN [2004] 266 ITR 99 . 20. DR. PAL RIGHTLY ARGUED THAT THE SECOND GROUND DISCLOSED FOR ISSUANCE OF THE IMPUGNED NOTICE IS THE SAME AS THE FOURTH GROUND DISCLOSED IN THE RECTIFICATION NOTICE UNDER SECTION 154 OF THE INCOME - TAX ACT, WHICH HAD BEEN DROPPED UPON CONSIDERATION OF THE SUBMISSION OF THE PETITIONER, IN ITS REPLY THERETO. 21. DR. PAL SUBMITTED THAT THE CONTENTION OF THE ASSESSING OFFICER, THAT THE PETITIONER HAD NOT DISCLOSED THE DIFFERENCE IN THE ACCOUN TING PROCEDURE OF RAJDOOT PAINTS, WAS UNFOUNDED. PAGE | 7 22. DR. PAL FURTHER SUBMITTED THAT THE STOCKS OF RAJDOOT PAINTS LTD. A COMPANY INCORPORATED UNDER THE COMPANIES ACT, 1956, WHICH WAS AMALGAMATED WITH THE PETITIONER WITH EFFECT FROM OCTOBER 1, 1998, HAD EARL IER BEEN VALUED AS PER THE ACCOUNTING METHODS OF RAJDOOT PAINTS LTD. AFTER AMALGAMATION THERE WAS A CHANGE IN THE ACCOUNTING METHOD AND THE MORE ACCEPTABLE METHOD OF ACCOUNTING SO LONG FOLLOWED BY THE PETITIONER WAS APPLIED FOR VALUATION OF THE STOCKS OF R AJDOOT PAINTS LTD. 23. DR. PAL ARGUED THAT THE DIFFERENCE IN THE ACCOUNTING PROCEDURE HAD BEEN DISCUSSED IN THE AUDITOR'S NOTE TO THE STATEMENT OF ACCOUNTS FILED WITH THE ASSESSING OFFICER ALONG WITH THE REVISED RETURN. THE PETITIONER HAD ALSO EXPLAINED TH E DIFFERENCE IN ITS REPLY. THE ASSESSING OFFICER WAS DULY SATISFIED WITH THE PETITIONER'S REPLY AND ACCORDINGLY DROPPED THE PROCEEDINGS UNDER SECTION 154 OF THE INCOME - TAX ACT. 24. DR. PAL SUBMITTED THAT THE ASSESSING OFFICER WAS IN EFFECT TRYING TO REVIVE THE SAID SECTION 154 PROCEEDINGS, ON THE BASIS OF THE SAME MATERIALS, WHICH HAD EARLIER BEEN CONSIDERED AND/OR IN OTHER WORDS, ON MERE CHANGE OF OPINION, WHICH WAS NOT PERMISSIBLE IN LAW. 25. WITH REGARD TO THE THIRD GROUND OF THE DEDUCTION OF RS. 12.50 C RORES ON ACCOUNT OF INCOME FROM THE PONDICHERRY UNIT UNDER SECTION 80 - IA BEING DISALLOWABLE, DR. PAL POINTED OUT THAT THE METHOD OF ALLOCATION OF EXPENSES FOR COMPUTATION OF THE INCOME OF THE PONDICHERRY UNIT DURING THE FINANCIAL YEAR IN QUESTION WAS FOLLO WED IN SUBSEQUENT YEARS. 26. THE ISSUE IS NOW COVERED BY A DECISION DATED OCTOBER 17, 2006, OF THE INCOME - TAX APPELLATE TRIBUNAL, 'E' BENCH, KOLKATA, IN FAVOUR OF THE PETITIONER IN RESPECT OF THE ASSESSMENT YEAR 2000 - 01. 27. THE TRIBUNAL, INTER ALIA , HELD AS FOLLOWS : 'ON GOING THROUGH THE BASIS OF ALLOCATION OF THE SAID COMMON HEAD OFFICE AND SELLING EXPENSES ADOPTED BY THE ASSESSEE CONSISTENTLY FROM THE ASSESSMENT YEAR 1998 - 99, WE ARE OF THE CONSIDERED VIEW THAT THE SAID BASIS ADOPTED BY THE ASSESSEE FOR ALLOCATION OF COMMON EXPENSES IS A REASONABLE AND SCIENTIFIC BASIS AND DOES NOT CALL FOR ANY MODIFICATION. THE BASIS ACCEPTED BY THE ASSESSING OFFICER IS ARBITRARY AS HE HAS NOT STATED THE REASON FOR REJECTION OF THE ASSESSEE'S METHOD, HE HAS NOT STATED H OW HE ARRIVED AT 20 PER CENT, FOR ALLOCATING COMMON HEAD OFFICE EXPENSES WHICH SHOWS HE HAS TAKEN AN AD HOC FIGURE AND WE ACCEPT THAT PROFIT RATIO CANNOT BE APPLIED PAGE | 8 CONSISTENTLY IN ALL YEARS. MOREOVER, IN ADDITION TO THE AUDITED ACCOUNTS OF THE COMPANY, TH E ASSESSEE MAINTAINS SEPARATE ACCOUNTS FOR THE PONDICHERRY UNIT TO ASCERTAIN ITS PROFIT AND WHICH AGAIN IS CERTIFIED BY THE AUDITORS. THE SAME SHOULD BE ACCEPTED. WE ARE IN AGREEMENT WITH THE CONTENTION OF THE LEARNED AUTHORISED REPRESENTATIVE WHICH IS SUP PORTED BY THE DECISIONS OF THE HON'BLE SUPREME COURT AS STATED ABOVE THAT ONCE THE DEPARTMENT HAS ACCEPTED A DECISION ON A PARTICULAR ISSUE BY NOT CHALLENGING THE SAME BEFORE ANY HIGHER FORUM IT IS NOT OPEN FOR IT TO CONTEND IN THE CONTRARY ON THE SAME ISS UE IN A LATER YEAR. WE WOULD REITERATE THAT IN THE PRESENT CASE THE DEPARTMENT HAS ACCEPTED THE BASIS OF ALLOCATION OF COMMON HEAD OFFICE AND SELLING EXPENSES IN THE ASSESSMENT YEAR 1998 - 99 AND THERE IS NO DISPUTE AS TO THE FACT THAT THE SAME BASIS HAS BEE N ADOPTED BY THE ASSESSEE IN THE ASSESSMENT YEAR 2000 - 01 WHICH ARE BEFORE US. FOLLOWING THE RATIO LAID DOWN IN THE DECISIONS RENDERED BY THE HON'BLE SUPREME COURT, WE UPHOLD THE DECISION OF THE COMMISSIONER OF INCOME - TAX (APPEALS) ON THIS ISSUE AND THUS DI SMISS GROUND NOS. ( III ) AND ( IV ) RAISED BY THE DEPARTMENT.' 28. BY AN ORDER DATED JANUARY 4, 2006, PASSED IN EXERCISE OF POWER UNDER SECTION 263 OF THE INCOME - TAX ACT, THE COMMISSIONER OF INCOME - TAX (APPEALS) DISALLOWED THE DEDUCTION OF RS. 12.39 CRORES C LAIMED BY THE PETITIONER FOR THE ASSESSMENT YEAR 2003 - 04 UNDER SECTION 80 - IB OF THE INCOME - TAX ACT IN RESPECT OF THE PONDICHERRY AND GOA UNITS. 29. THE INCOME - TAX APPELLATE TRIBUNAL, 'E' BENCH, KOLKATA, RELYING ON ITS EARLIER ORDER DATED OCTOBER 17, 2006, SET ASIDE THE ORDER DATED JANUARY 4, 2006, OF THE COMMISSIONER OF INCOME - TAX (APPEALS). THE TRIBUNAL HELD AS FOLLOWS : 'IN OUR CONSIDERED OPINION, THE CLAIM UNDER SECTION 80 - IB FOR THE PONDICHERRY UNIT HAS ALREADY BEEN CONSIDERED AND THE FACTS OF THE CLAIM OF DEDUCTION UNDER SECTION 80 - IB FOR THE GOA UNIT ARE ALSO SIMILAR TO THAT OF THE PONDICHERRY UNIT. RESPECTFULLY FOLLOWING THE DECISION OF THE INCOME - TAX APPELLATE TRIBUNAL DATED OCTOBER 17, 2006 ( SUPRA ) IN THE CASE OF THE ASSESSEE, WE ARE OF THE CONSIDER ED OPINION THAT THE DEPARTMENT SHOULD HAVE ACCEPTED THE ALLOCATION MADE BY THE ASSESSEE AND THE ORDER OF THE ASSESSING OFFICER, IN ANY CASE, COULD NOT BE CONSIDERED ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ORDER UNDER S ECTION 263 CANNOT, THEREFORE, BE SUSTAINED. THE APPEAL OF THE ASSESSEE IS, THEREFORE, ALLOWED.' 30. AS POINTED OUT BY DR. PAL, THE DEPARTMENT DID NOT APPEAL AGAINST THE AFORESAID ORDERS OF THE INCOME - TAX APPELLATE TRIBUNAL REFERRED TO ABOVE, WHICH HAVE ASS UMED FINALITY. IN VIEW OF THE CATEGORICAL FINDING OF THE INCOME - TAX APPELLATE TRIBUNAL THAT THE ALLOCATION OF COMMON EXPENSES FOR THE ASSESSMENT YEAR 1998 - 99 WAS REASONABLE AND SCIENTIFIC, IT IS NOT OPEN TO THE DEPARTMENT TO OPEN REASSESSMENT ON THE GROUND OF THE INCOME OF THE PONDICHERRY UNIT HAVING BEEN INFLATED BY MANIPULATION IN ALLOCATION OF EXPENSES. THE DECISION OF THE TRIBUNAL IS BINDING ON THE DEPARTMENT. PAGE | 9 31. THE FOURTH GROUND DISCLOSED BY THE ASSESSING OFFICER FOR REOPENING ASSESSMENT, THAT THE PE TITIONER HAD CLAIMED DEDUCTION UNDER SECTION 80 - O OF 50 PER CENT, OF THE GROSS INCOME IN CONVERTIBLE FOREIGN EXCHANGE, WITHOUT DEDUCTION OF EXPENSES WAS CATEGORICALLY DENIED BY THE PETITIONER IN ITS REPLY TO THE IMPUGNED NOTICE. DR. PAL POINTED OUT THAT TH E CATEGORICAL ASSERTION OF THE PETITIONER, THAT IT HAD CLAIMED DEDUCTION OF ONLY NET INCOME IN CONVERTIBLE EXCHANGE, COMPUTED BY EXCLUSION OF EXPENSES IN ACCORDANCE WITH THE DECISION OF THIS COURT IN CIT V. M. N. DASTUR AND CO. P. LTD. REPORTED IN [2000] 243 ITR 10 (CAL) HAD NOT BEEN DEALT WITH BY THE ASSESSING OFFICER. 32. THE ASSESSING OFFICER HAD ISSUED THE INTIMATION DATED NOVEMBER 20, 2001, UNDER SECTION 143(1) OF THE INCOME - TAX ACT AND THE REVISED INTIMATION DATED MARCH 27, 2002, UNDER THE SAME SECTION, ACCEPTING THAT RS. 194.6 LAKHS DEDUCTED TOWARDS SALES TAX IN THE PROFIT AND LOSS ACCOUNT, HAD NOT BEEN REALIZED FROM CUSTOMERS AND THERE WAS NO EXCESS DEBIT. 33. T HE PETITIONER, IN DEALING WITH THE FIFTH REASON FOR REOPENING ASSESSMENT, MADE A CATEGORICAL ASSERTION THAT SALES TAX REALIZED FROM CUSTOMERS WAS NEITHER CREDITED NOR DEBITED IN THE PROFIT AND LOSS ACCOUNT. NOR WAS ANY DEDUCTION CLAIMED IN RESPECT OF THE S AME. 34. THE PETITIONER WAS, APPARENTLY LIABLE TO TURNOVER TAX, UNDER THE SALES TAX LAWS, BASED ON ITS AGGREGATE TURNOVER DURING THE FINANCIAL YEAR. TURNOVER TAX IS NOT RECOVERABLE FROM CUSTOMERS SEPARATELY. THE PETITIONER CLAIMS TO HAVE DEBITED TURNOVER T AX OF RS. 194.61 LAKHS, PAID BY THE COMPANY, WHICH HAD NOT BEEN RECOVERED FROM CUSTOMERS, IN THE PROFIT AND LOSS ACCOUNT. 35. IT IS PATENTLY CLEAR THAT ASSESSMENT HAS BEEN SOUGHT TO BE REOPENED ON THE BASIS OF THE SAME MATERIALS, ON CHANGE OF OPINION. FROM THE REASONS, IT IS APPARENT THAT THERE WERE NO NEW MATERIALS BEFORE THE ASSESSING OFFICER WHEREFROM IT COULD BE DEDUCED THAT THE SUM OF RS. 194.61 LAKHS, CLAIMED AS DEDUCTION OR ANY PART THEREOF WAS REALIZED FROM CUSTOMERS. 36. AS ARGUED BY DR. PAL, THE S IXTH AND SEVENTH GROUNDS DISCLOSED BY THE ASSESSING OFFICER FOR REOPENING ASSESSMENT, WERE ALSO THE SECOND AND THIRD GROUNDS FOR THE NOTICE UNDER SECTION 154 FOR RECTIFICATION OF THE ASSESSMENT ORDER. THE RECTIFICATION PROCEEDINGS HAVING BEEN DROPPED, REAS SESSMENT PROCEEDINGS COULD NOT HAVE BEEN STARTED ON THE BASIS OF THE SAME MATERIALS. PAGE | 10 37. AS RIGHTLY POINTED OUT BY DR. PAL MERE CHANGE OF OPINION WAS NO GROUND FOR REASSESSMENT, AS HELD BY A FULL BENCH OF THE DELHI HIGH COURT IN CIT V. KELVINATOR OF INDIA LTD. [2002] 256 ITR 1 CITED BY DR. PAL. 38. IN DAMODAR H. SHAH V. ASST. CIT REPORTED IN [2000] 245 ITR 774 A DIVISION BENCH OF THE GUJARAT HIGH COURT LUCIDLY EXPLAINED THE DIFFERENCE BETWEEN THE POWER OF RECTIFICATION OF A MISTAKE UNDER SECTION 154 AND THE POWER OF REOPENING ASSESSMENT UNDER SECTION 147 OF THE 1961 ACT AND HELD THAT THE SCOPE OF THE TWO PROCEEDINGS BEING DIFFERENT, THE ASSESSING OFFICER COULD TAKE RECOURSE TO EITHER, HAVING REGARD TO THE FACTS AND CIRCUMSTANCES OF THE CASE. 39. IN CASES OF APPARENT MISTAKE RESULTING IN ESCAPEMENT, THE ASSESSING OFFICER COULD INVOKE SECTION 154 . IN CASES OF MERE MISTAKE RESULTING IN ASSESSMENT, WHICH WAS NOT APPARENT FROM RECORD, THE ASSESSING OFFICER MIGHT REOPEN ASSESSMENT UNDER SECTION 147. 40. THE COURT, INTER ALIA , HELD AS FOLLOWS (PAGES 791 AND 792) : 'MISTAKE APPARENT FROM THE RECORD WHICH HAS THE EFFECT OF ENHANCING ASSESSMENT OUGHT TO BE RECTIFIED BY RESORTING TO THIS SPECIAL AND SPEEDY PROCEDURE WHEN IN THE VIEW OF THE ASSESSING OFFICER IT IS UNNECESSARY TO RESORT TO REOPENING OF THE ASSESSMENT. IN THE FIELD OF CHARGEABLE INCOME ESCAPING ASSESSMENT, HOWEVER, SECTION 147 IS VERY WIDELY WORDED AND WOULD INCLUDE EVEN ESCAPEMENT DUE TO ANY MISTAKE IN THE ASSESSMENT ORDER. BUT, WHEN EVEN ACCORDING TO THE ASSESSING OFFICER HIMSELF THERE IS A MISTAKE, APPAR ENT FROM THE RECORD AS IT EXISTS, COMMITTED IN THE ORDER OF ASSESSMENT, WHICH IS RECTIFIABLE ON THE BASIS OF THE EXISTING RECORD UNDER SECTION 154 BEING A SPECIAL PROVISION MADE FOR THE PURPOSE, AND THAT THERE IS NO NEED TO RESORT TO REOPENING OF THE ASSES SMENT AS CONTEMPLATED BY SECTION 148 READ WITH SECTION 147 OF THE ACT, THEN HE MUST RESORT TO THE PROVISION AND CANNOT WANTONLY OR ARBITRARILY AND WITHOUT VALID REASON RESORT TO REOPENING OF THE ASSESSMENT . . . THE FUNCTION OF THE ASSESSING OFFICER ACTING UNDER SECTION 147 IS NOT LIMITED, AS UNDER SECTION 154, MERELY TO RECTIFYING THE RESULT WHICH MAY HAVE BEEN VITIATED DUE TO MISTAKE APPARENT FROM THE RECORD. IT WOULD, THEREFORE, FOLLOW THAT IN CASES OF MISTAKE RESULTING IN ESCAPEMENT, WHICH IS THE AREA W HERE BOTH THE PROVISIONS WOULD BECOME RELEVANT, THE ASSESSING OFFICER WILL HAVE TO CONSIDER WHETHER HE WAS REQUIRED BY THE NATURE OF ESCAPEMENT TO RECONSIDER THE QUESTION OF HOW HE WOULD ASCERTAIN AND ASSESS INCOME THAT HAS ESCAPED ASSESSMENT AND REOPEN TH E ASSESSMENT OR IF THAT IS NOT REQUIRED THEN MERELY TO RECTIFY THE MISTAKEN RESULT ON THE BASIS OF THE EXISTING RECORD. IF HE CHOOSES TO RESORT TO THE FORMER, I.E., SECTION 147 READ WITH SECTION 148 PROCEEDINGS, HE CANNOT BE COMPELLED TO RESORT TO SECTION 154 BECAUSE THAT WOULD PAGE | 11 IMPINGE UPON HIS SUBJECTIVE SATISFACTION UNDER SECTION 147. BUT IF HE RESORTS TO SECTION 154 ON THE GROUND THAT THE MISTAKE IN THE ORDER APPARENT FROM THE RECORD HAS RESULTED IN ESCAPEMENT WHICH COULD BE RECTIFIED BY AMENDING THE ORD ER AND ENHANCING THE ASSESSMENT, THEN HE, ON FINDING THAT THERE IS NO SUCH MISTAKE APPARENT FROM THE RECORD WARRANTING RECTIFICATION SINCE THE VIEW TAKEN IS PLAUSIBLE, CANNOT IN THE ABSENCE OF ANY OTHER GROUND ON THE BASIS OF WHICH HE HAS STILL REASON TO B ELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT, START PROCEEDINGS AGAIN UNDER SECTION 147. IF HE FINDS THAT THERE IS NO SUCH MISTAKE SINCE THE RESULT WAS WARRANTED FROM THE RECORD, THERE WOULD BE NO OCCASION TO AMEND THE ASSESSMENT ORDER, WHERE THE RECTIFIC ATION COULD NOT BE DONE ON THE GROUND THAT THERE WERE TWO VIEWS POSSIBLE OR THAT THERE WAS DISCRETION LAWFULLY EXERCISED, THEN THE SAME WILL ALSO BE TRUE EVEN WHEN THE ASSESSING OFFICER STARTS THE PROCEEDINGS UNDER SECTION 147 ON THE SAME MATERIAL, BECAUSE , THAT POWER CANNOT BE INVOKED WHEN THERE IS ONLY A MERE CHANGE OF OPINION AND IN CASE WHERE IN THE PROCEEDINGS UNDER SECTION 154 IT IS FOUND THAT WHAT WAS THOUGHT TO BE A MISTAKE WAS NOT A MISTAKE BECAUSE THAT VIEW WAS WARRANTED OR PERMISSIBLE FROM THE EX ISTING RECORD, THEN THE SAME FINDING WILL BIND THE ASSESSING OFFICER WHEN TRYING TO EXERCISE POWERS UNDER SECTION 147. IN SUCH A CASE, IT WOULD BE INCUMBENT ON THE PART OF THE ASSESSING OFFICER WHO HAD CHOSEN TO RESORT TO SECTION 154 TO DEMONSTRATE WHY HE IS NOW FOR THE SAME PURPOSE RESORTING TO SECTION 147. THERE HAS TO BE SOME COMPELLING REASON IN SUCH A CASE FOR HIM STILL TO BELIEVE THAT THE INCOME THAT WAS THE SUBJECT - MATTER OF RECTIFICATION HAS ESCAPED ASSESSMENT THOUGH THAT WAS NOT DUE TO ANY OBVIOUS MISTAKE BORNE OUT FROM THE EXISTING RECORD, WHICH COULD BE RECTIFIED UNDER SECTION 154. ... IT WILL NOT BE OPEN TO THE ASSESSING OFFICER TO ARBITRARILY OR WANTONLY RESORT TO THE PROVISIONS OF SECTION 147 WHERE THE PROCESS OF RECTIFICATION UNDER SECTION 154 FAILS ON THE MERITS.' 41. AS ARGUED ON BEHALF OF THE RESPONDENTS, THE ASSESSING OFFICER HAS JURISDICTION UNDER SECTION 148 OF THE INCOME - TAX ACT TO ISSUE NOTICE OF REASSESSMENT, UPON REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSME NT. 42. HOWEVER, IF THE ASSESSING OFFICER IS OF THE VIEW THAT INCOME HAS ESCAPED ASSESSMENT BY REASON OF A MISTAKE APPARENT FROM RECORDS, AND TAKES RECOURSE TO SECTION 154, BUT FINDS LATER, THAT THERE IS NO APPARENT MISTAKE, THEN HE CANNOT, IN THE ABSENCE OF ANY OTHER GROUND ON THE BASIS OF WHICH HE STILL HAS REASON TO BELIEVE THAT THE INCOME HAS ESCAPED ASSESSMENT, START REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT. IN OTHER WORDS, THE ASSESSING OFFICER CANNOT AGAIN START REASSESSMENT PROCEEDINGS ON THE BASIS OF THE SAME REASONS. 43. THE ASSESSING OFFICER HAS NOT DISCLOSED THE REASONS FOR THE ASSESSING OFFICER TO STILL BELIEVE THAT INCOME THAT WAS THE SUBJECT - MATTER OF RECTIFICATION HAD STILL ESCAPED ASSESSMENT THOUGH THAT WAS NOT DUE TO ANY OBVIOU S MISTAKE, BORNE OUT FROM EXISTING RECORDS. PAGE | 12 44. THE JUDGMENT IN GKN DRIVESHAFTS (INDIA) LTD. V. ITO REPORTED IN [2003] 259 ITR 19 , CITED BY MR. BHOWMIK WAS RENDERED BY THE SUPREME COURT IN THE PARTICULAR FACTS OF THAT CASE. THE SUPREME COURT HELD (PAGE 20) : 'WE SEE NO JUSTIFIABLE REASON TO INTERFERE WITH THE ORDER UNDER CHALLENGE. HOWEVER, WE CLARIFY THAT WHEN A NOTICE UNDER SECTION 148 OF THE INCOME - TA X ACT IS ISSUED, THE PROPER COURSE OF ACTION FOR THE NOTICEE IS TO FILE A RETURN AND IF HE SO DESIRES, TO SEEK REASONS FOR ISSUING NOTICES. THE ASSESSING OFFICER IS BOUND TO FURNISH REASONS WITHIN A REASONABLE TIME. ON RECEIPT OF REASONS) THE NOTICEE IS EN TITLED TO FILE OBJECTIONS TO ISSUANCE OF NOTICE AND THE ASSESSING OFFICER IS BOUND TO DISPOSE OF THE SAME BY PASSING A SPEAKING ORDER. IN THE INSTANT CASE, AS THE REASONS HAVE BEEN DISCLOSED IN THESE PROCEEDINGS, THE ASSESSING OFFICER HAS TO DISPOSE OF THE OBJECTIONS, IF FILED, BY PASSING A SPEAKING ORDER, BEFORE PROCEEDING WITH THE ASSESSMENT IN RESPECT OF THE ABOVESAID FIVE ASSESSMENT YEARS.' 45. THE CONDITION PRECEDENT FOR INITIATION OF REASSESSMENT PROCEEDINGS IS, IN ANY CASE, THE FORMATION OF THE BELIE F, BASED ON NEW MATERIALS THAT ANY INCOME HAD ESCAPED ASSESSMENT. A NOTICE UNDER SECTION 148 OF THE INCOME - TAX ACT MAY NOT BE ISSUED MERELY ON CHANGE OF OPINION. 46. IN NORMAL CIRCUMSTANCES, ON RECEIPT OF A NOTICE OF REASSESSMENT UNDER SECTION 148 OF THE I NCOME - TAX ACT, THE ASSESSEE SHOULD FILE A RETURN, ASK FOR THE REASONS AND THEN FILE ITS OBJECTION. HOWEVER, WHERE THE CONDITION PRECEDENT FOR ISSUANCE OF A NOTICE ARE ABSENT, THE NOTICE MIGHT BE CHALLENGED BY FILING A WRIT PETITION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA. 47. IN CALCUTTA DISCOUNT CO. LTD. V. ITO [1961] 41 ITR 201, THE SUPREME COURT HELD THAT IN EXERCISE OF POWER UNDER ARTICLE 226, THE COURT MIGHT EXAMINE WHETHER THE CONDITIONS PRECEDENT FOR EXERCISE OF JURISDICTION TO REASSESS EXISTE D. THE SUPREME COURT, INTER ALIA , HELD AS FOLLOWS (PAGE 207 AND 208) : 'THE EXISTENCE OF SUCH ALTERNATIVE REMEDY IS NOT HOWEVER ALWAYS A SUFFICIENT REASON FOR REFUSING A PARTY QUICK RELIEF BY A WRIT OR ORDER PROHIBITING AN AUTHORITY ACTING WITHOUT JURISDIC TION FROM CONTINUING SUCH ACTION. IN THE PRESENT CASE, THE COMPANY CONTENDS THAT THE CONDITIONS PRECEDENT FOR THE ASSUMPTION OF JURISDICTION UNDER SECTION 34 WERE NOT SATISFIED AND CAME TO THE COURT AT THE EARLIEST OPPORTUNITY. THERE IS NOTHING IN ITS COND UCT WHICH WOULD JUSTIFY THE REFUSAL OR PROPER RELIEF UNDER ARTICLE 226. WHEN THE CONSTITUTION CONFERS ON THE HIGH COURTS PAGE | 13 THE POWER TO GIVE RELIEF IT BECOMES THE DUTY OF THE COURTS TO GIVE SUCH RELIEF IN FIT CASES AND THE COURTS WOULD BE FAILING TO PERFORM THEIR DUTY IF RELIEF IS REFUSED WITHOUT ADEQUATE REASONS.' 48. MOREOVER, IN THIS CASE, WHERE THE WRIT PETITION HAD BEEN ENTERTAINED AND KEPT PENDING FOR ABOUT SIX YEARS AND DIRECTIONS ISSUED FOR FILING OF AFFIDAVITS, THIS COURT IS NOT INCLINED TO DECLINE R ELIEF ONLY ON THE GROUND OF EXISTENCE OF AN ALTERNATIVE REMEDY OF FILING AN OBJECTION BEFORE THE ASSESSING OFFICER AND THEN TAKING RECOURSE TO AN APPEAL UPON REASSESSMENT. 49. IN RAYMOND WOOLLEN MILLS LTD. V. ITO REPORTED IN [1999] 236 ITR 34 (SC) CITED BY MR. BHOWMICK, THE SUPREME COURT WAS SATISFIED ON FACTS THAT JURISDICTION TO REASSESS HAD VALIDLY BEEN ASSUMED. 50. IF THERE ARE REASONS TO BELIEVE THAT INCOME HAS ESCAPED ASSESSMENT, AND JURISDICTION TO ISSUE NOTICE OF REASSESSMENT UNDER SECTION 148 OF THE INCOME - TAX ACT HAS BEEN EXERCISED, THE COURT OUGHT NOT TO WEIGH THE SUFFICIENCY OF THE REASONS IN EXERCISE OF ITS EXTRAORDINARY WRIT JURISDICTION UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA. 51. THE COURT MAY, HOWEVER, IN EXERCISE OF ITS POWER OF JUDICIAL REVIEW EXAMINE WHETHER THE CONDITIONS PRECEDENT FOR EXERCISE OF JURISDICTION TO REOPEN ASSESSMENT AT ALL EXIST. IN THE ABSENCE OF ANY NEW AND/OR FRESH MATERIALS, ON TH E BASIS OF WHICH THE ASSESSING OFFICER COULD HAVE FORMED THE OPINION THAT INCOME HAS ESCAPED ASSESSMENT, THE ASSESSING OFFICER LACKED JURISDICTION TO REOPEN ASSESSMENT. 52. THE REASSESSMENT NOTICE HAS BEEN ISSUED FOR VIRTUALLY THE SAME REASONS FOR WHICH RE CTIFICATION PROCEEDINGS HAD EARLIER BEEN INITIATED BUT DROPPED. THE ASSESSING OFFICER HAS NOT DISCLOSED ANY NEW MATERIALS FOR REOPENING ASSESSMENT. ASSESSMENT CANNOT BE REOPENED MERELY ON CHANGE OF OPINION, AS HAS APPARENTLY BEEN DONE IN THIS CASE. THE ASS ESSING OFFICER ON BEING SATISFIED THAT THERE WAS NO APPARENT ERROR IN COMPUTATION OF INCOME, ON THE BASIS OF EXISTING RECORDS, DROPPED THE RECTIFICATION PROCEEDINGS. IN THE ABSENCE OF ANY NEW AND/OR FRESH MATERIALS AND IN THE ABSENCE OF ANY REASON FOR FORM ATION OF BELIEF THAT EVEN OTHERWISE, INCOME HAD ESCAPED ASSESSMENT EVEN THOUGH THERE WAS NO APPARENT MISTAKE OR ERROR, THE ASSESSING OFFICER LACKED JURISDICTION TO ISSUE THE IMPUGNED NOTICE. THE LEARNED DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE FACT THAT HOW THE ABOVE ISSUE IS NOT SQUARELY COVERED BY THE DECISION OF THE HONOURABLE CALCUTTA HIGH COURT. THEREFORE RESPECTFULLY FOLLOWING THE DECISION OF THE HONOURABLE CALCUTTA HIGH COURT WE CRASH THE PAGE | 14 REASSESSMENT MADE BY THE ASSESSING OFFICER UNDER SECTION 148 OF THE INCOME TAX ACT. ACCORDINGLY, ON GROUND NUMBER 1 OF THE APPEAL, THE APPEAL OF THE ASSESSEE IS ALLOWED. IN VIEW OF OUR DECISION IN GROUND NUMBER 1 OF THE APPEAL THE OTHER GROUNDS OF APPEAL ARE NOT REQUIRED TO BE ADJUDICATED. 8 . IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. 9 . ORDER PRONOUNCED IN THE OPEN COURT ON 1 3 / 1 1 / 2018 . S D / - S D / - ( AMIT SHUKLA ) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 3 / 1 1 / 2018 A K KEOT COPY FORWARDED TO 1 . APPLICANT 2 . RESPONDENT 3 . CIT 4 . CIT (A) 5 . DR:ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI PAGE | 15 DATE OF DICTATION DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/ PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 1 4 . 1 1 . 2 0 1 8 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER