DCIT RG 8(2), MUMBAI V. MONSANTO INDIA LTD, MUMBAI

ITA 7278/MUM/2010

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3944 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-07-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 31-12-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 25-10-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P SINGH
• Keywords: Reopening of assessment; Depreciation; Difference of opinion; Assessment record; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 80HHC; 80IB; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI . . , ! '# , % & & & & BEFORE SHRI B.R.MITTAL, JM AND SHRI SANJAY ARORA, A M ./ I.T.A. NO. 7278/MUM/2010 ( ' ( ' ( ' ( ' ( )( )( )( )( / ASSESSMENT YEAR : 2003-04) DCIT RG.8(2) ROOM NO.216-A, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI-400020 ' ' ' ' / VS. MONSANTO INDIA LTD. AHURA CENTRE, 5 TH FLOOR, 96 MAHAKALI CAVES,D, ANDHERI(E) MUMBAI-400093 * % ./ PAN : AAACM2875L ( *+ / APPELLANT ) .. ( ,-*+ / RESPONDENT ) *+ . / / APPELLANT BY : SHRI O.P.SINGH ,-*+ . / / RESPONDENT BY : SHRI RAJAN VORA ' . 0% / DATE OF HEARING : 25-07-2013 1') . 0% / DATE OF PRONOUNCEMENT : 25 -07-2013 2 / O R D E R PER B.R.MITTAL, J.M . THE DEPARTMENT HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2003-04 AGAINST THE ORDER OF THE LD. CIT(A) DATED 26/07/201 0. 2. IN GROUND NO. 1 OF THE APPEAL, THE DEPARTMENT HA S DISPUTED THE ORDER OF THE CIT(A) IN HOLDING THAT THE REASSESSMENT WAS NOT VALID. 3. THE RELEVANT FACTS GIVING RISE TO THIS GROUND OF APPEAL ARE THAT ASSESSE IS ENGAGED IN THE BUSINESS OF MANUFACTURING AND TRADIN G IN AGRICULTURAL CHEMICALS AND SEEDS. THE ASSESSEE FILED ITS RETURN OF INOMCE ON 14/11/2003 DECLARING TOTAL INCOME OF RS.18,98,85,190/-. THE ASSESSMENT U/S 143(3) OF THE ACT WAS MADE VIDE ORDER DATED 31/03/2006 AND INCOME OF RS.5 1,03,52,883/- WAS ASSESSED AFTER ALLOWING DEDUCTIION U/S 80IB OF RS.1 ,87,27,016/- AND DEDUCTION U/S 80HHC OF RS.36,61,248/-. THE ADDITIONS IN THE ASSESSMENT WERE MADE ON 2 ITA NO.7278/MUM/2010 M/S. MONSANTO INDIA LTD. ACCOUNT OF DISALLOWANCE OF CLAIM OF EXEMPTION U/S 1 0(1) OF SEED DIVISION OF RS.32,04,09,378/- . IT IS OBSERVED THAT THE ASSES SEMENT WAS REVISED VIDE ORDER DATED 30/06/2006 DUE TO THE CIT(A) ORDER AND ADDIT ION MADE ON ACCOUNT OF EXMPTED INCOME OF RS.32,04,09,378/- WAS DELETED. FURTHER AS PER THE DIRECTIONS OF THE CIT(A), THE DEDUCTIONS U/S 80HHC WAS ALLOWED AT RS.37,19,565/- AS CLAIMED BY THE ASSESSEE WORKED OUT EXCLUDING FROM THE TURNOVER THE EXCISE DUTY AND SALES TAX. THUS, INCO ME ASSESSED WAS DETERMINED TO RS.18,98,85,185/- ON GIVING EFFECT TO THE CIT(A)S ORDER. A COPY OF THE ORIGINAL ASSESSMENT ORDER MADE ON 31/03/2006 U/S 143(3) IS PLACED AT PAGES NO. 9 TO 17 OF THE PAPER-BOOK. 4. THE ASSESSING OFFICER ISSUED A NOTICE DATED 26/0 3/2009 U/S 148 OF THE INCOME-TAX ACT FOR REOPENING OF THE ASSESSMENT. TH E REASONS RECORDED BY THE ASSESSING OFFICER FOR REOPENING OF THE ASSESSMENT A RE STATED IN PARA 3 OF THE ASSESSMENT ORDER MADE U/S 143(3) R.W.S. 147 OF THE INCOME-TAX ACT DATED 11/12/2009 AND THE SAME READ AS UNDER:- AS PER THE PROVISIONS OF SECTION 80IB(4) OF THE IN COME TAX ACT, 1961 THE AMOUNT OF DEDUCTION IN THE CASE OF AN INDUSTRIAL UN DERTAKING IN A NOTIFIED INDUSTRIALLY BACKWARD STATE/UNION TERRITORY SHALL BE HUNDRED PER CENT OF THE PROFIT AND GAINS DERIVED FROM SUCH INDUSTRIAL UNDERTAKING FOR THE IN ITIAL FIVE ASSESSMENT YEARS AND THEREAFTER THIRTY PERCENT FOR THE NEXT FIVE ASSESSM ENT YEARS SUBJECT TO FULFILLMENT OF ALL THE PRESCRIBED CONDITIONS. SECTION 80IB(13) READ W ITH SECTION 80IA(9) STIPULATES THAT WHERE ANY AMOUNT OF PROFIT AND GAINS OF AN UNDERTAK ING IS CLAIMED AND ALLOWED UNDER THIS SECTION FOR ANY ASSESSMENT YEAR, DEDUCTI ON TO THE EXTENT OF SUCH PROFIT AND GAINS SHALL NOT BE ALLOWED UNDER ANY OTHER PROV ISIONS OF CHAPTER VI. ON PERUSAL OF THE ASSESSMENT RECORDS, IT IS NOTICED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.18,727,016 U/S 80IB IN RESP ECT OF ITS AGRO CHEMICAL MANUFACTURING UNITS LOCATED AT SILVASSA. THE CLAIM OF THE ASSESSEE HAS BEEN ALLOWED IN FULL IN THE SCRUTINY ASSESSMENT COMPLETED ON 31. 03.2006. A DEDUCTION OF RS.3,661,248/- U/S 80 HHC IN RESPECT OF EXPORT OF A GRO CHEMICALS WAS ALLOWED TO THE ASSESSEE. HOWEVER, THIS AMOUNT WAS NOT DEDUCTED WH ILE DETERMINING THE QUANTUM OF DEDUCTION U/S 80IB(4). THUS, THE ASSESSEE COMPA NY HAS BEEN ALLOWED DOUBLE DEDUCTION ON THE SAME AMOUNT OF PROFIT I.E. 80HHC A ND 80IB, WHICH IS PROHIBITED UNDER THE PROVISIONS OF THE ACT. THE EXCESS DEDUCT ION ALLOWED WORKS OUT TO RS.3,661,248, THEREFORE, I HAVE REASON TO BELIEVE T HAT THE INCOME CHARGEABLE TO TAX AMOUNTING TO RS.3,661,248 HAS ESCAPED ASSESSMENT. FURTHER, IT IS ALSO SEEN FROM SCHEDULE F OF NOTES T O ACCOUNT OF SILVASSA PLANT II THAT SCRAP (EMPTY REAMS) SALE OF RS.3,785,731 HAS B EEN REDUCED FROM MATERIALS. 3 ITA NO.7278/MUM/2010 M/S. MONSANTO INDIA LTD. SINCE THE AMOUNT OF SCRAP SALES CANNOT BE TREATED A S THE INCOME DERIVED FROM THE ELIGIBLE BUSINESS, THE SAME SHALL NOT QUALIFY FOR D EDUCTION U/S 80IB. INCIDENTALLY, IN THE SCRUTINY ASSESSMENT FOR THE SUBSEQUENT AY 2004- 05 THE ASSESSING OFFICER DISALLOWED THE SALE OF SCRAP WHILE DETERMINING 80IB DEDUCTION WHICH WAS UPHELD BY THE CIT(A) ON 16.07.2007. THUS, THE ASSESSEE COMPAN Y HAS BEEN ALLOWED EXCESS DEDUCTION OF RS.3,787,731 DUE TO NON-DISALLOWANCE O F SCRAP SALES FROM THE PROFITS CONSIDERED FOR 80IB DEDUCTION. THEREFORE, I HAVE R EASON TO BELIEVE THAT THE INCOME CHARGEABLE TO THE TAX OF RS.3,787,731 HAS ESCAPED A SSESSMENT. IN VIEW OF THE ABOVE, I AM SATISFIED THAT THE ASSES SEE COMPANY HAS BEEN ALLOWED THE AGGREGATE EXCESS DEDUCTION OF RS.7,448, 979 AND INCOME CHARGEABLE TO TAX TO THAT EXTENT HAS ESCAPED ASSESSMENT WITHIN TH E MEANING OF SEC. 147 OF THE INCOME TAX ACT, 1961. HENCE, THIS IS A FIT CASE FO R REOPENING THE ASSESSMENT. 5. THE ASSESSEE DISPUTED THAT THE REOPENING OF THE ASSESSMENT IS NOT VALID IN VIEW OF PROVISO TO SECTION 147 OF THE INCOME-TAX ACT AND THE NOTIC E ISSUED U/S 148 IS BARRED BY LIMITATION. THE ASSESSEE ALSO JUSTIFIED THE DEDUCTION CLAIMED U/S 80IB AND 80HHC OF THE ACT BEFORE THE AS SESSING OFFICER AND SUBMITTED THAT AT THE TIME OF ORIGINAL ASSESSMENT P ROCEEDINGS, THE ASSESSEE IN RESPONSE TO A SPECIFIC QUERY OF THE ASSESSING OFFIC ER, SUBMITTED BY A LETTER DATED 23.03.2006 A DETAILED EXPLANATION AS TO WHY T HERE IS NO REQUIREMENT U/S 80HHC TO REDUCE AMOUNT CLAIMED U/S 80IB OF THE ACT. HOWEVER, THE ASSESSING OFFICER COMPLETED THE ASSESSMENT ON 11/12/2009 AND REDUCED ELIGIBLE PROFIT OF THE BUSINESS BY AN AMOUNT OF RS.1,87,27,016/- ALLOW ED AS DEDUCTION U/S 80IB(4), WHILE CONSIDERING THE PROFIT ELIGIBLE FOR DEDUCTION U/S 80HHC OF THE ACT. BEING AGGRIEVED, ASSESSEE FILED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 6. LD. CIT(A) CONSIDERED THE SUBMISSIONS OF THE ASS ESSEE HAS HELD THAT FULL DETAILS OF THE CLAIM HAD BEEN FILED BY THE ASSESSEE ALONG WITH RETURN AND DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER CONSIDERED THE SAME BEFORE COMPLETION OF ASSESSMENT. THAT THE NOT ICE U/S 148 HAS BEEN ISSUED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. LD. CIT(A), AFTER CONSIDERING THE DECISION O F THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF 3I INFOTECH LTD. VS. ACIT & ORS. (41 DTR 377) AND ALSO THE DECISION IN THE CASE OF HINDUSTAN PETROLEUM CORPORATION LTD. VS. DCIT (42 DTR 262) HAS STATED THAT WHERE THERE IS FULL AND TRUE DISCLO SURE OF THE FACTS BY THE ASSESSEE AND APPLICATION OF MIND BY THE A.O. NO TICE U/S 148 AFTER EXPIRY OF 4 ITA NO.7278/MUM/2010 M/S. MONSANTO INDIA LTD. FOUR YEARS FROM END OF RELEVANT ASSESSMENT YEAR WAS NOT JUSTIFIED. ACCORDINGLY, LD. CIT(A) HAS HELD THAT REASSESSMENT IS NOT VALID. HENCE, THIS APPEAL BY THE DEPARTMENT. 7. AT THE TIME OF HEARING LD. DR HAS NOT DISPUTED T HE FACTS AS STATED BY LD. CIT(A) THAT THE ORIGINAL ASSESSMENT U/S 143(3) OF T HE ACT WAS MADE ON 23/03/2006 AND THE NOTICE U/S 148 OF THE ACT HAS BE EN ISSUED ON 26.03.2009, I.E. AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF RELEVANT ASSESSMENT YEAR UNDER CONSIDERATION. A QUERY WAS ALSO RAISED TO TH E LD. DR AS TO WHETHER THERE IS ANY AVERMENT IN THE REASONS RECORDED BY THE ASSE SSING OFFICER THAT THE ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY ALL MAT ERIAL FACTS NECESSARY FOR THE ASSESSMENT YEAR UNDER CONSIDERATION AT THE TIME OF MAKING THE ORIGINAL ASSESSMENT. THE LD. DR FAIRLY CONCEDED THAT THERE IS NO SUCH MENTION IN THE REASONS RECORDED BY THE ASSESSING OFFICER BUT SUBMI TTED THAT THE ASSESSING OFFICER HAS STATED SUBSEQUENTLY THAT THE ASSESSEE C LAIMED DEDUCTION U/S 80IB AND 80HHC EXCESSIVELY, HENCE THE INCOME CHARGEABLE TO TAX HAD ESCAPED ASSESSMENT. THE LD. DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. ON THE OTHER HAND, THE LD. AR SUPPORTED THE ORDER OF LD. C IT(A). HE FURTHER SUBMITTED THAT AT THE TIME OF MAKING ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT, THE ASSESSING OFFICER EXAMINED THE DETAILS OF THE DEDUC TION CLAIMED BY THE ASSESSEE U/S 80IB AND 80HHC. HE SUBMITTED THAT THE ASSESSEE VIDE ITS LETTER DATED 23 RD MARCH 2006 GAVE DETAILED EXPLANATION ON THE ISSUE I N REGARD TO WHICH THE REASSESSMENT PROCEEDINGS HAVE BEEN INITIATED. HE S UBMITTED THAT A COPY OF THE SAID LETTER DATED 23.03.2006 IS PLACED AT PAGES 5 T O 8 OF THE PAPER-BOOK. HE SUBMITTED THAT THE REASSESSMENT PROCEEDINGS HAVE BE EN INITIATED MERELY FOR CHANGE OF OPINION WHICH IS NOT PERMISSIBLE AS PER L AW. THE LD. AR FURTHER SUBMITTED THAT ON SIMILAR FACTS IN THE ASSESSEES O WN CASE FOR THE ASSESSMENT YEAR 2002-03, THE ASSESSING OFFICER INITIATED REASS ESSMENT PROCEEDINGS AND THE TRIBUNAL VIDE ITS ORDER DATED 18/09/2012 IN ITA NO. 7718/MUM/2010, COPY PLACED AT PAGES 9 TO 12 OF THE PAPER-BOOK, HELD THA T REOPENING OF ASSESSMENT AFTER A PERIOD OF FOUR YEARS SHOULD BE BASED ON SOM E RELIABLE PIECE OF 5 ITA NO.7278/MUM/2010 M/S. MONSANTO INDIA LTD. INFORMATION AND EVIDENCE BUT SUCH RELIABLE INFORMAT ION WAS MISSING. ACCORDINGLY THE TRIBUNAL UPHELD THE ORDER OF THE LD . CIT(A) THAT THE INITIATION OF THE REASSESSMENT PROCEEDINGS IS NOT VALID. THE LD. AR SUBMITTED THAT THE FACTS IN THE ASSESSMENT YEAR UNDER CONSIDERATION ARE IDEN TICAL TO THAT OF ASSESSMENT YEAR 2002-03. THEREFORE, THE ORDER OF THE LD. CIT(A ) MAY BE CONFIRMED THAT REASSESSMENT IS NOT VALID. 8. WE HAVE CAREFULLY CONSIDERED THE SUBMISSION OF T HE LD. REPRESENTATIVE OF THE PARTIES AND ORDERS OF AUTHORITIES BELOW AS WELL AS CAREFULLY CONSIDERED THE REASONS RECORDED BY THE ASSESSING OFFICER. WE HAVE ALSO CONSIDERED ORIGINAL ASSESSMENT ORDER DATED 31.03.2006 AND THE CONTENTS OF LETTER DATED 23.03.2006 VIDE WHICH ASSESSEE SUBMITTED THE CLAIM OF THE DEDU CTION U/S 80IB WHILE COMPUTING PROFIT FOR DEDUCTION U/S 80HHC OF THE ACT AND FILED DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDINGS U/S 143(3) OF TH E ACT. 9. ON PERUSAL OF THE ABOVE, WE OBSERVE THAT AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS, THE ASSESSEE NOT ONLY MADE DISCLOSURE OF THE CLAIM OF DEDUCTION U/S 80IB AND 80HHC OF THE ACT BUT ALSO FI LED DETAILED SUBMISSIONS BEFORE THE ASSESSING OFFICER DURING THE COURSE OF A SSESSMENT PROCEEDINGS MADE U/S 143(3) OF THE ACT. THEREFORE, THERE IS NO DISP UTE THAT AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDING, THE ASSESSING OFFICER APPLIE D HIS MIND WHILE CONSIDERING THE DEDUCTION ALLOWED TO THE ASSESSEE U/S 80IB AND 80HHC OF THE ACT. LD. CIT(A) HAS ALSO DISCUSSED THE ABOVE ASPECT IN THE I MPUGNED ORDER. IN VIEW OF ABOVE FACTS, IT IS NOT A CASE THAT ASSESSEE AT THE TIME OF ORIGINAL ASSESSMENT PROCEEDINGS FAILED TO DISCLOSE TRULY AND FULLY ALL MATERIAL FACTS NECESSARY FOR MAKING THE ASSESSMENT AND TO ALLOW THE DEDUCTION TO THE ASSESSEES CLAIM U/S 80IB AND 80HHC OF THE ACT. THERE IS NO DISPUTE THA T REASSESSMENT PROCEEDINGS IS INITIATED AFTER THE EXPIRY OF FOUR YEARS FROM TH E END OF THE RELEVANT ASSESSMENT YEAR VIZ ; ASSESSMENT YEAR 2003-04 AS THE NOTICE U/S 148 OF THE ACT HAS BEEN ISSUED ON 26.03.2009. THEREFORE, THE LD. AR HAS CONTENDED BEFORE US THAT THE LD. CIT(A) IS JUSTIFIED TO HOLD THAT THE N OTICE U/S 148 IS BARRED BY 6 ITA NO.7278/MUM/2010 M/S. MONSANTO INDIA LTD. LIMITATION IN VIEW OF PROVISO TO SECTION 147 OF THE ACT. WE CONSIDER IT USEFUL TO REPRODUCE THE RELEVANT PROVISIONS OF SECTION 147 A ND 148 OF THE ACT, WHICH ARE AS UNDER:- 147 IF THE [ASSESSING] OFFICER [HAS REASON TO BELIE VE] THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY AS SESSMENT YEAR, HE MAY, SUBJECT TO THE PROVISION OF SECTIONS 148 TO 153, AS SESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS E SCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF T HE PROCEEDINGS UNDER THIS SECTION, OR RECOMPUTE THE LOSS OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY BE, FOR THE ASSESSMENT Y EAR CONCERNED (HEREAFTER IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVANT ASSESSMENT YEAR): PROVIDED THAT WHERE AS ASSESSMENT UNDER SUB-SE CTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT Y EAR, NO ACTION SHALL BE TAKEN UNDER THIS SECTION AFTER THE EXPIRY OF FOUR YEARS F ROM 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 TH E PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTI CE ISSUED UNDER SEB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YE AR: ------------ ------------ 148(1) BEFORE MAKING THE ASSESSMENT, REASSESSMENT OR RECOMPUTATION UNDER SECTION 147, THE ASSESSING OFFICER SHALL SERVE ON T HE ASSESSEE A NOTICE REQUIRING HIM TO FURNISH WITHIN SUCH PERIOD, AS MAY BE SPECIF IED IN THE NOTICE, A RETURN OF HIS INCOME OR THE INCOME OF ANY OTHER PERSON IN RESPECT OF WHICH HE IS ASSESSABLE UNDER THIS ACT DURING THE PREVIOUS YEAR CORRESPONDI NG TO THE RELEVANT ASSESSMENT YEAR, IN THE PRESCRIBED FORM AND VERIFIED IN THE PR ESCRIBED MANNER AND SETTING FORTH SUCH OTHER PARTICULARS AS MAY BE PRESCRIBED; AND TH E PROVISION OF THIS ACT SHALL, SO FAR AS MAY BE, APPLY ACCORDINGLY AS IF SUCH RETURN WERE A RETURN REQUIRED TO BE FURNISHED UNDER SECTION 139:] ------------ ----------- ------------- (2) THE ASSESSING OFFICER SHALL BEFORE ISSUING ANY NOTICE UNDER THIS SECTION RECORD HIS REASONS FOR DOING SO. 10. FROM THE ABOVE PROVISION OF SECTION 147, IT IS CLEA R THAT IF THE AO HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, HE MAY, SUBJECT TO THE PROVISIONS OF SECTIONS 148 T O 153, ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENT LY IN THE COURSE OF THE PROCEEDINGS UNDER SECTION 147, OR RECOMPUTE THE LOS S OR THE DEPRECIATION ALLOWANCE OR ANY OTHER ALLOWANCE, AS THE CASE MAY B E, FOR THE ASSESSMENT YEAR 7 ITA NO.7278/MUM/2010 M/S. MONSANTO INDIA LTD. CONCERNED. HOWEVER, WHEN AN ASSESSMENT HAD BEEN MAD E U/S.143(3) FOR THE RELEVANT ASSESSMENT YEAR, NO ACTION CAN BE TAKEN UN DER SECTION 147 AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT A SSESSMENT YEAR, UNLESS THE AO HAS REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT, INTER ALIA, BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. IT IS ALSO PROVIDED U/S.148(2) OF THE ACT THAT BEFORE ISSUING NOTICE TO INITIATE REASSESSMENT PROCEEDINGS, AO MUS T RECORD HIS REASONS U/S.148 OF THE ACT. 11 . THE HONBLE BOMBAY HIGH COURT HAS HELD IN THE CASE OF HINDUSTAN LEVER LTD (SUPRA) THAT REASONS RECORDED MUST BE BASED ON EVIDENCE. THAT AO MUST DISCLOSE IN THE REASONS AS TO WHICH FACTS OR MATERI AL FACTS NOT DISCLOSED BY THE ASSESSEE FULLY AND TRULY WAS NECESSARY FOR ASSESSME NT OF THAT ASSESSMENT YEAR, SO AS TO ESTABLISH VITAL LINK BETWEEN THE REASONS AND EVIDEN CE. THEIR LORDSHIPS HAVE HELD THAT SAID VITAL LINK IS THE SAFEGUARD AGA INST ARBITRARY REOPENING OF THE CONCLUDED ASSESSMENT. IT WAS FURTHER HELD BY THEIR LORDSHIPS IN THE ABOVE CASE THAT THE REASONS RECORDED BY THE ASSESSING OFFICER CANNOT BE SUPPLEMENTED BY FILING AN AFFIDAVIT OR MAKING AN ORAL SUBMISSION. 12. IN VIEW OF ABOVE, WE OBSERVE THAT THE RELEVANT MATE RIAL AT THE TIME OF MAKING ORIGINAL ASSESSMENT U/S 143(3) OF THE ACT WA S AVAILABLE TO THE ASSESSING OFFICER. FURTHER, NO NEW MATERIAL OR FACT HAS COME ON RECORD TO STATE THAT THE ASSESSEE EITHER FILED WRONG PARTICULARS OF INCOME A ND/OR FAILED TO DISCLOSE TRULY AND WHOLLY MATERIAL FACTS DUE TO WHICH ANY EXCESSIV E CLAIM OF DEDUCTION WAS ALLOWED TO THE ASSESSEE. THEREFORE, WE ARE OF THE C ONSIDERED VIEW THAT NO NEW INFORMATION HAS BEEN RECEIVED BETWEEN THE DATE OF O RDER OF ASSESSMENT SOUGHT TO BE REOPENED AND THE DATE OF FORMATION OF OPINION BY THE ASSESSING OFFICER AND TO INITIATE REASSESSMENT PROCEEDINGS. HENCE, W E AGREE WITH THE LD. CIT(A) THAT IT WOULD AMOUNT TO REOPENING OF ASSESSMENT BY THE ASSESSING OFFICER 8 ITA NO.7278/MUM/2010 M/S. MONSANTO INDIA LTD. MERELY BECAUSE OF CHANGE OF OPINION, WHICH IS NOT P ERMISSIBLE. HENCE LD. CIT(A) HAS RIGHTLY HELD THAT NOTICE ISSUED U/S 148 OF THE ACT IS NOT VALID AND CONSEQUENTLY THE INITIATION OF REASSESSMENT PROCEED INGS IS NOT IN ACCORDANCE WITH LAW. HENCE WE UPHOLD THE ORDER OF THE LD. CIT (A) AND REJECT GROUNDS NO.1 TO 3 TAKEN BY THE DEPARTMENT . 13. SINCE WE HAVE HELD THAT NOTICE U/S 148 OF THE ACT TO INITAITE REASSESSMENT PROCEEDINGS IS NOT VALID AND SAME IS Q UASHED, WE DO NOT FIND IT NECESSARY TO GO INTO OTHER GROUNDS OF APPEAL TAKEN BY THE DEPARTMENT. 14. IN THE RESULT, APPEAL FILED BY THE DEPARTMENT I S DISMISSED. ORDER PRONOUNCED AFTER CONCLUSION OF HEARING IN THE PRESENCE OF LD. REPRESENTATIVES OF BOTH PARTIES IN THE OPEN COURT O N 25 TH JULY, 2013 2 . 1') % 3'4 25 TH JULY . 2013 ' . 5 SD/- SD/- ( SANJAY ARORA ) ( B.R.MITTAL ) % / ACCOUNTANT MEMBER / JUDICIAL MEMBER / MUMBAI ; 3' / DATED. 25-07-2013 ' . ./ SHEKHAR 2 2 2 2 . .. . ,06 ,06 ,06 ,06 76)0 76)0 76)0 76)0 / COPY OF THE ORDER FORWARDED TO : 1. *+ / THE APPELLANT 2. ,-*+ / THE RESPONDENT. 3. 8 ( ) / THE CIT(A)-17, MUMBAI 4. 8 / CIT CONCERNED, MUMBAI 5. 6 95 ,0' , , / DR, ITAT, MUMBAI BENCH 6. 5:( ; / GUARD FILE. 2' 2' 2' 2' / BY ORDER, -60 ,0 //TRUE COPY// < << < / = = = = ! ! ! ! ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI