M/s Pearl Plastic Products, Pune V. ITO, Pune

ITA 742/PUN/2010

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93798 (ITAT-PUNE)
• Duration Of Justice: 5 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-05-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 17-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Reopening of assessment; Depreciation; Tangible material; Difference of opinion; Reason to believe; Change of opinion; Reassessment proceedings
• Section: 143(3); 80HHC; 147; 148; 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE: SHRI R.K. PANDA, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ITA NO S . 740 TO 744 /PN/201 0 ASSESSMENT YEAR S : 2002 - 03 TO 2006 - 07 M/S PEARL PLASTIC PRODUCTS, CHAITANYA 774, BUDHWAR PETH, PUNE 411 002 VS. INCOME TAX OFFICER, WARD 5(4), PUNE. (APPELLANT) (RESPONDENT) PAN NO. AABFP4498C ASSESSEE BY: SHRI M.R. BHAGWAT REVENUE BY: SHRI B.C. MALAKAR DATE OF HEARING : 15-05-2015 DATE OF PRONOUNCEMENT : 29-05-2015 ORDER PER VIKAS AWASTHY, JM:- THE BUNCH OF FIVE APPEALS BY THE ASSESSEE IMPUGNING THE O RDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-III, PUNE DATED 03.03.2010 COMMON FOR THE ASSESSMENT YEARS 2002-03 TO 2006-07 IS IN SECOND ROUND BEFORE THE TRIBUNAL. 2. IN THESE SET OF APPEALS ASSESSEE HAS CHALLENGED REO PENING OF ASSESSMENT UNDER SECTION 147 OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT) AND DISALLOWANCE OF DEDUCTION U NDER SECTION 80-IA IN THE IMPUGNED ASSESSMENT YEARS. 3. IN THE FIRST ROUND, THE TRIBUNAL VIDE ORDER DATED 30.0 3.2012 ADJUDICATED THE ISSUE OF DISALLOWANCE OF DEDUCTION UNDER SE CTION 80-IA OF 2 THE ACT ALONE. IN RESPECT OF REOPENING OF ASSESSMENT, T HE TRIBUNAL OBSERVED THAT THE ISSUE OF DISALLOWANCE UNDER SECTION 80- IA IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONBLE MADR AS HIGH COURT RENDERED IN THE CASE OF VELAYUDHASWAMY SPINNING MILLS (P) LTD . VS. ACIT REPORTED AS 38 DTR 57 (MAD.). THEREFORE, ISSUE OF REOPEN ING OF ASSESSMENT HAS BECOME ACADEMIC AND THUS, DOES NOT REQ UIRE ADJUDICATION. THE ASSESSEE FILED MISCELLANEOUS APPLICATION NO.03/PN/2014 UNDER SECTION 254(2) WITH A PRAYER TO ADJUDICATE THE GRO UND CHALLENGING VALIDITY OF REOPENING OF ASSESSMENT UNDER SECTION 147 OF T HE ACT IN ALL APPEALS. THE MISCELLANEOUS APPLICATION OF THE ASSESSEE WAS ACCEPTED VIDE ORDER DATED 04.12.2014 AND THE APPEALS WERE DIRECT ED TO BE LISTED ONLY FOR LIMITED PURPOSE OF ADJUDICATING GROUND CHALLENGING T HE VALIDITY OF REOPENING OF ASSESSMENT UNDER SECTION 147 OF THE ACT. 4. BEFORE WE PROCEED WITH THE ISSUE OF REOPENING, IT IS NECE SSARY TO RECAPITULATE THE FACTS OF THE CASE AS EMANATING FROM THE RECORDS. THE ASSESSEE IS A PARTNERSHIP FIRM AND IS ENGAGED IN MANUFACTURING OF PLASTIC MOULDED PRODUCTS. THE ASSESSEE HAD INSTALLED WINDMILL IN AS SESSMENT YEAR 2000-01 FOR GENERATION OF POWER. IN ITS RETURN OF IN COME FOR THE ASSESSMENT YEAR 2002-03 ONWARDS, THE ASSESSEE HAS BE EN CLAIMING DEDUCTION UNDER SECTION 80-IA OF THE ACT. THE RETURN O F INCOME OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2002-03 WAS PROCESS ED UNDER SECTION 143(1) ON 17.03.2003. WHEREAS, RETURN OF INCOME OF THE ASS ESSEE FOR THE ASSESSMENT YEARS 2003-04 TO 2006-07 WERE SUBJECT TO SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT. IN THE RETU RN OF INCOME FILED FOR ALL THE AFORESAID ASSESSMENT YEARS, THE ASSESSEE HAS CLAIMED 3 DEDUCTION UNDER SECTION 80-IA OF THE ACT. THEREAFTER, ON 20.03.2009 SEPARATE NOTICES UNDER SECTION 148 OF THE ACT WERE ISSUED TO TH E ASSESSEE IN RESPECT OF ALL THE IMPUGNED FIVE ASSESSMENT YEARS. THE ASSESSING OFFICER HAD GIVEN SIMILAR REASONS FOR REOPENING OF ASSESSME NT IN ALL THE YEARS. ASSESSMENT ORDERS UNDER SECTION 143(3) R.W.S. 147 OF THE ACT FOR ALL THE IMPUGNED ASSESSMENT YEARS WERE PASSED ON 25.11.2 009. IN REASSESSMENT PROCEEDINGS THE CLAIM OF DEDUCTION UNDER S ECTION 80-IA WAS DENIED TO THE ASSESSEE. AGGRIEVED BY THE RE-ASSESSMENT ORDERS, THE ASSESSEE C HALLENGED THE ORDERS FOR RESPECTIVE ASSESSMENT YEARS IN APPEAL B EFORE THE COMMISSIONER OF INCOME TAX (APPEALS). THE COMMISSIONER OF IN COME TAX (APPEALS) VIDE ORDER DATED 03.03.2010 COMMON FOR ALL THE IMPUGNED ASSESSMENT YEARS REJECTED THE CONTENTIONS OF THE ASS ESSEE CHALLENGING REOPENING PROCEEDINGS AS WELL AS DISALLOWING OF DEDUCTION UND ER SECTION 80-IA OF THE ACT. AGAINST THE ORDER OF FIRST APPELLATE AUTHORITY, THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL CHALLENGING JURISDICTION OF REASSESSMENT PROCEEDINGS AND DISALLOWANCE O F DEDUCTION CLAIMED UNDER SECTION 80-IA OF THE ACT. 5. SHRI M.R. BHAGWAT APPEARING ON BEHALF OF THE ASSESSEE SU BMITTED THAT RE-ASSESSMENT PROCEEDINGS INITIATED IN RESPECT OF AS SESSMENT YEARS 2002-03 AND 2003-04 ARE BEYOND THE PERIOD OF FOUR YEAR S. THE REVENUE HAS NOT BEEN ABLE TO SHOW THAT THE INCOME CHARGEABLE T O TAX HAS ESCAPED ASSESSMENT BY REASON OF FAILURE ON THE PART OF THE ASSES SEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSES SMENT. FURTHER, NO TANGIBLE MATERIAL HAS COME INTO THE POSSESSION OF THE R EVENUE TO INITIATE REASSESSMENT PROCEEDINGS. IT IS A CASE OF MERE CHANGE OF 4 OPINION. THE RETURN OF INCOME OF THE ASSESSEE FOR THE ASS ESSMENT YEARS 2003-04 TO 2006-07 WAS SUBJECT TO SCRUTINY ASSESSMEN T. IT IS PRESUMED THAT THE ASSESSING OFFICER HAS APPLIED HIS MIND BEFORE ACCEP TING THE CLAIM OF DEDUCTION UNDER SECTION 80-IA OF THE ACT. THE AS SESSEES RETURNS OF INCOME WERE SELECTED FOR SCRUTINY ONLY ON THE BASIS OF DEDUCTION CLAIMED BY THE ASSESSEE UNDER CHAPTER VI-A O F THE ACT. IN REASSESSMENT PROCEEDINGS, THE REVENUE HAS DISALLOWED THE CLAIM OF ASSESSEE UNDER SECTION 80-IA, WHEREAS IN THE CASE OF THE ASSESS EES SISTER CONCERN, M/S PRIMA PAPERS AND ENGINEERING INDUSTRY THE CLAIM OF DEDUCTION UNDER SECTION 80-IA HAS BEEN GRANTED IN THE ASSESSMENT YEAR 2001-02. THE ASSESSEE IN SUPPORT OF HIS SUBMISSIONS PLACE D RELIANCE ON THE FOLLOWING DECISIONS :- (I) BALAKRISHNA H. WANI VS. ITO, 321 ITR 519 (BOM); (II) ARUN GUPTA VS. UOI & OTHERS, 371 ITR 394 (ALL); AND, (III) CIT VS. PRIMA PAPER AND ENGINEERING INDUSTRY, 364 ITR 222 (BOM). 6. ON THE OTHER HAND, SHRI B.C. MALAKAR REPRESENTING THE DEPARTMENT VEHEMENTLY SUPPORTED THE ACTION OF THE DEP ARTMENT IN INITIATING REASSESSMENT PROCEEDINGS AGAINST THE ASSESSEE. THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT A PERUSAL OF THE ORIGINAL ASSESSMENT ORDERS WOULD SHOW THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND ON THE DEDUCTION CLAIMED BY THE ASSESSEE U NDER SECTION 80-IA OF THE ACT. THERE IS NO DISCUSSION IN ANY OF THE AS SESSMENT ORDERS WITH REGARD TO THE DEDUCTION UNDER SECTION 80-IA. SINCE , NO OPINION WAS FORMED BY THE ASSESSING OFFICER IN THE ORIGINAL ASSESSMENT O RDERS THERE IS NO QUESTION OF CHANGE OF OPINION. THE LD. DEPARTMENTA L 5 REPRESENTATIVE VEHEMENTLY DEFENDED THE IMPUGNED ORDER AND THE ACTION OF THE AUTHORITIES BELOW IN INITIATING REASSESSMENT PROCEED INGS AGAINST THE ASSESSEE. 7. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENT ATIVES OF BOTH THE SIDES AND HAVE PERUSED THE ORDERS OF THE AUT HORITIES BELOW. WE HAVE ALSO EXAMINED THE JUDGEMENTS AND THE DOCUMENTS FILE D BY THE ASSESSEE IN THE FORM OF PAPER BOOK. IT IS AN UNDISPUTED FACT THAT REASSESSMENT PROCEEDINGS IN RESPECT OF ASSESSMENT YEA RS 2002-03 AND 2003-04 HAVE BEEN INITIATED AFTER THE ELAPSE OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR. THUS, THE PROVISO TO SE CTION 147(1) SHALL COME INTO PLAY. IT IS ALSO AN UNDISPUTED FACT THAT IN ASS ESSMENT YEAR 2002-03, ASSESSMENT WAS MADE UNDER SECTION 143(1). IN OTHER FOUR IMPUGNED ASSESSMENT YEARS, ASSESSMENT ORDERS WERE PAS SED UNDER SECTION 143(3) OF THE ACT. THE ASSESSMENTS IN ALL THE FIVE Y EARS WAS REOPENED ON THE SAME DATE I.E. 20.03.2009. THE LD. AR HAS PLACED ON RECORD THE REASONS FOR REOPENING OF THE ASSESSMENT IN ALL THE FIVE YEARS. THE REASONS GIVEN IN ASSESSMENT YEAR 2002-03 ARE REPR ODUCED HEREINBELOW :- THE ASSESSEE FIRM HAS CLAIMED THE DEDUCTION UNDER SECTION 80IA OF IT ACT OF RS.11,79,686/- FOR THE AY 2002-03 ON ACCO UNT OF INCOME FROM WINDMILL. THE RETURN WAS ACCEPTED UNDER SECTION 14 3(1). AS PER PROVISION OF SECTION 80IA(5) OF THE IT ACT, DEDUCTION UNDER S ECTION 80IA IS ALLOWABLE IF THERE IS POSITIVE INCOME FROM WINDMILL AFTER SETTIN G OFF CARRIED FORWARD DEPRECIATION ON THE WINDMILL, AS THOUGH WINDMILL IS THE ONLY BUSINESS OF THE ASSESSEE. AS PER RECORDS, THE DEPRECIATION ON THE WINDMILL WHICH IS TO BE SO SET OFF IS RS.1,03,98,500/-, WHEN SUCH DEPREC IATION IS SET OFF AGAINST WINDMILL INCOME FOR VARIOUS SUCCEEDING YEARS INCLUD ING THE YEAR UNDER CONSIDERATION, THE ASSESSEE IS LEFT WITH NO POSITIV E INCOME FROM THE WINDMILL AND IS HENCE NOT ELIGIBLE FOR ANY DEDUCTIO N UNDER SECTION 80IA. THE POSITION OF SUCH DEDUCTION WHICH IS CLAIMED IS AS PER COLUMN F OF THE ENCLOSED CHART, WHEREAS POSITION OF DEDUCTION ALLOW ABLE FOR VARIOUS YEARS IS AS PER THE COLUMN H OF THE CHART. WHEREVER THE DEDUCTION ALLOWABLE IS LOWER THAN DEDUCTION CLAIMED UNDER SECTION 80IA, TH ERE IS ESCAPEMENT OF INCOME ASSESSED, BY VIRTUE OF EXCESSIVE CLAIM OF DE DUCTION. IN THE YEAR 6 UNDER CONSIDERATION THE DEDUCTION UNDER SECTION 80I A IS NIL, WHEREAS THE DEDUCTION CLAIMED BY THE ASSESSEE IS RS.11,79,686/- , LEADING TO THE ESCAPEMENT OF INCOME ACCESSED TO THE TUNE OF RS.11, 79,686/-. HENCE, THE UNDER SIGN HAS REASON TO BELIEVE THAT TH ERE IS ESCAPEMENT OF INCOME TO THE EXTENT OF RS.11,79,686/ -, FOR THE AY 2002-03 IN THE CASE OF PEARL AND PLASTIC PRODUCTS. THEREFO RE, NECESSARY PERMISSION MAY BE ACCORDED FOR ISSUE OF NOTICE UNDER SECTION 1 48 OF THE IT ACT 1961 FOR THE AY 2002-03. SD/- (A D CHAUBAL) INCOME TAX OFFICER WARD 5(4), PUNE A PERUSAL OF REASONS OF REOPENING THE ASSESSMENT IN ALL T HE YEARS SHOW THAT EXCEPT FOR THE AMOUNT, THEY ARE ALL IDENTICAL. 8. FIRST, WE TAKE-UP THE APPEALS OF THE ASSESSEE FOR THE ASSESSMENT YEARS 2002-03 AND 2003-04, WHERE REOPENING PROCEEDINGS HAVE BEEN INITIATED AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS. FOR INVOKING JURISDICTION UNDER SECT ION 147 OF THE ACT, WHERE THE REASSESSMENT PROCEEDINGS ARE INITIATED AFT ER THE EXPIRY OF FOUR YEARS, TWO CONDITIONS ARE REQUIRED TO BE SATISFIED : (I) THE ASSESSING OFFICER MUST HAVE REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT; AND, (II) HE MUST ALSO HAVE REASON TO BELIEVE THAT SUCH ESCAPEM ENT OCCURRED BY REASON OF EITHER (A) OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN OF INCOME UNDER SECTION 139 OF THE ACT; OR, (B) OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR H IS ASSESSMENT FOR THAT YEAR. 7 THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINAT OR OF INDIA LTD. REPORTED AS 256 ITR 1 (DELHI) HAS HELD THAT TH E AFORESTATED TWO CONDITIONS ARE PRECEDENT FOR INVOKING JURISDICTION TO REOPE N THE ASSESSMENT UNDER SECTION 147 OF THE ACT. BOTH THE CON DITIONS ARE CUMULATIVE, IF ANY, OF THE SAID TWO CONDITIONS ARE NOT FULFILLED, TH E NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SECTION 148 OF THE A CT IS WITHOUT JURISDICTION. 9. THE HONBLE DELHI HIGH COURT IN THE CASE OF E.I. DUPONT INDIA PVT. LTD. AND ANOTHER VS. DCIT REPORTED AS 351 ITR 299 (DE LHI) HAS HELD THAT FAILURE TO DISCLOSE ALL MATERIAL FACTS NECESSARY FOR ASSESSME NT IS A CONDITION PRECEDENT FOR REOPENING OF AN ASSESSMENT BEYO ND A PERIOD OF FOUR YEARS FROM THE DATE OF ASSESSMENT. IT IS INCUMBENT UPON THE ASSESSING OFFICER TO DEMONSTRATE THAT THERE WAS FAILURE ON THE PART OF THE ASSESSEE TO FULLY AND TRULY DISCLOSE ALL MATERIAL FACTS NECE SSARY FOR ITS ASSESSMENT. IF THE REASONS DO NOT EVEN ALLEGE THAT THE RE HAD BEEN A FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE ALL MATERIA L FACTS WHICH ARE NECESSARY FOR THE ASSESSMENT, THE NOTICE IS ITSELF BAD IN LA W AND IS LIABLE TO BE QUASHED. 10. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. OR IENT CRAFT LTD. REPORTED AS 354 ITR 536 (DELHI) WHILE DEALING WITH THE REASSESSMENT PROCEEDINGS IN RESPECT OF RETURN OF INCOME ASSESSED UNDE R SECTION 143(1) AND ASSESSMENT MADE UNDER SECTION 143(3) HAS OBSERVED AS UNDER : - HAVING REGARD TO THE JUDICIAL INTERPRETATION PLACE D UPON THE EXPRESSION 'REASON TO BELIEVE', AND THE CONTINUED U SE OF THAT EXPRESSION RIGHT FROM 1948 TILL DATE, WE HAVE TO UNDERSTAND TH E MEANING OF THE EXPRESSION IN EXACTLY THE SAME MANNER IN WHICH IT H AS BEEN UNDERSTOOD BY THE COURTS. THE ASSUMPTION OF THE REVENUE THAT S OMEHOW THE WORDS 'REASON TO BELIEVE' HAVE TO BE UNDERSTOOD IN A LIBE RAL MANNER WHERE THE 8 FINALITY OF AN INTIMATION UNDER SECTION 143(1) IS S OUGHT TO BE DISTURBED IS ERRONEOUS AND MISCONCEIVED. AS POINTED OUT EARLIER, THERE IS NO WARRANT FOR SUCH AN ASSUMPTION BECAUSE OF THE LANGUAGE EMPLOYED IN SECTION 147 ; IT MAKES NO DISTINCTION BETWEEN AN ORDER PASSED UNDER SECTION 143(3) AND THE INTIMATION ISSUED UNDER SECTION 143(1). THEREFO RE, IT IS NOT PERMISSIBLE TO ADOPT DIFFERENT STANDARDS WHILE INTERPRETING THE WORDS 'REASON TO BELIEVE' VIS-A-VIS SECTION 143(1) AND SECTION 143(3 ). WE ARE UNABLE TO APPRECIATE WHAT PERMITS THE REVENUE TO ASSUME THAT SOMEHOW THE SAME RIGOROUS STANDARDS WHICH ARE APPLICABLE IN THE INTE RPRETATION OF THE EXPRESSION WHEN IT IS APPLIED TO THE REOPENING OF A N ASSESSMENT EARLIER MADE UNDER SECTION 143(3) CANNOT APPLY WHERE ONLY A N INTIMATION WAS ISSUED EARLIER UNDER SECTION 143(1). IT WOULD IN EF FECT PLACE AN ASSESSEE IN WHOSE CASE THE RETURN WAS PROCESSED UNDER SECTION 1 43(1) IN A MORE VULNERABLE POSITION THAN AN ASSESSEE IN WHOSE CASE THERE WAS A FULL- FLEDGED SCRUTINY ASSESSMENT MADE UNDER SECTION 143( 3). WHETHER THE RETURN IS PUT TO SCRUTINY OR IS ACCEPTED WITHOUT DE MUR IS NOT A MATTER WHICH IS WITHIN THE CONTROL OF THE ASSESSEE ; HE HA S NO CHOICE IN THE MATTER. THE OTHER CONSEQUENCE, WHICH IS SOMEWHAT GRAVER, WO ULD BE THAT THE ENTIRE RIGOROUS PROCEDURE INVOLVED IN REOPENING AN ASSESSMENT AND THE BURDEN OF PROVING VALID REASONS TO BELIEVE COULD BE CIRCUMVENTED BY FIRST ACCEPTING THE RETURN UNDER SECTION 143(1) AND, THER E-AFTER, ISSUE NOTICES TO REOPEN THE ASSESSMENT. AN INTERPRETATION WHICH MAKE S A DISTINCTION BETWEEN THE MEANING AND CONTENT OF THE EXPRESSION ' REASON TO BELIEVE' IN CASES WHERE ASSESSMENTS WERE FRAMED EARLIER UNDER S ECTION 143(3) AND CASES WHERE MERE INTIMATIONS WERE ISSUED EARLIER UN DER SECTION 143(1) MAY WELL LEAD TO SUCH AN UNINTENDED MISCHIEF. IT WO ULD BE DISCRIMINATORY TOO. AN INTERPRETATION THAT LEADS TO ABSURD RESULTS OR MISCHIEF IS TO BE ESCHEWED. CERTAIN OBSERVATIONS MADE IN THE DECISION OF RAJESH JHAVERI (SUPRA) ARE SOUGHT TO BE RELIED UPON BY THE REVENUE TO POIN T OUT THE DIFFERENCE BETWEEN AN 'ASSESSMENT' AND AN 'INTIMATION'. THE CO NTEXT IN WHICH THOSE OBSERVATIONS WERE MADE HAS TO BE KEPT IN MIND. THEY WERE MADE TO POINT OUT THAT WHERE AN 'INTIMATION' IS ISSUED UNDER SECT ION 143(1) THERE IS NO OPPORTUNITY TO THE ASSESSING AUTHORITY TO FORM AN O PINION AND, THEREFORE, WHEN ITS FINALITY IS SOUGHT TO BE DISTURBED BY ISSU ING A NOTICE UNDER SECTION 148, THE PROCEEDINGS CANNOT BE CHALLENGED O N THE GROUND OF 'CHANGE OF OPINION'. IT WAS NOT OPINED BY THE SUPRE ME COURT THAT THE STRICT REQUIREMENTS OF SECTION 147 CAN BE COMPROMISED. ON THE CONTRARY, FROM THE OBSERVATIONS (QUOTED BY US EARLIER) IT WOULD AP PEAR CLEAR THAT THE COURT REITERATED THAT 'SO LONG AS THE INGREDIENTS OF SECT ION 147 ARE FULFILLED' AN INTIMATION ISSUED UNDER SECTION 143(1) CAN BE SUBJE CTED TO PROCEEDINGS FOR REOPENING. THE COURT ALSO EMPHASISED THAT THE ONLY REQUIREMENT FOR DISTURBING THE FINALITY OF AN INTIMATION IS THAT TH E ASSESSING OFFICER SHOULD HAVE 'REASON TO BELIEVE' THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN OUR OPINION, THE SAID EXPRESSION SHO ULD APPLY TO AN INTIMATION IN THE SAME MANNER AND SUBJECT TO THE SA ME INTERPRETATION AS IT WOULD HAVE APPLIED TO AN ASSESSMENT MADE UNDER SECT ION 143(3). THE ARGUMENT OF THE REVENUE THAT AN INTIMATION CANNOT B E EQUATED TO AN ASSESSMENT, RELYING UPON CERTAIN OBSERVATIONS OF TH E SUPREME COURT IN RAJESH JHAVERI (SUPRA) WOULD ALSO APPEAR TO BE SELF -DEFEATING, BECAUSE IF AN 'INTIMATION' IS NOT AN 'ASSESSMENT' THEN IT CAN NEVER BE SUBJECTED TO SECTION 147 PROCEEDINGS, FOR, THAT SECTION COVERS O NLY AN 'ASSESSMENT' AND WE WONDER IF THE REVENUE WOULD BE PREPARED TO CONCE DE THAT POSITION. IT IS 9 NOBODY'S CASE THAT AN 'INTIMATION' CANNOT BE SUBJEC TED TO SECTION 147 PROCEEDINGS ; ALL THAT IS CONTENDED BY THE ASSESSEE , AND QUITE RIGHTLY, IS THAT IF THE REVENUE WANTS TO INVOKE SECTION 147 IT SHOULD PLAY BY THE RULES OF THAT SECTION AND CANNOT BOG DOWN. IN OTHER WORDS , THE EXPRESSION 'REASON TO BELIEVE' CANNOT HAVE TWO DIFFERENT STAND ARDS OR SETS OF MEANING, ONE APPLICABLE WHERE THE ASSESSMENT WAS EA RLIER MADE UNDER SECTION 143(3) AND ANOTHER APPLICABLE WHERE AN INTI MATION WAS EARLIER ISSUED UNDER SECTION 143(1). IT FOLLOWS THAT IT IS OPEN TO THE ASSESSEE TO CONTEND THAT NOTWITHSTANDING THAT THE ARGUMENT OF ' CHANGE OF OPINION' IS NOT AVAILABLE TO HIM, IT WOULD STILL BE OPEN TO HIM TO CONTEST THE REOPENING ON THE GROUND THAT THERE WAS EITHER NO REASON TO BE LIEVE OR THAT THE ALLEGED REASON TO BELIEVE IS NOT RELEVANT FOR THE FORMATION OF THE BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. IN DOING SO, IT IS FURTHER OPEN TO THE ASSESSEE TO CHALLENGE THE REASONS RECORDED U NDER SECTION 148(2) ON THE GROUND THAT THEY DO NOT MEET THE STANDARDS SET IN THE VARIOUS JUDICIAL PRONOUNCEMENTS. 11. THE HONBLE GUJARAT HIGH COURT IN THE CASE OF CADILA H EALTHCARE LTD. VS. DCIT REPORTED AS 334 ITR 420 (GUJ) HAS STRUCK DOWN THE REASSESSMENT PROCEEDINGS WHERE THE REASSESSMENT WAS INITIAT ED AFTER THE PERIOD OF FOUR YEARS ONLY ON THE GROUND THAT THE CLAIM O F DEDUCTION UNDER SECTION 80HHC OF THE ACT WAS NOT EXAMINED PROPERLY. THE H ONBLE HIGH COURT HELD AS UNDER :- FROM THE FACTS EMERGING ON RECORD, THERE IS NOTHIN G TO INDICATE THAT THE PETITIONER HAS WITHHELD ANY PARTICULARS. THE SU CCESSOR-ASSESSING OFFICER HAS VERIFIED THE SAME RECORD TO COME TO THE CONCLUSION THAT THERE IS ESCAPE-MENT OF INCOME WHICH COULD HAVE BEEN DONE AT THE INITIAL STAGE ITSELF. THERE IS NOTHING ON RECORD TO INDICATE ANY OMISSION ON THE PART OF THE ASSESSEE IN FULFILLING ANY OBLIGATION IN LAW. WHETH ER THE ASSESSING OFFICER WHILE FRAMING THE ORIGINAL ASSESSMENT HAD FAILED TO WORK OUT THE TAX LIABILITY CORRECTLY OR NOT, THE ASSESSEE CANNOT BE CHARGED FOR ANY OMISSION. IN CASE THE ASSESSEE HAD LAID A CLAIM TO A PARTICUL AR AMOUNT, IT WAS THE JOB OF THE ASSESSING OFFICER TO CORRECTLY COMPUTE T HE TAX LIABILITY. MERELY MAKING A CLAIM CANNOT BE STATED TO BE NON-DISCLOSUR E OF MATERIAL FACTS SO AS TO VEST IN THE ASSESSING OFFICER JURISDICTION UN DER SECTION 147 OF THE ACT. BESIDES, AS ALREADY NOTED HEREINABOVE, THE RESPONDE NT SEEKS TO REOPEN THE (SIC) AFTER A PERIOD OF FOUR YEARS FROM THE END OF THE RE LEVANT ASSESSMENT YEAR. IN THE REASONS RECORDED, THERE IS NOTHING TO INDICATE THAT THE ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT FOR THE YEAR UNDER CONSIDERATION . HENCE, THE INGREDIENTS OF THE PROVISO TO SECTION 147 OF THE ACT ARE CLEARL Y NOT SATISFIED. IN THE CIRCUMSTANCES, THERE IS NO JUSTIFICATION FOR ASSUMP TION OF JURISDICTION BY THE RESPONDENT-ASSESSING OFFICER FOR REOPENING THE PROC EEDINGS UNDER SECTION 147 OF THE ACT. THE ENTIRE PROCEEDINGS INITIATED PU RSUANT TO THE IMPUGNED 10 NOTICE DATED OCTOBER 28, 2009, THEREFORE, ARE WITHO UT JURISDICTION AND AS SUCH, CANNOT BE SUSTAINED. 12. THERE ARE CATENA OF JUDGEMENTS WHEREIN IT HAS BEEN HELD THAT FOR REOPENING OF ASSESSMENT AFTER THE EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEARS, IT IS ESSENTIAL TO SHOW THAT T HE ASSESSEE HAS FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSA RY FOR THE ASSESSMENT YEAR UNDER CONSIDERATION. A PERUSAL OF REASONS FOR REOPENING REPRODUCED HEREINABOV E SHOW THAT NOWHERE IT IS ALLEGED BY THE REVENUE, THAT THE ASSE SSMENT PROCEEDINGS ARE INITIATED AS THE ASSESSEE HAS FAILED TO DIS CLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSMENT. THE TWO PRE- CONDITIONS LAID DOWN BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. (SUPRA) FOR EXERCISING JURISDICTION UNDER SECTION 147, THAT HAVE BEEN SUBSEQUENTLY AFFIRMED BY THE HONBLE SUPREME COURT OF INDIA IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. REPORTED AS 320 ITR 561 ARE ABSENT IN THE PRESENT CASE. ONE OF THE SUBMISSIONS OF LD. DR IS THAT IN ASSESSMENT YE AR 2002-03 ASSESSMENT WAS MADE UNDER SECTION 143(1), THERE FORE THE ASSESSING OFFICER HAD NO OCCASION TO APPLY HIS MIND ON THE RETURN OF INCOME. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V S. ORIENT CRAFT LTD. (SUPRA) HAS ERASED THE LINE OF DISTINCTION BETWEEN ASSE SSMENT MADE UNDER SECTION 143(1) AND 143(3). THUS, IN VIEW OF THE LAW LAID DOWN IN THE CASE OF CIT VS. ORIENT CRAFT LTD. (SUPRA) THE CONTENTIO N OF THE LD. DR DOES NOT HOLD GROUND. 11 IN VIEW OF THE FACTS OF THE CASE AND THE JUDGEMENTS OF THE HONBLE HIGH COURT DISCUSSED ABOVE, WE ARE OF THE CONSIDERED VIEW THAT THE NOTICE ISSUED UNDER SECTION 148 FOR THE ASSESSMENT YEAR 2002-03 AND 2003-04 IS BAD IN LAW. HENCE, THE SUBSEQUENT PROCEEDING S ARISING THEREFROM ARE VITIATED AND ARE LIABLE TO BE SET ASIDE. 13. NOW, WE PROCEED ON TO THE ASSESSMENT YEARS 2004-0 5, 2005-06 AND 2006-07. THE REASSESSMENT PROCEEDINGS CAN BE INITIA TED AGAINST THE ASSESSEE IF THE ASSESSING OFFICER HAS REASON TO BELIEVE T HAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR ANY ASSE SSMENT YEAR. FOR REOPENING THE ASSESSMENT WITHIN A PERIOD OF FOUR YEARS FR OM THE END OF THE RELEVANT ASSESSMENT YEARS, THE TEST TO BE APPLIED IS WHETHER THERE IS A TANGIBLE MATERIAL TO DO SO. THE ASSESSING OFFICER BEFORE IN VOKING THE JURISDICTION UNDER SECTION 147 MUST HAVE IN HIS POSSESSION ANY TANGIBLE AND/OR FRESH MATERIAL WHICH WAS NOT CONSIDERED BY HIM AT THE TIME OF MAKING ASSESSMENT. THE LEGISLATURE HAS NOT GRANTED UNFET TERED POWERS TO THE ASSESSING OFFICER TO REVIEWS THE ORDER IN THE GAR B REASSESSMENT PROCEEDINGS. THE ASSESSING OFFICER SHOULD NOT BE ALLOWED TO CLOAK HIMSELF WITH THE JURISDICTION OF REASSESSMENT TO REVIEW HIS O RDERS. THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS. KELVINATOR O F INDIA (SUPRA) HAS OBSERVED :- 23. . WHEN A REGULAR ORDER OF ASSESSMENT IS PLACED IN TERMS OF THE SAID SUB-SECTION (3) OF SECTION 143 , A PRESUMPTION CAN BE RAISED THAT SUCH AN ORDER HAS BEEN PASSED ON APPLIC ATION OF MIND. IT IS WELL-KNOWN THAT A PRESUMPTION CAN ALSO BE RAISED TO THE EFFECT THAT IN TERMS OF CLAUSE (E) OF SECTION 114 OF THE INDIAN EV IDENCE ACT THE JUDICIAL AND OFFICIAL ACTS HAVE BEEN REGULARLY PERFORMED. I F IT BE HELD THAT AN ORDER WHICH HAS BEEN PASSED PURPORTEDLY WITHOUT APPLICATI ON OF MIND WOULD ITSELF CONFER JURISDICTION UPON THE ASSESSING OFFIC ER TO REOPEN THE PROCEEDING WITHOUT ANYTHING FURTHER, THE SAME WOULD AMOUNT TO GIVING PREMIUM TO AN AUTHORITY EXERCISING QUASI-JUDICIAL F UNCTION TO TAKE BENEFIT OF ITS OWN WRONG. 12 14. IN THE INSTANT CASE, A PERUSAL OF THE ORIGINAL ASSESSM ENT ORDERS PASSED UNDER SECTION 143(3) OF THE ACT FOR THE ASSESSMEN T YEARS 2005-06 AND 2006-07 SHOWS THAT THE ASSESSING OFFICER HAS CLEARLY STATED THAT THE ASSESSEE HAS CLAIMED DEDUCTION UNDER CHAPTER VI-A OF TH E ACT. THE ASSESSING OFFICER WHILE DRAWING COMPUTATION OF TOTAL INCOME HA S CLEARLY MENTIONED, INCOME FROM WINDMILL ACTIVITY AND HAS THEREAFTER GRANTED DEDUCTION UNDER CHAPTER VI-A OF THE ACT ON WINDMILL INCOME . ONCE THE ASSESSING OFFICER HAS APPLIED HIS MIND WHILE PASSING THE ASSES SMENT ORDER AND HAS GRANTED RELIEF, THERE IS NO QUESTION OF REVIE WING THE SAME UNDER THE GARB OF REASSESSMENT PROCEEDINGS. IN THE RE ASONS FOR REOPENING NOWHERE IT HAS BEEN STATED THAT THE DEDUCT ION CLAIMED BY THE ASSESSEE UNDER SECTION 80-IA OF THE ACT HAS COME TO THE KNOWLEDGE OF THE ASSESSING OFFICER AFTER PASSING OF ASSESSMENT ORDERS. IN O UR CONSIDERED VIEW, IT IS CLEAR CASE OF CHANGE OF OPINION. THUS, THE ASSE SSING OFFICER HAS ACTED BEYOND HIS JURISDICTION IN INITIATING REASSESSMENT PROCEEDINGS UNDER SECTION 147 OF THE ACT. THE IMPUGNED ORDERS ARE SET-ASIDE AND THE FIRST GROUND IN THE APPEALS OF THE ASSESSEE IS ALLOWED. 15. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON FRIDAY, THE 29 TH DAY OF MAY, 2015 AT PUNE. SD/- SD /- (R.K. PANDA) (VIKAS AWASTHY) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 29 TH MAY, 2015 SUJEET 13 COPY TO 1 ASSESSEE 2 DEPARTMENT 3 THE CIT(A) - II I, PUNE 4 THE CIT - II I , PUNE 5 6 THE DR, ITAT, B BENCH, PUNE. GUARD FILE. BY ORDER //TRUE COPY// SR. PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL, PUNE