The ACIT, Circle-1(1)(1), Vadodara V. Gujarat Energy Transmission Corpn. Ltd., Vadodara

ITA 851/AHD/2018

AI Insights

The case involves the Assistant Commissioner of Income Tax (ACIT) as the appellant and Gujarat Energy Transmission Corporation Ltd. as the respondent. The dispute centered on the reassessment order under section 143(3) read with section 147 of the Income Tax Act, 1961, for the Assessment Year 2011-12. The primary issue was the addition of capital grants and subsidies to the book profit under section 115JB, which the Assessing Officer initially did not include in the original assessment but later added during the reassessment. The CIT(A) upheld the reopening of the assessment but deleted the addition, leading to the Revenue's appeal to the Tribunal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114298 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2023
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 20-06-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 05-04-2018
• Other Referred Cases: ACIT Vs. Gujarat State Energy Generation Ltd., PCIT v. Sun Pharmaceuticals Industries Ltd., Madhya Gujarat Vij Co. Ltd. v. ACIT, Gujarat Power Corpn. Limited v. Asstt. CIT, Kelvinator of India Ltd. v. PCIT, Rajesh Jhaveri Stock Brokers Pvt. Ltd. v. PCIT, Dahod Sahakari Kharid Vechan Sangh Ltd. v. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Depreciation; Tangible material; Difference of opinion; Change of opinion; Reassessment proceedings; Set aside
• Section: 148; 143(3); 115JB; 119; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before: Smt. Annapurna Gupta, Accountant Member And Shri T.R. Senthil Kumar, Judicial Member The Asstt. CIT, Circle-1(1)(1), Vadodara (Appellant) Vs Gujarat Energy Transmission Corp. Ltd., Sardar Patel Vidyut Bhavan, Race Course Circle, Baroda-390007 PAN: AABCG4029R (Respondent) Assessee Represented: Shri M.J. Shah, Shri Jimi Patel & Shri Rushin Patel, A.Rs. Revenue Represented: Shri A.P. Singh, CIT-DR Date of hearing : 21-06-2023 Date of pronouncement : 28-07-2023 आदेश/ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Revenue as against the appellate order dated 29.01.2018 passed by the Commissioner of Income Tax (Appeals)-1, Vadodara arising out of the reassessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 ITA No. 851/Ahd/2018 Assessment Year 2011-12 I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 2 (hereinafter referred to as ‘the Act’) relating to the Assessment Year (A.Y) 2011-12. 2. The brief facts of the case is that the assesse is a Public Sector Company engaged in the business of Transmission of Power. For the Assessment Year 2011-12, the assessee filed its Return of Income declaring total income of Rs. Nil after setting off brought forward losses of Rs. 2,66,33,64,437/- and Book Profit u/s. 115JB was returned at Rs. 2,65,73,22,107/-. The return was subject to regular assessment u/s. 143(3) of the Act vide assessment order dated 05-02-2014 wherein business income was assessed at Rs.3,09,99,15,987/- and income from other sources was assessed at Rs. 4,06,94,000/- and the same were set off against brought forward loss and unabsorbed depreciation and assessed to Nil income. 2.1. Subsequently, the Assessing Officer noticed that the addition made on account of capital grants and subsidies under normal provisions to the extent of Rs. 4028.91 lakhs remained to be added to the book profit u/s. 115JB and accordingly A.O. initiated reassessment proceedings by issuance of notice u/s. 148 dated 25- 02-2016. The reasons recorded for reopening of the assessment is as follows: "2. It was seen that the assessee had shown capital grant/subsidy of 87,541.25 lakh at the year end. Out of which the assessee had offered only 10% of the grants received from the Central/State Government as revenue receipt and deferred the remaining grant to 10 years. Though, the assessing officer took the view that instead of 10% of the grant, the assessee had to offer 15% of the grant as revenue receipt of current year in the income under normal provisions, which was confirmed by the Ld. C1T(A) in the case of Dakshin Gujarat Vij Company Ltd and held that the assessee had to offer 15% of the grants at the year-end to the Profit and I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 3 Loss Account, the same remained to be added to the Book Profit u/s 115JB of the Act. As discussed above and accepted by the Ld. C1T(A), the assessee had to credit the P&L account @15% of the subsidies received instead of 10% as credited by assessee, therefore, the assessing officer had to give its effect to the Profit and Loss account of the assessee and the difference income not credited to P&L of 4,028.91 lakh, being remaining 5% of the total year- end balance of capital grant/subsidy (87,54 1.25 lakhs) was required to be credited to P&L Account and accordingly net profit to be increased by this amount for the purposes of computing Book Profit u/s. 115JB.” 3. The assessee’s objection of reopening of assessment was overruled and the Ld. A.O. completed the reassessment by making addition on account of capital grants of Rs. 4082.91 lakhs in the computation under section 115JB of the Act. 4. Aggrieved against the same, the assessee filed an appeal before Ld. CIT(A) challenging both on the ground of reopening of assessment and addition made u/s. 115JB of the Act by the A.O. The Ld. CIT(A) upheld the reopening of assessment is good in law and however deleted the addition made by the Assessing Officer following the decision in the case of ACIT Vs. Gujarat State Energy Generation Ltd. observing as follows: “....4.2. Ground No. 2 pertains to the addition of 40,82,91,000/- to the book profit u/s 115JB. This addition pertains to additional 5% of the capital grant and subsidies added to the total income under normal Income-tax provisions. My predecessor, vide letter dated 22.09.2015 in the case of the appellant itself in AY 2012-13 contained in Appeal No.CAB- 1/300/2014-15, after relying upon the decision of the Hon'ble ITAT in ACIT vs Gujarat State Energy Generation Ltd., ITA No. 1777/Ahd/2009 and 2028/Ahd/2009 (AY 2006-07) dated 15.04.2011, has held that addition of capital grant and subsidies made under normal provisions, cannot be made to the book profit u/s 115JB because it is not covered by any of the items specifically mentioned in the Explanation-1 to section 1153B(2). Accordingly, he has deleted the addition made to the book profit on this account. Since, the facts are identical in this year also, I respectfully following the above order of my predecessor, hold that the addition of capital grant and subsidies made under normal provisions at 40,82,91,000/- cannot be made to the book profit u/s 115JB. Hence, the I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 4 addition made by the AO on this account is directed to be deleted from the book profit computed u/s. 115JB. Thus appellant succeeds in rerspect of ground No. 2.” 5. Aggrieved against the same, the Revenue is in appeal before us raising the following Grounds of Appeal: 1. "On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made in book profit on account of capital grants amounting to Rs.4082.91 lacs made by the AO without appreciating the fact that the assessee neither credited this grant to the Profit & Loss account directly nor debited the capital assets from the capital grant nor it defer the amount of grant for certain period as provided." 2. The appellant craves leave to add to, amend or alter the above grounds as may be deemed necessary. 6. Per Contra, the assessee filed application under Rule 27 of the Income Tax Appellate Tribunal Rules, 1963 raising the following Grounds: “....10. It is humbly submitted that, the respondent in the present case, may kindly be allowed to support the order appealed against on the ground decided against it by challenging the reopening notice u/s.148 of the Act. This right has been provided as per the aforesaid Rule 27 of the ITAT Rules, 1963. Reliance is placed on the binding judgement of the Hon'ble jurisdictional Gujarat High Court in the case of PCIT v. Sun Pharmaceuticals Industries Ltd. reported in (2017) 408 ITR 517 (Guj), wherein under identical circumstances, it was held that the Hon'ble ITAT was right in law in allowing the respondent assessee to raise the question of validity of the reopening notice taking recourse to Rule 27 of the ITAT Rules without the assessee having filed cross appeal or cross objection before the Tribunal against the order of the CIT(A). 11. On the ground challenging the reopening notice u/s. 148 by taking recourse to the aforesaid Rule 27, the respondent humbly submits that, the issue is squarely covered by the binding judgment of the Hon'ble jurisdictional Gujarat High Court in the case of associate concern, namely, Madhya Gujarat Vij Co. Ltd. v. ACIT reported in (2018) 94 taxmann.com 337 (Guj), wherein under identical circumstances, the Hon'ble Court had quashed the reopening notice. The relevant portions of the judgment are reproduced hereunder. "9. Adverting to rest of the cases where notices have been issued within a period of four years and also as an additional ground I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 5 pressed into service in the cases where notices have been issued beyond the period of four years, we may examine the assessee's contention of Assessing Officer recking up a scrutinized issue. 14. He finally worked out the assessee's book profit under Section 115JB of the Act at Rs. 32.11 Crores. It can thus be seen that the Assessing Officer was of the opinion that instead of 10% of the government subsidy, 15% thereof should be reflected in the assessee's books of account He accordingly made such additions in the normal computation of assessee's income. While the Assessing Officer was so examining the assessee's treatment to the Government grants and subsidies, he simultaneously also examined the assessee's computation of Book-profit under Section 1151B of the Act. Both issues were thus clearly interconnected and were not possible for consideration separately. The fact that the Assessing Officer did not make any similar upward revision of the assessee's book profit under Section 115JB of the Act, that too without citing the reasons, would not mean that he had not examined the issue. 15. The Revenue's contention could as well be that not making such an addition was an error on the part of Assessing Officer. The decision of the Assessing Officer being erroneous, is quite different from the failure of the Assessing Officer to notice a certain element of taxability. The former would have to be rectified through the process of revision or suo motu by the Commissioner [Appeals]; if one filed by the assessee. The latter may give rise to reopening of the assessment, subject to fulfillment of other conditions. In the present case, particularly when the assessee itself had carried the issue of upward revision in the normal computation of income the Commissioner as well could have in such appeal itself suo motu or if so urged by the Revenue, made amends, if there was any error in the order of assessment. This is however not the case where the Assessing Officer has not scrutinized the issue. 16. In view of such discussion, it is not necessary to examine assessee's remaining two contentions of notices. Respective notices in all the petitions are therefore quashed. Petitions are disposed of accordingly." 12. In this view of the matter, it is humbly submitted that, the reopening notice u/s. 148 of the Act dated 25.02.2016 as well as the consequent reassessment order are required to be quashed. 13. Without prejudice to the above contentions, it is humbly submitted that, even on the grounds of merits of the addition made, the issue is squarely covered in the favour of the assessee by the order of a co-ordinate bench of the ITAT dated 13.12.2016 in the case of associate concern, namely, Gujarat State Electricity Corp. Ltd. v. CIT in ITA No.950/Ahd/2015 I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 6 14. It is pertinent to note that, the said issue on merits of the addition is also covered by a recent order of this same bench of the ITAT dated 24.08.2022 in the assessee's own case for A.Y. 2013-14 & 2014-15 in ITA Nos. 753 & 754/Ahd/2018, wherein the issue has been decided in the favour of the assessee. In view of whatever is stated hereinabove, it is most humbly prayed of your honours that the reopening notice u/s. 148 dated 25.02.2016 may kindly be quashed as invalid and bad in law and in the alternative, the present appeal may kindly be dismissed on merits by sustaining the deletion of the addition.” 7. Per contra, the Ld. CIT-D.R. Mr. A.P. Singh appearing for the Revenue filed written submission as follows: “During the hearing the A.R. of the assessee has taken plea that though the assessee has not appealed the order of CIT(A) but he may be allowed to appeal the grounds of reopening decided against him by the CIT(A) in accordance with the Rule 27 of Appellate Tribunal Rules, 1963. He has also relied on the decisions of Hon'ble Gujarat High Court in the case of Dahod Sahakari Kharid Verchan Sangh Ltd. vs. CIT - 282 ITR 32 (Guj.) (2006) and Madhya Gujarat Vij Co. Ltd. vs. ACIT - 94 taxmann.com 337 (Guj.) dated 07.03.2018. In this regard, it is submitted that case laws relied upon by the A.R. is not applicable in this case as facts are different in above mentioned case laws. In the case of Dahod Sahakari Kharid Verchan Sangh Ltd. issue was relating to penalty where quantum addition was confirmed by the CIT(A) and the assessee has accepted the same whereas in the present case the issue involved is reopening of assessment u/s. 147. Further, in second case law relied upon the reopening was done after 6 years whereas in present case, the case was reopened within 4 years from the end of assessment years. Moreover, while deciding the issue of reopening of assessment the CIT(A) in para 4.1 (Page 10) of his order has categorically given his finding as under: "I found that the AO has recorded detailed reasons in this regard before issuance of the notice u/s. 148 on 25.02.2016. The copy of reasons recorded was also provided to the appellant and the objections filed by the appellant have also been disposed off by a speaking order dated 15.07.2016. Therefore, procedure laid down for reopening of the assessment has been properly followed. It may also be noted that the assessment was reopened within 4 years from the end of the assessment year. The appellant has failed to prove with the documentary evidences that the issue under consideration was examined and adjudicated during the course of the original assessment proceedings. Under these circumstances, I find no infirmity in reopening of the assessment u/s. 147 and, I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 7 accordingly, the ground raised in this regard being baseless is dismissed." In view of above it is submitted before your honours that the CIT(A) has rightly upheld the reopening of the assessment by dismissing the assessee's ground.” 8. We have given our thoughtful consideration and perused the materials available on record including the submissions filed by the Revenue and Rule 27 application filed by the assessee. Non-filing of cross objection by the Assessee/Revenue and filing Application under Rule 27 of the ITAT Rules is no more res integra as held by the Jurisdictional High Court in the case of PCIT Vs. Sun Pharmaceuticals Industries Ltd. reported in [2017] 86 taxmann.com 148 as follows: “....11. To put the controversy beyond doubt, Rule 27 of the Rules makes it clear that the respondent in appeal before the Tribunal even without filing an appeal can support the order appealed against on any of the grounds decided against him. It can be easily appreciated that all prayers in the appeal may be allowed by the Commissioner (Appeals), however, some of the contentions of the appellant may not have appealed to the Commissioner. When such an order of the Commissioner is at large before the Tribunal, the respondent before the Tribunal would be entitled to defend the order of the Commissioner on all grounds including on grounds held against him by the Commissioner without filing an independent appeal or cross-objection. 12. Rule 27 of the Rules is akin to Rule 22 Order XLI of the Civil Procedure Code. Sub-rule (1) provides that any respondent, though he may not have appealed from any part of the decree, may not only support the decree but may also state that the finding against him in the Court below in respect of any issue ought to have been decided in his favour; and may also take any cross-objection to the decree which he could have taken by way of an appeal. In case of Virdhachalam Pillai v. Chaldean Syrian Bank Ltd. AIR 1964 SC 1425 in context of the said Rule the Supreme Court observed as under: "32. Learned Counsel for the appellant raised a short preliminary objection that the learned Judges of the High Court having categorically found that there was an antecedent debt which was discharged by the suit-mortgage loan only to the extent of Rs. 59,000/- and odd and there being no appeal by the Bank against the finding that the balance of the Rs. 80,000/- had not gone in discharge of an antecedent debt, the respondent was precluded from putting forward a contention that the entire sum of Rs. 80,000/- covered by Exs. A and B went for the discharge of antecedent debts. We do not see any substance in this objection, because the I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 8 respondent is entitled to canvass the correctness of findings against it in order to support the decree that has been passed against the appellant." 13. Likewise, in case of S. Nazeer Ahmed v. State Bank of Mysore AIR 2007 SCW 766 it was held and observed as under: "7. The High Court, in our view, was clearly in error in holding that the appellant not having filed a memorandum of cross-objections in terms of Order XLI Rule 22 of the Code, could not challenge the finding of the trial court that the suit was not barred by Order II Rule 2 of the Code. The respondent in an appeal is entitled to support the decree of the trial court even by challenging any of the findings t might have been rendered by the trial court against himself. For supporting the decree passed by the fr court, it is not necessary for a respondent in the appeal, to file a memorandum of cross-objections challenging a particular finding that is rendered by the trial court against him when the ultimate decree itself is in his favour. A memorandum of cross-objections is needed only if the respondent claims any relief which had been negatived to him by the trial court and in addition to what he has already been given by the decree under challenge. We have therefore no hesitation in accepting the submission of the learned counsel for the appellant that the High Court was in error in proceeding on the basis that the appellant not having filed a memorandum of cross-objections, was not entitled to canvass the correctness of the finding on the bar of Order II Rule 2 rendered by the trial court." 14. Similar issue came-up before Division Bench of this Court in case of Dahod Sahakari Kharid Vechan Sangh Ltd. v. CIT [2006] 282 ITR 321/[2005] 149 Taxman 456 (Guj.) in which the Court observed as under: "17. Taking up the second issue first, the Tribunal has committed an error in law in holding that the assessee having not filed cross-objection against findings adverse to the assessee in the order of Commissioner (Appeals), the said findings had become final and remained unchallenged. The Tribunal apparently lost sight of the fact that the assessee had succeeded before the Commissioner (Appeals). The appeal had been allowed and the penalty levied by the assessing officer deleted in entirety. In fact, there was no occasion for the assessee to feel aggrieved and hence, it was not necessary for the assessee to prefer an appeal. The position in law is well settled that a cross objection, for all intents and purposes. would amount to an appeal and the cross objector would have the same rights which an appellant has before the Tribunal. 18. Section 253 of the Act provides for appeal to the Tribunal. Under sub- section (1), an assessee is granted right to file an appeal; under sub- section (2), the Commissioner is granted a right to file appeal by issuing necessary direction to the assessing officer; sub-section (3) prescribes the period of limitation within which an appeal could be preferred. Section 253(4) of the Act lays down that either the assessing officer or the assessee, on receipt of notice that an appeal against the order of Commissioner (Appeals) has been preferred under sub-section (1) or subsection (2) by the other party, may, notwithstanding that no appeal had been filed against such an order or any part thereof, within 30 days of the notice, file a memorandum of cross objections verified in the prescribed I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 9 manner and such memorandum shall be disposed of by the Tribunal as if it were an appeal presented within the period of limitation prescribed under sub-section (3). Therefore, on a plain reading of the provision, it transpires that a party has been granted an option or a discretion to file cross objection. 19. In case a party having succeeded before Commissioner (Appeals) opts not to file cross objection even when an appeal has been preferred by the other party, from that it is not possible to infer that the said party has accepted the order or the part thereof which was against the respondent. The Tribunal has, in the present case, unfortunately drawn such an inference which is not supported by the plain language employed by the provision. 20. If the inference drawn by the Tribunal is accepted as a correct proposition, it would render Rule 27 of the Tribunal Rules redundant and nugatory. It is not possible to interpret the provision in such manner. Any interpretation placed on a provision has to be in harmony with the other provisions under the Act or the connected Rules and an interpretation which makes other connected provisions otiose has to be avoided. Rule 27 of the Tribunal Rules is clear and unambiguous. The right granted to the respondent by the said Rule cannot be taken away by the Tribunal by referring to provisions of Section 253(4) of the Act. The Tribunal was, therefore, in error in holding that the finding recorded by the Commissioner (Appeals) remained unchallenged since the assessee had not filed cross objections." 8.1. Thus we entertain the application filed by the Assessee under Rule 27 of the ITAT Rules by following the series of Judgments rendered by the Jurisdictional High Court in the case of Dahod Sahakari Kharid Vechan Sangh Ltd. and in the case of S. Nazeer Ahmed (cited surpa). Thus the Revenue’s objection in entertaining the Application under Rule 27 is hereby rejected. 8.2. The Ld. Counsel Mr. M.J. Shah appearing for the assessee brought to our attention to the original assessment order passed by the Assessing Officer dated 05-12-2014 which includes the issue of capital grant and in fact on the book profit u/s. 115JB of the Act. During the original assessment proceedings, the assessee replied to the Assessing Officer which is extracted at Page No. 4 of the said assessment order as follows: I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 10 "Regarding the question of making adjustment to the book profits under section 115JB of the IT Act on account of grants and subsidies, it is submitted that the company has not received any revenue grant. The company has accounted the Government Grants and subsidies, etc., in terms of the mandatory accounting standard(A) 12 on "Accounting for Government Grants" prescribed by apex Accounting Body ICAI. It is submitted that there is no provision whatsoever in the companies Act of the Accounting Standards to reduce such a kind of Govt. Grants from the cost of fixed assets. It has been prescribed in the AS that only the Specific Grants/Subsidies received for the specific assets are to be reduced from the cost of such Assets. The Grants in question are capital Grant and have been received. Hence, no adjustments to the book profits are warranted on account of the same." 8.3. However the Ld. A.O. was not made addition u/s. 115JB of the Act. Thus there is no failure on the part of the assessee in disclosing the income to the authorities. Therefore reopening of the assessment even within four years period is also amount to “change of opinion” which is not permissible u/s. 147 of the Act. In this connection, the Ld. Counsel relied upon Jurisdictional High Court in the case of Madhya Gujarat Vij Co. Ltd. Vs. ACIT reported in [2018] 94 taxmann.com 337 wherein it is held as follows: “....14. He finally worked out the assessee's book profit under Section 115JB of the Act at Rs. 3211 Crores. It can thus be seen that the Assessing Officer was of the opinion that instead of 10% of the government subsidy. 15% thereof should be reflected in the assessee's books of account. He accordingly made such additions in the normal computation of assessee's income. While the Assessing Officer was so examining the assessee's treatment to the Government grants and subsidies, he simultaneously also examined the assesses's computation of Book-profit under Section 115JB of the Act. Both issues were thus clearly interconnected and were not possible for consideration separately. The fact that the Assessing Officer did not make any similar upward revision of the assessee's book profit under Section 115JB of the Act, that too without citing the reasons, would not mean that he had not examined the issue. 15. The Revenue's contention could as well be that not making such an addition was an error on the part of Assessing Officer. The decision of the Assessing Officer being erroneous, is quite different from the failure of the Assessing Officer to notice a certain element of taxability. The former would have to be rectified through the process of revision or suo motu by the Commissioner [Appeals]; if one filed by the assessee. The latter may give rise to reopening of the assessment, subject to fulfilment of other conditions. In the present case. particularly when the assessee itself had carried the issue of upward revision in the normal computation I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 11 of income, the Commissioner as well could have in such appeal itself suo motu or if so urged by the Revenue, made amends, if there was any error in the order of assessment. This is however not the case where the Assessing Officer has not scrutinized the issue. This Court, in case of Gujarat Power Corpn. Limited v. Asstt. CIT [2012] 26 taxmann.com 51/211 Taxman 63 (Mag)/[2013] 350 ITR 266 in the context of Assessing Officer accepting the view point of the assessee, after scrutiny, but without either citing the reasons or mentioning the same in the order of assessment, has made following observations: "41. The powers under section 147 of the Act are special powers and peculiar in nature where a quasi- judicial order previously passed after full hearing and which has otherwise become final is subject to reopening on certain grounds. Ordinarily, a judicial or quasi-judicial order is subject to appeal, revision or even review if statute so permits but not liable to be re- opened by the same authority. Such powers are vested by the Legislature presumably in view of the highly complex nature of assessment proceedings involving large number of assesses concerning multiple questions of claims, deductions and exemptions, which assessments have to be completed in a time frame. To protect the interest of the revenue, therefore, such special provisions are made under section 147 of the Act. However, it must be appreciated that an assessment previously framed after scrutiny when reopened, results into considerable hardship to the assessee. The assessment gets reopened not only qua those grounds which are recorded in the reasons, but also with respect to entire original assessment, of course at the hands of the revenue. This obviously would lead to considerable hardship and uncertainty. It is precisely for this reason that even while recognizing such powers, in special requirements of the statute, certain safeguards are provided by the statute which are zealously guarded by the courts. Interpreting such statutory provisions courts upon courts have held that an assessment previously framed cannot be reopened on a mere change of opinion. It is stated that power to reopening cannot be equated with review. 42. Bearing in mind these conflicting interests, if we revert back to central issue in debate, it can hardly be disputed that once the Assessing Officer notices a certain claim made by the assessee in the return filed, has some doubt about eligibility of such a claim and therefore, raises queries, extracts response from the assessee, thereafter in what manner such claim should be treated in the final order of assessment, is an issue on which the assessee would have no control whatsoever. Whether the Assessing Officer allows such a claim, rejects such a claim or partially allows and partially rejects the claim, are all options available with the Assessing Officer, over which the assessee beyond trying to persuade the Assessing Officer, would have no control whatsoever. Therefore, while framing the assessment, allowing the claim fully or partially, in what manner the assessment order should be framed, is totally beyond the control of the assessee. If the Assessing Officer, therefore, after scrutinizing the claim minutely during the assessment proceedings, does not reject such a claim, but chooses not to give any reasons for such a course of action that he adopts, it can hardly be stated that he did not form an opinion on such a claim. It is not unknown that assessments of larger corporations in the modern day, involve large number of -complex claims, voluminous material, numerous exemptions and deductions. If the Assessing Officer is burdened with the responsibility of giving reasons for several claims so I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 12 made and accepted by him, it I would even otherwise cast an unreasonable expectation which within the short frame of time available under law would be too much to expect him to carry. Irrespective of this, in a given case, if the Assessing Officer on his own for reasons best known to him, chooses not to assign reasons for not rejecting the claim of an assessee after thorough scrutiny, it can hardly be stated by the revenue that the Assessing Officer cannot be seen to have formed any opinion on such a claim. Such a contention, in our opinion, would be devoid of merits. If a claim made by the assessee in the return is not rejected, it stands allowed. If such a claim is scrutinized by the Assessing Officer during assessment, it means he was convinced about the validity of the claim. His formation of opinion is thus complete. Merely because he chooses not to assign his reasons in the assessment order would not alter this position. It may be a non-reasoned order but not of acceptance of a claim without formation of opinion. Any other view would give arbitrary powers to the Assessing Officer. 43. We are, therefore, of the opinion that in a situation where the Assessing Officer during scrutiny assessment, notices a claim of exemption, deduction or such like made by the assessee, having some prima facie doubt raises queries, asking the assessee to satisfy him with respect to such a claim and thereafter, does not make any addition in the final order of assessment, he can be stated to have formed an opinion whether or not in the final order he gives his reasons for not making the addition." 16. In view of such discussion, it is not necessary to examine assessee's remaining two contentions of notices. Respective notices in all the petitions are therefore quashed. Petitions are disposed of accordingly. 8.4. In our considered opinion, the facts in the present case regarding reopening of assessment is squarely covered in favour of the assessee by the Full Bench Judgment of the Delhi High Court which is duly confirmed by Hon’ble Apex Court in the case of Kelvinator of India Ltd. (187 Taxmann.com 312 SC). Further the Jurisdictional High Court in the case of Gujarat Power Corporation after detailed consideration of the various High Court judgments and the Hon’ble Supreme Court of India in the case of Kelvinator of India Ltd. and in the case of Rajesh Jhaveri Stock Brokers Pvt. Ltd. held as follows: “.....48. Before closing this issue, we would like to clarify one aspect. We have expressed our opinion on the question framed by us. In a given case, it may so happen that a particular claim may have many facets. For example, a claim of deduction under section 80-HHC of the Act would have various parameters. If one I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 13 of the parameters is scrutinized or accepted either with or without reasons, that by itself may not mean that the entire claim of deduction under section 80-HHC of the Act stood verified and accepted by the Assessing Officer. We hasten to add that each case must depend on facts individually and in a given case, it may be possible for the assessee to argue that all aspects of the claim were examined or that different facets of the claim were so inextricably interlinked that the assessing officer must be taken to have examined the entire claim. We only clarify that our answer to the second question must be seen within the limited scope of the question itself. 49. The last question is how would these conclusions apply in the present case. To quickly recapitulate, the petitioner assessee put forth his claim for exemption under section 10(23G), of the Act with respect to three different incomes, namely, (1) interest from SSNNL bonds, (2) interest from GIPCL bonds, and (3) capital gain from sale of shares by GPEC. Such claim was supported by the notes forming part of the return of income. It is not as if the Assessing Officer did not notice these claims. In fact, the Assessing Officer asked the assessee to justify all the claims. In paragraph 5 of his letter dated 31.1.2005, he called upon the assessee to justify the claim of exemption of capital gain on the sale of shares. In paragraph 12, he called upon the assessee to justify the claim of exemption under section 10(23G) of the Act vis-a-vis interest earned from SSNNL/GIPCL bonds. The assessee gave detailed reply to the query raised in para 5 with respect to capital gain. The assessee, thereafter, contended that such justification would apply with respect to interest on the bonds also. Contents of the letter of the assessee would demonstrate that the assessee offered its explanation for claiming exemptions under section 10(23G) of the Act. If for some reason the Assessing Officer was not satisfied with such explanation, surely it was open for him to call for further explanation. In the final order of assessment, it is not as if the Assessing Officer totally lost sight of such claims. He in fact took into account the fact that the assessee was claiming exemption on the interest income from the bonds. He, therefore, examined as to what extent expenditure for earning such tax free income should be disallowed. In the order of assessment, he gave detailed reasons why a portion of the expenditure relating to earning tax free interest should be disallowed. 50. In the reasons which the Assessing Officer recorded for reopening the assessment, he based his case on wrong exemption of interest from SSNNL/GIPCL Bonds claimed under section 10(23G). 51. In our opinion, any such reopening would be based on a mere change of opinion. In the reasons, the Assessing Officer started with the words, "from the records, it can be seen that ...". Entire information and the material that the Assessing Officer, therefore, had at his command was reflected from the record itself. This coupled with the fact that in the original assessment, the Assessing Officer examined such claims in detail, would convince us that any reopening of the assessment of same claims on the basis of same material, amounts to a mere change of opinion. The fact that the Assessing Officer did not record reasons for making no disallowance on such claim of exemption, would be of no consequence. 52. In the result, we are of the opinion that the notice was issued without jurisdiction. The same, therefore, requires to be and is hereby quashed. Rule is made absolute accordingly with no order as to costs.” I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 14 8.5. Even in the case before us, the reasons recorded by the Assessing Officer for reopening of assessment, used the phrase “It was seen that the assessee had shown capital grant/subsidy”. Thus it is proved beyond doubt, the Assessing Officer from the very same materials available on record proceeded to make reassessment without any new tangible material, which is not permissible in law and the same amount to “mere change of opinion” from the original assessment order passed which amounts to Review his own order, such a power is not available to the A.O. Further there is no failure on the part of the assessee in full and true disclosure of materials relevant for the assessment. 9. Similarly, the Hon’ble Supreme Court of India in the case of PCIT vs. Atul Ltd. reported in [2020] 119 taxmann.com 287 dismissed the SLP are held as follows: “Section 28(1), read with section 147, of the Income-tax Act, 1961 - Business loss/deductions - Allowable as (Loss on sale of stores) - Assessment year 2007-08 - Assessee-company was engaged in manufacturing pharmaceuticals, fertilizers, chemicals, paints etc. - For relevant year, assessee filed its return declaring certain taxable income Assessing Officer completed assessment under section 143(3) wherein loss incurred by assessee on sale of stores was allowed as business loss - Subsequently, Assessing Officer initiated reassessment proceedings by taking a view that loss in question was in nature of capital loss not eligible for deduction - Tribunal set aside reassessment proceedings by holding that same was based on mere change of opinion High Court upheld Tribunal's order- Whether SLP filed by revenue against order of High Court was to be dismissed - Held, yes [Para 2][In favour of assessee]” 10. Respectfully following the above judicial precedents, we have no hesitation in holding that in the absence of any tangible material, reopening of assessment amounts to “change of opinion” only. Therefore the reopening of assessment is not valid in law and the same is hereby quashed. Thus the ground raised by the Assessee in I.T.A No. 851/Ahd/2018 A.Y. 2011-12 Page No ACIT Vs. Gujarat Energy Transmission Corp.. Ltd. 15 Rule 27 Application is hereby allowed. In view of our decision that the reassessment order itself is quashed, the grounds raised by the Revenue on merits do not call for any adjudication and the same becomes infructuous. 11. In the result, the appeal filed by the Revenue stands dismissed. Order pronounced in the open court on 28-07-2023 Sd/- Sd/- (ANNAPURNA GUPTA) (T.R. SENTHIL KUMAR) ACCOUNTANT MEMBER True Copy JUDICIAL MEMBER Ahmedabad : Dated 28/07/2023 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से, उप/सहायक पंजीकार आयकर अपीलȣय अͬधकरण, अहमदाबाद