ACIT 9(3), MUMBAI V. RUSAN PHARMA LTD, MUMBAI

ITA 8649/MUM/2011

• Counselvise Citation: 864919914 RSA 2011
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 31-10-2013
• Assessment Year: 2005-2006
• Appeal Filed On: 22-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Difference of opinion; Validity of assessment; Competent authority; Reason to believe; Change of opinion; Reassessment proceedings; Capital expenditure
• Section: 143(3); 148

Judgement Text

J IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI .. , !'# $ $ $ $ %&. !.'.. $( ) !'# !* BEFORE SHRI P.M. JAGTAP, AM AND DR. S.T.M. PAVALAN, JM !./ I.T.A. NO. 8702/MUM/2011 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2005-06 M/S RUSAN PHARMA LTD., RUSAN HOUSE, 58D, GOVT. INDUSTRIAL ESTATE, CHARKOP, KANDIVALI (E), MUMBAI 400 067. ( ( ( ( / VS. ADDL. COMMISSIONER OF INCOME TAX- RG. 9(3), MUMBAI. #. !./ PAN : AABCR3179 H ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) !./ I.T.A. NO. 8649/MUM/2011 ( )( , $-, )( , $-, )( , $-, )( , $-, / / / / ASSESSMENT YEAR : 2005-06 ADDL. COMMISSIONER OF INCOME TAX- RG. 9(3), MUMBAI. ( ( ( ( / VS. M/S RUSAN PHARMA LTD., RUSAN HOUSE, 58D, GOVT. INDUSTRIAL ESTATE, CHARKOP, KANDIVALI (E), MUMBAI 400 067. #. !./ PAN : AABCR3179 H ( ./ / // / APPELLANT ) .. ( 01./ / RESPONDENT ) ASSESSEE BY SHRI PRAKASH PANDIT REVENUE BY : SHRI TUSHAR DHAWAL SINGH !($ 2 / // / DATE OF HEARING : 31-10-2013 34- 2 / DATE OF PRONOUNCEMENT : 13-11-2013 [ ITA 8702/M/11 & 8649/M/11 2 '5 / O R D E R PER P.M. JAGTAP, A.M . : .. , !'# THESE TWO APPEALS, ONE FILED BY THE ASSESSEE BEING ITA NO. 8702/MUM/2011 AND THE OTHER FILED BY THE REVENUE BE ING ITA NO. 8649/MUM/2011, ARE CROSS APPEALS WHICH ARE DIRECTED AGAINST THE ORDER OF LD. CIT(A) 20 DATED 31-10-2011. 2. THE RELEVANT FACTS OF THE CASE GIVING RISE TO TH ESE APPEALS ARE AS FOLLOWS. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY WHICH IS ENGAGED IN THE BUSINESS OF MANUFACTURING PHARMACEUTICAL PRODUCTS A ND BULK DRUGS. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION W AS FILED BY IT ON 18-10- 2005 DECLARING A LOSS OF RS. 3,77,20,900/-. IN THE ASSESSMENT ORIGINALLY COMPLETED U/S 143(3) OF THE ACT VIDE AN ORDER DATED 13-12-2007, THE TOTAL INCOME OF THE ASSESSEE WAS COMPUTED BY THE A.O. AT NIL. SUBSEQUENTLY, HE REOPENED THE SAID ASSESSMENT AFTER RECORDING THE RE ASONS AND ISSUED A NOTICE TO THE ASSESSEE U/S 148 OF THE ACT ON 23-3-2010. IN REPLY, A LETTER DATED 6-9- 2010 WAS FILED BY THE ASSESSEE STATING THAT ORIGINA L RETURN OF INCOME FILED BY IT ON 18-10-2005 MAY BE TREATED AS THE RETURN FILED IN RESPONSE TO NOTICE ISSUED U/S 148 OF THE ACT. IN THE ASSESSMENT COMPLETED U/ S 143(3) R.W.S. 147 OF THE ACT, THE CLAIM OF THE ASSESSEE FOR DEDUCTION OF RS. 2,02,43,023/- WAS RESTRICTED BY THE A.O. TO RS. 1,86,19,635/- FOR THE FOLLOWING REASONS:- IN THE ASSESSMENT ORDER U/S.143(3) OF THE ACT, THE ASSESSEE WAS ALLOWED DEDUCTION U/S 10A AT RS. 2,02,43,023/-. THE ASSESSEE HAS FAILED TO BRING IN THE A SUM OF EXPORT PROCEEDS IN FOREIGN CONVERTIBLE EXCHANGE OF RS. 2,26,75,109/- WITHIN THE DUE DATE A S SPECIFIED U/S. 10A OF THE ACT AND IN THE CURRENT CASE I.E. 30.09.2 005 ALSO, NO PERMISSION WAS GRANTED TO THE ASSESSEE TILL 30.09.2 005 BY THE COMPETENT AUTHORITY EXTENDING THE DATE FOR REALIZIN G THE SAID AMOUNTS. AS PER PROVISIONS OF SECTION 10A, THE TOTAL EXPORT TURNOVER TO BE ADOPTED FOR CALCULATING THE SAID DEDUCTION HAS TO BE REDUCE D BY THE SUM OF EXPORT PROCEEDS WHICH THE ASSESSEE FAILS TO BRING I N AS REQUIRED. THEREBY THE TOTAL EXPORT TURNOVER ADOPTED FOR CALCU LATING THE DEDUCTION ITA 8702/M/11 & 8649/M/11 3 U/S. 10A OF THE ACT AFTER REDUCING THE UNREALIZED F OREIGN EXCHANGE EXPORT PROCEEDS, IS TAKEN AT RS. 26,00,74,691 ( RS. 28,27,49,800 - RS. 2,26,75,109). ACCORDINGLY, THE DEDUCTION U/S. 10A O F THE ACT OF THE ASSESSEE IS WORKED OUT AS UNDER: TOTAL PROFITS AS PER ORDER U/S. 143(3) OF THE ACT - RS.2,02,43,023 TOTAL EXPORT TURNOVER(AS DISCUSSED ABOVE) - RS.26,00,74,691 TOTAL TURNOVER - RS.28,27,49,800 DEDUCTION U/S 10A= TOTAL PROFITS X TOTAL EXPORT TURNOVER TOTAL TURNOVER ACCORDINGLY, THE DEDUCTION ALLOWABLE U/S 10A TO THE ASSESSEE IS RS. 1,86,19,635/-. THE A.O. ALSO DISALLOWED THE CLAIM OF THE ASSESSEE FOR PRODUCT DEVELOPMENT CHARGES OF RS. 22,30,657/- TREATING THE SAME AS CAP ITAL IN NATURE. HE FURTHER MADE A DISALLOWANCE OF RS. 4,43,582/- U/S 36(1)(VA) OF THE ACT AND ALSO DISALLOWED THE LOSS AS A RESULT OF THEFT OF RS. 12, 793/- CLAIMED BY THE ASSESSEE. ACCORDINGLY, THE TOTAL INCOME OF THE ASSE SSEE WAS COMPUTED BY THE A.O. AT RS. 65,30,120/- IN THE ASSESSMENT COMPLETED U/S 143(3) R.W.S. 147 OF THE ACT VIDE AN ORDER DATED 22-12-2010. 3. AGAINST THE ORDER OF THE A.O. PASSED U/S 143(3) R.W.S. 147 OF THE ACT, AN APPEAL WAS PREFERRED BY THE ASSESSEE BEFORE THE LD. CIT(A) CHALLENGING THE VALIDITY OF THE SAID ASSESSMENT AS WELL AS DISPUTIN G THE ADDITIONS MADE THEREIN ON MERIT. AFTER CONSIDERING THE SUBMISSION S MADE ON BEHALF OF THE ASSESSEE AND THE MATERIAL AVAILABLE ON RECORD, THE LD. CIT(A) UPHELD THE VALIDITY OF REASSESSMENT MADE BY THE A.O. FOR THE F OLLOWING REASONS GIVEN IN PARA 6.2 OF HIS IMPUGNED ORDER:- 6.2 I HAVE PERUSED THE ORIGINAL ASSESSMENT ORDER, RE-ASSESSMENT ORDER AND N SUBMISSIONS OF THE APPELLANT. IT IS OBS ERVED THAT REOPENING HAS BEEN MADE WITHIN 4 YEARS OF ORIGINAL ASSESSMENT ORDER. THEREFORE STRICT REQUIREMENTS OF SECTION 147 ARE NOT ATTRACTE D IN THIS CASE. THE APPELLANT CLAIMS THAT IT HAD DISCLOSED ALL THE MATE RIAL FACTS IN RESPECT OF ALL THE ISSUES WHICH ARE SUBJECT MATTER OF REOPENIN G. IN THE RECENT JUDGMENT OF HONBLE HIGH COURT IN THE CASE OF DALMI A PVT. LTD VS CIT, IT ITA 8702/M/11 & 8649/M/11 4 HAS BEEN HELD THAT DESPITE AND SPECIFIC QUERIES IN PROCEEDINGS ULS.143(3), THE ASSESSING OFFICER CANNOT BE SAID TO HAVE FORMED ANY OPINION IF EXPLICIT OPINION WAS NOT RECORDED. ACCOR DING TO THE HONBLE COURT THE QUESTION OF CHANGE OF OPINION ARISES WHEN AN ASSESSING OFFICER FORMS AN OPINION AND DECIDES NOT TO MAKE AN ADDITION AND HOLDS THAT THE ASSESSEE IS CORRECT. IN ANY CASE, THE LAW ON REOPENING HAS UNDERGONE A CHANGE FROM 1989 AND NEITHER KEEPING IN VIEW OF THE FACT THAT THE ISSUE OF PRODUCT DEVELOPMENT CHARGES WAS N OT EXAMINED NOR EXPLICIT OPINION GIVEN BY THE ASSESSING OFFICER, TH IS ADDITIONAL GROUND OF APPEAL IS, THEREFORE, REJECTED. THE LD. CIT(A) ALSO CONFIRMED THE ADDITION OF RS. 2 2,30,657/- MADE BY THE A.O. ON ACCOUNT OF PRODUCT DEVELOPMENT CHARGES TREA TING THE SAME AS CAPITAL EXPENDITURE FOR THE FOLLOWING REASONS GIVEN IN PARA 5.2 OF HIS IMPUGNED ORDER:- 5.2. I HAVE PERUSED THE ORIGINAL ASSESSMENT ORDER, RE-ASSESSMENT ORDER AND WRITTEN SUBMISSIONS OF THE APPELLANT. AS PER THE APPELLANTS OWN ADMISSION THE APPELLANT REQUIRES DETAILED STUDY AS WELL AS CLINICAL TESTS FOR DEVELOPING NEW PRODUCTS AND DRUGS WHICH A RE INTENDED TO BE MANUFACTURED. IT IS OBVIOUS THAT SUCH NEW PRODUCTS WHICH ARE MANUFACTURED ON THE BASIS OF STUDY REPORTS YIELD EN DURING BENEFITS TO THE APPELLANT. IT IS AN EXPENDITURE WHICH HAS BEEN INCURRED FOR BRINGING INTO AN EXISTENCE A NEW PRODUCT WHICH GIVES AN ADVA NTAGE TO THE APPELLANT AND, THEREFORE, SHOULD NORMALLY BE TREATE D AS CAPITAL. IN THESE CIRCUMSTANCES, IT WILL BE FAIR TO CONCLUDE THAT EXP ENDITURE INCURRED FOR PRODUCT DEVELOPMENT CHARGES ARE CAPITAL IN NATURE. THE ALTERNATIVE CLAIM OF THE APPELLANT CANNOT BE ENTERTAINED AT THE APPELLATE STAGE. MOREOVER, FOR CLAIMING DEDUCTION U/S. 35(1)(I) COND ITIONS HAVE TO BE FULFILLED WHICH HAS TO BE BACKED BY CORROBORATIVE E VIDENCES. THIS ALTERNATIVE CLAIM IS, THEREFORE, REJECTED. THE ADDI TION OF RS. 22,30,657/- BEING AMOUNT PAID FOR THE PRODUCT DEVELOPMENT CHARG ES IS CONFIRMED. THE ADDITIONS MADE BY THE A.O. BY RESTRICTING THE C LAIM OF THE ASSESSEE FOR DEDUCTION U/S 10A(3) OF THE ACT HOWEVER WAS DELETED BY THE LD. CIT(A) FOR THE FOLLOWING REASONS GIVEN IN PARA 3.2 OF HIS IMPUGNED ORDER:- 3.2. I HAVE PERUSED THE ORIGINAL ASSESSMENT ORDER, RE-ASSESSMENT ORDER AND WRITTEN SUBMISSIONS OF THE APPELLANT. THE APPELLANT HAD FILED ALL THE REQUISITE DOCUMENTS INCLUDING THE AUTHORIZE D DEALERS (CANARA BANK, NARIMAN POINT BRANCH) SHOWING THAT THE TIME L IMIT OF REALIZING THE SALE PROCEEDS UPTILL 31.03.2006. THEREAFTER, TH E BANK CERTIFICATE FOR EXPORT AND REALIZATION WAS ALSO FILED. IT WAS CLEAR LY ESTABLISHED THAT THE EXPORT PROCEEDS HAVE BEEN COLLECTED BEFORE 31.03.20 06. THESE CERTIFICATES AND AUTHORIZED DEALERS LETTER WERE ALS O FILED BEFORE THE ITA 8702/M/11 & 8649/M/11 5 ASSESSING OFFICER U/S.154 OF THE I.T. ACT, 1961 BUT THERE WAS NO RESPONSE. SINCE ALL THE CONDITIONS GIVEN U/S. 10A(3 ) OF THE IT. ACT, 1961 ARE FULFILLED, THE APPELLANT IS ENTITLED TO DEDUCTI ON ON AN AMOUNT OF 2,02,43,023/- AND THE ACTION OF THE ASSESSING OFFIC ER IS REVERSED AND THE ADDITION IS DELETED. SIMILARLY THE DISALLOWANCE OF RS. 4,43,582/- MADE B Y THE A.O. U/S 36(1)(VA) OF THE ACT ON ACCOUNT OF DELAYED PAYMENT OF PF AND ESI C WAS DELETED BY THE LD. CIT(A) RELYING ON THE DECISION OF HONBLE SUPREME C OURT IN THE CASE OF ALOM EXTRUSIONS LTD. (319 ITR 306). THE APPEAL OF THE AS SESSEE FILED BEFORE HIM THUS WAS PARTLY ALLOWED BY THE LD. CIT(A) VIDE HIS APPELLATE ORDER DATED 31-10- 2011 AND AGGRIEVED BY THE SAME, THE ASSESSEE AND RE VENUE BOTH ARE IN APPEAL BEFORE THE TRIBUNAL. 4. IN ITS APPEAL, THE ASSESSEE HAS CHALLENGED THE V ALIDITY OF ASSESSMENT MADE BY THE A.O. U/S 143(3) R.W.S. 147 OF THE ACT A S WELL AS THE ADDITION OF RS. 22,30,657/- MADE BY THE A.O. AND CONFIRMED BY T HE LD. CIT(A) ON ACCOUNT OF PRODUCT DEVELOPMENT CHARGES WHEREAS THE REVENUE IN ITS APPEAL HAS CHALLENGED THE ORDER OF THE LD. CIT(A) DELETING THE DISALLOWANCE MADE BY THE A.O. ON ACCOUNT OF ASSESSEES CLAIM FOR DEDUCTION U /S 10A(3) OF THE ACT. 5. IN GROUND NO. 1 OF ITS APPEAL, THE ASSESSEE HAS RAISED A PRELIMINARY ISSUE RELATING TO THE VALIDITY OF ASSESSMENT MADE B Y THE A.O. U/S 143(3) R.W.S. 147 OF THE ACT ON THE GROUND THAT THE REOPENING ITS ELF WAS BAD IN LAW. 6. THE LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET, TOOK US THROUGH THE RELEVANT DOCUMENTARY EVIDENCE PLACED IN HIS PAPER B OOK TO SHOW THAT ALL THE ISSUES RAISED BY THE A.O. IN THE REASONS RECORDED F OR REOPENING THE ASSESSMENT WERE DULY CONSIDERED AND EXAMINED BY THE A.O. DURING THE COURSE OF ORIGINAL ASSESSMENT PROCEEDING U/S 143(3) OF THE ACT. HE SUBMITTED THAT THERE WAS NO NEW MATERIAL OR INFORMATION RECEI VED BY THE A.O. AFTER THE COMPLETION OF ORIGINAL ASSESSMENT AND REOPENING THU S WAS BASED ON THE SAME MATERIAL AS WAS AVAILABLE TO THE A.O. AT THE TIME O F COMPLETION OF THE ORIGINAL ITA 8702/M/11 & 8649/M/11 6 ASSESSMENT. HE CONTENDED THAT THE REOPENING OF ASSE SSMENT THUS WAS BASED ON A MERE CHANGE OF OPINION WHICH IS NOT PERMISSIBL E IN LAW. IN SUPPORT OF THIS CONTENTION, HE RELIED ON THE DECISION OF FULL BENCH OF HONBLE DELHI HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. KELVINATOR OF INDIA LTD. (2002) 256 ITR 0001 (DEL) [FB] AND THAT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF IL & FS INVESTMENT MANAGERS LTD. VS. ITO & ORS (2007) 209 CTR 0001 (BOM). 7. THE LD. D.R., ON THE OTHER HAND, HAS RELIED ON T HE IMPUGNED ORDER OF THE LD. CIT(A) IN SUPPORT OF THE REVENUES CASE THA T THE REOPENING OF ASSESSMENT ON THE BASIS OF REASONS RECORDED BY THE A.O. WAS IN ACCORDANCE WITH LAW. 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL ON RECORD. IN ORDER TO APPRECIATE THE STAN D OF THE PARTIES ON THIS ISSUE, IT WOULD BE WORTHWHILE TO REFER TO THE REASO NS RECORDED BY THE A.O. AS GIVEN ON PAGE NO. 1 & 2 OF THE ASSESSMENT ORDER WHI CH ARE EXTRACTED BELOW: ON THIS CASE, THE RETURN OF INCOME FOR A.Y. 2005-06 WAS FILED ON 18- 10-2005 DECLARING TOTAL LOSS OF RS. 3,77,20,900/-. ASSESSMENT U/S 143(3)OF THE I.T. ACT WAS COMPLETED ON 13-12-2007 D ETERMINING TOTAL INCOME AT RS. NIL. THEREAFTER, IT IS SEEN THE EXPO RT TURNOVER WAS RS. 28,27,49,800/- AND THE EXPORT PROCEEDS RECEIVED IN CONVERTIBLE FOREIGN EXCHANGE OF RS. 26,00,71,791/-, THE BALANCE AMOUNT OF RS. 2,26,75,109/- NOT BROUGHT BEYOND SIX MONTHS FROM TH E END OF THE PREVIOUS YEAR ENDING 31.03.2005. THE COMPANY HAD AP PLIED FOR PERMISSION ON 05.10.2005 FOR GRANT OF EXTENSION UPT O 31.12.2005. HOWEVER, REPLY WAS AWAITED FROM COMPETENT AUTHORITY . THIS HAS RESULTED IN ALLOWANCE OF EXCESS DEDUCTION OF RS. 16 ,23,388/- U/S. 10A OF I.T. ACT. FURTHER, IT IS SEEN FROM SCHEDULE T SIGNIFICANT ACC OUNTING POLICIES AND NOTES FORMING PART OF ACCOUNTS THAT THE NET GAIN DU E TO FLUCTUATION IN FOREIGN CURRENCY CREDIT IN P & L ACCOUNT DURING THE YEAR IS RS. 22,19,702/-. HOWEVER, THE ASSESSEE HAD NOT CREDITED THE SAME TO THE P & L ACCOUNT. THIS HAS RESULTED IN ESCAPEMENT OF INC OME OF RS. 22,19,702/-. ITA 8702/M/11 & 8649/M/11 7 IT IS ALSO SEEN FROM THE COMPUTATION OF INCOME THAT THE ASSESSEE HAD ADDED RS. 4,43,582/- TO TOTAL INCOME TOWARDS EXPENS ES DISALLOWED U/S. 36(I)(VA). HOWEVER, THE SAME WAS NOT CONSIDERED BY THE A.O. IN THE ASSESSMENT ORDER. FURTHER, AS PER THE AUDIT REPORT, IT WAS CERTIFIED THAT RS. 12,793/- BEING LOSS ON SALE OF ASSET/THEFT. THE FACT HAD NEITHER BEEN CONSIDERED BY THE ASSESSEE NOR THE ASSESSING O FFICER. FURTHER, THE ASSESSING OFFICER DISALLOWED RS. 39,25,947/- TOWARD S PRODUCTS REGISTRATION CHARGES. HOWEVER, PRODUCT DEVELOPMENT CHARGES OF RS. 22,30,657/- WHICH ARE ALSO CAPITAL IN NATURE HAVE N OT BEEN DISALLOWED. THIS HAS RESULTED IN UNDER ASSESSMENT OF RS. 26,87, 032/-. THEREFORE, I HAVE REASON TO BELIEVE THAT TOTAL INCO ME OF RS. 65,30,122/- HAS ESCAPED FROM ASSESSMENT. 9. A PERUSAL OF THE ABOVE REASONS RECORDED BY THE A .O. CLEARLY SHOWS THAT THE ASSESSMENT WAS REOPENED BY HIM NOT ON THE BASIS OF ANY NEW MATERIAL OR INFORMATION WHICH HAD COME TO HIS POSSESSION AFTER THE COMPLETION OF ORIGINAL ASSESSMENT IN THE CASE OF THE ASSESSEE U/S. 143(3). THE ASSESSMENT COMPLETED ORIGINALLY U/S. 143(3) THUS WAS RE-OPENED BY HIM ON THE BASIS OF SAME MATERIAL WHICH WAS AVAILABLE EVEN AT THE TIME OF COMPLETION OF ORIGINAL ASSESSMENT AS WELL AS ON THE BASIS OF SAME SET OF F ACTS AND THIS POSITION HAS NOT BEEN DISPUTED EITHER BY THE LD. CIT(A) IN HIS I MPUGNED ORDER OR EVEN BY THE LD. D.R. AT THE TIME OF HEARING BEFORE US. THE LD. CIT(A), HOWEVER, HAS STILL UPHELD THE VALIDITY OF INITIATION OF REASSESSMENT P ROCEEDINGS REJECTING THE CONTENTION RAISED ON BEHALF OF THE ASSESSEE ABOUT T HE SAME BEING BASED ON CHANGE OF OPINION ON THE GROUND THAT NO ENQUIRIES W ERE CONDUCTED BY THE A.O. DURING THE COURSE OF ASSESSMENT COMPLETED ORIG INALLY U/S. 143(3) ON THE ISSUES WHICH FORMED PART OF THE REASONS RECORDED. H E HELD THAT THE CONCEPT OF CHANGE OF OPINION ARISES ONLY WHEN SOME OPINION HAS BEEN FORMED WITH REFERENCE TO THE MATERIAL ON RECORD AND ON AN APPLI CATION OF MIND WHICH WAS MISSING IN THE CASE OF THE ASSESSEE. WE FIND IT DI FFICULT TO SUBSCRIBE TO THIS VIEW TAKEN BY THE LD. CIT(A) KEEPING IN VIEW THE LE GAL POSITION PROPOUNDED ON THIS POINT IN THE VARIOUS JUDICIAL PRONOUNCEMENTS. 10. IN THE CASE OF KELVINATOR INDIA LTD. (SUPRA), T HE FULL BENCH OF HONBLE DELHI HIGH COURT HAS HELD THAT SECTION 147 OF THE ACT DOES NOT POSTULATE ITA 8702/M/11 & 8649/M/11 8 CONFERMENT OF POWER UPON THE A.O. TO INITIATE REASS ESSMENT PROCEEDINGS UPON A MERE CHANGE OF OPINION. IT HAS ALSO BEEN HELD TH AT WHEN A REGULAR ORDER OF ASSESSMENT IS PASSED U/S 143(3), A PRESUMPTION CAN BE RAISED THAT SUCH AN ORDER HAS BEEN PASSED ON APPLICATION OF MIND. IN TH E CASE OF ASIAN PAINTS LTD. VS. DCIT 308 ITR 195, THE HONBLE JURISDICTIONAL HI GH COURT HAD AN OCCASION TO CONSIDER A SIMILAR ISSUE AND IT WAS HELD IN THIS CONTEXT THAT WHEN A REGULAR ORDER OF ASSESSMENT IS PASSED IN TERMS OF SECTION 1 43(3), A PRESUMPTION CAN BE RAISED THAT SUCH ORDER HAS BEEN PASSED ON AN APP LICATION OF MIND. IT WAS ALSO HELD THAT IF NON-APPLICATION OF MIND BY A.O. I N PASSING AN ORDER WOULD ITSELF CONFER JURISDICTION UPON THE A.O. TO RE-OPEN THE PROCEEDINGS WITHOUT ANYTHING FURTHER, IT WOULD AMOUNT TO GIVING A PREMI UM TO AN AUTHORITY EXERCISING QUASI-JUDICIAL FUNCTION TO TAKE BENEFIT OF ITS OWN WRONG. IT WAS FURTHER HELD THAT THE LEGISLATURE HAS NOT CONFERRED THE POWER ON THE A.O. TO REVIEW HIS OWN ORDER. THE INITIATION OF REASSESSME NT PROCEEDINGS IN THE SAID CASE THEREFORE WAS HELD TO BE INVALID BY THE HONBL E JURISDICTIONAL HIGH COURT ON THE GROUND THAT THE SAME WAS BASED ON CHANGE OF OPINION OF THE A.O. AS IT WAS MAINLY ON FRESH APPLICATION OF MIND BY THE A.O. TO THE SAME SET OF FACTS. 11. AS ALREADY NOTED, THE INITIATION OF REASSESSMEN T PROCEEDINGS IN THE PRESENT CASE WAS NOT BASED ON ANY NEW MATERIAL OR I NFORMATION WHICH HAD COME TO THE POSSESSION OF THE A.O. AFTER THE COMPLE TION OF ORIGINAL ASSESSMENT U/S. 143(3). THE SAME THUS WAS BASED MERELY ON A F RESH APPLICATION OF MIND BY A.O. TO THE SAME SET OF FACTS AND TO THE SAME MA TERIAL ON RECORD AS WAS AVAILABLE AT THE TIME OF COMPLETION OF THE ASSESSME NT ORIGINALLY U/S. 143(3). THIS BEING THE UNDISPUTED POSITION, WE ARE OF THE V IEW THAT THE INITIATION OF REASSESSMENT PROCEEDINGS WAS BASED ON A MERE CHANGE OF OPINION OF THE A.O. WHICH IS NOT PERMISSIBLE IN LAW AS HELD BY THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF ASIAN PAINTS LTD.(SUPRA) AND B Y THE FULL BENCH OF HONBLE DELHI HIGH COURT IN THE CASE OF KELVINATOR INDIA LT D. (SUPRA). RESPECTFULLY FOLLOWING THE SAID DECISIONS OF THE HONBLE JURISDI CTIONAL HIGH COURT AND ITA 8702/M/11 & 8649/M/11 9 HONBLE DELHI HIGH COURT, WE HOLD THAT THE INITIATI ON OF REASSESSMENT PROCEEDINGS ITSELF IN THE PRESENT CASE WAS BAD IN L AW AND THE REASSESSMENT COMPLETED BY THE A.O. U/S. 143(3)/147 IN PURSUANCE OF SUCH INITIATION IS LIABLE TO BE CANCELLED BEING INVALID. WE ORDER ACC ORDINGLY. 12. KEEPING IN VIEW OUR DECISION RENDERED ABOVE ON THE PRELIMINARY ISSUE CANCELLING THE REASSESSMENT MADE BY THE A.O. U/S. 1 43(3)/147, THE OTHER GROUNDS RAISED IN THE APPEAL OF THE ASSESSEE AS WEL L AS THE APPEAL OF THE REVENUE RELATING TO THE ADDITIONS MADE IN THE SAID ASSESSMENT HAVE BECOME INFRUCTUOUS. WE, THEREFORE, DO NOT CONSIDER IT NEC ESSARY OR EXPEDIENT TO DECIDE THE SAME. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D WHEREAS THE APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH NOVEMBER, 2013. . '5 2 34- 6'(7 13-11-2013 4 2 SD/- SD/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) ) !'# JUDICIAL MEMBER !'# / ACCOUNTANT MEMBER MUMBAI ; 6'( DATED 13-11-2013. $.)(.!./ RK , SR. PS ITA 8702/M/11 & 8649/M/11 10 '5 2 0)89 :9- '5 2 0)89 :9- '5 2 0)89 :9- '5 2 0)89 :9-/ COPY OF THE ORDER FORWARDED TO : 1. ./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. ; () / THE CIT(A)20, MUMBAI. 4. ; / CIT 9,, MUMBAI 5. 9$> 0))( , , / DR, ITAT, MUMBAI J BENCH 6. %, ? / GUARD FILE. '5(! '5(! '5(! '5(! / BY ORDER, !19 0) //TRUE COPY// @ @ @ @/ // /!A !A !A !A ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI