M/S. RAVI DEVELOPMENTS, MUMBAI V. ACIT CC(2), MUMBAI

ITA 938/MUM/2022

AI Insights

M/s Ravi Developments appealed against the re-assessment orders issued by the Assessing Officer for the assessment years 2009-10 and 2010-11, which were based on the disallowance of a provision for construction cost. The primary legal issues revolved around the validity of the re-assessment under section 148 of the Income Tax Act, 1961, and whether it was based on a change of opinion rather than new tangible material. The Tribunal examined the arguments and evidence presented, including previous assessments and the lack of new material, leading to the decision to quash the re-assessment orders.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123351 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 03-01-2023
• Assessment Year: 2010-2011
• Appeal Filed On: 05-05-2022
• Other Referred Cases: Export Credit Guarantee Corporation of India Ltd vs Addl.CIT & Ors, Indo Aden Sault Mfg & Trading Co. Pvt. Ltd, Multi Screen Media Pvt Ltd vs UOI, Bharat Krishi Kendra vs UOI
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reopening of assessment; Tangible material; Difference of opinion; Change of opinion; Set aside
• Section: 147; 148; 37; 143(3); 153A; 143(2); 191

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SANDEEP SINGH KARHAIL (JUDICIAL MEMBER) ITA Nos.937 & 938/Mum/2022 (Assessment Years: 2009-10 & 2010-11) M/s Ravi Developments 76, Laxmi Palace, Mathuradas Road, Kandivali (West) Mumbai-400 067 PAN : AAAFR2516G Vs. Asst. Commissioner of Income Tax-CC(2), 6 th Floor Room No.13, A-Wing Ashar IT Park, Road No.16-Z Wagle Industrial Estate Thane-400 604 Appellant Respondent Assessee by : Shri Akshay Jain, Ms Morvci Chaturvedi Revenue by : Smt. Mahita Nair (Sr.AR. CIT) Date of Hearing : 04/01/2023 Date of pronouncement : 12/01/2023 ORDER PER OM PRAKASH KANT, AM These two appeals by the assessee are directed against a common order dated 20/11/2019 passed by the Learned Commissioner of Income-tax (Appeals), Pune-11 [in short, the Ld.CIT(A)] for Assessment Year 2009-10 & 2010-11. 2. In both these appeals common grounds challenging validity of the re-assessment and addition on merit are involved and, therefore, these appeals were heard together and are disposed of by way off this consolidated order, for convenience and to avoid repetition of facts. 3. In both the assessment years, the Assessing Officer has reopened the assessments on the issue of construction cost. The appeal for up for adjudication as lead case. 4. The grounds raised by the assesse for A.Y. 2009-10 are reproduced as under: “1. That the Ld.CIT(A) erred in the facts and circumstances of the case and in law, in confirming the reopening the assessment u/s 148, after a period of 4 years from the end of the assessment year without any failure on the part of the assessee to disclose truly and fairly all material facts, and as such the reopening is bad in law and is liable to be quashed. 2. That the Ld.CIT(A) erred in the facts and circumstances of the case and in la of assessment, without appreciating that the profit & loss account of the appellant, was already scrutinized during the original scrutiny proceedings, and as such, the reopening is not In both these appeals common grounds challenging validity of assessment and addition on merit are involved and, therefore, these appeals were heard together and are disposed of by this consolidated order, for convenience and to avoid In both the assessment years, the Assessing Officer has reopened the assessments on the issue of claim of The appeal for Assessment Year 2009 up for adjudication as lead case. The grounds raised by the assessee in ITA No.937/Mum/2022 10 are reproduced as under:- That the Ld.CIT(A) erred in the facts and circumstances of the case and in law, in confirming the reopening the assessment u/s 148, after a period of 4 years from the end of the ment year without any failure on the part of the assessee to disclose truly and fairly all material facts, and as such the reopening is bad in law and is liable to be quashed. That the Ld.CIT(A) erred in the facts and circumstances of the case and in law, the Ld.CIT(A) erred in confirming the reopening of assessment, without appreciating that the profit & loss account of the appellant, was already scrutinized during the original scrutiny proceedings, and as such, the reopening is not M/s Ravi Developments. ITAs 937 & 938/Mum/2022 2 In both these appeals common grounds challenging validity of assessment and addition on merit are involved and, therefore, these appeals were heard together and are disposed of by this consolidated order, for convenience and to avoid In both the assessment years, the Assessing Officer has claim of provision of Assessment Year 2009-10 is taken e in ITA No.937/Mum/2022 That the Ld.CIT(A) erred in the facts and circumstances of the case and in law, in confirming the reopening the assessment u/s 148, after a period of 4 years from the end of the ment year without any failure on the part of the assessee to disclose truly and fairly all material facts, and as such the reopening is bad in law and is liable to be quashed. That the Ld.CIT(A) erred in the facts and circumstances of the w, the Ld.CIT(A) erred in confirming the reopening of assessment, without appreciating that the profit & loss account of the appellant, was already scrutinized during the original scrutiny proceedings, and as such, the reopening is not based on any new tan opinion’ and is liable to be quashed. 3. That the Ld.CIT(A) erred in the facts and circumstances of the case and in law, the Ld.CIT(A) erred in confirming the disallowance of the provision of construction cost of ₹3,42,31,544/ 3. Briefly stated, facts of the case are that the scrutiny assessment under section 143(3) read with section 153A of the Income-tax Act, 1961(in short, ‘the Act’) for the year under consideration was completed on 28/03/2013 wherein total income of the assessee was assessed at the above assessment proceedings, the Assessing Officer reopened the assessment by way of issue of notice under section 148 of the Act. The re-assessment was completed on 20 after making an addition on account of disallowance of provision for cost of construction amounting to appeal, the Ld.CIT(A) upheld the validity of re confirmed the addition on merit. issue of validity of re- “17. It is the claim of the appellant that the issue of provision of construction cost debited in P & L account had already been examined in the assessment completed based on any new tangible material but a mere ‘change of opinion’ and is liable to be quashed. That the Ld.CIT(A) erred in the facts and circumstances of the case and in law, the Ld.CIT(A) erred in confirming the disallowance of the provision of construction cost of 31,544/-.” Briefly stated, facts of the case are that the scrutiny assessment under section 143(3) read with section 153A of the tax Act, 1961(in short, ‘the Act’) for the year under consideration was completed on 28/03/2013 wherein total income e was assessed at ₹10,64,96,560/-. Subsequent to the above assessment proceedings, the Assessing Officer reopened the assessment by way of issue of notice under section 148 of the assessment was completed on 20 th December, 2016, an addition on account of disallowance of provision for cost of construction amounting to ₹3,42,31,544/ appeal, the Ld.CIT(A) upheld the validity of re-assessment as well as confirmed the addition on merit. The finding of the Ld.CIT(A) on th -assessment is reproduced as under: It is the claim of the appellant that the issue of provision of construction cost debited in P & L account had already been examined in the assessment completed M/s Ravi Developments. ITAs 937 & 938/Mum/2022 3 gible material but a mere ‘change of That the Ld.CIT(A) erred in the facts and circumstances of the case and in law, the Ld.CIT(A) erred in confirming the disallowance of the provision of construction cost of Briefly stated, facts of the case are that the scrutiny assessment under section 143(3) read with section 153A of the tax Act, 1961(in short, ‘the Act’) for the year under consideration was completed on 28/03/2013 wherein total income . Subsequent to the above assessment proceedings, the Assessing Officer reopened the assessment by way of issue of notice under section 148 of the December, 2016, an addition on account of disallowance of provision for 3,42,31,544/-. On further assessment as well as The finding of the Ld.CIT(A) on the assessment is reproduced as under:- It is the claim of the appellant that the issue of provision of construction cost debited in P & L account had already been examined in the assessment completed u/s 143(3) r.w.s. 153A dtd.2 28/3/20 13, indicate that this was a search assessment. However, it seen from the record that notice u/s 143(2) dated 19/08/2010 was issued for A.Y 2009 proceedings got abated on the date of searc proceedings u/s 153A of the Act, it is very evident that no query has been raised by the AO in respect to the provision o P & L account. Neither any query was made on th was taken by him in the assessment u/s 153A. As indicated, the Bombay High Court in the case of Export Credit Guarantee Corporation that if no query has been raise proceedings, with regard to the of reason to believe by the A judgments of Bombay High Court in the case of Multi Screen Media and the Apex Court decision in the case of Indo Aden Sault Mfg & Trading Ltd (supra). Thus, the fact that the issue of provision of examined during the assessment u/s 153A nor the details with respect to the same were provided by the appellant before the AO, the conditions laid down u/s 147 of the Act allow the AO to assume jurisdiction by issue of notice u/s 148 of the Act. The challenge by the appellant by way of grounds of appeal in 1 & 2 are therefore rejected.” 4. We have heard rival submissions of the parties on the issue in dispute and perused the relevant materials on record. In this case, validity of re-assessment has been challenged on two grounds. Firstly, the reopening being beyond a period of 4 years fr of the relevant assessment year without any failure on the part of the assessee to disclose truly and fully all material facts; and, secondly, the P&L Account was already scrutinized during earlier scrutiny proceedings and, therefore, reopening any new tangible material, it was merely change of opinion. u/s 143(3) r.w.s. 153A dtd.28/3/2013. A perusal of the assessment order dtd. 28/3/20 13, indicate that this was a search assessment. However, it seen from the record that notice u/s 143(2) dated 19/08/2010 was issued for A.Y 2009 proceedings got abated on the date of search i.e 24.03.2011. From the assessment proceedings u/s 153A of the Act, it is very evident that no query has been raised by the AO in respect to the provision of construction cost which has been debited to the P & L account. Neither any query was made on this issue by the AO, nor any view was taken by him in the assessment u/s 153A. As indicated, the Bombay High Court in the case of Export Credit Guarantee Corporation Ltd (supra) have clarified o query has been raised by the AO during the course of the assessment proceedings, with regard to the issue, re-assessment can be reopened on the basis of reason to believe by the AO. The same principles have been upheld by the bay High Court in the case of Multi Screen Media Court decision in the case of Indo Aden Sault Mfg & Trading , the fact that the issue of provision of construction cost was neither during the assessment u/s 153A nor the details with respect to the same re provided by the appellant before the AO, the conditions laid down u/s 147 of allow the AO to assume jurisdiction by issue of notice u/s 148 of the Act. The challenge by the appellant by way of grounds of appeal in 1 & 2 are therefore We have heard rival submissions of the parties on the issue in dispute and perused the relevant materials on record. In this case, assessment has been challenged on two grounds. Firstly, the reopening being beyond a period of 4 years fr of the relevant assessment year without any failure on the part of the assessee to disclose truly and fully all material facts; and, secondly, the P&L Account was already scrutinized during earlier scrutiny proceedings and, therefore, reopening not being based on any new tangible material, it was merely change of opinion. M/s Ravi Developments. ITAs 937 & 938/Mum/2022 4 8/3/2013. A perusal of the assessment order dtd. 28/3/20 13, indicate that this was a search assessment. However, it seen from the record that notice u/s 143(2) dated 19/08/2010 was issued for A.Y 2009-10 and the h i.e 24.03.2011. From the assessment proceedings u/s 153A of the Act, it is very evident that no query has been raised by construction cost which has been debited to the by the AO, nor any view was taken by him in the assessment u/s 153A. As indicated, the Bombay High supra) have clarified of the assessment be reopened on the basis have been upheld by the bay High Court in the case of Multi Screen Media Pvt Ltd (supra) Court decision in the case of Indo Aden Sault Mfg & Trading Co. Pvt. construction cost was neither during the assessment u/s 153A nor the details with respect to the same re provided by the appellant before the AO, the conditions laid down u/s 147 of allow the AO to assume jurisdiction by issue of notice u/s 148 of the Act. The challenge by the appellant by way of grounds of appeal in 1 & 2 are therefore We have heard rival submissions of the parties on the issue in dispute and perused the relevant materials on record. In this case, assessment has been challenged on two grounds. Firstly, the reopening being beyond a period of 4 years from the end of the relevant assessment year without any failure on the part of the assessee to disclose truly and fully all material facts; and, secondly, the P&L Account was already scrutinized during earlier not being based on any new tangible material, it was merely change of opinion. 5. As regards the first ground, the Ld.CIT(A) has referred to decision of Hon’ble Supreme Court in the case of Trading Co. Pvt. Ltd (1986) 159 CTR Supreme Court has held that only primarty facts and not inferential facts. Supreme Court has held that lay embedded in the evidence which th uncovered, but did not, then it is the duty of the assessee to bring it to the notice of the Assessing Authority. The assessee knows all material and relevant facts omission to disclose might immaterial. But if there is omission to disclose the material facts, then subject to other conditions, jurisdiction to reopen is attracted. Hon’ble Supreme Court in the case of ITR 191 (Cal) has also held jurisdiction to reopen the case wherever there is a failure on the part of the assessee fully and truly disclosing all material facts beyond the period of 4 years from the end of the relevant assessment year. As regards the first ground, the Ld.CIT(A) has referred to decision of Hon’ble Supreme Court in the case of Aden Sault Mfg & Trading Co. Pvt. Ltd (1986) 159 CTR 624 (SC) wherein the Hon’ble Supreme Court has held that obligation of the assessee only primarty facts and not inferential facts. Further, Hon’ble Supreme Court has held that if some material for the assessment lay embedded in the evidence which the Revenue would have uncovered, but did not, then it is the duty of the assessee to bring it to the notice of the Assessing Authority. The assessee knows all material and relevant facts – the Assessing Authority might not. The omission to disclose might be deliberate or inadvertent, that is . But if there is omission to disclose the material facts, then subject to other conditions, jurisdiction to reopen is attracted. Hon’ble Supreme Court in the case of Calcutta Discount Co Ltd (1961) 41 has also held that the Income Tax Officer h jurisdiction to reopen the case wherever there is a failure on the part fully and truly disclosing all material facts beyond the period of 4 years from the end of the relevant assessment year. M/s Ravi Developments. ITAs 937 & 938/Mum/2022 5 As regards the first ground, the Ld.CIT(A) has referred to Aden Sault Mfg & wherein the Hon’ble obligation of the assessee is to disclose Further, Hon’ble if some material for the assessment e Revenue would have uncovered, but did not, then it is the duty of the assessee to bring it to the notice of the Assessing Authority. The assessee knows all the Assessing Authority might not. The be deliberate or inadvertent, that is . But if there is omission to disclose the material facts, then subject to other conditions, jurisdiction to reopen is attracted. Calcutta Discount Co Ltd (1961) 41 Income Tax Officer has jurisdiction to reopen the case wherever there is a failure on the part fully and truly disclosing all material facts beyond the period of 4 years from the end of the relevant assessment year. In the instant case, assessment has been reopened for provision of construction cost not being allowable under sections 30 to 36 or under section 37 of the Act. For ready reference, the reasons recorded by the Assessing Officer are reproduced as under: “Sub: - Supply of reason recorded u/s 148(2) of l.T Act for re-opening of assessment for assessment year 2009 10 reg Kindly refer to the above, 2. Vide letter dated 30.03.2016 received in this office on 30.03.2016 you have acknowledged the receipt of notice u/s 143 dated 23.03,2016 received by you un 29.03.2016 and requested for supply of reasons of re 2009-10 in your case. 3. Notice u/s 148 of the Act dated 23.03.2016 was issued and duly served upon you by this office after duly recording the reasons of reopening for said notice, vide letter dated 30.03,2016 you have requested for reasons for reopening. Vide letter dated 12.04.2016 you have submitted that the original return filed bearing ack no 0000000090 for AY 2009- the notice u/s 148 of the Abated 23.03.2016, 4. The assessment in your case was reopened as from the perusal of profit and loss account filed for the relevant year, it is noticed that you have debited profit and loss account amounting to Rs. 3,42,31.544/ under consideration. The provision for construction cost amounting to Rs. 3,42.31.544/ being only provision and not allowable either u/s 30 to 36 or u/s 37 of the Income Tax Act, 1961, this issue remained proceedings in your case understated the income for A.Y. 2009 escaped assessment for failure loss account under the head provi leading to the furnishing o! inaccurate pa be added to the total income of the assessee while pa 153A of the Income Tax Act, This resulted in escapement of of Rs, 3,42,31,544/- for assessment year 2 5. In view of the above facts of the case, assessment reopened within the meaning of provisions of section 147 of the I 1961 by this office on 23.03.2016 after duly recording reasons (as mentioned in 4).” In the instant case, assessment has been reopened for provision of construction cost not being allowable under sections 30 to 36 or nder section 37 of the Act. For ready reference, the reasons recorded by the Assessing Officer are reproduced as under: Supply of reason recorded u/s 148(2) of l.T Act for opening of assessment for assessment year 2009 10 reg Vide letter dated 30.03.2016 received in this office on 30.03.2016 you have acknowledged the receipt of notice u/s 143 dated 23.03,2016 received by you un 29.03.2016 and requested for supply of reasons of re-opening of the assessment for assessment year Notice u/s 148 of the Act dated 23.03.2016 was issued and duly served upon you by this office after duly recording the reasons of reopening for- AY 2UU9 10. In response to the dated 30.03,2016 you have requested for reasons for reopening. Vide letter dated 12.04.2016 you have submitted that the original return filed bearing ack no -10 on 27.02,2012 may be treated as the return filed in response to e u/s 148 of the Abated 23.03.2016, The assessment in your case was reopened as from the perusal of profit and loss account filed for the relevant year, it is noticed that you have debited profit and loss account amounting to Rs. 3,42,31.544/- on account of provision for construction cost for the year under consideration. The provision for construction cost amounting to Rs. 3,42.31.544/ being only provision and not allowable either u/s 30 to 36 or u/s 37 of the Income Tax Act, his issue remained to be examined at the time of completion of assessment proceedings in your case for the year under consideration. As a result, you understated the income for A.Y. 2009-10 amounting to ₹3,42,31,544/ or failure- on your part as you have debited the profit loss account under the head provision which is not an allowable expenditure leading to the furnishing o! inaccurate particulars of income and remained to be be added to the total income of the assessee while passing order u/s 143(3) r.w.s. 53A of the Income Tax Act, This resulted in escapement of income to the extent for assessment year 2009-10.” view of the above facts of the case, assessment for AY meaning of provisions of section 147 of the I 1 by this office on 23.03.2016 after duly recording reasons (as mentioned in M/s Ravi Developments. ITAs 937 & 938/Mum/2022 6 In the instant case, assessment has been reopened for provision of construction cost not being allowable under sections 30 to 36 or nder section 37 of the Act. For ready reference, the reasons recorded by the Assessing Officer are reproduced as under:- opening of assessment for assessment year 2009 10 reg - Vide letter dated 30.03.2016 received in this office on 30.03.2016 you have acknowledged the receipt of notice u/s 143 dated 23.03,2016 received by you un 29.03.2016 sessment for assessment year Notice u/s 148 of the Act dated 23.03.2016 was issued and duly served upon you by AY 2UU9 10. In response to the dated 30.03,2016 you have requested for reasons for reopening. Vide letter dated 12.04.2016 you have submitted that the original return filed bearing ack no 10 on 27.02,2012 may be treated as the return filed in response to The assessment in your case was reopened as from the perusal of profit and loss account filed for the relevant year, it is noticed that you have debited profit and loss account t of provision for construction cost for the year under consideration. The provision for construction cost amounting to Rs. 3,42.31.544/- being only provision and not allowable either u/s 30 to 36 or u/s 37 of the Income Tax Act, examined at the time of completion of assessment for the year under consideration. As a result, you 3,42,31,544/- which part as you have debited the profit and is not an allowable expenditure of income and remained to be order u/s 143(3) r.w.s. income to the extent or AY 2009-10 was meaning of provisions of section 147 of the Income Tax Act, 1 by this office on 23.03.2016 after duly recording reasons (as mentioned in para 6. From the above reasons recorded, we find that the Assessing Officer has nowhere recorded as which mate disclosed truly and fully by the assessee. During the course of assessment, i.e. (earlier assessment), the assessee filed P&L Account, the ledger of ‘provision for construction cost’ for three projects, viz.Green Valley Green (₹1,58,00,000/ these details clearly reflect more was embedded in the said information which had been hidden by the assessee. The ma provision, was fully disclosed in the statements filed before the assessment proceedings. Therefore, the finding of the Ld.CIT(A) charging the assessee for non disclosure of material facts fully and truly is not justified and accordingly, we set aside the finding of the Ld.CIT(A). Secondly, the Ld.CIT(A) has rejected the contention of the assessee that the Assessing Officer has reopened the assessment on same set of the facts without there being any fresh facts or tangible material and, therefore, the re merely on change of opinion. The Ld.CIT(A) has referred to the decision of the Hon’ble Bombay High Court in the case of Export Credit Guarantee Corporation of India Ltd vs Addl.CIT & Ors (2013) 350 ITR 651 (Bom) and held during the course of the assessment, therefore, reopening is justified. But the Ld.CIT(A) has missed the other part of the From the above reasons recorded, we find that the Assessing Officer has nowhere recorded as which material fact has not been disclosed truly and fully by the assessee. During the course of (earlier assessment), the assessee filed P&L Account, the ledger of ‘provision for construction cost’ for three projects, viz.Green Valley (₹1,74,00,782/-, provision for Gaurav 1,58,00,000/-) and Gaurav Enclave (₹10,30,762/ these details clearly reflected the expenses as provision and nothing more was embedded in the said information which had been hidden by the assessee. The material facts of these expenses being provision, was fully disclosed in the statements filed before the assessment proceedings. Therefore, the finding of the Ld.CIT(A) charging the assessee for non disclosure of material facts fully and ied and accordingly, we set aside the finding of the Ld.CIT(A). Secondly, the Ld.CIT(A) has rejected the contention of the assessee that the Assessing Officer has reopened the assessment on same set of the facts without there being any fresh ible material and, therefore, the re-assessment is based merely on change of opinion. The Ld.CIT(A) has referred to the decision of the Hon’ble Bombay High Court in the case of Export Credit Guarantee Corporation of India Ltd vs Addl.CIT & Ors (2013) and held that no query was raised by the AO during the course of the assessment, therefore, reopening is justified. But the Ld.CIT(A) has missed the other part of the M/s Ravi Developments. ITAs 937 & 938/Mum/2022 7 From the above reasons recorded, we find that the Assessing rial fact has not been disclosed truly and fully by the assessee. During the course of (earlier assessment), the assessee filed P&L Account, the ledger of ‘provision for construction cost’ for three , provision for Gaurav 10,30,762/-). All the expenses as provision and nothing more was embedded in the said information which had been hidden terial facts of these expenses being provision, was fully disclosed in the statements filed before the assessment proceedings. Therefore, the finding of the Ld.CIT(A) charging the assessee for non disclosure of material facts fully and ied and accordingly, we set aside the finding of the Ld.CIT(A). Secondly, the Ld.CIT(A) has rejected the contention of the assessee that the Assessing Officer has reopened the assessment on same set of the facts without there being any fresh assessment is based merely on change of opinion. The Ld.CIT(A) has referred to the decision of the Hon’ble Bombay High Court in the case of Export Credit Guarantee Corporation of India Ltd vs Addl.CIT & Ors (2013) no query was raised by the AO during the course of the assessment, therefore, reopening is justified. But the Ld.CIT(A) has missed the other part of the decision of the Hon’ble High Court assessment can be reopened subsequently on the basis of tangible material found during assessment proceedings for subsequent year(s) by the Assessing Officer. Further, Ld.CIT(A) has referred to the decision of Hon’ble Bombay High Court in the case of Screen Media Pvt Ltd vs UOI 324 ITR 54 (Bom) assessment was held to be validly reopened on the basis of the finding of the fact made on the basis of fresh material in the course of an assessment for a subsequent assessment year. Thus, for reopening, the Assessing Officer should have some fresh facts or materials which might i.e. assessment carried out in other years, but in absence of any fresh facts or material which should cause or trigger for reason to believe that income escaped assessment, reopening the assessment on appreciation of the same facts or material which were available in prior assessment, then the action of the Assessing Officer amounts to “change of the opinion which, he is not permitted. 7. The Ld.DR, during the course of hearing, referred to the decision of Hon’ble High Court of Chattisgarh, Bilaspur in the case of Bharat Krishi Kendra vs UOI Writ Petition No. 27 of 2022 judgement dated 15/03/2022 to support that re re-looking on facts already available on record. However, in para 9 decision of the Hon’ble High Court wherein it has been held that be reopened subsequently on the basis of tangible material found during assessment proceedings for subsequent by the Assessing Officer. Further, Ld.CIT(A) has referred to the decision of Hon’ble Bombay High Court in the case of Pvt Ltd vs UOI 324 ITR 54 (Bom) assessment was held to be validly reopened on the basis of the finding of the fact made on the basis of fresh material in the course of an assessment for a subsequent assessment year. Thus, for ssessing Officer should have some fresh facts or materials which might be from external sources or internal source, i.e. assessment carried out in other years, but in absence of any fresh facts or material which should cause or trigger for reason to e that income escaped assessment, reopening the assessment on appreciation of the same facts or material which were available in prior assessment, then the action of the Assessing Officer change of the opinion” or review of the assessment which, he is not permitted. The Ld.DR, during the course of hearing, referred to the decision of Hon’ble High Court of Chattisgarh, Bilaspur in the case Bharat Krishi Kendra vs UOI Writ Petition No. 27 of 2022 judgement to support that re-assessment can be carried out by looking on facts already available on record. However, in para 9 M/s Ravi Developments. ITAs 937 & 938/Mum/2022 8 wherein it has been held that be reopened subsequently on the basis of tangible material found during assessment proceedings for subsequent by the Assessing Officer. Further, Ld.CIT(A) has referred to the decision of Hon’ble Bombay High Court in the case of Multi Pvt Ltd vs UOI 324 ITR 54 (Bom) wherein the assessment was held to be validly reopened on the basis of the finding of the fact made on the basis of fresh material in the course of an assessment for a subsequent assessment year. Thus, for ssessing Officer should have some fresh facts or from external sources or internal source, i.e. assessment carried out in other years, but in absence of any fresh facts or material which should cause or trigger for reason to e that income escaped assessment, reopening the assessment on appreciation of the same facts or material which were available in prior assessment, then the action of the Assessing Officer or review of the assessment The Ld.DR, during the course of hearing, referred to the decision of Hon’ble High Court of Chattisgarh, Bilaspur in the case Bharat Krishi Kendra vs UOI Writ Petition No. 27 of 2022 judgement assessment can be carried out by looking on facts already available on record. However, in para 9 of the decision, the Hon’ble High Court has made it clear that re assessment proceedings can be started on fresh facts information with regard to the facts previously disclosed which comes into possession of the Assessing Officer to expose the untruthfulness of those facts. In such situation, the case will not be of change of opinion. The relevant finding of the Chattisgarh, Bilapur High Court is reproduced as under: “In aforementioned ruling, Hon'ble Supreme Court has held that reassessment proceedings can be started on fresh facts or some information with regard to fact previously disclosed comes into untruthfulness of those facts and that situations will not opinion or drawing of a different inference from the same facts. Hon'ble Supreme Court has further held that sufficiency of reas Court to judge, but it is open to an assessee to establish that there exists fact not belief or that belief was not at all bona fide one. In present case, reasons assigned for issuance of proposal under Section 14 application of mind by Assessing Officer based on information received from the DDIT and also about verification of PAN details of assessee.” 8. In the instant case, the information of ‘provision of construction cost’ was already available on record and in the reasons recorded, the Assessing Officer has only referred to the P&L Account and no reference to any fresh facts or information received from any tangible material has been referred and, therefore, the action of the Ld.AO of reopening the assessment is merely based on change of opinion, which is not permitted in law. Thus, the re assessment is not valid as per law and is quashed. of the decision, the Hon’ble High Court has made it clear that re assessment proceedings can be started on fresh facts information with regard to the facts previously disclosed which comes into possession of the Assessing Officer to expose the untruthfulness of those facts. In such situation, the case will not be of change of opinion. The relevant finding of the Chattisgarh, Bilapur High Court is reproduced as under: In aforementioned ruling, Hon'ble Supreme Court has held that reassessment proceedings can be started on fresh facts or some information with regard to fact previously disclosed comes into his possession which tends to expose the untruthfulness of those facts and that situations will not be a case of mere change of opinion or drawing of a different inference from the same facts. Hon'ble Supreme Court has further held that sufficiency of reasons for forming this belief is not for the to judge, but it is open to an assessee to establish that there exists fact not belief or that belief was not at all bona fide one. In present case, reasons assigned for issuance of proposal under Section 148 of the Act of 1961 clearly mentions about application of mind by Assessing Officer based on information received from the DDIT and also about verification of PAN details of assessee.” In the instant case, the information of ‘provision of construction cost’ was already available on record and in the reasons recorded, the Assessing Officer has only referred to the P&L Account and no reference to any fresh facts or information received m any tangible material has been referred and, therefore, the action of the Ld.AO of reopening the assessment is merely based on change of opinion, which is not permitted in law. Thus, the re assessment is not valid as per law and is quashed. M/s Ravi Developments. ITAs 937 & 938/Mum/2022 9 of the decision, the Hon’ble High Court has made it clear that re- assessment proceedings can be started on fresh facts or some information with regard to the facts previously disclosed which comes into possession of the Assessing Officer to expose the untruthfulness of those facts. In such situation, the case will not be of change of opinion. The relevant finding of the Hon’ble Chattisgarh, Bilapur High Court is reproduced as under:- In aforementioned ruling, Hon'ble Supreme Court has held that reassessment proceedings can be started on fresh facts or some information with regard to fact his possession which tends to expose the a case of mere change of opinion or drawing of a different inference from the same facts. Hon'ble Supreme ons for forming this belief is not for the to judge, but it is open to an assessee to establish that there exists fact not belief or that belief was not at all bona fide one. In present case, reasons assigned 8 of the Act of 1961 clearly mentions about application of mind by Assessing Officer based on information received from the In the instant case, the information of ‘provision of construction cost’ was already available on record and in the reasons recorded, the Assessing Officer has only referred to the P&L Account and no reference to any fresh facts or information received m any tangible material has been referred and, therefore, the action of the Ld.AO of reopening the assessment is merely based on change of opinion, which is not permitted in law. Thus, the re- 9. In view of the above discussion, grounds 1 & 2 of the appeal of the assessee stand allowed. 10. Since we have already quashed the re adjudication of the issues raised on merits is only academic and, therefore, we are not adjudicating the issues 11. As far as ground CIT(A) has decided the appeal for A.Y. 2010 to A.Y. 2009-10. Before us, both the parties agreed that facts and circumstances of the appeal for assessment year 2010 identical to appeal for A.Y. 2009 in A.Y. 2010-11 are decided mutatis mutandis. 12. In the result, both the appeals of the assessee are allowed. Order pronounced under Rule 34(4) of the ITAT Rules, 1963 on 12/01/2023. Sd/- (SANDEEP SINGH KARHAIL JUDICIAL MEMBER Mumbai; Dated: 12/01/2023 Pavanan, Sr. P.S (on contract) of the above discussion, grounds 1 & 2 of the appeal of the assessee stand allowed. Since we have already quashed the re-assessment order, adjudication of the issues raised on merits is only academic and, therefore, we are not adjudicating the issues on merit. As far as grounds of A.Y. 2010-11 are concerned, the Ld. CIT(A) has decided the appeal for A.Y. 2010-11 as mutatis mutandis Before us, both the parties agreed that facts and circumstances of the appeal for assessment year 2010 identical to appeal for A.Y. 2009-10. Therefore, the grounds raised 11 are decided mutatis mutandis. In the result, both the appeals of the assessee are allowed. Order pronounced under Rule 34(4) of the ITAT Rules, /2023. sd/ SANDEEP SINGH KARHAIL) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER M/s Ravi Developments. ITAs 937 & 938/Mum/2022 10 of the above discussion, grounds 1 & 2 of the appeal of assessment order, adjudication of the issues raised on merits is only academic and, on merit. concerned, the Ld. 11 as mutatis mutandis Before us, both the parties agreed that facts and circumstances of the appeal for assessment year 2010-11 are 10. Therefore, the grounds raised In the result, both the appeals of the assessee are allowed. Order pronounced under Rule 34(4) of the ITAT Rules, sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary) ITAT, Mumba M/s Ravi Developments. ITAs 937 & 938/Mum/2022 11 BY ORDER, (Sr. Private Secretary) ITAT, Mumbai