JARUN PHARMACEUTICALS PVT LTD. V. THE INCOME TAX OFFICER, WARD 2(1)(2)

SCA/19008/2018

AI Insights

Jarun Pharmaceuticals Pvt Ltd, a company engaged in trading and marketing of pharmaceutical products, faced a reassessment notice from the Income Tax Officer for the Assessment Year 2013-14. The notice sought to reopen the assessment based on alleged discrepancies in sales promotion expenses and transactions related to purchases and sales. The company contested the notice, arguing that the issues raised were already examined during the original assessment, and reopening constituted a mere change of opinion. The court examined the reasons for reopening and found that the issues were indeed previously considered, leading to the conclusion that the reopening was unjustified.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 750672 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 25-06-2019
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income-Tax vs. Kelvinator of India Ltd., Gujarat Power Corporation Ltd. vs. Assistant Commissioner of Income-tax, Commissioner of Income-tax vs. Chhabil Dass Agarwal
• Laws Referred To: Income Tax Act, 1961, Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: MAUNA BHATT
• Assessee Lawyers: VAIBHAVI PARIKH
• Keywords: Change of opinion; Escaped assessment; Income tax reassessment; Sales promotion expenses
• Section: 147; 148; 143(3); 142(1); 143(1)

Judgement Text

"C/SCA/19008/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 19008 of 2018 ============================================= JARUN PHARMACEUTICALS PVT LTD. Versus THE INCOME TAX OFFICER, WARD 2(1)(2) ============================================= Appearance: MS VAIBHAVI K PARIKH(3238) for the Petitioner(s) No. 1 MRS MAUNA M BHATT(174) for the Respondent(s) No. 1 ============================================= CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR.JUSTICE A.C. RAO Date : 25/06/2019 ORAL ORDER (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1. Rule returnable forthwith. Mrs. Mauna Bhatt, the learned senior standing counsel waives service of notice of rule for and on behalf of the respondent. 2. By this writ application under Article 226 of the Constitution of India, the writ applicant – a Company incorporated under the Companies Act, 1956 has prayed for the following reliefs : “(a) quash and set aside the impugned notice at ANNEXURE “A” to this petition; (b) pending the admission, hearing and final disposal of this petition, to stay the implementation and operation Page 1 of 23 C/SCA/19008/2018 ORDER of the notice at ANNEXURE “A” to this petition and stay the further proceedings for the Asst. Year 2013- 14; (c) any other and further relief deemed just and proper be granted in the interest of justice; (d) to provide for the cost of this petition.” 3. The case of the writ applicant may be summarized as under : “2.1 The petitioner is a Company incorporated under the Companies Act, 1956 of which majority shareholders are citizens of India. The petitioner is, therefore, entitled to the constitutional rights guaranteed under Article 14 and 19(1)(g) of the Constitution of India. 2.2 The petitioner is engaged in the activity of trading-cum-marketing of pharmaceutical products. The petitioner, during the year under consideration (i.e. Assessment Year 2013-14), had incurred sales promotion expenses of Rs.30,43,808/-, made purchases of Rs.1,66,76,556/- and sales of Rs.2,97,60,315/-. Such three items duly appear in the Audit Annual Accounts of the petitioner, relevant being Schedule-20 (sales promotion expenses), Schedule-15 (purchases) and Schedule-13 (sales). The petitioner filed return of income for the year under consideration on 28.09.2013 declaring total income at Rs.NIL and the same was initially processed under section 143(1) of the Act. Page 2 of 23 C/SCA/19008/2018 ORDER 2.3 The case of the petitioner was selected for scrutiny assessment under section 143(3) of the Act. Various details were called for by then Assessing Officer from time to time and the same were duly furnished by the petitioner. The then Assessing Officer, vide notice dated 07.08.2015 issued under section 142(1) of the Act, called upon the petitioner to furnish various details including the followings: ◦Details of month-wise “purchase” & “sales” (Point “x”); ◦Details of “Sales promotion expenses” along with evidences, as specified therein (Point “xiv”); Copy of notice dated 07.08.2015 issued under section 142(1) of the Act is annexed herewith and marked as ANNEXURE “B”. 2.4 The petitioner, vide letter dated 10.08.15, furnished details of sales promotion expenses along with supporting evidences (Point “6”) which comprised of ledger of sales and promotion expenses as well as three bills issued by Thomas Cook (Rs.5,10,205/-), Le Passage to India Tours & Travels (Rs.5,14,600/-) and “SM Tours & Travels (Rs.1,73,866/-) along with other documentary evidences. Copy of letter dated 10.08.15, ledger of sales promotions expenses and relevant three bills is annexed herewith and marked hereto as ANNEXURE ”C (Colly.)”. 2.5 The petitioner, vide letter dated 14.08.15, furnished the following details among various other details: • Details of month-wise “purchase” and “sales” in Page 3 of 23 C/SCA/19008/2018 ORDER the specified format (Point “10”); • Details of “Sales promotion expenses” along with supporting evidences (Point “14”); Copy of letter dated 14.08.15 along with details of purchases and sales is annexed herewith and marked hereto as ANNEXURE “D (Colly.)” 2.6 The petitioner, vide letter dated 07.11.14, also placed on record ledger of “Kamdhenu Enterprise” (Point “iv”) as well as names of the persons who attended the conference, tours, etc. (Point “v”). copy of letter dated 07.11.14 is annexed herewith and marked as ANNEXURE “E”. 2.7 The then Assessing Officer, after perusing the details as well as the documentary evidences furnished by the petitioner, consciously chose not to make any addition in respect of sales promotion expenses, purchase or sales while framing assessment under section 143(3) of the Act vide order dated 26.10.15. Copy of the Assessment Order dated 26.10.15 passed under section 143(3) of the Act is annexed herewith and marked as ANNEXURE “F”. 2.8 Suddenly thereafter, the Respondent issued the impugned notice dated 30.03.18 under section 148 of the Act seeking to reopen the case of the petitioner for the year under consideration. 2.9 The petitioner filed return of income in response to the impugned notice on 05.05.18. The petitioner, vide letter dated 14.05.18, informed the Respondent Page 4 of 23 C/SCA/19008/2018 ORDER about filing of such return of income and further requested the Respondent to supply copy of reasons for reopening. 2.10 The Respondent, vide letter dated 30.05.18, was pleased to supply copy of reasons for reopening. Perusal of reasons for reopening reveals that the case has been reopened broadly on twin counts viz. (1) “Sales promotion expenses” to the tune of Rs.20,00,271/- incurred on various tours have not been expended wholly and exclusively for the business of the petitioner and (2) Further verification and investigation of “Purchases” and “Sales” is required. Briefly, the case of the Respondent is as follows : “SALES PROMOTION EXPENSES”: The petitioner has debited Rs.45,57,388/- towards indirect expenses out of which, a sum of Rs.30,43,808/- is towards “Sales promotion expenses” which accounts for almost 67% of total indirect expenses. Further, upon perusal of the details furnished at the original assessment stage, it was found that an expenses aggregating to Rs.20,00,271/- have been incurred on tours. The Respondent has also given reference to three particulars vouchers/receipts [viz. Thomas Cook (Rs.5,10,205/-), Le Passage to India Tours & Travels (Rs.5,14,600/-) and “SM Tours & Travels (Rs.1,73,866/-)] wherein details as to the person travelling and dates of travel were not mentioned. Hence, the Respondent is of the view that such expenditure has not been incurred wholly and exclusively for the business of the petitioner. Page 5 of 23 C/SCA/19008/2018 ORDER Accordingly, the Respondent has reason to believe that income of Rs.20,22,271/- has escaped assessment. “PURCHASE AND SALES”: The case of the Respondent is that the petitioner has shown total purchases and sales at Rs.1,66,76,556/- and Rs.2,97,60,315/-. Further, the petitioner also transfers goods to its branch office i.e. M/s. Kamdhenu Enterprise at Kolkatta. During the month of March 2013, the petitioner made purchases of Rs.7,81,132/- whereas the petitioner made sales of Rs.80,89,891/- and also transferred goods worth Rs.81,40,038/- to the branch office at Kolkatta in the month of March 2013. Thus, against the purchases of Rs.7,81,132/- for the month of March 2013, total sales including value of branch transfer aggregated to Rs.1,62,29,929/- (i.e. Rs.80,89,891/- + Rs.81,40,038/-). Hence, the Respondent is of the view that the petitioner must be in possession of goods valuing at least Rs.1,62,29,929/- or more. It is further mentioned in the reasons that permutation-combination of incoming and outgoing goods reveals that the petitioner does not have goods available for such huge dales. Thus, the Respondent is of the view that further verification and investigation is required in connection with the same. Hence, the case of the petitioner has been reopened. Copy of letter dated 30.05.18 along with reasons for reopening is annexed herewith and marked hereto as ANNEXURE “G” (Colly.). 2.11 The petitioner, vide letter dated 18.07.18 (filed Page 6 of 23 C/SCA/19008/2018 ORDER on 27.07.18), raised objections against reopening. The petitioner made various factual and legal submissions in the objections raised against reopening. Thus, it was submitted that the action of reopening is not justified and hence, reopening proceedings deserves to be dropped. Copy of letter daetd 18.07.18 (filed on 27.07.18) raising objections against reopening is annexed and marked as ANNEXURE “H”. 2.12 However, the Respondent, vide letter dated 25.09.18 (received on 04.12.18), disposed off the objections raised by the petitioner against reopening and, inter alia, held that the action of reopening is valid in the eye of law. Copy of order dated 17.10.18 disposing off objections against reopening is annexed and marked as ANNEXURE “I”. 2.13 The petitioner states that the impugned notice under section 148 of the Act is bad, illegal barred by limitation and without jurisdiction and therefore deserves to be quashed.” 4. Mr. Tushar Hemani, the learned advocate appearing for the writ applicant invited the attention of this court to the reasons recorded for reopening the assessment. He submitted that the assessment is sought to be reopened on two fold grounds: first, the sales promotion expenses to the tune of Rs.20,00,271/- incurred on various tours have been expended wholly and exclusively for the business purpose, and secondly, Page 7 of 23 C/SCA/19008/2018 ORDER further verification and investigation of the purchases and sales is required. It was pointed out that insofar as the first aspect is concerned, in the reasons recorded itself, the Assessing Officer has recorded that during the course of assessment proceedings under section 143(3) of the Income Tax Act, 1961, the Assessing Officer had called for the details of the sales promotion expenses and further that he had also called for the details like the copies of vouchers/receipts issued by such tour operators. It is submitted that evidently therefore, at the time of framing the assessment under section 143(3) of the Act, the Assessing Officer had examined all the materials and thereafter allowed the expenses of Rs.45,57,388/-. It was submitted that therefore, the Assessing Officer seeks to reopen the assessment merely to examine the matter from a different angle, which is nothing but a change of opinion, which is not permissible in law. 4.1 It was submitted that insofar as the second issue is concerned, the Assessing Officer merely seeks to further verify and investigate, however, the Assessing Officer has not recorded any satisfaction that any income chargeable to tax has escaped assessment in relation to that issue and therefore, the assumption of jurisdiction under section 147 of Page 8 of 23 C/SCA/19008/2018 ORDER the Act is without authority of law. 4.2 Mr. Hemani places reliance on the decision of the Supreme Court in the case of Commissioner of Income-Tax vs. Kelvinator of India Ltd. reported in (2010) 320 ITR 561 (SC). 5. On behalf of the Revenue affidavit-in-reply has been filed, duly affirmed by one Shri M.N. Sahay, Income Tax Officer, Ward-2(1)(2), Ahmedabad, inter alia, stating as under : “2. At the outset, I most respectfully submit that the petition is filed at a pre-mature stage in as much as only a notice u/s. 148 read with section 147 of the Income Tax Act (‘the Act’ for short) has been issued. In the event, the petitioner is aggrieved by the reassessment, alternative efficacious remedy is available by way of an Appeal to the CIT(A) and thereafter to the Tribunal as per the provisions of the Act. On this ground alone, I humbly submit that the petition is devoid of any merits and be summarily rejected. 3. Without prejudice to the above para wise reply to the petition is as under : 4. The facts are that the assessee company filed E return of income for AY 2013-14 on 28.09.2013 Page 9 of 23 C/SCA/19008/2018 ORDER declaring total income at NIL. The case was thereafter selected for scrutiny and assessment order under Section 143(3) was passed on 26.10.2005 determining total income at (-5,54,649/-). Subsequently, it was noticed that the assessee had debited an amount of Rs.45,57,388/- towards indirect expenses. Verification of expenditure claimed, revealed that the assessee had claimed expenses of Rs.30,43,808/- towards sale promotion. Out of the total sale promotion expenses of Rs.30,43,808/-, Rs.20,00,271/- was in relation to various tours within India and outside India. During original scrutiny proceedings assessment, the details in relation to the sale promotion expenses were not verified and no opinion was formed. The assessee failed in establishing the nexus between the expenditure claimed and its business connection. Though the expenditure claimed was not in relation to business, the assessee claimed as sale promotion. This had resulted into under assessment of income for which notice u/s 148 was issued after recording reasons. 5. It is submitted that discrepancies were also noticed in relation to the purchases and sales shown by the assessee for the year under consideration. The discrepancies found are stated in the reasons recorded and respondent crave leave to refer to and rely upon the same. Thus the assessee made incorrect disclosure which resulted into under assessment of income. As the Assessing Officer had reason to believe that income chargeable to tax has escaped assessment, notice under Section 148 was issued, which is legal and valid Page 10 of 23 C/SCA/19008/2018 ORDER notice. 6. With reference to para 2.1 to 2.7. it is submitted that notice was issued after following due procedure and after taking approval from the competent authority. Therefore, there is no illegality as alleged. 7. With reference to para 3.2. it is submitted that as stated in the reasons recorded, income chargeable to tax has escaped assessment. For sale promotion expenditure, though the expenses were not incurred for business the assessee claimed by providing incorrect details. The documents provided at the time of original assessment could not establish nexus with the business. As the expenditure was not incurred for the business purpose, the same was not allowable. As the assessee had not made full and true disclosure it resulted into escapement of income, for which, notice under Section 148 was issued. For second ground of escapement i.e. discrepancy with regard to purchase and sale, the assessee also failed in providing the details. Therefore, notice issued under Section 148 is valid notice. 8. It is submitted that in this case, notice under Section 148 was issued on 30.03.2018 for AY 2013-14 which is within a period of four years from the end of the relevant Assessment Year. As can be seen from the original assessment order, no opinion is formed in original assessment order in relation to the grounds stated in the reason recorded. Therefore, there cannot be any change of opinion as alleged. Therefore, notice issued by the Assessing Officer is legal and valid notice. Page 11 of 23 C/SCA/19008/2018 ORDER 9. With reference to para 4 to 7, it is submitted that sufficiency of reason is not open to question in a court of law but existence of belief can be challenged. The Hon'ble Court can examine whether the reasons are relevant or have bearing in the matters with regard to which he is required to entertain the belief before he can issue notice. Moreover, reliance is also placed in the case of Commissioner of Income-tax vs. Chhabil Dass Agarwal ITR 357 (SC)/[2013] 261 CTR the hon'ble Supreme Court has held that when statutory forum is created by law for redressal of grievances, a writ petition should not be entertained ignoring the statutory dispensation. The high Court must not interfere if there is an adequate efficacious alternative remedy available to the petitioner, and petitioner approached the High Court without availing the same, unless petitioner makes out an exceptional case warranting such interference or there exist sufficient grounds to invoke the extraordinary jurisdiction under article 226. It is pertinent to mention that in the instant case petitioner has not brought on record any such exception to invoke the extraordinary jurisdiction under article 226. 10. With reference to para 4 to 7, it is submitted that in the present case income chargeable to tax as escaped assessment, for which, no opinion is formed. Further sufficiency of reasons may not be required to be gone into at this stage. In this case, notice under Section 148 was issued as income chargeable to tax has escaped assessment, for which, no opinion is formed in the original assessment order.” Page 12 of 23 C/SCA/19008/2018 ORDER 5.1 Mrs. Mauna Bhatt, the learned senior standing counsel appearing for the respondent places strong reliance on a decision of this Court in the case of Gujarat Power Corporation Ltd. vs. Assistant Commissioner of Income- tax reported in (2012) 26 taxmann.com 51 (Guj.). Mrs. Bhatt places reliance on the following observations made in the said judgement : “30. In the result, we are of the opinion that reopening of an assessment within a period of four years from the end of relevant assessment year after 1.4.1989 could be made as long as the same is not based on mere change of opinion. Merely because a certain material which is otherwise tangible and enables the Assessing Officer to form a belief that income chargeable to tax has escaped assessment, formed part of original assessment record, per se would not bar the Assessing Officer from reopening the assessment on the basis of such material. Expression “tangible material” does not mean material alien to the original record. 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 Page 13 of 23 C/SCA/19008/2018 ORDER by the Legislature presumably in view of the highly complex nature of assessment proceedings involving large number of assessees 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 Page 14 of 23 C/SCA/19008/2018 ORDER 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 made and accepted by him, it 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 can not 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 Page 15 of 23 C/SCA/19008/2018 ORDER 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. 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 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.” 5.2 Mrs. Bhatt tried her best to convince this Court by submitting that the case on hand is not just one of change of Page 16 of 23 C/SCA/19008/2018 ORDER opinion. According to Mrs. Bhatt, the notice under Section 148 of the Income Tax Act, 1961 (for short “the Act, 1961”) came to be issued on the basis of certain material which is otherwise tangible and enables the Assessing Officer to form a belief that the income chargeable to tax had escaped assessment. She submitted that even if such material formed part of the original assessment record, the same per se would not bar the Assessing Officer from reopening the assessment on the basis of such material. The expression “tangible material” does not mean material absolutely foreign to the original record. In such circumstances referred to above, Mrs. Bhatt prays that there being no merit in this writ application, the same be rejected. 6. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the only question that falls for our consideration is whether the respondent was justified in issuing notice under Section 148 of the Act, 1961. 6.1 In Kelvinator of India Ltd. (supra), the Supreme Court had observed as under : “On going through the changes, quoted above, made to Page 17 of 23 C/SCA/19008/2018 ORDER Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, reopening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1st April, 1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re- open the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words “reason to believe” failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion”, which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review; he has the power to reassess. But re- assessment has to be based on fulfillment of certain pre-condition and if the concept of “change of opinion” is removed, as contended on behalf of the Department, then, in the garb of reopening the assessment, review would take place. One must treat the concept of “change of opinion” as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to Section 147 of the Act, as quoted Page 18 of 23 C/SCA/19008/2018 ORDER hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words “reason to believe” but also inserted the word “opinion” in Section 147 of the Act. However, on receipt of representations from the Companies against omission of the words “reason to believe”, Parliament reintroduced the said expression and deleted the word “opinion” on the ground that it would vest arbitrary powers in the Assessing Officer. We quote hereinbelow the relevant portion of Circular No.549 dated 31st October, 1989, ([1990] 182 ITR (St.) 1, 29) which reads as follows : “7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression `reason to believe’ in Section 147.--A number of representations were received against the omission of the words `reason to believe’ from Section 147 and their substitution by the `opinion’ of the Assessing Officer. It was pointed out that the meaning of the expression, `reason to believe’ had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression `has reason to believe’ in place of the words `for reasons to be recorded by him in writing, is of the opinion’. Other provisions of the new section 147, however, remain the same.” Page 19 of 23 C/SCA/19008/2018 ORDER 6.2 Bearing the aforesaid dictum in mind, we need to examine whether the notice under Section 148 of the Act deserves to be quashed and set aside. The Assessment Order dated 26.10.2015 reads thus : ASSESSMENT ORDER “In this case, the assessee company filed E-Return of Income for A.Y. 2013-14 on 28.09.2013 declaring total income at NIL. The return was processed u/s. 143(1) of the Act. Notice u/s. 143(2) of the Act was issued on 03.09.2014 which was duly served upon the assessee. Thereafter, notices u/s. 142(1) of the Act were issued on 07.05.2015, 03.07.2015, 07.08.2015, 03.09.2015 & 14.10.2015 calling for various details. 2. In response to the notice u/s. 142(1) of the Act, Shri Rohit Patel, C.A. and Shri Hiren Parikh, Director of the assessee company attended with letter of authority, copy of return of income, computation of income and other required details. The assessee is a company engaged in the business of trading cum marketing of pharmaceutical products. The case was discussed with them. The details filed in response to the notice issued have been verified and placed on record. 3. On the basis of the details filed by the assessee company and data made available, the total income of the assessee company is worked out as under :- Total Loss as per return of income (-) Rs.5,54,649/- Assessed Total loss (-) Rs.5,54,649/- ========== Page 20 of 23 C/SCA/19008/2018 ORDER 4. Assessed u/s. 143(3) of the Income-tax Act, 1961. Charge interest u/s. 234A, 234B, 234C & 234D of the Income-tax Act, 1961, as applicable. Give credit for prepaid taxes after due verification. Issue demand notice and challan and RO as the case may be.” 6.3 The writ applicant was served with a notice under Section 142(1) of the Act, 1961 calling upon him to furnish certain details. The notice is at Page 20 Annexure “B” to this petition. Clause – xiv reads thus : “(xiv) Please furnish the complete details of sales promotion expenses with account copy, name and address of parties, PAN, confirmation, its business expediency etc.” 6.4 The writ applicant was asked to furnish a complete details of the sales promotion expenses with account copy, name and address of the parties, PAN, confirmation, its business exigencies, etc. It is not in dispute that such details were furnished by the writ applicant at the relevant point of time in response to the notice issued under Section 142(1) of the Act, 1961. The department seeks to reopen the assessment on the ground that the income chargeable to tax to the extent of Rs.20,00,271/- had escaped assessment and, therefore, further verification and investigation is required. In the copy Page 21 of 23 C/SCA/19008/2018 ORDER of the reasons recorded for reopening of assessment under Section 147 of the Act for A.Y. 2013-14, it has been stated as under : “The assessee has incurred total expenditure of Rs.20,00,271/- on various work undertaken regularly during the year. In this connection Assessing Officer called for details like copies of vouchers/receipts issued by such tour operators. The assessee had furnished vouchers/receipts of three such tours.” 6.5 Thus, it appears that necessary details were called for by the authority concerned in connection with the assessment proceedings by issuing notice under Section 142(1) of the Act. In response to such notice, the writ applicant had furnished complete details as indicated from various documentary evidence on record. The entire case was discussed by the ITO with the writ applicant. The details furnished by the writ applicant in response to the notice issued were verified. Ultimately, the assessment was carried out and that is how the order dated 26.10.2015 came to be passed. 6.6 In such circumstances referred to above, it cannot be said that the tangible material which is said to have come Page 22 of 23 C/SCA/19008/2018 ORDER to the notice of the Assessing Officer was not taken into consideration at the relevant point of time on account of which the income chargeable to tax could be said to have escaped assessment. On the basis of the very same material, the assessment cannot be reopened on some change of opinion. In the facts and circumstances of the present case, we are of the view that the issue of notice under Section 148 of the Act, 1961 is not justified. 7. In the result, this petition succeeds and is hereby allowed. The impugned notice at Annexure “A” to this petition is hereby quashed and set aside. Consequently, all proceedings undertaken, if any, pursuant to the issue of notice under Section 148 of the Act also stands terminated. (J. B. PARDIWALA, J) (A. C. RAO, J) Dolly Page 23 of 23 "