LSI INDIA RESEARCH AND DEVELOPMENT PRIVATE LIMITED V. ADDITIONAL COMMISSIONER FOR INCOME TAX

WP/51208/2019

AI Insights

The case involves LSI India Research and Development Private Limited, which challenged the reassessment notice and order issued by the Income Tax authorities for the assessment year 2014-15. The primary contention was that the reassessment was based on the same material that was previously considered during the original assessment, and thus constituted a mere change of opinion, which is not a valid ground for reopening an assessment under the Income Tax Act. The court examined whether the Assessing Officer had formed a deemed opinion on the TDS deductions claimed by the petitioner in the original assessment, and whether the subsequent reassessment was justified.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 754179 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 14-03-2022
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax v. Kelvinator of India Ltd, Income Tax Officer v. TechSpan India (P.) Limited, ACIT v. Marico Ltd, Infosys Ltd v. DCIT, Dell India (P.) Limited v. JCIT, Commissioner of Income-tax VI, New Delhi v. Usha International Ltd, Kalyanji Mavji and Co v. CIT, West Bengal - II, Indian and Eastern Newspaper Society v. CIT, New Delhi, A.L.A. Firm v. CIT, Madras
• Laws Referred To: Income Tax Act 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: T SURYANARAYANA; THANMAYE RAJKUMAR
• Keywords: Income Tax; Jurisdiction; Reassessment; TDS non-deduction; Writ petition
• Section: 147; 148; 143(3); 40(a)(ia); 226

Judgement Text

"IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 14TH DAY OF MARCH 2022 BEFORE THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD WRIT PETITION NO. 51208/2019 (T-IT) BETWEEN : LSI INDIA RESEARCH AND DEVELOPMENT PRIVATE LIMITED (SUCCESSOR-IN-INTEREST TO RENESAS MOBILE INDIA PVT. LTD.) S1, WIPRO ELECTRONIC CITY SPECIAL ECONOMIC ZONE, DODDATHOGUR VILLAGE, BEGUR HOBLI, ELECTRONIC CITY, BANGALORE-560 100. REPRESENTED HEREIN BY ITS AUTHORIZED REPRESENTATIVE, MS. REKHA JOSHI. ... PETITIONER (BY SRI. T. SURYANARAYANA, SENIOR ADVOCATE FOR MS. THANMAYEE RAJKUMAR, ADVOCATE) AND : 1. ADDITIONAL COMMISSIONER FOR INCOME TAX SPECIAL RANGE-1, 2ND FLOOR, BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE - 560 095. 2 2. JOINT COMMISSIONER OF INCOME TAX CIRCLE-4(1)(1), BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE - 560 095. 3. THE PRINCIPAL COMMISSIONER OF INCOME TAX, BANGALORE-1, 5TH FLOOR, BMTC BUILDING, 6TH BLOCK, 80 FEET ROAD, KORAMANGALA, BANGALORE - 560 095. ... RESPONDENTS (BY SRI.K.V. ARAVIND, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 23.08.2019 (ANNEXURE-M) PASSED BY THE R-1 REJECTING THE PETITIONERS OBJECTIONS AS TO HIS JURISDICTION IN RESPECT OF THE ASSESSMENT YEAR 2014-15; QUASH THE NOTICE DATED 28.03.2019 (ANNEXURE-E) ISSUED BY THE R-1 U/S. 148 R/W SECTION 147 OF THE ACT FOR THE ASSESSMENT YEAR 2014-15 AND ETC. THIS WRIT PETITION HAVING BEEN HEARD AND COMING ON FOR PRONOUNCEMENT OF ORDERS THIS DAY, THE COURT DELIVERED THE FOLLOWING: 3 O R D E R The petitioner has impugned the Notice dated 28.03.2019 (Annexure- E) issued under Section 148 read with Section 147 of the Income Tax Act 1961 and the order dated 23.08.2019 (Annexure-M) by the Additional Commissioner of Income Tax, Special Range-I (the first respondent) rejecting the petitioner’s objections against re-opening of assessment for the assessment year 2014-2015. The first respondent, on the petitioner’s request has offered reasons for reassessment, and the reasons offered by the first respondent read as under: “Basis of forming reason to believe and the details of escapement of income. On verification of records it is reveals (sic) that assessee had debited subcontracting charges of Rs.23,03,36,536/- in the profit and loss account under the head ‘other expenses’. On perusal of records, it is observed that the assessee has debited and expenditure under the head ‘contractors and subcontractors’ and has deducted TDS on Rs.35187025 against payment of 4 Rs.74931004 (Clause 34 (a) of Form 3CD). Further it was also observed that the assessee has paid sub- contractors charges to M/s Broadcom Communications Technologies Private Limited of Rs.3.77 crore which means that the assessee had not deducted TDS on payment of subcontracting charges paid of Rs.3,97,43,979/- (74931004 - 35187025) which would have been deducted u/s. 194C of the Act. Since the assessee has not deducted TDS, the amount of Rs.3,97,43,979/- is not allowable to the assessee u/s. 40 (a)(ia.) of the IT Act, 1961. This amount has thus escaped assessment. The case of assessee for AY:2014- 2015 is being reopened to bring to tax the income escaping assessment u/s 147 r.w.s 148 of IT Act, 1961” 2. The first respondent, after opportunity to the petitioner to file objections to the reasons offered, has issued the impugned order dated 28.03.2019 (Annexure-M). The first respondent, in this impugned order, has opined that re- assessment is not because of mere suspicion but there is 5 reason to believe that Rs.3,97,43,979/- has escaped taxation and the re-assessment need not be based only on fresh material. The first respondent has further opined that there is no change of opinion as the question of non-deduction of TDS was not examined at the time of assessment order under section 143(3) of the Income Tax Act [for short, ‘the I-T Act’]. 3. A brief statement of facts would be as follows. The petitioner was issued with notice under Section 142(1) read with Section 129 of the I-T Act on 11.08.2016. This notice required the petitioner to furnish, amongst others, the details of the payments covered under Section 40A (2)(b) of the I-T Act in a particular format. This notice required the petitioner not only to furnish the details of the related party, nature of transaction, payments made but also to furnish details on whether TDS is deducted or not and if TDS is deducted the necessary details in this regard. The petitioner has furnished these details. The Assessing Officer [AO] has extended the benefit of hearing to the petitioner, and during the course of 6 this hearing, the AO has asked the petitioner to furnish certain details/information with regard to the AY: 2014-2015. 4. The petitioner, by its reply dated 15.11.2016 [Annexure – C], has furnished such details. The details furnished by the petitioner include reconciliation of the amount paid to the related persons under Section 40A (2) (b) of the Act. The petitioner has also furnished the details of taxes withheld on behalf of the Sub-contractor charges viz., M/s. Broadcom Communications Technology Limited – the related party for whom, according to the re-assessment notice, the petitioner had to effect TDS for a sum of Rs.3,97,43,973/-. The details in this regard are appended as Annexure 7 to Annexure – C. This Annexure-7 discloses that a sum of Rs.40,17,326/- was withheld on behalf of M/s. Broadcom Communications Technology. Thereafter, the AO has passed the assessment order dated on 22.11.2016 under Section 143(3) of the I-T Act. It is after this assessment order, the impugned notice dated 28.03.2019 is issued under 7 Section 148 read with Section 147 of the I-T Act resulting in the impugned order dated 23.08.2019. 5. Sri. T.Suryanarayana, the learned Senior counsel for the petitioner and Sri. K.V.Aravind, the learned counsel for the authorities, submit at the threshold that the question that will have to be decided by this Court would be: “Whether in the facts and circumstances of the case, this Court could opine that there is a deemed opinion of the assessing officer [AO] on the expenditure filed by the petitioner disclosing the actual TDS affected and the tax withheld on behalf of M/s.Broadcom Communications Technologies Limited with the assessment order dated 22.11.2016 under Section 143(3) of the IT Act” Sri T. Suryanarayana submits that if the petitioner persuades this Court to accept that indeed the AO has expressed an opinion on the details furnished by the petitioner towards the tax withheld on payments made to M/s.Broadcom Communications Technologies Limited in issuing the 8 assessment order dated 22.11.2016 under section 143 (3) of the I-T Act, reopening of assessment would amount to change of opinion and therefore, re-opening of the assessment would be impermissible in law. 6. Sri. T.Suryanarayana also submits that this Court must decide whether, in the facts and circumstances of the case, where the first respondent, who relies upon the records already submitted during the hearing of the proceedings under section 143 of the I-T Act, could be held to have reasons to believe that any income chargeable to income tax has escaped assessment. Sri T. Suryanarayana emphasizes that if it could be held either that the first respondent proposes to change opinion or that there is no reason to believe, the impugned re-assessment notice and the subsequent order would be without jurisdiction. 7. Sri. T.Suryanarayana in support of his submissions that this Court must opine that the AO has 9 accepted the explanation offered by the petitioner in the proceedings under Section 143 of the I-T Act and therefore there is AO’s deemed opinion in this regard urges the following grounds. 7.1 The AO had issued notice under Section 143(1) read with 129 of the I-T Act as the petitioner’s returns for the relevant assessment year was selected for scrutiny through Computer Aided Scrutiny Selection [CASS] and in the course of the hearing after the said notice, the petitioner is extended opportunity of hearing. Though the petitioner was called upon to furnish the details of related party transactions including related party sub-contractors, for the purposes of Section 40A of the I-T Act, the petitioner was also specifically called upon to file certain additional information and details. The petitioner accordingly filed the details on 15.11.2016. The petitioner along with these details has furnished the party wise details of the payment to sub-contractors (including M/s. Broadcom Communications Technology 10 Limited) indicating the tax withheld. It is after the detailed discussion and the scrutiny of the details furnished, the assessment order dated 22.11.2016 is passed under Section 143(3) of the I-T Act without any additions. 7.2 It is settled law that an AO need not offer reasons for acceptance of the cause shown on an issue [or a query] during the assessment proceedings and the reasons must be offered only when an assessee’s claim is disallowed. When an order of regular assessment is made under section 143(3) of the I-T Act after a query, there would be a presumption that such order is the result of application of mind1. The assessment order dated 22.11.2016, after the query and the response, can only be construed as a result of the AO’s deemed opinion on the petitioner’s claim for allowance. In 1 In this regard, reliance is placed upon paragraph 23 of the Full Bench decision of the High Court of Delhi in Commissioner of Income Tax v. Kelvinator of India Ltd stating that this decision is considered by the Apex Court in the proceedings between the same parties in its decision reported in (2010) 187 taxman 312 (SC). 11 which event, the threshold bar of a subsequent change in the deemed opinion on an issue or a query raised and considered would apply and the proposed reassessment would be without jurisdiction. 7.3 In continuation, it is contended that the reassessment proceedings will be invalid in case where a query is raised and is answered by the assessee in the original assessment proceedings but thereafter the AO does not make any addition in the assessment order as in such situations it must be considered that the AO has examined the issue but did not find any ground or reason to make addition or reject the assessee’s stand, and in this there is a deemed opinion. In support of this contention, a strong reliance is placed upon another Full Bench decision of the High Court of Delhi viz., Commissioner of Income-tax VI, New Delhi v. Usha International Ltd2. 2 (2012) 25 Taxmann.com 200 (Delhi) (FB) 12 7.4 A change in the AO’s opinion cannot be a reason for reopening assessment. If change of opinion by itself could confer jurisdiction for reopening of assessment, it would tantamount to review and an AO has no power to review. Therefore, change of opinion is an inbuilt test to check abuse of power by an AO. After the Amendment Act, 1989 (w.e.f. 01.04.1989), an AO can reopen assessment provided there is subsequent ‘tangible material’ to come to the conclusion that there is escapement of income from assessment as against mere change of opinion. In this regard reliance is placed upon paragraph 4 of the decision of the Apex Court in Commissioner of Income Tax, Delhi v. Kelvinator of India Ltd3. 7.5 The petitioner, in furnishing the details of the tax withheld qua M/s Broadcom Communications Technologies Ltd., in response to a query during the hearing prior to the assessment order dated 22.11.2016, had truthfully placed all 3 ibid 13 material details and it is on the perusal of these details that the AO has accepted the expenditure claimed without issuing a demand. The reassessment proceedings in such circumstances based on the very same records/details would be impermissible. In the event a reassessment has to be made when all the details are furnished, it would be only when subsequent tangible materials are brought out to justify reassessment. But, in this case no tangible materials are placed on record to justify that the assessment order dated 22.11.2016 does not have a deemed opinion and therefore, the change of opinion cannot be a reason for reassessment. In support of this proposition, reliance is placed upon the decision of this court in TTK Prestige Ltd v. DCIT4. 7.6 As regards the recent decisions both by the Apex Court and this Court, reliance is placed upon the decision of the Apex Court in Income Tax Officer v. TechSpan India 4 (2018) 97 Taxmann.com 112 (Karnataka) 14 (P.) Limited5 and ACIT v. Marico Ltd6, and the decisions of this Court in Infosys Ltd v. DCIT7 and Dell India (P.) Limited v. JCIT8. These decisions are to reiterate the propositions that though alternative remedy would be available for an assessee if aggrieved by the reasons for reopening of the assessment, this Court could exercise jurisdiction under Article 226 of the Constitution of India if it is shown that the proposed reopening would be without jurisdiction; if the notice under section 147 read with section 148 of the I-T Act is only based on a change of opinion, the AO would not have jurisdiction and the other propositions reiterated by the earlier decisions referred to hereinabove. 8. Sri K. V. Aravind, the learned counsel for the revenue, contests the maintainability of the writ petition while not contesting the proposition that if there is a deemed 5 (2018) 92 Taxmann.com 361 (SC) and also Income Tax Officer v. TechSpan India (P.) Limited in (2007) 158 Taxmann.com 182 (Delhi) 6 (2020) 117 Taxmann.com 244 (SC) 7 (2019) 109 Taxmann.com 107 (Karnataka) 8 (2021) 123 Taxmann.com 468 (Karnataka) 15 opinion at the time of assessment, and if reassessment is commenced because of change of opinion, such commencement of the assessment would be without jurisdiction. However, Sri K V Aravind strenuously refutes the canvass on behalf of the petitioner that there is a deemed opinion in the assessment order dated 22.11.2016 and the impugned notice is because of a change in this opinion. 8.1 Sri K V Aravind contends that, at the stage of issuance of notice under section 147 read with section 148 of the I-T Act, the only question that would be relevant is whether there is relevant material on which a reasonable person could have formed the requisite belief regarding escapement of tax; if this threshold is established, whether the materials will conclusively prove the escapement - the final outcome - would not be material. He emphasizes that this is the proposition underlined by the Hon’ble Apex Court 16 in ACIT v. Rajesh Jhaveria Stockbrokers (P) Limited9. He argues that in the present case, it is obvious that the question of non-deduction of TDS and the consequence thereof under section 40(a)(ia) of the I-T Act was not considered by the AO in the original proceedings, and therefore there is prima facie reason to conclude that the commencement of the reassessment proceedings would be justified. The petitioner will not be without remedy as it would be open to it to present its case before the first respondent. 8.2 Sri K V Aravind next submits that relevant material for requisite belief on escapement of tax i.e, information, could be obtained even from the record of the original assessment or from an investigation of the material on record; if it is shown that the relevant issue, the reason d’être for commencement of the reassessment, was not gone into in the assessment proceedings, it cannot be argued that because the reassessment proceedings is based on the 9 (2007) 291 ITR 0500 (SC) 17 material on record the reassessment must be invalidated. Sri K V Aravind relies upon the decision of the Hon’ble Apex Court in Kalyanji Mavji and Co v. CIT, West Bengal - II10, and he argues that the exposition in this regard in the above decision cannot be disputed in view of the later decision of the Hon’ble Apex Court in Indian and Eastern Newspaper Society v. CIT11 only because the second proposition exposited in Kalyanji Mavji and Co., is held to be bad. 8.3 Sri K V Aravind also argues that there can be no legal impediment in the reopening of assessment in cases where material is available with the AO but the same escapes attention while making the assessment. He relies upon the decision of the decision of the Division Bench of Delhi High Court in TechSpan v. ITO and the later affirmation of this decision by the Hon’ble Apex Court in ITO v. TechSpan supra in support of the above proposition and to contend that 10 (1976) 102 ITR 0287 (SC) 11 (1976) 119 ITR 0996 (SC) 18 an attempt to bring to tax that income which has escaped assessment cannot be absorbed by judicial intervention on an assumption that there is change of opinion even in cases where the assessment order does not address itself to a given aspect sought to be examined in the reassessment proceedings. 9. The Hon’ble Apex Court in Kalyanji Mavji and Co. v. CIT, West Bengal-II supra while considering the provisions of section 34(1) of the I-T Act, 1922, and the amendments thereto over a period of time, and the significance of the expression, “information” as found in the last of the amendments to this section12, has declared that for 12 [34. Income escaping assessment.—(1) If— (a) the Income-tax Officer has reason to believe that by reason of the omission or failure on the part of an assessee to make a return of his income under section 22 for any year or to disclose fully and truly all material facts necessary for his assessment for that year, income, profits or gains chargeable to income-tax have escaped assessment for that year, or have been under- assessed, or assessed at too low a rate, or have been made the subject of excessive relief under the Act, or excessive loss or depreciation allowance has been computed, or 19 the purposes of reassessment, “information” contemplated for reassessment in 34(1)(b) could be when it is secured by the AO in certain circumstances. The circumstances delineated by the Hon’ble Apex Court are as follows: (1) where the information is as to the true and correct state of the law derived from relevant judicial decisions; (2) where in the original assessment the income liable to tax has escaped assessment due to oversight, inadvertence or a mistake committed by the Income-tax Officer. This is obviously based on the principle that the taxpayer would not be allowed to take advantage of an oversight or mistake committed by the taxing authority; (3) where the information is derived from an external source of any kind. Such external source would include discovery of new and important matters or knowledge of fresh facts (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income- tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed, 20 which were not present at the time of the original assessment; (4) where the information may be obtained even from the record of the original assessment from an investigation of the materials on the record, or the facts disclosed thereby or from other enquiry or research into facts or law. 10. In the later decision in Indian and Eastern Newspaper Society, New Delhi v. CIT, New Delhi supra, examining the question of reassessment commenced under the provisions of section 147 read with section 148 of the I-T Act [as it stood at the relevant time], and considering the circumstances delineated in Kalyanji Mavji and Co. v. CIT, West Bengal-II supra has declared that the observation in this decision that ‘where income had escaped assessment due to the oversight, inadvertence are mistake must fall within section 34 (1)(b) of the I-T Act’ travels farther than the statute warrants and any observation in this regard does not lay down the correct law. The significance of the other three circumstances are reiterated. 21 11. Later the provisions of section 147 have been amended w.e.f 01.04.198813 and again w.e.f 01.04.198914. The significance of these amendments are stated in Circular No. 549 dated 31.10.1989. As regards the significance of the first Amendment it is inter alia stated as follows: Separate provisions contained in clauses (a) and (b) of the old section have been merged into a single new section, which provides that if the Assessing Officer is of the opinion that income chargeable to tax for any assessment year has escaped assessment, he can assess or reassess, the same after recording in writing the reasons for doing so. This merger also introduced certain changes as discussed in the decisions relied upon by the parties, but a discussion in this regard will not be relevant for the case on hand15. This amendment also dispensed with the requirement that the AO (Income Tax Officer) should have reason to believe or information in his possession before taking action for 13 Direct Tax Laws (Amendment) Act, 1987-III 14 Direct Tax Laws (Amendment) Act, 1989-III 15 The discussion on the differences could be found in the full bench decision of the High Court of Delhi in CIT v. Kelvinator of India Ltd supra 22 reassessment under the substituted provisions of section 147 of the I-T Act. However, by the later amendment, the requirement of reason to believe is brought back into the statute replacing reasons to be recorded in writing and opinion. 12. In the later decision in A.L.A. Firm v. CIT, Madras supra, the Hon’ble Apex Court, after referring to these amendments, has reiterated that only the second proposition delineated in Kalyanji Mavji and Co. v. CIT, West Bengal-II is doubted and not the other three propositions, and insofar as ‘information’ gathered by the AO for commencing reassessment based on the material already on record, the Hon’ble Supreme Court has held as follows. What then, is the difference between the situations envisaged in propositions (2) and (4) of Kalyanji Mavji (supra)? The difference, if one keeps in mind the trend of the judicial decisions, is this. Proposition (4) refers to a case where the I.T.O. initiates reassessment proceedings in the light of \"information\" obtained by 23 him by an investigation into material already on record or by research into the law applicable thereto which has brought out an angle or aspect that had been missed earlier, for e.g., as in the two Madras decisions referred to earlier. Proposition (2) no doubt covers this situation also but it is so widely expressed as to include also cases in which the I.T.O., having considered all the facts and law, arrives at a particular conclusion, but reinitiates proceedings because, on a reappraisal of the same material which had been considered earlier and in the light of the same legal aspects to which his attention had been drawn earlier, he comes to a conclusion that an item of income which he had earlier consciously left out from the earlier assessment should have been brought to tax. In other words, as pointed out in IENS case, it also ropes in cases of a \"bare or mere change of opinion\" where the I.T.O. (very often a successor officer) attempts to reopen the assessment because the opinion formed earlier by himself (or, more often, by a predecessor I.T.O.) was, in his opinion, incorrect. Judicial decisions had consistently held that this could not be done and the IENS case (supra) has warned that this line of cases cannot be taken to have been overruled by Kalyanji Mavji (supra). The second paragraph from the judgment in the IENS case earlier extracted has also reference 24 only to this situation and insists upon the necessity of some information which make the ITO realise that he has committed an error in the earlier assessment. This paragraph does not in any way affect the principle enumerated in the two Madras cases cited with approval in Anandji Haridas, Even making allowances for this limitation placed on the observations in Kalyanji Mavji, the position as summarised by the High Court in the following words represents, in our view, the correct position in law: \"The result of these decisions is that the statute does not require that the information must be extraneous to the record. It is enough if the material, on the basis of which the reassessment proceedings are sought to be initiated, came to the notice of the Income-tax Officer subsequent to the original assessment. If the Income-tax Officer had considered and formed an opinion on the said material in the original assessment itself, then he would be powerless to start the proceedings for the reassessment. Where, however, the Income- tax Officer had not considered the material and subsequently come by the material from 25 the record itself, then such a case would fall within the scope of section 147(b) of the Act 13. It follows from the aforesaid proposition that, the reiteration that the material which is part of the original assessment proceedings could be the basis for reopening of assessment prevails and this is provided the other conditions are satisfied16. This Court, as such, cannot interfere with the impugned show cause notice dated 28.03.2019 (Annexure- E) or the order dated 23.08.2019 (Annexure-M) only because the proposed reassessment is based on the materials furnished during the hearing prior to the Assessment order dated 22.11.2016. 14. At this stage, this Court must refer to the decision of the Full Bench of the High Court of Delhi in Commissioner of Income Tax - VI, New Delhi v. Usha International Ltd., supra because circumstances akin to the present case’s 16 This Court can also draw support from the decision of the Hon’ble Apex Court in Commissioner of Income Tax, Delhi versus Kelvinator of India Ltd supra 26 circumstances are discussed. The relevant part reads as under: Reassessment proceedings will be invalid in case an issue or query is raised and answered by the assessee in original assessment proceedings but thereafter the Assessing Officer does not make any addition in the assessment order. In such situations it should be accepted that the issue was examined but the Assessing Officer did not find any ground or reason to make addition or reject the stand of the assessee. He forms an opinion. The reassessment will be invalid because the Assessing Officer had formed an opinion in the original assessment, though he had not recorded his reasons. 15. In the present case, it is undisputed, as recorded in annexure C, that the petitioner was asked to submit certain details/information relating to the relevant assessment year viz., AY 2014-15. The petitioner in response thereto, furnished different details including the details as regards the payments made to related parties, the TDS affected and the tax withheld. The petitioner has furnished 27 such details relating to M/s Broadcom Communications Technologies Pvt. Ltd. After these details are furnished, the assessment order is issued on 22.11.2016 without any additions, or rejection. 16. These circumstances would be material to decide whether the assessment order dated 22.11.2016 incorporates the AO’s deemed opinion on the query raised. It is now settled that an assessment order can be passed either in terms of section 143(1) or 143(3) of the I-T Act, and when a regular order of assessment is passed in terms of section 143 (3), a presumption that such an order is passed on application of mind is attached to it. This presumption is raised with the aid of section 114(e) of the Evidence Act which stipulates that judicial and official acts are regularly performed. A useful reference in this regard could be made to the decision of the Full Bench of the High Court of Delhi in Commissioner of Income Tax v. Kelvinator of India Ltd., supra. In the considered opinion of this court, when it is 28 undisputed that the AO asked for details relating to the details of the payments made as subcontractor charges and the TDS affected and the petitioner has furnished those details, with the AO issuing the assessment order dated 22.11.2016 without any additions, it must be deemed that the AO has opined in favour of the petitioner on the TDS deductions made. 17. It is settled by the decision of the Hon’ble Apex Court with the decision in Commissioner of Income Tax, Delhi v. Kelvinator of India Ltd., supra [which holds the field even today] that mere change of opinion cannot by itself be a reason for reopening of the assessment as it would amount to the AO reviewing the assessment; the change of opinion must be applied as a built-in check to prevent such review and the AO can reopen assessment only when there is tangible material to conclude that there is escapement of income from assessment. 29 18. The question of tangible material that would justify the reason to believe that certain income has escaped tax must be tested against the settled law that, ‘material on which the assessing authority bases its opinion must not be arbitrary, irrational, vague, distant or irrelevant and it must bring home the appropriate rational of the action taken by the AO in pursuance of such belief; if the material relied upon by the AO for reopening assessment does not satisfy these requirements, the AO’s action would be held as arbitrary and bad in law17. 19. The reason offered in justification of the notice issued under section 147 read with section 148 of the I-T Act is that on perusal of records it is observed by the AO that though the petitioner has paid subcontractor charges in a sum of Rs.7,4,931,004/- to M/s Broadcom Communications Technologies Private Limited, the petitioner has not deducted the TDS for the entire amount and therefore a sum of 17 State of Uttar Pradesh v. Aryaverth Chawl Udyog reported in (2015) 53 Taxmann.com 66 (SC) 30 Rs.39,743,979/- cannot be allowed under section 40(a)(ia) of the I-T Act. If there is conscious application of mind on an issue during assessment, and this Court as in the circumstances of the case has already opined that there was such conscious application of mind and therefore a deemed opinion, there cannot be reassessment only because of an error in such opinion. The reasons offered by the A.O to justify reassessment cannot be accepted as an objective view based on any subsequent information in the absence of necessary material in this regard. 20. In the light of the afore discussion, this Court is of the considered view that the impugned notice dated 28.03.2019 (Annexure- E) issued under Section 148 read with Section 147 of the Income Tax Act 1961 and the order dated 23.08.2019 (Annexure-M) by the Additional Commissioner of Income Tax, Special Range-I (the first respondent) cannot be sustained and must be quashed on the ground of lack of jurisdiction. Therefore, the following: 31 ORDER The writ petition is allowed, and the impugned notice dated 28.03.2019 (Annexure- E) issued under Section 148 read with Section 147 of the Income Tax Act 1961 and the order dated 23.08.2019 (Annexure-M) by the Additional Commissioner of Income Tax, Special Range-I (the first respondent) are quashed. Sd/- JUDGE RB "