MACK STAR MARKETING PRIVATE LIMITED,MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX 2(2)(1), MUMBAI

ITA 4994/MUM/2024

AI Insights

Mack Star Marketing Pvt. Ltd. appealed against the order of the Commissioner of Income-tax (Appeals) - National Faceless Appeal Centre, which upheld the reassessment order for the assessment year 2013-14. The primary contention was the disallowance of building maintenance charges amounting to INR 3,42,97,676, which the appellant argued had been previously allowed in a subsequent assessment year. The Tribunal examined whether the reassessment was justified under Section 147 of the Income Tax Act, focusing on the principles of 'change of opinion' and the requirement of new tangible material for reopening an assessment. The Tribunal found that the original assessment had considered the building maintenance charges, and thus, the subsequent reopening was merely a change of opinion, leading to the quashing of the reassessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 24016 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-01-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Other Referred Cases: Radhasaomi Satsang v. CIT, Marico Ltd. v. ACIT, PALLONJI ENERPRISES P. LTD, Union Bank of India v. DCIT, Kelvinator of India Ltd v. ITO, Export Credit Guarantee Corporation of India Ltd v. ACIT, State Bank of India vs. ACIT, CIT vs. Kelvinator of India Ltd, M/s. Usha International v. CIT, CIT & Ars v. Rinku Chakraborthy, Kalyanji Mavji and Company v. CIT, Raymond Woolen Mills Ltd. v. ITO & Others, Revathy Cp Equipment Ltd. vs Deputy Commissioner of Income-tax and Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: R.R. MAKWANA
• Assessee Lawyers: YASH VARMANI
• Keywords: Set aside; Business income; Difference of opinion; Change of opinion; Revenue expenditure; Reassessment proceedings; Business expenditure; Depreciation; Rule of consistency; Period of limitation; Reopening of assessment; Principle of natural justice; Search and seizure; Audit objection; Assessment record; Reason to believe; Time period of passing order; Tangible material
• Section: 147; 148; 143(3); 142(1); 153; 139; 37; 37(1)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “D” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI SUNIL KUMAR SINGH (JUDICIAL MEMBER) ITA No. 4994/MUM/2024 Assessment Year: 2013-14 Mack Star Marketing Pvt. Ltd., Unit 404, Kaledonia, 19 Sahar Road, Andheri (E), Mumbai-400069. Vs. National Faceless Appeal Centre. PAN NO. AADCM 7564 K Appellant Respondent Assessee by : Mr. Yash Varmani Revenue by : Mr. R.R. Makwana, Sr. DR Date of Hearing : 17/12/2024 Date of pronouncement : 21/01/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 29.07.2024 passed by the Ld. Commissioner of Income-tax (Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2013-14, raising following grounds: 1. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances in upholding the reassessment order dated 14 December challenge and agitated in this appeal. 2. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in disallowing the building maintenance charges of INR 3,42,97,676 incurred by the Appellant in relation to the commercial building Kaledonia for AY 2013-14. Reassessment was without jurisdiction 3. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in l circumstances of the case in not appreciating that the issue of building maintenance charges was discussed in detailed by the Appellant's assessing officer (AO) during the assessment proceedings and thus, reopening the assessment on ground is merely a change in opinion. 4. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in not appreciating the Appellant's objections to the reopening of the a no failure on part of the Appellant to disclose all material facts necessary fully and truly for its assessment for AY 2013 and thus the reassessment was without jurisdiction. The issue of deduction claimed on account of buildin maintenance charges has been decided in favour of the Appellant in the immediately succeeding AY 5. 5. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in not was made on the same issue of building maintenance charges by the AO in the reassessment order dated 29 March 2022 under Section 147 read with Section 144B of the Income Tax Act, 1961 (IT Act) for the immediately succeeding AY 6. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in not appreciating that since there are no change in facts of the present AY 2013 2014-15 (i.e., the immediately succeeding AY), no addition can be made on account of the building maintenance charges pursuant to the principle of consistency as laid down by the Hon'ble Supreme Court in the case of Radhasaomi Satsang v. CIT (1992) 193 ITR 321 (SC Principles of Natural Justice 7. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and the facts and Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 2018 in relation to the disputed items under challenge and agitated in this appeal. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in disallowing the building ntenance charges of INR 3,42,97,676 incurred by the Appellant in relation to the commercial building Kaledonia for 14. Reassessment was without jurisdiction That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in not appreciating that the issue of building maintenance charges was discussed in detailed by the Appellant's assessing officer (AO) during the assessment proceedings and thus, reopening the assessment on ground is merely a change in opinion. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in not appreciating the Appellant's objections to the reopening of the assessment that there was no failure on part of the Appellant to disclose all material facts necessary fully and truly for its assessment for AY 2013 and thus the reassessment was without jurisdiction. The issue of deduction claimed on account of buildin maintenance charges has been decided in favour of the Appellant in the immediately succeeding AY 5. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in not appreciating that no addition was made on the same issue of building maintenance charges by the AO in the reassessment order dated 29 March 2022 under Section 147 read with Section 144B of the Income Tax Act, 1961 (IT Act) for the immediately succeeding AY 2014 That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in not appreciating that since there are no change in facts of the present AY 2013-14 vis-à- (i.e., the immediately succeeding AY), no addition can be made on account of the building maintenance charges pursuant to the principle of consistency as laid down by the Hon'ble Supreme Court in the case of Radhasaomi Satsang v. CIT (1992) 193 ITR 321 (SC). Principles of Natural Justice That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and the facts and ck Star Marketing Pvt. Ltd. 2 ITA No. 4994/MUM/2024 2018 in relation to the disputed items under That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in disallowing the building ntenance charges of INR 3,42,97,676 incurred by the Appellant in relation to the commercial building Kaledonia for That the Commissioner of Income Tax (Appeals) / National aw and on the facts and circumstances of the case in not appreciating that the issue of building maintenance charges was discussed in detailed by the Appellant's assessing officer (AO) during the assessment proceedings and thus, reopening the assessment on this That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in not appreciating the Appellant's ssessment that there was no failure on part of the Appellant to disclose all material facts necessary fully and truly for its assessment for AY 2013-14 The issue of deduction claimed on account of building maintenance charges has been decided in favour of the 5. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and appreciating that no addition was made on the same issue of building maintenance charges by the AO in the reassessment order dated 29 March 2022 under Section 147 read with Section 144B of the Income Tax 2014-15 That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and on the facts and circumstances of the case in not appreciating that since there -vis AY (i.e., the immediately succeeding AY), no addition can be made on account of the building maintenance charges pursuant to the principle of consistency as laid down by the Hon'ble Supreme Court in the case of Radhasaomi Satsang v. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and the facts and circumstances of the case in not considering the submissions made by the Appellant before passing the Impugned O 8. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and the facts and circumstances of the case in passing the Impugned Order without providing an opportunity of personal hearing to the Appellant which goes 9. That the Appellant craves leave to add to and / or amend and / or delete and / or modify and / or alter the aforesaid grounds of appeal as and when the occasion demands. 10. All the aforesaid grounds of appeal are ind alternative and without prejudice to one another. 2. Briefly stated, facts of the case are that the assessee company is a real estate company and is a joint venture between a foreign investor, i.e. 78.79% shares Holding Ltd’. (Foreign Investor) certain companies owned by promoters of the Promoter Entities). During the year under consideration, the assessee company was engaged in the development/constructio commercial building its statement of facts filed before the Ld. CIT(A) mentioned that during period from 2011 control and management of the company was handled by the promoters of the HDIL group i.e. Sarang Wadhawan through complete control over the documents and tax e assessee. It is further stated that carried out by them took management control of the company For the assessment year under consideration, the assessee Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 circumstances of the case in not considering the submissions made by the Appellant before passing the Impugned Order. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and the facts and circumstances of the case in passing the Impugned Order without providing an opportunity of personal hearing to the Appellant which goes against the principles of natural justice. That the Appellant craves leave to add to and / or amend and / or delete and / or modify and / or alter the aforesaid grounds of appeal as and when the occasion demands. All the aforesaid grounds of appeal are independent, in the alternative and without prejudice to one another. Briefly stated, facts of the case are that the assessee company is a real estate company and is a joint venture between a foreign 78.79% shares are held by ‘Ocean Debt Inv . (Foreign Investor) and 21.19% shares certain companies owned by promoters of the ‘HDIL Group Promoter Entities). During the year under consideration, the assessee company was engaged in the development/constructio mercial building namely ‘Kaledonia’ in Mumbai. The assessee in its statement of facts filed before the Ld. CIT(A) mentioned that during period from 2011-17 upto 1st September, 2017, control and management of the company was handled by the romoters of the HDIL group i.e. Mr. Rakesh wadhawan Wadhawan through their representative complete control over the documents and tax e-filing portal of the assessee. It is further stated that when misappropriation of funds carried out by them came to public knowledge, the foreign investor management control of the company only form AY 2018 or the assessment year under consideration, the assessee ck Star Marketing Pvt. Ltd. 3 ITA No. 4994/MUM/2024 circumstances of the case in not considering the submissions rder. That the Commissioner of Income Tax (Appeals) / National Faceless Appeal Centre erred in law and the facts and circumstances of the case in passing the Impugned Order without providing an opportunity of personal hearing to the against the principles of natural justice. That the Appellant craves leave to add to and / or amend and / or delete and / or modify and / or alter the aforesaid ependent, in the Briefly stated, facts of the case are that the assessee company is a real estate company and is a joint venture between a foreign Ocean Debt Investment 21.19% shares are held by HDIL Group’ (‘HDIL’ Promoter Entities). During the year under consideration, the assessee company was engaged in the development/construction of . The assessee in its statement of facts filed before the Ld. CIT(A) mentioned that September, 2017, entire control and management of the company was handled by the wadhawan and Shri and they had filing portal of the misappropriation of funds the foreign investor only form AY 2018-19. or the assessment year under consideration, the assessee company filed its regular return of income on 30.09.2013 declaring a total income of Rs.2,25,79,333/ the assessee was selected for scrutiny assessment. The Assessing Officer completed the scrutiny assessment u/s 143(3) of the Income-tax Act, 1961 (in short ‘the Act’) on 30.09.2016, assessing total income at Rs.41,87,12,490/ order, the assessee filed Authority on 15.06.2016 the Ld. counsel for the assessee in the written submission fil before us. 2.1 Subsequently, the Assessing Officer recorded reason believe that income escaped assessment and accordingly issued notice u/s 148 of the Act on 27.03.2018. In the reasons recorded, the Assessing Officer noted that on the building main charges of Rs.3,42,97,676/ deduction, firstly, the deduction provided by the Assessing Officer u/s 24(a) of the Act at the rate of the vacant flats and, the reason that building maintenance charges loss account were claimed as allowable revenue expenditure reassessment order passed on Assessing Officer disallowed the building Rs.3,42,97,676/-. On further appeal assessee challenged validity of the reassessment proceedings as Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 regular return of income on 30.09.2013 declaring total income of Rs.2,25,79,333/-. The return of income filed by the assessee was selected for scrutiny assessment. The Assessing Officer completed the scrutiny assessment u/s 143(3) of the tax Act, 1961 (in short ‘the Act’) on 30.09.2016, assessing total income at Rs.41,87,12,490/-. Against the said assessment he assessee filed appeal before the Ld. Authority on 15.06.2016, which is currently pending as informed by the Ld. counsel for the assessee in the written submission fil Subsequently, the Assessing Officer recorded reason believe that income escaped assessment and accordingly issued notice u/s 148 of the Act on 27.03.2018. In the reasons recorded, the Assessing Officer noted that on the building main charges of Rs.3,42,97,676/-, the assessee had taken double , the deduction provided by the Assessing Officer at the rate of 30% on the deemed rental value of , secondly, a deduction u/s 37 building maintenance charges debited in profit and were claimed as allowable revenue expenditure reassessment order passed on 14.12.2018 u/s 147 of the Act, t Assessing Officer disallowed the building maintenance charges of . On further appeal before the ld CIT(A) assessee challenged validity of the reassessment proceedings as ck Star Marketing Pvt. Ltd. 4 ITA No. 4994/MUM/2024 regular return of income on 30.09.2013 declaring . The return of income filed by the assessee was selected for scrutiny assessment. The Assessing Officer completed the scrutiny assessment u/s 143(3) of the tax Act, 1961 (in short ‘the Act’) on 30.09.2016, assessing inst the said assessment Ld. First Appellate which is currently pending as informed by the Ld. counsel for the assessee in the written submission filed Subsequently, the Assessing Officer recorded reasons to believe that income escaped assessment and accordingly issued notice u/s 148 of the Act on 27.03.2018. In the reasons recorded, the Assessing Officer noted that on the building maintenance the assessee had taken double , the deduction provided by the Assessing Officer 30% on the deemed rental value of u/s 37 of the Act for debited in profit and were claimed as allowable revenue expenditure. In the 14.12.2018 u/s 147 of the Act, the maintenance charges of before the ld CIT(A) , the assessee challenged validity of the reassessment proceedings as well as merit of the addition, however, could not succeed. Aggrieved the assessee is in appeal before the (in short ‘the Tribunal’) raising the grounds as reproduced above. 3. Before us, the assessee filed a Paper Book containing pages 1 to 1519. The assessee also filed a compilation of the relevant documents from page 1 to 172. 4. Before us, the Ld. counsel for the assessee submitted ground No. 7 and 8 of the appeal and accordingly same Nos. 1, 2, 9 and 10 of the appeal being also dismissed as infructuous. 4.1 Now, we take up the effective ground No. 3 and 4 challenging the validity of the reassessment. In ground No. 4, the assessee has objected that there was no failure on the part of the assessee to disclose all the material facts necessary for the assessment and truly and therefore reassessment was without jurisdiction to lack of complying mandatory requirement of proviso to section 147 of the Act. 5. We have heard the rival submissions of both parties perused the relevant material placed on record. The assessee has challenged the validity of the reassessment proceedings initiated under Section 147 of the Act, specifically with reference to the Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 well as merit of the addition, however, could not succeed. Aggrieved the assessee is in appeal before the Income-tax Appellate Tribunal (in short ‘the Tribunal’) raising the grounds as reproduced above. Before us, the assessee filed a Paper Book containing pages 1 The assessee also filed a compilation of the relevant documents from page 1 to 172. Before us, the Ld. counsel for the assessee submitted ground No. 7 and 8 of the appeal were not pressed by the assessee and accordingly same are dismissed as infructuous. The ground of the appeal being general in nature also dismissed as infructuous. we take up the effective ground No. 3 and 4 challenging the validity of the reassessment. In ground No. 4, the assessee has objected that there was no failure on the part of the assessee to e material facts necessary for the assessment and therefore reassessment was without jurisdiction of complying mandatory requirement of proviso to section We have heard the rival submissions of both parties perused the relevant material placed on record. The assessee has challenged the validity of the reassessment proceedings initiated under Section 147 of the Act, specifically with reference to the ck Star Marketing Pvt. Ltd. 5 ITA No. 4994/MUM/2024 well as merit of the addition, however, could not succeed. Aggrieved tax Appellate Tribunal (in short ‘the Tribunal’) raising the grounds as reproduced above. Before us, the assessee filed a Paper Book containing pages 1 The assessee also filed a compilation of the relevant Before us, the Ld. counsel for the assessee submitted that not pressed by the assessee dismissed as infructuous. The ground general in nature, same are we take up the effective ground No. 3 and 4 challenging the validity of the reassessment. In ground No. 4, the assessee has objected that there was no failure on the part of the assessee to e material facts necessary for the assessment fully and therefore reassessment was without jurisdiction due of complying mandatory requirement of proviso to section We have heard the rival submissions of both parties and perused the relevant material placed on record. The assessee has challenged the validity of the reassessment proceedings initiated under Section 147 of the Act, specifically with reference to the proviso to Section 147 applicable during the relevant pe ready reference, the said proviso is reproduced as under: \"147. Income escaping assessment. If the Assessing Officer, for reasons to be recorded by him in writing, is of the opinion that any income chargeable to tax has escaped assessment for to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedin section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in Sections 148 to 153 referred to as the relevant assessment year): Provided that where an assessment under sub of Section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unl chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year 5.1 On perusal of the above proviso, it is clear that reopening of an assessment for failure on the part of the assessee for not disclosing the material facts for completing assessment fully and truly is permissible only if two cumulative conditions are satisfied: Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 proviso to Section 147 applicable during the relevant pe ready reference, the said proviso is reproduced as under: \"147. Income escaping assessment.— If the Assessing Officer, for reasons to be recorded by him in writing, is of the opinion that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in Sections 148 to 153 referred to as the relevant assessment year): that where an assessment under sub of Section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year the above proviso, it is clear that reopening of an assessment for failure on the part of the assessee for not disclosing the material facts for completing assessment fully and truly is permissible only if two cumulative conditions are satisfied: ck Star Marketing Pvt. Ltd. 6 ITA No. 4994/MUM/2024 proviso to Section 147 applicable during the relevant period. For ready reference, the said proviso is reproduced as under: If the Assessing Officer, for reasons to be recorded by him in writing, is of the opinion that any income chargeable to tax has any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice gs under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in Sections 148 to 153 referred to as the relevant assessment year): that where an assessment under sub-section (3) of Section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the ess any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year.\" the above proviso, it is clear that reopening of an assessment for failure on the part of the assessee for not disclosing the material facts for completing assessment fully and truly is permissible only if two cumulative conditions are satisfied:  First, the assessment must have been completed under Section 143(3) of the Act.  Second, the reopening is made four years from the end of relevant assessment year. 5.2 In the present case, the scrutiny assessment under Section 143(3) of the Act was completed on the first condition. However, as regards the second condition, the relevant assessment year in this case is year limitation period from the end of the relevant assessment year expired on 31.03.2018 148 of the Act was issued on four-year period. Since the reopening has occurred within the prescribed four-year period, the proviso to Section 147 requiring assessee's failure to disclose material facts fully and truly does not apply. In light of the above findings, it is evident that the proviso to Section 147 is not applicable to the facts of the instant case, as the reopening of the assessment falls wi Consequently, the ground challenging the validity of reassessment on the basis of the assessee's alleged failure to disclose all material facts does not succeed. dismissed. 5.3 In ground No. 3, the assessee has challenged validity of the reassessment on the ground of for the assessee referred to the Paper Book page 3 and submitted Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 e assessment must have been completed under Section 143(3) of the Act. Second, the reopening is made for assessment year four years from the end of relevant assessment year. 5.2 In the present case, the scrutiny assessment under Section e Act was completed on 30.03.2016, thereby satisfying However, as regards the second condition, the relevant assessment year in this case is AY 2013-14 year limitation period from the end of the relevant assessment year 31.03.2018. In this instance, the notice under Section 148 of the Act was issued on 27.03.2018, which falls within the year period. Since the reopening has occurred within the year period, the proviso to Section 147 requiring assessee's failure to disclose material facts fully and truly does not apply. In light of the above findings, it is evident that the proviso to Section 147 is not applicable to the facts of the instant case, as the reopening of the assessment falls within the four Consequently, the ground challenging the validity of reassessment on the basis of the assessee's alleged failure to disclose all material facts does not succeed. Accordingly, Ground No. 4 of the appeal In ground No. 3, the assessee has challenged validity of the reassessment on the ground of ‘change of opinion’. The Ld. counsel for the assessee referred to the Paper Book page 3 and submitted ck Star Marketing Pvt. Ltd. 7 ITA No. 4994/MUM/2024 e assessment must have been completed under for assessment year beyond four years from the end of relevant assessment year. 5.2 In the present case, the scrutiny assessment under Section , thereby satisfying However, as regards the second condition, the 14, and the four- year limitation period from the end of the relevant assessment year . In this instance, the notice under Section , which falls within the year period. Since the reopening has occurred within the year period, the proviso to Section 147 requiring the assessee's failure to disclose material facts fully and truly does not apply. In light of the above findings, it is evident that the proviso to Section 147 is not applicable to the facts of the instant case, as the thin the four-year period. Consequently, the ground challenging the validity of reassessment on the basis of the assessee's alleged failure to disclose all material Ground No. 4 of the appeal is In ground No. 3, the assessee has challenged validity of the . The Ld. counsel for the assessee referred to the Paper Book page 3 and submitted that during the original assessment proceedings u/s 143(3) of t Act, the Assessing Officer asked the query regarding the detail of maintenance expenses of slum/rehab buildings. The Ld. counsel further referred to Paper Book page 7 providing detail of maintenance expenses in respect of slum building amounting to Rs.1,98,50,207/- and commercial building to the tune of Rs.1,44,47,469/- totaling to building maintenance expenses of Rs.3,42,97,676/-. It was contended by the assessee that said building maintenance were required to be undertaken by the developer/assessee til to the society of slum/rehab building. The Ld. counsel further referred to Paper Book page 18 wherein detail of gross building maintenance charges was called for provided by the asse the Assessing Officer, a copy which is available on Paper Book pages 21 to 27. In view of the above contentions the assessee submitted that the issue of the expenses’ was already examined by the Assessing Officer and no addition was made in the assessment order passed u/s 143(3) of the Act and therefore, now the Assessing Officer has reopened the assessment without any tangible material, information/material which was available before him during the regular assessment proceedings. Therefore, the Assessing Officer is seeking to reopen the assessment for the year under consideration only on account of building maintenance charges merely Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 that during the original assessment proceedings u/s 143(3) of t Act, the Assessing Officer asked the query regarding the detail of maintenance expenses of slum/rehab buildings. The Ld. counsel further referred to Paper Book page 7 providing detail of maintenance expenses in respect of slum building amounting to and commercial building to the tune of totaling to building maintenance expenses of . It was contended by the assessee that said building maintenance were required to be undertaken by the developer/assessee till the slum/rehab building were handed over to the society of slum/rehab building. The Ld. counsel further referred to Paper Book page 18 wherein detail of gross building maintenance charges was called for in prescribed format which was provided by the assessee in reply submitted on 17.02.2016 before the Assessing Officer, a copy which is available on Paper Book 21 to 27. In view of the above contentions, the the assessee submitted that the issue of the ‘building maintenance as already examined by the Assessing Officer and no addition was made in the assessment order passed u/s 143(3) of the Act and therefore, now the Assessing Officer has reopened the without any tangible material, based on the same erial which was available before him during the regular assessment proceedings. Therefore, the Assessing Officer is seeking to reopen the assessment for the year under consideration only on account of building maintenance charges merely ck Star Marketing Pvt. Ltd. 8 ITA No. 4994/MUM/2024 that during the original assessment proceedings u/s 143(3) of the Act, the Assessing Officer asked the query regarding the detail of maintenance expenses of slum/rehab buildings. The Ld. counsel further referred to Paper Book page 7 providing detail of maintenance expenses in respect of slum building amounting to and commercial building to the tune of totaling to building maintenance expenses of . It was contended by the assessee that said building maintenance were required to be undertaken by the l the slum/rehab building were handed over to the society of slum/rehab building. The Ld. counsel further referred to Paper Book page 18 wherein detail of gross building prescribed format which was ssee in reply submitted on 17.02.2016 before the Assessing Officer, a copy which is available on Paper Book , the Ld. counsel for building maintenance as already examined by the Assessing Officer and no addition was made in the assessment order passed u/s 143(3) of the Act and therefore, now the Assessing Officer has reopened the based on the same erial which was available before him during the regular assessment proceedings. Therefore, the Assessing Officer is seeking to reopen the assessment for the year under consideration only on account of building maintenance charges merely due to ‘change of the opinion in law. The Ld. counsel referred to the decision of the Co Bench of the Tribunal in the case PALLONJI ENERPRISES P. LTD, MUMBAI 1907/Mum/2017, wherein th Officer raised specific queries in relation to expense and the taxpayer responded to such queries during the assessment proceedings, then the AO cannot be reassessment to disallow the same expens placed reliance on the decision of the Hon’ble Bombay High Court in the case of Marico Ltd. v. ACIT (2019) 111 taxmann.com 253 (Bombay), wherein it is held that if the AO has remained silent in relation to issue during the assessment proceedings even though he has raised specific queried on such issue part of the Assessing Officer would be presumed that he had applied his mind to the issue under consideration and accepted the position taken by the taxpayer and the reassessment undertaken by the Assessing Officer thus rendered counsel further referred to the decision of the Co the Tribunal in the case of No. 1677 & 1676/Mum/2024 for assessment year 2016 2017-18. 5.2 On the contrary, the Ld. Departmental Representative (DR) submitted that in the queries raised by the Assessin Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 he opinion’ on same set of facts, which is not permitted in law. The Ld. counsel referred to the decision of the Co Bench of the Tribunal in the case ITO 1(2)(3), MUMBAI VS. M PALLONJI ENERPRISES P. LTD, MUMBAI wherein the Tribunal held that if the Assessing Officer raised specific queries in relation to expense and the taxpayer responded to such queries during the assessment proceedings, then the AO cannot be permitted to reassessment to disallow the same expense. The Ld. counsel further placed reliance on the decision of the Hon’ble Bombay High Court Marico Ltd. v. ACIT (2019) 111 taxmann.com 253 wherein it is held that if the AO has remained silent in relation to issue during the assessment proceedings even though he has raised specific queried on such issue, then such silence on the sing Officer would be presumed that he had lied his mind to the issue under consideration and accepted the position taken by the taxpayer and the reassessment undertaken by the Assessing Officer thus rendered is without jurisdiction. The Ld. counsel further referred to the decision of the Co-ordina the Tribunal in the case of Union Bank of India v. DCIT in ITA No. 1677 & 1676/Mum/2024 for assessment year 2016 On the contrary, the Ld. Departmental Representative (DR) submitted that in the queries raised by the Assessin ck Star Marketing Pvt. Ltd. 9 ITA No. 4994/MUM/2024 which is not permitted in law. The Ld. counsel referred to the decision of the Co-ordinate ITO 1(2)(3), MUMBAI VS. M in ITA No. e Tribunal held that if the Assessing Officer raised specific queries in relation to expense and the taxpayer responded to such queries during the assessment permitted to undertake e. The Ld. counsel further placed reliance on the decision of the Hon’ble Bombay High Court Marico Ltd. v. ACIT (2019) 111 taxmann.com 253 wherein it is held that if the AO has remained silent in relation to issue during the assessment proceedings even though he then such silence on the sing Officer would be presumed that he had lied his mind to the issue under consideration and accepted the position taken by the taxpayer and the reassessment undertaken by without jurisdiction. The Ld. ordinate Bench of Union Bank of India v. DCIT in ITA No. 1677 & 1676/Mum/2024 for assessment year 2016-17 and On the contrary, the Ld. Departmental Representative (DR) submitted that in the queries raised by the Assessing Officer during the original assessment proceedings, the Assessing Officer called for detail of the entire building maintenance expenses filed details in respect of slum/rehab building building maintenance expenses amounting to Rs.1,44,47,469/ Officer in assessment proceddings became more important particularly made addition for the building flats in the ‘Ka for maintenance expenses toward such commercial flats was allowed to the extent of 30% provisions of section 24 of the Act. expenses at the rate of by the Assessing Officer expenses of commercial building /flats account was not allowable and th Assessing Officer for reopening the assessment is justified and there is no ‘change of opinion that issue in the original assessment proceedings. He further submitted that in the decisi specific issue was duly examined in the original assessment proceedings whereas in the instant case the issue of building maintenance expenses in relation to commercial buildings which were though in the return o assessee as investment but in assessment proceedings, the Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 the original assessment proceedings, the Assessing Officer called for building maintenance expenses but the assessee in respect of slum/rehab building only and no details of building maintenance expenses in respect of commercial building amounting to Rs.1,44,47,469/- was filed before the Assessing in assessment proceddings. The examination of such details became more important particularly, when the Assessing Officer made addition for the ‘deemed rent’ in respect of commercial s in the ‘Kaladonia’ project was made, but for maintenance expenses toward such commercial flats was to the extent of 30% by the Assessing Officer under the provisions of section 24 of the Act. In view of the maintenance at the rate of 30% of the gross ‘deemed rent by the Assessing Officer, the claim of the assessee of maintenance of commercial building /flats in the profit and loss account was not allowable and therefore, the action of the Assessing Officer for reopening the assessment is justified and there change of opinion’ when the Assessing Officer did not examine that issue in the original assessment proceedings. He further submitted that in the decisions relied upon by the assessee, the specific issue was duly examined in the original assessment proceedings whereas in the instant case the issue of building expenses in relation to commercial buildings which were though in the return of income were treated by the assessee as investment but in assessment proceedings, the ck Star Marketing Pvt. Ltd. 10 ITA No. 4994/MUM/2024 the original assessment proceedings, the Assessing Officer called for but the assessee and no details of in respect of commercial building was filed before the Assessing . The examination of such details when the Assessing Officer in respect of commercial made, but deduction for maintenance expenses toward such commercial flats was by the Assessing Officer under the In view of the maintenance deemed rent’ was allowed the claim of the assessee of maintenance in the profit and loss erefore, the action of the Assessing Officer for reopening the assessment is justified and there when the Assessing Officer did not examine that issue in the original assessment proceedings. He further ons relied upon by the assessee, the specific issue was duly examined in the original assessment proceedings whereas in the instant case the issue of building expenses in relation to commercial buildings/flats f income were treated by the assessee as investment but in assessment proceedings, the assessee admitted the same to be stock Accordingly, he submitted that order of the lower authorities must be sustained. 6. We have heard rival relevant material on record. The Co in the case of M PALLONJI ENERPRISES P. LTD (supra) discussed the issue of there is a new tangible material or a trigger to reopen the assessment then even within four years from the end of the rel assessment year, assessment cannot be reopened. The relevant finding of the Tribunal “8. We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The issue in dispute before us is whether the reasons recorded by the Assessing Officer to believe that income escaped assessm change of opinion without there being any tangible material. For adjudication of issue in dispute it is relevant to refer the reasons recorded by the Assessing Officer, which are available on page 26 to 27 of the paperbook. For read \"The assessee, M. Pallonji Enterprises Pvt. Ltd. having PAN: AAFCM3357A is an assessee of this charge. The assessee for the A.Y. 2009 income on 29/09/2009 declaring income at Rs. Nil. assessment u/s. 143(3) of the IT. Act was completed on 26/09/2011 assessing income at Rs. Nil. From the records, it is seen that during the F.Y. 2008 relevant to A.Y. 2009 premium amounting to Rs.279, premium was not a subject matter of verification by the A:O. and therefore no opinion has been formed on the issue in original assessment u/s. 143(3). At the same time, the assessee Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 assessee admitted the same to be stock-in-trade of the assessee. Accordingly, he submitted that order of the lower authorities must We have heard rival submission of the parties and perused the relevant material on record. The Co-ordinate Bench of the Tribunal M PALLONJI ENERPRISES P. LTD (supra) discussed the issue of ‘change of opinion’ and held that unless there is a new tangible material or a trigger to reopen the assessment then even within four years from the end of the rel ssessment cannot be reopened. The relevant finding of the Tribunal (supra) is reproduced as under: We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The issue in dispute before us is whether the reasons recorded by the Assessing Officer to believe that income escaped assessment are merely based on change of opinion without there being any tangible material. For adjudication of issue in dispute it is relevant to refer the reasons recorded by the Assessing Officer, which are available on page 26 to 27 of the paperbook. For ready reference, same are extracted as under: \"The assessee, M. Pallonji Enterprises Pvt. Ltd. having PAN: AAFCM3357A is an assessee of this charge. The assessee for the A.Y. 2009-10 has e- filed its return of income on 29/09/2009 declaring income at Rs. Nil. assessment u/s. 143(3) of the IT. Act was completed on 26/09/2011 assessing income at Rs. Nil. From the records, it is seen that during the F.Y. 2008 relevant to A.Y. 2009-10 assessee has shown receipt of shäre premium amounting to Rs.279,48,42,181/- The issue of share premium was not a subject matter of verification by the A:O. and therefore no opinion has been formed on the issue in original assessment u/s. 143(3). At the same time, the assessee ck Star Marketing Pvt. Ltd. 11 ITA No. 4994/MUM/2024 trade of the assessee. Accordingly, he submitted that order of the lower authorities must submission of the parties and perused the ordinate Bench of the Tribunal M PALLONJI ENERPRISES P. LTD (supra) has and held that unless there is a new tangible material or a trigger to reopen the assessment then even within four years from the end of the relevant ssessment cannot be reopened. The relevant as under: We have heard rival submission of the parties on the issue in dispute and perused the relevant material on record. The issue in dispute before us is whether the reasons recorded by the Assessing ent are merely based on change of opinion without there being any tangible material. For adjudication of issue in dispute it is relevant to refer the reasons recorded by the Assessing Officer, which are available on page 26 to 27 y reference, same are extracted as under: \"The assessee, M. Pallonji Enterprises Pvt. Ltd. having PAN: filed its return of income on 29/09/2009 declaring income at Rs. Nil. In this case, assessment u/s. 143(3) of the IT. Act was completed on From the records, it is seen that during the F.Y. 2008-09 10 assessee has shown receipt of shäre The issue of share premium was not a subject matter of verification by the A:O. and therefore no opinion has been formed on the issue in original assessment u/s. 143(3). At the same time, the assessee has also not filed complete details showing share premium (justification for the excess share premium received in comparison to the intrinsic value of the share The Hon'ble Bombay High Court in the case of E.C.G.C. v/s. Addl. C.I.T. Writ Petition No. 502 of 2012 dated 10 their Lordships have held that when the assessment is sought to be reopened within a period of four years, then what is required is 'reason to believe' but not established fact of escapement of income. At this stage of issue of notice, the only q where there is relevant material on which the reasonable person can form a requisite belief. When an assessment is sought to be reopened within a period of four years, the test to be applied is whether there is tangible material to do so. Someth new. An Assessing Officer who has plainly ignored relevant material in arriving at an assessment acts contrary to the law. If as a consequence of this there is escapement of income, the jurisdictional re confirmation of a reason to believe that income has escapement assessment. A reason to believe is what is relevant and not an established fact of escapement of income. Reliance is also placed on the judgment in 348 IT 485 (Delhi High Court). In view of the above facts and the judicial decision of the Hon’ble Bombay High Court, I have reason to believe that income, in the garb of share application money/share premium received i provisions of section 147 of the I.T. Act. Necessary approval reopening the assessee’ case has been obtained from the Addl. CIT, Range of notice u/s 148 of the I.T. Act. Issue notice of the assessee.” 8.1 On perusal of the above reasons recorded, it is evident that there was no new tangible material before the Assessing Officer to invoke a trigger for making belief that income escaped assessment. The Assessing Offic assessment within four years from the end of the relevant assessment year, there should be some tangible material to do so. For reopening the assessment there has to be some trigger by way of a fresh material or information, which make the Assessing Officer to relook into the Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 has also not filed complete details showing the nature of this share premium (justification for the excess share premium received in comparison to the intrinsic value of the share The Hon'ble Bombay High Court in the case of E.C.G.C. v/s. Addl. C.I.T. Writ Petition No. 502 of 2012 dated 10-11 Janua their Lordships have held that when the assessment is sought to be reopened within a period of four years, then what is required is 'reason to believe' but not established fact of escapement of income. At this stage of issue of notice, the only q where there is relevant material on which the reasonable person can form a requisite belief. When an assessment is sought to be reopened within a period of four years, the test to be applied is whether there is tangible material to do so. Something which is tangible need not be something which is new. An Assessing Officer who has plainly ignored relevant material in arriving at an assessment acts contrary to the law. If as a consequence of this there is escapement of income, the jurisdictional requirement of section 147 is fulfilled on the confirmation of a reason to believe that income has escapement assessment. A reason to believe is what is relevant and not an established fact of escapement of income. Reliance is also placed on the judgment in the case of M/s. Usha International, 348 IT 485 (Delhi High Court). In view of the above facts and the judicial decision of the Hon’ble Bombay High Court, I have reason to believe that income, in the garb of share application money/share premium received in this case has escaped assessments in terms of provisions of section 147 of the I.T. Act. Necessary approval reopening the assessee’ case has been obtained from the Addl. CIT, Range-1(2), Mumbai before issue of notice u/s 148 of the I.T. Act. Issue notice u/s 148 of the Act of the assessee.” On perusal of the above reasons recorded, it is evident that there was no new tangible material before the Assessing Officer to invoke a trigger for making belief that income escaped assessment. The Assessing Officer has himself mentioned that for reopening the assessment within four years from the end of the relevant assessment year, there should be some tangible material to do so. For reopening the assessment there has to be some trigger by way of a fresh material or information, which make the Assessing Officer to relook into the ck Star Marketing Pvt. Ltd. 12 ITA No. 4994/MUM/2024 the nature of this share premium (justification for the excess share premium received in comparison to the intrinsic value of the share The Hon'ble Bombay High Court in the case of E.C.G.C. v/s. Addl. 11 January, 2013, their Lordships have held that when the assessment is sought to be reopened within a period of four years, then what is required is 'reason to believe' but not established fact of escapement of income. At this stage of issue of notice, the only question is where there is relevant material on which the reasonable person can form a requisite belief. When an assessment is sought to be reopened within a period of four years, the test to be applied is whether there is tangible material to do so. ing which is tangible need not be something which is new. An Assessing Officer who has plainly ignored relevant material in arriving at an assessment acts contrary to the law. If as a consequence of this there is escapement of income, the quirement of section 147 is fulfilled on the confirmation of a reason to believe that income has escapement assessment. A reason to believe is what is relevant and not an established fact of escapement of income. Reliance is also the case of M/s. Usha International, In view of the above facts and the judicial decision of the Hon’ble Bombay High Court, I have reason to believe that income, in the garb of share application money/share premium n this case has escaped assessments in terms of Necessary approval reopening the assessee’ case has been 1(2), Mumbai before issue u/s 148 of the Act On perusal of the above reasons recorded, it is evident that there was no new tangible material before the Assessing Officer to invoke a trigger for making belief that income escaped assessment. er has himself mentioned that for reopening the assessment within four years from the end of the relevant assessment year, there should be some tangible material to do so. For reopening the assessment there has to be some trigger by way of a fresh material or information, which make the Assessing Officer to relook into the completed assessment. It cannot be a situation where an Assessing Officer suddenly wake up a fine morning and say that income had escaped assessment in case of an assessee. The trigger fo believe that income escaped assessment may be in the form tangible material, which may be information or material external to assessment record or information from other assessment year etc. (i.e. internal source), but same cannot be by way of on same material, which will be in the nature of review of the assessment rather than reassessment. In the case of CIT & Ars v. Rinku Chakraborthy 56 DTR 227 (Kar) and Kalyanji Mavji and Company v. CIT 102 ITR 287 (SC) it is held that external sources only. The information obtained in assessment proceedings of subsequent assessment year can also be utilized for reopening of the completed assessment (Raymond Woolen Mills Ltd. v. ITO & Others 236 ITR 34 Deputy Commissioner of Income 8.2 Further, the Ld. counsel of the assessee has referred to inquiries made by the Assessing Officer in original assessment proceeding on the issue of examination of share capital and security premium. The Assessing Officer had issued a notice under section 14 09/08/2011 asking the assessee to furnish details of increase in share capital and details of security premium. A copy of said notice is placed on paper book page Nos. 35. A detailed reply filed by the assessee giving detail of increase with bank statement is available on pages 36 to 50 of the paperbook. The Assessing Officer completed the original assessment on 26/09/2011 under section 143(3) of the Act accepting the returned income, and no add capital or security premium, which means that the Assessing Officer has satisfied himself and formed an opinion on the issue of share capital and share premium. Thereafter, the Assessing Officer has reopened the assessment by way of notice dated 28/03/2014 i.e. within four years from end of the relevant assessment year, that too without any new tangible material, for the purpose of taxing the share premium amount received by the assessee, which stands already verified during the course of the original assessment proceeding. The reopening in such circumstances, amounts to based on “change of opinion”, which is not permitted in law. The Hon’ble Bombay High Court in the case of State Bank of India vs. ACIT (2018) 9 taxmann.com 77 (Bom) after considering the judgment in Export Credit Guarantee Corporation vs. Add CIT (supra) held that reopening within four years on change of opinion and without fresh material is Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 completed assessment. It cannot be a situation where an Assessing Officer suddenly wake up a fine morning and say that income had escaped assessment in case of an assessee. The trigger fo believe that income escaped assessment may be in the form tangible material, which may be information or material external to assessment record or information from other assessment year etc. (i.e. internal source), but same cannot be by way of a dream or rethinking on same material, which will be in the nature of review of the assessment rather than reassessment. In the case of CIT & Ars v. Rinku Chakraborthy 56 DTR 227 (Kar) and Kalyanji Mavji and Company v. CIT 102 ITR 287 (SC) it is held that such information need not be from external sources only. The information obtained in assessment proceedings of subsequent assessment year can also be utilized for reopening of the completed assessment (Raymond Woolen Mills Ltd. v. ITO & Others 236 ITR 34 (SC) and Revathy Cp Equipment Ltd. vs Deputy Commissioner of Income-tax and Ors. 241 ITR 856 (Mad.) Further, the Ld. counsel of the assessee has referred to inquiries made by the Assessing Officer in original assessment proceeding on the issue of examination of share capital and security premium. The Assessing Officer had issued a notice under section 142(1) of the Act on 09/08/2011 asking the assessee to furnish details of increase in share capital and details of security premium. A copy of said notice is placed on paper book page Nos. 35. A detailed reply filed by the assessee giving detail of increase in share capital and security premium along with bank statement is available on pages 36 to 50 of the paperbook. The Assessing Officer completed the original assessment on 26/09/2011 under section 143(3) of the Act accepting the returned income, and no addition was made in respect of increase in share capital or security premium, which means that the Assessing Officer has satisfied himself and formed an opinion on the issue of share capital and share premium. Thereafter, the Assessing Officer has he assessment by way of notice dated 28/03/2014 i.e. within four years from end of the relevant assessment year, that too without any new tangible material, for the purpose of taxing the share premium amount received by the assessee, which stands already erified during the course of the original assessment proceeding. The reopening in such circumstances, amounts to based on “change of opinion”, which is not permitted in law. The Hon’ble Bombay High Court in the case of State Bank of India vs. ACIT (2018) 9 taxmann.com 77 (Bom) after considering the judgment in Export Credit Guarantee Corporation vs. Add CIT (supra) held that reopening within four years on change of opinion and without fresh material is ck Star Marketing Pvt. Ltd. 13 ITA No. 4994/MUM/2024 completed assessment. It cannot be a situation where an Assessing Officer suddenly wake up a fine morning and say that income had escaped assessment in case of an assessee. The trigger for reason to believe that income escaped assessment may be in the form tangible material, which may be information or material external to assessment record or information from other assessment year etc. (i.e. a dream or rethinking on same material, which will be in the nature of review of the assessment rather than reassessment. In the case of CIT & Ars v. Rinku Chakraborthy 56 DTR 227 (Kar) and Kalyanji Mavji and Company v. such information need not be from external sources only. The information obtained in assessment proceedings of subsequent assessment year can also be utilized for reopening of the completed assessment (Raymond Woolen Mills Ltd. v. (SC) and Revathy Cp Equipment Ltd. vs tax and Ors. 241 ITR 856 (Mad.) Further, the Ld. counsel of the assessee has referred to inquiries made by the Assessing Officer in original assessment proceeding on the issue of examination of share capital and security premium. The 2(1) of the Act on 09/08/2011 asking the assessee to furnish details of increase in share capital and details of security premium. A copy of said notice is placed on paper book page Nos. 35. A detailed reply filed by the assessee in share capital and security premium along with bank statement is available on pages 36 to 50 of the paperbook. The Assessing Officer completed the original assessment on 26/09/2011 under section 143(3) of the Act accepting the returned ition was made in respect of increase in share capital or security premium, which means that the Assessing Officer has satisfied himself and formed an opinion on the issue of share capital and share premium. Thereafter, the Assessing Officer has he assessment by way of notice dated 28/03/2014 i.e. within four years from end of the relevant assessment year, that too without any new tangible material, for the purpose of taxing the share premium amount received by the assessee, which stands already erified during the course of the original assessment proceeding. The reopening in such circumstances, amounts to based on “change of opinion”, which is not permitted in law. The Hon’ble Bombay High Court in the case of State Bank of India vs. ACIT (2018) 96 taxmann.com 77 (Bom) after considering the judgment in Export Credit Guarantee Corporation vs. Add CIT (supra) held that reopening within four years on change of opinion and without fresh material is bad in law. In the case of PCIT Vs Motilal Todi (ITXA dated 28/01/2019) relied upon by the assessee, the Hon’ble Bombay High Court quashed the reopening on the ground that there was no new material despite the case being reopened within four years from the end of the relevant assessment year. Fur Supreme Court in the case of Kelvinator of India Ltd (2010) 320 ITR 561 held the concept of change opinion is an inbuilt test check on abuse of power of the Assessing Officer. The relevant finding of the Hon’ble Supreme Court is r \"Income escaping assessment. 147. If— [a] the Income the omission or failure on the part of an assessee to make a return under section 139 for any assessment year to the Income Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or [b] notwithstanding that there has been no omission or failure as mentioned in clause (a on the part of the assessee, the Income consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year).\" After enactment of Direct Tax La (Amendment) Act, 1987, i.e., prior to 1st April, 1989, Section 147 of the Act, reads as under: \"147. Income escaping assessment. reasons to be recorded by him in writing, is of the opinion that any income chargeable to ta Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 bad in law. In the case of PCIT Vs Motilal Todi (ITXA 1287 of 2016 dated 28/01/2019) relied upon by the assessee, the Hon’ble Bombay High Court quashed the reopening on the ground that there was no new material despite the case being reopened within four years from the end of the relevant assessment year. Further we know that Hon’ble Supreme Court in the case of Kelvinator of India Ltd (2010) 320 ITR 561 held the concept of change opinion is an inbuilt test check on abuse of power of the Assessing Officer. The relevant finding of the Hon’ble Supreme Court is reproduced as under: \"Income escaping assessment. — [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 under section 139 for any assessment year to the Income Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or [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 chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year).\" After enactment of Direct Tax La (Amendment) Act, 1987, i.e., prior to 1st April, 1989, Section 147 of the Act, reads as under: \"147. Income escaping assessment.-- If the Assessing Officer, for reasons to be recorded by him in writing, is of the opinion that any income chargeable to tax has escaped assessment for any ck Star Marketing Pvt. Ltd. 14 ITA No. 4994/MUM/2024 1287 of 2016 dated 28/01/2019) relied upon by the assessee, the Hon’ble Bombay High Court quashed the reopening on the ground that there was no new material despite the case being reopened within four years from ther we know that Hon’ble Supreme Court in the case of Kelvinator of India Ltd (2010) 320 ITR 561 held the concept of change opinion is an inbuilt test check on abuse of power of the Assessing Officer. The relevant finding of the tax Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any assessment year to the Income-tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or [b] notwithstanding that there has been no omission or failure as mentioned in clause (a) tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 153, assess or reassess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year).\" After enactment of Direct Tax Laws (Amendment) Act, 1987, i.e., prior to 1st April, 1989, Section 147 If the Assessing Officer, for reasons to be recorded by him in writing, is of the opinion that any x has escaped assessment for any assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently i this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in Sections 148 to 153 referred to as the After the Amending Act, 1989, Section 147 reads as under: \"Income escaping assessment. 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or r or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year).\" On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re and fulfillment of the said conditions alone conferred jurisdictio 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 assessment, confers jurisdiction to re Therefore, post Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in Sections 148 to 153 referred to as the relevant assessment year).\" After the Amending Act, 1989, Section 147 reads as under: \"Income escaping assessment. 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year).\" On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdictio 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 by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has assessment, confers jurisdiction to re-open the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. ck Star Marketing Pvt. Ltd. 15 ITA No. 4994/MUM/2024 assessment year, he may, subject to the provisions of Sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes n the course of the proceedings under this section, or recomputed the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in Sections 148 to After the Amending Act, 1989, Section 147 reads as under: \"Income escaping assessment. 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped , subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the ecompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) opening 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 by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped open the assessment. open is much wider. However, one needs to give a schematic interpretation to the words \"reason to believe\" failing which, we are afraid, Secti would give arbitrary powers to the Assessing Officer to re assessments on the basis of \"mere change of opinion\", which cannot be per se reason to re the conceptual difference between power to review and power to review; he has the power to re to be based on fulfillment of certain pre concept of \"change of opinion\" is removed, as contended on behalf of the Department, assessment, review would take place. One must treat the concept of \"change of opinion\" as an in abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re there is \"tangible material\" to come to the conclusion that there is escapement of income from assessment. have a live link with the formation of the belief. Our view gets support from the changes made to Section 147 of the Act quoted 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 re introduced the said expression and deleted the word \"opinion\" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote here in below the relevant portion of Circular No.549 dated 31st October, 1989, which reads as follows: \"7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression `reason to believe' in Section 147. representations were received against the omission of the words Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 However, one needs to give a schematic interpretation to the words \"reason to believe\" failing which, we are afraid, Secti would give arbitrary powers to the Assessing Officer to re assessments on the basis of \"mere change of opinion\", which cannot be per se reason to re-open. 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 re-assess. But reassessment 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 re-opening 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 quoted 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 ainst omission of the words \"reason to believe\", Parliament re introduced the said expression and deleted the word \"opinion\" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote here in below the relevant portion of Circular No.549 dated 31st October, 1989, 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 ck Star Marketing Pvt. Ltd. 16 ITA No. 4994/MUM/2024 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 We must also keep in mind the conceptual difference between power to review and reassess. The Assessing Officer has no power to assess. But reassessment has condition and if the concept of \"change of opinion\" is removed, as contended on opening the assessment, review would take place. One must treat the built test to check abuse of power by the Assessing Officer. Hence, after 1st open, provided there is \"tangible material\" to come to the conclusion that 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 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 ainst omission of the words \"reason to believe\", Parliament re- introduced the said expression and deleted the word \"opinion\" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote here in below the relevant portion of Circular No.549 dated 31st October, 1989, which reads as follows: \"7.2 Amendment made by the Amending Act, 1989, to reintroduce A number of representations were received against the omission of the words `reason `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 t 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.\" 8.3 The Assessing Officer has referred the ratio of the Bombay High Court in the case of ECGC (supra) that when an assessment is sought to be reopened within a period of four years, then what is required is reason to believe and not an established fact of escapement of income. This ratio of Hon’ble High and but in the in the instant case issue is not related to established fact of escapement of income but the issue is absence of tangible material which could trigger process of reason to believe. The Hon’ble Bombay High Court in the ca Ltd (supra) held as under: “8. To hold that the Assessing Officer must be deemed to have accepted what he has plainly overlooked or ignored in the assessment order would be to stretch the interpretation of 147 to a point where the provision would cease to have meaning and content. Such an exercise of excision by judicial interpretation is impermissible. When an assessment is sought to be reopened within a period of four years of the end of the relev year. the test to be applied is whether there is tangible material to do so. What is tangible is something which is not illusory, hypothetical or a matter of conjecture. Something which is tangible need not be something which is new. An Asse Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 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 t 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.\" (Emphasize supplied externally) The Assessing Officer has referred the ratio of the Bombay High Court in the case of ECGC (supra) that when an assessment is sought to be reopened within a period of four years, then what is required is reason to believe and not an established fact of escapement of income. This ratio of Hon’ble High Court is undisputed and but in the in the instant case issue is not related to established fact of escapement of income but the issue is absence of tangible material which could trigger process of reason to believe. The Hon’ble Bombay High Court in the case of Export Credit Guarantee Corporation of India Ltd (supra) held as under: 8. To hold that the Assessing Officer must be deemed to have accepted what he has plainly overlooked or ignored in the assessment order would be to stretch the interpretation of 147 to a point where the provision would cease to have meaning and content. Such an exercise of excision by judicial interpretation is impermissible. When an assessment is sought to be reopened within a period of four years of the end of the relevant assessment year. the test to be applied is whether there is tangible material to do so. What is tangible is something which is not illusory, hypothetical or a matter of conjecture. Something which is tangible need not be something which is new. An Assessing Officer ck Star Marketing Pvt. Ltd. 17 ITA No. 4994/MUM/2024 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, (Emphasize supplied externally) The Assessing Officer has referred the ratio of the Hon’ble Bombay High Court in the case of ECGC (supra) that when an assessment is sought to be reopened within a period of four years, then what is required is reason to believe and not an established fact of Court is undisputed and but in the in the instant case issue is not related to established fact of escapement of income but the issue is absence of tangible material which could trigger process of reason to believe. The Hon’ble Bombay se of Export Credit Guarantee Corporation of India 8. To hold that the Assessing Officer must be deemed to have accepted what he has plainly overlooked or ignored in the assessment order would be to stretch the interpretation of Section 147 to a point where the provision would cease to have meaning and content. Such an exercise of excision by judicial interpretation is impermissible. When an assessment is sought to be reopened ant assessment year. the test to be applied is whether there is tangible material to do so. What is tangible is something which is not illusory, hypothetical or a matter of conjecture. Something which is ssing Officer who has plainly ignored relevant material in arriving at an assessment acts contrary to law. If there is an escapement of income in consequence, the jurisdictional requirement of Section 147 would be fulfilled on the formation of a reason to income has escaped assessment. The reopening of the assessment within a period of four years is in these circumstances within jurisdiction. 8.4 The Hon’ble High Court has justified reopening by the Assessing Officer, when he has plainly ignor arriving at an assessment order, but in the instant case the Assessing Officer had raised specific queries on the issue of increase in share capital and share premium and after examining the reply of the assessee, made no add the ratio of the decision of the Hon’ble High Court (supra) cannot be applied over the facts of the instant case. 8.5 Thus, respectfully following the finding of the Hon’ble Supreme Court in the case of Kelvi reopening based on the change of opinion without there being any tangible material, is not permitted in law and accordingly, we quash the reassessment proceeding. The grounds of cross objection are accordingly allowe 6.1 Similarly, in the case of Union Bank of India (supra) the Co ordinate Bench has referred to the decision of the Hon’ble Supreme Court in the case of and held that ‘change of opinion period of four years from the end of the relevant assessment year. The relevant finding of the Tribunal “9.6 In view of the above decision of the Hon’ble Jurisdictional High Court, it is settled that reopening of the assessment on the material and information which was already available on the record while passing the original assessment order, amounts to change which is not permitted in law. Further, In Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 who has plainly ignored relevant material in arriving at an assessment acts contrary to law. If there is an escapement of income in consequence, the jurisdictional requirement of Section 147 would be fulfilled on the formation of a reason to believe that income has escaped assessment. The reopening of the assessment within a period of four years is in these circumstances within jurisdiction.” The Hon’ble High Court has justified reopening by the Assessing Officer, when he has plainly ignored the relevant material while arriving at an assessment order, but in the instant case the Assessing Officer had raised specific queries on the issue of increase in share capital and share premium and after examining the reply of the assessee, made no addition in original assessment proceedings, thus the ratio of the decision of the Hon’ble High Court (supra) cannot be applied over the facts of the instant case. Thus, respectfully following the finding of the Hon’ble Supreme Court in the case of Kelvinator of India Ltd(supra), we hold that reopening based on the change of opinion without there being any tangible material, is not permitted in law and accordingly, we quash the reassessment proceeding. The grounds of cross objection are accordingly allowed.” Similarly, in the case of Union Bank of India (supra) the Co ordinate Bench has referred to the decision of the Hon’ble Supreme Court in the case of CIT vs. Kelvinator of India Ltd change of opinion’ cannot be allowed four years from the end of the relevant assessment year. The relevant finding of the Tribunal(supra) is reproduced as under: In view of the above decision of the Hon’ble Jurisdictional High Court, it is settled that reopening of the assessment on the material and information which was already available on the record while passing the original assessment order, amounts to change which is not permitted in law. Further, In CIT vs. Kelvinator of India ck Star Marketing Pvt. Ltd. 18 ITA No. 4994/MUM/2024 who has plainly ignored relevant material in arriving at an assessment acts contrary to law. If there is an escapement of income in consequence, the jurisdictional requirement of Section believe that income has escaped assessment. The reopening of the assessment within a period of four years is in these circumstances within The Hon’ble High Court has justified reopening by the Assessing ed the relevant material while arriving at an assessment order, but in the instant case the Assessing Officer had raised specific queries on the issue of increase in share capital and share premium and after examining the reply of the ition in original assessment proceedings, thus the ratio of the decision of the Hon’ble High Court (supra) cannot be Thus, respectfully following the finding of the Hon’ble Supreme nator of India Ltd(supra), we hold that reopening based on the change of opinion without there being any tangible material, is not permitted in law and accordingly, we quash the reassessment proceeding. The grounds of cross objection are Similarly, in the case of Union Bank of India (supra) the Co- ordinate Bench has referred to the decision of the Hon’ble Supreme CIT vs. Kelvinator of India Ltd. 256 ITR 1 llowed even within the four years from the end of the relevant assessment year. is reproduced as under: In view of the above decision of the Hon’ble Jurisdictional High Court, it is settled that reopening of the assessment on the material and information which was already available on the record while passing the original assessment order, amounts to change of opinion CIT vs. Kelvinator of India Ltd. 256 ITR 1 , the Full Bench of the Delhi High Court was considering a case of reopening u/s 147 within 4 years from the end of the assessment year. The Court held that wh assessment is passed in terms of section 143 (3) of the Act, presumption can be raised that such an order has been passed on application of mind. It was held that if it be held that an order which has been passed purportedly without confer jurisdiction upon the Assessing Officer to reopen the proceeding without anything further, the same would amount to giving premium to an authority exercising quasi own wrong. It was held that section 147 of the Act does not postulate conferment of power upon the Assessing Officer to initiate reassessment proceedings upon a mere change of opinion. On appeal by the department to the Supreme Court in 320 ITR 561(SC), dismissing the appeal, held as under: “ On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re two conditions and fulfillment of the said conditions 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 remained, viz., that ...4/ Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post 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 re mind the conc power to re review; he has the power to re be based on fulfillment of certain pre concept of “change of opinio behalf of the Department, then, in the garb of re assessment, review would take place. One must treat the concept of “change of opinion” as an in of power by the Assessing Officer. Hence, Assessing Officer has power to re “tangible material” to come to the conclusion that there is Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 Ltd. 256 ITR 1 , the Full Bench of the Delhi High Court was considering a case of reopening u/s 147 within 4 years from the end of the assessment year. The Court held that when a regular order of assessment is passed in terms of section 143 (3) of the Act, presumption can be raised that such an order has been passed on application of mind. It was held that if it be held that an order which has been passed purportedly without application of mind would itself confer jurisdiction upon the Assessing Officer to reopen the proceeding without anything further, the same would amount to giving premium to an authority exercising quasi-judicial function to take benefit of its It was held that section 147 of the Act does not postulate conferment of power upon the Assessing Officer to initiate reassessment proceedings upon a mere change of opinion. On appeal by the department to the Supreme Court in 320 ITR 561(SC), he appeal, held as under: “ On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions 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 ...4/- www.taxguru.in - 4 Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the “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 re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to re-assess. 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 re 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 ck Star Marketing Pvt. Ltd. 19 ITA No. 4994/MUM/2024 Ltd. 256 ITR 1 , the Full Bench of the Delhi High Court was considering a case of reopening u/s 147 within 4 years from the end of the en a regular order of assessment is passed in terms of section 143 (3) of the Act, a presumption can be raised that such an order has been passed on application of mind. It was held that if it be held that an order which application of mind would itself confer jurisdiction upon the Assessing Officer to reopen the proceeding without anything further, the same would amount to giving premium judicial function to take benefit of its It was held that section 147 of the Act does not postulate conferment of power upon the Assessing Officer to initiate reassessment proceedings upon a mere change of opinion. On appeal by the department to the Supreme Court in 320 ITR 561(SC), “ On going through the changes, quoted above, made to Section 147 of the Act, we find that, prior to Direct Tax Laws opening 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 by and only one condition has 4 - where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. open is much wider. However, one needs to give a schematic interpretation to the “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”, open. We must also keep in eptual difference between power to review and assess. The Assessing Officer has no power to assessment has to condition and if the n” is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the built test to check abuse after 1st April, 1989, 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 get from the changes made to Section 147 of the Act, as quoted 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 re-introduced the said expression and deleted the word “opinion” on the ground that it would vest arbitrary powers in the Assessing Officer portion of Circular No.549 dated 31st October, 1989, which reads as follows: “7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression `reason to believe' in Section 147. number of representations 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 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 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.” For the afore appeals filed by the Department, hence, dismissed with no order as to costs.” 9.7 In our opinion, after completion of the assessment u/s 143(3) of the Act, for reopening of the assessment, there has to be some trigger by way of either information received from the external source or from the internal source and without such trigger reopening of the assessment merely to relook into the assessment on the issues, which had been considered during the regular assessment proceedings, amount to review of the assessment order by the Assessing Officer, which is not permitted in law under the provisions of section 147 of the Act. The Assessing Officer can only reassess the assessment wherever Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view get from the changes made to Section 147 of the Act, as quoted 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. ever, on receipt of representations from the Companies against omission of the words “reason to believe”, Parliament introduced 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, which reads as follows: “7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression `reason to believe' in Section 147. 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 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.” For the afore-stated reasons, we see no merit in these civil appeals filed by the Department, hence, dismissed with no order as to costs.” In our opinion, after completion of the assessment u/s 143(3) of the Act, for reopening of the assessment, there has to be some trigger either information received from the external source or from the internal source and without such trigger reopening of the assessment merely to relook into the assessment on the issues, which had been considered during the regular assessment proceedings, amount to review of the assessment order by the Assessing Officer, which is not permitted in law under the provisions of section 147 of the Act. The Assessing Officer can only reassess the assessment wherever ck Star Marketing Pvt. Ltd. 20 ITA No. 4994/MUM/2024 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 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. ever, on receipt of representations from the Companies against omission of the words “reason to believe”, Parliament introduced the said expression and deleted the word “opinion” on the ground that it would vest arbitrary powers in . We quote hereinbelow the relevant portion of Circular No.549 dated 31st October, 1989, which “7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression `reason to believe' in Section 147.--A 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 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, see no merit in these civil appeals filed by the Department, hence, dismissed with no order In our opinion, after completion of the assessment u/s 143(3) of the Act, for reopening of the assessment, there has to be some trigger either information received from the external source or from the internal source and without such trigger reopening of the assessment merely to relook into the assessment on the issues, which had been considered during the regular assessment proceedings, will amount to review of the assessment order by the Assessing Officer, which is not permitted in law under the provisions of section 147 of the Act. The Assessing Officer can only reassess the assessment wherever income escaped assessment, and not the rev him. In view of the above discussion and respectfully following the decision of the Hon’ble Bombay High Court in the case of HDFC Bank Ltd. (supra) and Castrol India Ltd. (supra), we set aside the finding of the Ld. CIT(A) on the is the reassessment proceedings. The ground No. 2 of the appeal of the assessee is accordingly allowed. 6.2 In view of the above decisions, we are of the opinion that it need to be examined in the instant cas assessment proceedings, the Assessing Officer examined the specific issue of the allowability of the building maintenance expenses u/s 37(1) of the Act despite allowing the deduction @ 30% deemed rental under the provisions of sec query raised u/s 142(1) of the Act during the regular assessment u/s 143(3) of the Act (Paper Book page 3), the Assessing Officer called detail of maintenance expenses of slum/rehab buildings only. Accordingly, the assessee in it (Paper Book page 7) also provided justification for maintenance charges of the rehab building on the ground that same was the responsibility of the assessee till such slum/rehab building handed over to relevant slum dwel 25, the assessee has provided details of the slum building maintenance expenses of these facts, it is relevant the AO in instant case 2. The reasons for reopening of assessment recorded are as under: Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 income escaped assessment, and not the review the order passed by him. In view of the above discussion and respectfully following the decision of the Hon’ble Bombay High Court in the case of HDFC Bank Ltd. (supra) and Castrol India Ltd. (supra), we set aside the finding of the Ld. CIT(A) on the issue of validity of the reassessment and we quash the reassessment proceedings. The ground No. 2 of the appeal of the assessee is accordingly allowed.” In view of the above decisions, we are of the opinion that it need to be examined in the instant case whether in the original assessment proceedings, the Assessing Officer examined the specific issue of the allowability of the building maintenance expenses u/s 37(1) of the Act despite allowing the deduction @ 30% deemed rental under the provisions of section 24 of the Act. In the query raised u/s 142(1) of the Act during the regular assessment u/s 143(3) of the Act (Paper Book page 3), the Assessing Officer called detail of maintenance expenses of slum/rehab buildings only. Accordingly, the assessee in its submissions dated 28.12.2015 (Paper Book page 7) also provided justification for maintenance charges of the rehab building on the ground that same was the responsibility of the assessee till such slum/rehab building handed over to relevant slum dwellers society. On paper book page the assessee has provided details of the slum building expenses to the tune of Rs.1,98,50,207/ it is relevant to reproduce the reasons recorded the AO in instant case as under: 2. The reasons for reopening of assessment recorded are as under: ck Star Marketing Pvt. Ltd. 21 ITA No. 4994/MUM/2024 iew the order passed by him. In view of the above discussion and respectfully following the decision of the Hon’ble Bombay High Court in the case of HDFC Bank Ltd. (supra) and Castrol India Ltd. (supra), we set aside the finding of sue of validity of the reassessment and we quash the reassessment proceedings. The ground No. 2 of the appeal of the In view of the above decisions, we are of the opinion that it e whether in the original assessment proceedings, the Assessing Officer examined the specific issue of the allowability of the building maintenance expenses u/s 37(1) of the Act despite allowing the deduction @ 30% tion 24 of the Act. In the query raised u/s 142(1) of the Act during the regular assessment u/s 143(3) of the Act (Paper Book page 3), the Assessing Officer called detail of maintenance expenses of slum/rehab buildings only. s submissions dated 28.12.2015 (Paper Book page 7) also provided justification for maintenance charges of the rehab building on the ground that same was the responsibility of the assessee till such slum/rehab building were . On paper book page the assessee has provided details of the slum building to the tune of Rs.1,98,50,207/-. In the light reasons recorded by 2. The reasons for reopening of assessment recorded are as under:- \"On verification of the financials submitted with F.Y.2012-13 relevant to A. Y.2013 claimed Building Maintenance Charges of head Other Expenses in the Profit and Loss Account. 2. During the assessment additions were made mainly on account of deemed rent on vacant flats, and interest disallowed being non purpose. However, deduction w/s. 24(a calculating deemed rent thus building 3,42,97,676/- added back while 3. Allowance of building maintenance charges of R of allowance of deduction u/s. 24(n) @ 30% on account of deemed rent on vacant flats would tantamount to double deduction. Thus income chargeable to tax of Rs.3,42,97,676/ the above facts, I have Rs.3,42,97,676/ 2013-14 within the meaning of clause (c) of Explanation the Income-tax Act, 1961 and is also covered by the Explanation 1 to section 147 of the Act. 4. It is pertinent to mention here that building maintenance charges of Rs.3,42,97,676/ the above, provisions of clause (c) of Explanation Explanation 1 to and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped 5. In this case a return of income was filed for the year under consideration and regular assessment u/s. 143(3) was made on 30.03.2016. Since, 4 years from the end of the relevant year has not expired in this case, the only requirement to initiate proceedings u/s. 147 of the Act is reason to believe which has been rec paragraph 2 & 4). 5.1. It is pertinent to mention here that in this case an assessment was made as stipulated u/s. 2(40) of the Act. However, as discussed in reason to believe in this case income chargeable to tax has been under assessed by an amount of Rs. 3,42,97,676/ 6.3 On perusal of the reasons recorded, we find that the Assessing Officer has recorded that once the deduction charges in respect of flats of the commercial building held as stock in-trade was allowed a of section 24(a) of the Act, t Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 On verification of the financials submitted with annual 13 relevant to A. Y.2013-14, it is observed that assessee had claimed Building Maintenance Charges of Rs. 3,42,97,676/ head Other Expenses in the Profit and Loss Account. 2. During the assessment additions were made mainly on account of deemed rent on vacant flats, and interest disallowed being non purpose. However, deduction w/s. 24(a) @ 30% was allowed while calculating deemed rent thus building maintenance charges of Rs. claimed in the Profit and Loss Account should have been added back while calculating business income. 3. Allowance of building maintenance charges of Rs. 3,42,97,676/ of allowance of deduction u/s. 24(n) @ 30% on account of deemed rent on vacant flats would tantamount to double deduction. Thus income chargeable to tax of Rs.3,42,97,676/- has escaped assessment. In view of the above facts, I have a reason to believe that the amount of Rs.3,42,97,676/- chargeable to tax has escaped assessment for 14 within the meaning of clause (c) of Explanation-2 of section 147of tax Act, 1961 and is also covered by the Explanation 1 to ion 147 of the Act. 4. It is pertinent to mention here that building maintenance charges of Rs.3,42,97,676/- chargeable to tax has been under assessed. In view of the above, provisions of clause (c) of Explanation-2 of section 147 Explanation 1 to section 147 of the Act is applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment. 5. In this case a return of income was filed for the year under consideration and regular assessment u/s. 143(3) was made on 30.03.2016. Since, 4 years from the end of the relevant year has not expired in this case, the only requirement to initiate proceedings u/s. 147 of the Act is reason to believe which has been recorded above (refer paragraph 2 & 4). 5.1. It is pertinent to mention here that in this case an assessment was made as stipulated u/s. 2(40) of the Act. However, as discussed in reason to believe in this case income chargeable to tax has been under assessed by an amount of Rs. 3,42,97,676/-.\" On perusal of the reasons recorded, we find that the Assessing Officer has recorded that once the deduction for maintenance charges in respect of flats of the commercial building held as stock trade was allowed at the rate of 30% of the deemed rent in ter of section 24(a) of the Act, the allowance of the building ck Star Marketing Pvt. Ltd. 22 ITA No. 4994/MUM/2024 annual report for the 14, it is observed that assessee had Rs. 3,42,97,676/- under the 2. During the assessment additions were made mainly on account of deemed rent on vacant flats, and interest disallowed being non-business ) @ 30% was allowed while maintenance charges of Rs. claimed in the Profit and Loss Account should have been s. 3,42,97,676/- in view of allowance of deduction u/s. 24(n) @ 30% on account of deemed rent on vacant flats would tantamount to double deduction. Thus income has escaped assessment. In view of a reason to believe that the amount of chargeable to tax has escaped assessment for A. Y. 2 of section 147of tax Act, 1961 and is also covered by the Explanation 1 to 4. It is pertinent to mention here that building maintenance charges of chargeable to tax has been under assessed. In view of 2 of section 147 and also section 147 of the Act is applicable to facts of this case and the assessment year under consideration is deemed to be a case 5. In this case a return of income was filed for the year under consideration and regular assessment u/s. 143(3) was made on 30.03.2016. Since, 4 years from the end of the relevant year has not expired in this case, the only requirement to initiate proceedings u/s. 147 orded above (refer 5.1. It is pertinent to mention here that in this case an assessment was made as stipulated u/s. 2(40) of the Act. However, as discussed in reason to believe in this case income chargeable to tax has been under assessed On perusal of the reasons recorded, we find that the Assessing for maintenance charges in respect of flats of the commercial building held as stock- 30% of the deemed rent in terms he allowance of the building maintenance charges claimed in the profit and loss account was in the nature in the income escaped assessment. reasons recorded, we ha opinion’ by the Assessing Officer in respect of building maintenance charges. The building maintenance expenses rehab/slum building and commercial building was claimed by the assessee as business for the purpose of business in the return of income filed. The assessee treated the commercial flats a part of its investment but the AO treated the same as stock Dehi High Court in the case of Vs ACIT (2018) 89 taxmann.com 238(Delhi) c annual lettable value (ALV) of those flats invoking provisos of the Act related to head of income from house property and allowed thirty percent expenses as repairs and maintenance. issue of allowability of maintenance expens by the Assessing Officer in any of the queries raised proceedings. The Assessing Officer has merely examined the maintenance expenses in respect of slum/rehab buildings and did not examine into the justification of the expenses claimed in respect of commercial building which was treated as stock-in-trade and deemed rent had the Assessing Officer in respect of vacant flats. Since we have concluded that no specific query has been raise Officer for allowance of building maintenance charges vis Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 maintenance charges claimed in the profit and loss account was in in the income escaped assessment. In view of above e have to examine whether there is a by the Assessing Officer in respect of building maintenance he building maintenance expenses debited for both rehab/slum building and commercial building was claimed by the assessee as business expenditure incurred wholly and exclusively for the purpose of business in the return of income filed. The assessee treated the commercial flats a part of its investment but the AO treated the same as stock-in-trade and in view of Hon’ble in the case of Ansal housing and construction ltd Vs ACIT (2018) 89 taxmann.com 238(Delhi) computed deemed annual lettable value (ALV) of those flats invoking provisos of the Act related to head of income from house property and allowed thirty percent expenses as repairs and maintenance. of allowability of maintenance expenses had by the Assessing Officer in any of the queries raised he Assessing Officer has merely examined the maintenance expenses in respect of slum/rehab buildings and did not examine into the justification of the building maintenance expenses claimed in respect of commercial building which was trade and deemed rent had been computed by the Assessing Officer in respect of vacant flats. Since we have concluded that no specific query has been raised by the Assessing Officer for allowance of building maintenance charges vis ck Star Marketing Pvt. Ltd. 23 ITA No. 4994/MUM/2024 maintenance charges claimed in the profit and loss account was in In view of above ve to examine whether there is a ‘change of by the Assessing Officer in respect of building maintenance debited for both rehab/slum building and commercial building was claimed by the expenditure incurred wholly and exclusively for the purpose of business in the return of income filed. The assessee treated the commercial flats a part of its investment but trade and in view of Hon’ble housing and construction ltd omputed deemed annual lettable value (ALV) of those flats invoking provisos of the Act related to head of income from house property and allowed thirty percent expenses as repairs and maintenance. Evidently, this not been raised by the Assessing Officer in any of the queries raised in assessment he Assessing Officer has merely examined the maintenance expenses in respect of slum/rehab buildings and did building maintenance expenses claimed in respect of commercial building which was been computed by the Assessing Officer in respect of vacant flats. Since we have d by the Assessing Officer for allowance of building maintenance charges vis-à-vis 30% deduction of the deemed rent for the maintenance charges wh computing income from house, t by the assessee are not applicable ove accordingly the issue of instant case. 6.4 However, we note that the Assessing Officer has not referred to any information of the material for reopening the assessment. In our opinion, the word ‘reason to believe’ suggest that there must be some material or information in possession of the Assessing Officer to believe that assessee has either under stated his income or claimed loss or deduction as allowance. The Hon’ble Supreme Court in the case of Ganga Saran & Sons (P.) Ltd (SC) has held that AO must have reasons to believe that income chargeable to tax as escaped income. In the word ‘reasons to believe’ are stronger than word ‘is satisfied’. The Hon’ble Supr Court in the case of 236 ITR 34 (SC) held that in determining whether commencement of the reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of whi the Department could reopen the case. In the case of Bajrang Lal v. ITO [1993] 203 ITR 456 (SC) exist reasons for holding believe for escapement of income although the question whether reasons adequate or courts to decide. Further the Hon’ble Delhi High Court in the case Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 deduction of the deemed rent for the maintenance charges wh computing income from house, the ratio of the decisions relied upon not applicable over the facts of instant case and accordingly the issue of ‘change of opinion’ does not arise in the However, we note that the Assessing Officer has not referred to any information of the material for reopening the assessment. In on, the word ‘reason to believe’ suggest that there must be some material or information in possession of the Assessing Officer to believe that assessee has either under stated his income or claimed loss or deduction as allowance. The Hon’ble Supreme Court Ganga Saran & Sons (P.) Ltd v. ITO [1981] 130 ITR 1 (SC) has held that AO must have reasons to believe that income chargeable to tax as escaped income. In the word ‘reasons to believe’ are stronger than word ‘is satisfied’. The Hon’ble Supr Court in the case of Raymond Woollen Mills Ltd. v. ITO [1999] held that in determining whether commencement of the reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of whi the Department could reopen the case. In the case of Bajrang Lal v. ITO [1993] 203 ITR 456 (SC) held that there must exist reasons for holding believe for escapement of income although the question whether reasons adequate or sufficient is n to decide. Further the Hon’ble Delhi High Court in the case ck Star Marketing Pvt. Ltd. 24 ITA No. 4994/MUM/2024 deduction of the deemed rent for the maintenance charges while he ratio of the decisions relied upon instant case and does not arise in the However, we note that the Assessing Officer has not referred to any information of the material for reopening the assessment. In on, the word ‘reason to believe’ suggest that there must be some material or information in possession of the Assessing Officer to believe that assessee has either under stated his income or claimed loss or deduction as allowance. The Hon’ble Supreme Court v. ITO [1981] 130 ITR 1 (SC) has held that AO must have reasons to believe that income chargeable to tax as escaped income. In the word ‘reasons to believe’ are stronger than word ‘is satisfied’. The Hon’ble Supreme Raymond Woollen Mills Ltd. v. ITO [1999] held that in determining whether commencement of the reassessment proceedings was valid it has only to be seen whether there was prima facie some material on the basis of which the Department could reopen the case. In the case of Phool Chand held that there must exist reasons for holding believe for escapement of income although sufficient is not for the to decide. Further the Hon’ble Delhi High Court in the case of SMCC Construction v. ACIT [2014] 220 Taxman 354 (Delhi) held that where the reasons to believe recorded does not referred to any material came to the knowledge of the Assessing Officer from which the Assessing Officer could have formed reasonable believe that the expenditure referred to not crystallized during when the recorded reasons to believe that income had escaped assessee were not based and were in realm or mere suspicion set aside. The Tribunal in the case of LTD (supra) has also observed that unless there is any material whether external or internal reopening without any material, will be in the nature of the review of the assessment rather than reassessment. Similarly, in the case of Unio India, the Tribunal has also trigger by way of either information received from the external source or from the internal source and reopening of the assessment is merely to relook into t on the issues which had already been considered during the regular assessment proceedings and same will amount to review of the assessment which is not permitted in law. 6.5 We find that in any information whether from the external source or internal source. Though internal source may be any finding of the Assessing Officer in earlier or subsequent assessment years or any Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 SMCC Construction v. ACIT [2014] 220 Taxman 354 (Delhi) held that where the reasons to believe recorded does not referred to any material came to the knowledge of the Assessing Officer from which the Assessing Officer could have formed reasonable believe that the expenditure referred to not crystallized during when the recorded reasons to believe that income had escaped assessee were not based on any direct or circumstantial and were in realm or mere suspicion, thus, the reassessment was The Tribunal in the case of M PALLONJI EN (supra) has also observed that unless there is any material whether external or internal reopening without any material, will be in the nature of the review of the assessment rather than reassessment. Similarly, in the case of Unio India, the Tribunal has also observed that there has to be so trigger by way of either information received from the external source or from the internal source and in absence reopening of the assessment is merely to relook into t on the issues which had already been considered during the regular assessment proceedings and same will amount to review of the assessment which is not permitted in law. We find that in instant case the reasons recorded information whether from the external source or internal source. Though internal source may be any finding of the Assessing Officer in earlier or subsequent assessment years or any ck Star Marketing Pvt. Ltd. 25 ITA No. 4994/MUM/2024 SMCC Construction v. ACIT [2014] 220 Taxman 354 (Delhi) held that where the reasons to believe recorded does not referred to any material came to the knowledge of the Assessing Officer from which the Assessing Officer could have formed reasonable believe that the expenditure referred to not crystallized during the year and when the recorded reasons to believe that income had escaped on any direct or circumstantial evidence the reassessment was M PALLONJI ENERPRISES P. (supra) has also observed that unless there is any material whether external or internal reopening without any tangible material, will be in the nature of the review of the assessment rather than reassessment. Similarly, in the case of Union Bank of observed that there has to be some trigger by way of either information received from the external in absence such trigger, reopening of the assessment is merely to relook into the assessment on the issues which had already been considered during the regular assessment proceedings and same will amount to review of the the reasons recorded do not refer information whether from the external source or internal source. Though internal source may be any finding of the Assessing Officer in earlier or subsequent assessment years or any information received either from the audit objections and such audit objections were duly accepted by him. But in absence of any such reference to source of reopening of the assessment cannot be sustained. 6.6 In the facts discussed above, we find it is the AO who made addition for deemed rent in respect of commercial flats and allowed maintenance expenses at the rate of 30 percentile in assessment proceedings u/s 143(3) of the Act, but omitted to disallow the maintenance expenses debited in profit and loss account. This was in the nature of error on the part of the AO in the assessment order which could have subject to revision proceedings rather then reassessment proceedings. 6.7 In view of the aforesaid discussion, the reassessment is not sustainable in law and accordingly we quashed t proceedings. 6.8 As far as ground No Ld. counsel for the assessee submitted that in the immediate succeeding assessment year 2014 on the identical ground of building maintenance charges amounting to Rs.2,13,34,586/- raised by the assessee against the rea made on account of building maintenance charges i reassessment order for assessment year 2014 Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 information received either from the audit objections and such ions were duly accepted by him. But in absence of any rence to source of information in the reasons recorded, the reopening of the assessment cannot be sustained. In the facts discussed above, we find it is the AO who made rent in respect of commercial flats and allowed maintenance expenses at the rate of 30 percentile in assessment proceedings u/s 143(3) of the Act, but omitted to disallow the maintenance expenses debited in profit and loss account. This was of error on the part of the AO in the assessment order which could have subject to revision proceedings rather then reassessment proceedings. In view of the aforesaid discussion, the reassessment is not sustainable in law and accordingly we quashed the reassessment As far as ground Nos.5 and 6 of the appeal are Ld. counsel for the assessee submitted that in the immediate succeeding assessment year 2014-15, the assessment was reopened on the identical ground of building maintenance charges amounting allowed as double deduction but on objec raised by the assessee against the reassessment no addition was made on account of building maintenance charges i for assessment year 2014-15. The Ld. counsel ck Star Marketing Pvt. Ltd. 26 ITA No. 4994/MUM/2024 information received either from the audit objections and such ions were duly accepted by him. But in absence of any the reasons recorded, the In the facts discussed above, we find it is the AO who made rent in respect of commercial flats and allowed maintenance expenses at the rate of 30 percentile in assessment proceedings u/s 143(3) of the Act, but omitted to disallow the maintenance expenses debited in profit and loss account. This was of error on the part of the AO in the assessment order which could have subject to revision proceedings rather then In view of the aforesaid discussion, the reassessment is not he reassessment are concerned, the Ld. counsel for the assessee submitted that in the immediate 15, the assessment was reopened on the identical ground of building maintenance charges amounting allowed as double deduction but on objections ssessment no addition was made on account of building maintenance charges in the The Ld. counsel for the assessee contested that there is no change in the facts in present assessment year vis assessment year and thus the quashed on the principle of consistency as laid down by the Hon’ble Supreme Court in the case of ITR 321 (SC). 6.9 We have heard rival submission of the parties and perused the relevant material on record. We also examined the reasons recorded for assessment year 2014 page 40. On perusal of the said reasons recorded, we fi the assessment year 2014 four years from the end of the relevant case of beyond four years, the condition of failure on the part of the assessee to disclose all material facts full the assessment is to be satisfied. Since in assessment year 2013 14, the reassessment is within the four years from the end of the relevant assessment year and therefore facts of the two assessment years are entirely different. He addition in the assessment year 2013 for the reason that no addition has been made in the assessment year 2014-15 following the principle of consistency. 6.10 In view of aforesaid discussion, the in the instant assessment can’t be sustained for the reasons discussed above. The Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 for the assessee contested that there is no change in the facts in present assessment year vis-à-vis immediately succeeding assessment year and thus the reassessment order quashed on the principle of consistency as laid down by the Hon’ble Supreme Court in the case of Radhasoami Satsang (1992) 193 We have heard rival submission of the parties and perused the relevant material on record. We also examined the reasons recorded for assessment year 2014-15 which are available on paper book page 40. On perusal of the said reasons recorded, we fi the assessment year 2014-15 reopening has been made beyond the four years from the end of the relevant assessment year and in the case of beyond four years, the condition of failure on the part of the assessee to disclose all material facts fully and truly necessary for the assessment is to be satisfied. Since in assessment year 2013 14, the reassessment is within the four years from the end of the relevant assessment year and therefore facts of the two assessment years are entirely different. Hence we are of the opinion that addition in the assessment year 2013-14 cannot be deleted merely for the reason that no addition has been made in the assessment 15 following the principle of consistency. In view of aforesaid discussion, the reassessment in the instant assessment can’t be sustained for the reasons The relevant ground challenging validity of ck Star Marketing Pvt. Ltd. 27 ITA No. 4994/MUM/2024 for the assessee contested that there is no change in the facts in the vis immediately succeeding order should be quashed on the principle of consistency as laid down by the Hon’ble Radhasoami Satsang (1992) 193 We have heard rival submission of the parties and perused the relevant material on record. We also examined the reasons recorded 15 which are available on paper book page 40. On perusal of the said reasons recorded, we find that in 15 reopening has been made beyond the assessment year and in the case of beyond four years, the condition of failure on the part of the y and truly necessary for the assessment is to be satisfied. Since in assessment year 2013- 14, the reassessment is within the four years from the end of the relevant assessment year and therefore facts of the two assessment nce we are of the opinion that 14 cannot be deleted merely for the reason that no addition has been made in the assessment ment proceedings in the instant assessment can’t be sustained for the reasons challenging validity of reassessment accordingly reassessment itself as non sustainable in law, the addition on merit is rendered merely academic, and therefore, we are adjudicating grounds raised on merit of additions. 7. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on Sd/ (SUNIL KUMAR SINGH JUDICIAL MEMBER Mumbai; Dated: 21/01/2025 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Mack Star Marketing Pvt. Ltd. ITA No. 4994/MUM/2024 accordingly allowed. Since, we have held the reassessment itself as non sustainable in law, the addition on merit is rendered merely academic, and therefore, we are adjudicating grounds raised on merit of additions. In the result, the appeal of the assessee is partly allowed. nounced in the open Court on 21/01/2025. Sd/- Sd/ (SUNIL KUMAR SINGH) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai ck Star Marketing Pvt. Ltd. 28 ITA No. 4994/MUM/2024 allowed. Since, we have held the reassessment itself as non sustainable in law, the adjudicating of addition on merit is rendered merely academic, and therefore, we are adjudicating grounds raised on merit of additions. In the result, the appeal of the assessee is partly allowed. /01/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Assistant Registrar) ITAT, Mumbai "