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TMI Blog2020 (2) TMI 839X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961. 2. The learned counsel for the Petitioner submits that details regarding the computation of income was called from the Petitioner. Clarification was also given by the Petitioner on 24.06.2010 pursuant to which the Assessment Order dated dated 14.11.2011 came to be passed. 3. The learned counsel for the petitioner submits that the invocation of Section 148 of the Income Tax Act, 1961 was without jurisdiction. He submits that the reasons given to invoke the powers vested with the respondent under Section 148 of the Income Tax Act, 1961 vide communication dated 26.04.2013 and ultimate rejection of the objection of the petitioner vide order dated 03.10.2013 was contrary to the decision of the Karnataka High Court in Commissioner of Income Tax Vs. Yokogawa India Ltd., dated 09.08.2011. 4. He submits that the above decision of the Karnataka High Court has been upheld by the Hon'ble Supreme Court, after passing of the impugned order in Commissioner of Income Tax Vs. Yokogawa India Ltd., (2017) 2 SCC 1. 5. The learned counsel for the petitioner further submits that the entire exercise by the respondent was contrary to the law settled by the Supreme Court in Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Income Tax Vs. Usha International Limited, [2012] 348 ITR 485, wherein the Full Bench and the Hon'ble Division Bench has summarized law as follows:- "13. It is therefore, clear from the aforesaid position that: (1) Reassessment proceedings can be validly initiated in case return of income is processed under section 143(1) and no scrutiny assessment is undertaken. In such cases there is no change of opinion. (2) Reassessment proceedings will be invalid in case the assessment order itself records that the issue was raised and is decided in favour of the assessee. Reassessment proceedings in the said cases will be hit by the principle of "change of opinion". (3) Reassessment proceedings will be invalid in case an issue or query is raised and answered by the assessee in original assessment proceedings but thereafter the Assessing Officer does not make any addition in the assessment order. In such situations it should be accepted that the issue was examined but the Assessing Officer did not find any ground or reason to make addition reject the stand of the assessee. He forms an opinion. The Reassessment will be invalid because the Assessing Officer had formed an opinion in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... records. 10. The decisions cited by the learned counsel for the petitioner do not deal with Section 149 of the Income Tax Act, 1961. As per the aforesaid provision, Section 148 of the Income Tax Act, 1961, can be invoked either within four years of the end of the relevant assessment year or after six years or sixteen years as the case may be. 11. The officers who exercise the power under the Act duty bound to take note of the decisions of the Hon'ble Supreme Court, High Courts and Superior Tribunal while passing orders. 12. As far as jurisdictional issue is concerned, none of the decisions cited by the learned counsel for the Petitioner, have dealt with Section 149 of the Income Tax Act, 1961 reads as follows:- "149. [(1) No notice under section 148 shall be issued for the relevant assessment year- (a) If four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b) [or clause (c)]; (b) If four years, but not more than six years, have elapsed from the end of the relevant assessment year unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to one lakh rupees or more for that ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich is chargeable to tax and has escaped assessment.]" 14. Therefore, I am of the view, it cannot be stated that the impugned notice is without jurisdiction. However the another thing is the answer confirms the proposals in the notice contrary to the laws settling by the Hon'ble Supreme Court under Kelvinator India Limited's case and the decisions cited by the learned counsel. 15. Thus, it cannot be said that the notice issued under Section 148 of the Income Tax Act, 1961 was without jurisdiction. However, if an order is passed by the assessing officer under Section 147 of the Income Tax Act, 1961 contrary to the well-settled principles of law or despite true and full disclosure of all material facts necessary for the assessment, such order would be liable to be quashed. 16. At the same time, if in the course of such reassessment, the 2nd respondent assessing officer finds any other reasons for justifying reopening of the assessment on some other point, he may do so. Such exercise cannot be stifled under Article 226 of the Constitution of India. Otherwise, the Court would be rendering the Explanation III of the Income Tax Act, 1961, redundant which is not intended. At t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erroneous order contrary to law that has caused prejudiced can be correct, when jurisdiction under Section 263 is invoked." 15. Thus where an Assessing Officer incorrectly or erroneously applies law or comes to a wrong conclusion and income chargeable to tax has escaped assessment, resort to Section 263 of the Act is available and should be resorted to. But initiation of reassessment proceedings will be invalid on the ground of change of opinion. 16. Here we must draw a distinction between erroneous application/interpretation/understanding of law and cases where fresh or new factual information comes to the knowledge of the Assessing Officer subsequent to the passing of the assessment order. If new facts, material or information comes to the knowledge of the Assessing Officer, which was not on record and available at the time of the assessment order, the principle of "change of opinion" will not apply. The reason is that "opinion" is formed on facts. "Opinion" formed or based on wrong and incorrect facts or which are belied and untrue do not get protection and cover under the principle of "change of opinion". Factual information or material which was incorrect or was not avai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f period of tax holiday. The absence of any reference to deduction under Section 10-A in Chapter VI of the Act can be understood by acknowledging that any such reference or mention would have been a repetition of what has already been provided in Section 10-A. The provisions of Sections 80-HHC and 80-HHE of the Act providing for somewhat similar deductions would be wholly irrelevant and redundant if deductions under Section 10-A were to be made at the stage of operation of Chapter VI of the Act. The retention of the said provisions of the Act i.e. Sections 80-HHC and 80- HHE, despite the amendment of Section 10-A, in our view, indicates that some additional benefits to eligible Section 10-A units, not contemplated by Sections 80-HHC and 80-HHE, was intended by the legislature. Such a benefit can only be understood by a legislative mandate to understand that the stages for working out the deductions under Sections 10-A and 80-HHC and 80-HHE are substantially different. This is the next aspect of the case which we would now like to turn to. 17. From a reading of the relevant provisions of Section 10-A it is more than clear to us that the deductions contemplated therein are qua th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der Chapter IV of the Act and not at the stage of computation of the total income under Chapter VI. All the appeals shall stand disposed of accordingly. 19. Therefore, I do not find any merits in interfering with the reassessment procedure hitherto undertaken by the 2nd respondent assessing officer. At the same time, it is made clear that while passing orders under Section 147 of the Income Tax Act, 1961, the 2nd respondent assessing officer will have to pass an appropriate order on merits considering the decision of the Hon'ble Supreme Court rendered in Commissioner of Income Tax and Another Vs. M/s. Yokogawa India Ltd. and the other well-settled principles of law. It is made clear that the order to be passed cannot be based on change of opinion if there was true and full disclosure by the Petitioner at the time of filing of the return. 20. In the light of the above discussion, I dispose this present Writ Petition by directing the Petitioner to participate in the adjudicatory mechanism before the concerned Respondent. The respondent shall pass appropriate orders after considering the submission of the Petitioner and after taking note of the decisions of the Hon'ble Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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