TMI Blog2022 (2) TMI 596X X X X Extracts X X X X X X X X Extracts X X X X ..... f the income articulated under second head Correct computation of Business Income also suffers from the same vice of mere change of opinion. The third head under which the income allegedly escaped assessment, under the caption, Excess DIT Relief stands on a much weaker foundation. AO explicitly refers to the availability of two options for computation of deduction under section 10A and 80 HHE, namely, (i) exclusive method; and (ii) alternatively, profit of 10A units shall form part of calculation of 80 HHE and export turnover of 10A is to be excluded therefrom. According to the AO, the choice of the second method by the department resulted in escapement of income as excess DIT relief to the extent of ₹ 3,67,31,204/- had been allowed. This inference is a classic example of change of opinion as it is rooted in expediency of exercise of one option over another. The impugned notice and the consequent action is legally unsustainable as the Revenue fails to satisfy the twin tests. Firstly, there is no assertion, much less material to indicate, that the income escaped assessment on account of failure on the part of the petitioner to disclose fully and truly all material facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2006, an assessment order was passed under section 143(3) determining a total income of ₹ 858,87,52,290/-. 2.4) Being aggrieved, the petitioner preferred an appeal against the said assessment before Commissioner of Income Tax (Appeals)-XXXIII, Mumbai ( CIT-[A] ). The said appeal was disposed of by CIT-[A] by an order dated 16th March 2007. 2.5) The Assessing Officer-respondent No.2 passed an order in conformity with, and giving effect to, the order of CIT [A] and determined the revised total income of the petitioner at ₹ 98,55,51,776/-. 2.6) On 23rd July 2008, the respondent No.2 issued notices under section 154 seeking to rectify the assessment order dated 26th April 2007 passed by the Assessing Officer. In the meanwhile, on 5th April 2010, the petitioner was served with the notice under section 148 of the Act issued by respondent No.1, purportedly dated 31st March 2010, to the effect that the Assessing Officer had reason to believe that income chargeable to tax for assessment year 2003-04 has escaped assessment within the meaning of section 147 of the Act, 1961, and, thus, it was proposed to reopen the assessment. Upon request being made, the respondent No.1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... invocation of the power contained in section 147 of the Act, 1961. 6. We have heard Mr.Pardiwalla, the learned Senior Counsel for the petitioner and Mr. Pinto, the learned counsel for the respondents-Revenue. 7. We have perused the material on record, especially the reasons recorded for the proposed reopening of the assessment, the order disposing the objections, and the resistance sought to be put-forth by the respondents by way of affidavit-in-reply. 8. Mr.Pardiwalla submitted that the petitioner is in a position to demonstrate that the impugned notice was not dispatched on 31st March 2010, as claimed by the respondents. Attention of the Court was invited to the postal-tracking report which, inter-alia, shows that the article in question was booked on 3rd April 2010. Mr.Pardiwalla, however, submitted that the petitioner has a strong case on merits and, therefore, the petitioner may not be required to solely bank upon the technical objection on the point of limitation. 9. Mr. Pardiwalla would urge that from the bare perusal of the reasons recorded by the Assessing Officer, it becomes explicitly clear that there was no reason to form the belief that income has escaped ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tulated that where the primary facts necessary for assessment are fully and truly disclosed and the Assessing Officer took a conclusive view thereon, it is impermissible to reopen the assessment based on the very same material on the premise that the said material sustains a different opinion. 12. The aforesaid principles are deducible from the judgments of the Supreme Court in the case of Commissioner of Income-Tax Vs. Kelvinator of India Ltd. Anr. [2010] 320 ITR 561 (SC) wherein the concepts of tangible material and change of opinion were enunciated, and a Division Bench of this Court in case of Aroni Commercials Ltd. Vs. Deputy Commissioner of Income-tax 2(1) [2014] 44 taxmann.com 304 (Bombay), wherein the legal principles were culled out. 13. On the aforesaid touchstone, re-adverting to the facts of the case, first and foremost, it is imperative to note that the reasons recorded for the proposed reopening are conspicuously silent on the aspect that the income escaped assessment on account of failure to make full and true disclosure of all material facts relevant for the assessment, by the assessee. An assertion that the petitioner suppressed facts is singularl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of 80 HHE and export turnover of 10A is to be excluded therefrom. According to the Assessing Officer, the choice of the second method by the department resulted in escapement of income as excess DIT relief to the extent of ₹ 3,67,31,204/- had been allowed. This inference is a classic example of change of opinion as it is rooted in expediency of exercise of one option over another. 16. The conspectus of the aforesaid consideration is that the impugned notice and the consequent action is legally unsustainable as the Revenue fails to satisfy the twin tests. Firstly, there is no assertion, much less material to indicate, that the income escaped assessment on account of failure on the part of the petitioner to disclose fully and truly all material facts necessary for the assessment, and, secondly, the reasons recorded by the Assessing Officer should not fall within the ambit of mere change of opinion on the very same material. Consequently, we are persuaded to hold that there was no material to justify the formation of a reason to believe that income escaped assessment and invoke the power under section 147 of the Act, 1961. The petition, therefore, deserves to be allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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