At This Juncture, We Take Note Of The Decision Of The Hon’ble Supreme Courtin Commissioner Of Income Tax, Delhi v. Graphite India Ltd

O - 23 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/207/2016IA NO: GA/1/2016 (OLD NO. GA/2156/2016)PRINCIPAL COMMISSIONER OF INCOME TAX, KOLKATA-4, KOLKATAVS.GRAPHITE INDIA LIMITED BEFORE :THE HON’BLE JUSTICE T.S. SIVAGNANAMAndTHE HON’BLE JUSTICE HIRANMAY BHATTACHARYYADate : AUGUST 02, 2022. Appearance :Mr. Aryak Dutta, Adv….for appellantMr. Somak Basu, Adv.…for respondent The Court : This appeal by the revenue filed under Section 260A of theIncome Tax Act, 1961 (the Act) is directed against the order dated 8[th] January,2016 passed by the Income Tax Appellate Tribunal “B” Bench, Kolkata (Tribunal)in I.T.A. No. 398/Kol/2008 and I.T.A. No. 537/Kol/2008 for the assessment year2000-2001 respectively. The revenue has raised the following substantial questions of law forconsideration :- i)Whether on the facts and in the circumstances of the case thelearned Tribunal was justified in law in quashing the order passedunder Section 147 of the said Act despite the fact that there wasfailure on the part of the assessee to disclose material facts in thelearned Tribunal was justified in law in quashing the order passedunder Section 147 of the said Act despite the fact that there wasfailure on the part of the assessee to disclose material facts in the return of the income that SEB price used as indicator of realizablevalue of Power included an element of tax duty which is really didnot have to pay? ii)Whether on the facts and in the circumstances of the case theTribunal was justified in law in quashing the Order passed underSection 147 holding inter-alia that there was a change of opinion bythe Assessing Officer despite the fact the issue was never to0uchedupon in the orders of assessment of appeal? We have heard Mr. Aryak Dutta, learned standing Counsel appearing forappellant and Mr. Somak Basu, learned Advocate appearing for therespondent/assessee. The short question involved in the instant case is with regard to thecorrectness of exercise of power by the assessing officer under Section 147/148of the Act and reopening the assessment which was completed vide order dated31[st] March, 2003. From the reasons for reopening it is seen that the basis wasfrom the records, which was already submitted by the assessee during the courseof the original scrutiny assessment. The learned Advocate appearing for therespondent has filed a compilation which was filed before the Commissioner ofAppeals challenging the revised assessment order. From the said compilation wefind that the assessing officer had issued two notices under Section 142(1) of theAct dated 10[th] December, 2002 and on 13[th] January, 2003. There were,therefore, three issues which were raised by the assessing officer and one suchissue pertains to the basis of realizable market value for claim of deduction under Section 80IA of the Act. In response to the said notices the assessee hadsubmitted a reply on 13[th] March, 2003 and on 21[st] March, 2003. In the replydated 21[st] March, 2003 the assessee has extracted the question posed to theassessee by the assessing officer regarding the claim of deduction under Section80IA of the Act. We find that there were six questions which were asked to theassessee and the assessee has submitted a detailed reply. If that be the positionwhether the assessment could have been reopened. In our considered view, theTribunal rightly granted relief to the assessee after noting the factual position, bypointing out that relevant material was placed on record by the assessee whenthey made the claim for deduction under Section 80IA of the Act and query wasraised and the case was discussed and the assessee had placed material beforethe assessing officer and it is only thereafter the realisable market value of thepower as adopted by the assessee was initially accepted by the assessing officer.Therefore, the Tribunal, in our considered view, rightly stated that thereassessment proceedings were clearly a case of change of opinion. At this juncture, we take note of the decision of the Hon’ble Supreme Courtin COMMISSIONER OF INCOME TAX, DELHI VERSUS KELVINATOR OF INDIALTD., [2010] 187 Taxman 312 (SC), wherein the Hon’ble Supreme Court pointedout that the assessing officer has no power to review, he has power to reassessbut reassessment has to be based on fulfillment of certain pre-conditions and ifthe concept of change of opinion is removed then in the garb of reopening theassessment review takes place. Apart from that we note that the very same issuenamely the direction claimed in 80IA in the assessee’s own case for the assessment year 1999 – 2000 and 2001-2002 was agitated and, ultimately, thematter travelled up to the tribunal and by order dated 6[th] December, 2007 thetribunal granted relief to the assessee in ITA No.949/Kol/2005 etc. As againstthe said order the revenue preferred appeal before the court in ITA/733/2008which was dismissed by judgment dated December 10, 2008. That apart, inassessee’s own case for the assessment year 2003-04 the assessee succeededbefore Tribunal in ITA/304/305/Kol/2008 and ITA/559/Kol/2008 dated 24[th]August, 2016. The learned standing Counsel appearing for the appellant placed relianceon the decision of the Hon’ble Supreme Court in the case of KALYANJI MAVJI &CO. Versus C.I.T. WEST BENGAL-II, (1976) 1 Supreme Court Cases 985. In thesaid decision the word “information” occurring in Section 34(1)(b) of the IncomeTax Act, 1922 was considered and explained. We note that the said decision wasconsidered by the Hon’ble Supreme Court in INDIAN AND EASTERN NEWSPAPERSOCIETY VERSUS COMMISSIONER OF INCOME TAX 1979 (119) ITR 996 and thelegal position was explained by stating that the proposition in Kalyanji Mavji &Co. to the effect that a case where income had escaped assessment due tooversight, inadvertence or mistake of the ITO must fall within S.34(1)(b) of the1922 Act, is stated too widely and travels further than the statute warrants in sofar as it can be said to lay down that if, on reappraising the material consideredby him during the original assessment, the ITO discovers that he has committedan error in consequence of which income has escaped assessment, it is open to him to reopen the assessment. An error discovered on a reconsideration of thesame material does not give him that power. The factual position has been noted by us in the preceding paragraphswhere we find that the Assessing Officer had elaborately questioned the assesseeon the very same issue and the assessee has submitted in details and documentsto support their contention and therefore, on the self-same material a freshdecision cannot be taken as it would tantamount to review of the originalassessment. In the light of the above discussion, we hold that the order passed by theTribunal does not suffer from any error. In the result, the appeal filed by the revenue is dismissed. The substantial questions of law are answered against the revenue. With the dismissal of the appeal, the stay application being GA/1/2016(Old No: GA/2156/2016) also stands dismissed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.)