Court In G.k.n. Driveshaft (India) Limited v. Income Taxofficer – 259 Itr 19 Was Never Followed Insofar As Thepetitioner

Suchitra IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITION NO.1145 OF 2017 1. SMT. NIRUPA UDHAV PAWAR aged about 41 years,Indian National, Flat No.244,Landscape Park,Behind Reliance World,Campal, Panaji-Goa. 2. UDDHAV MAHADEV PAWAR, aged about 42 years,Indian National, Flat No.244,Landscape Park,Behind Reliance World,Campal, Panaji-Goa. …PETITIONERS Versus1. THE ASSISTANT COMMISSIONER OF INCOME TAX, Circle 1(1),Office of Income Tax Department,Aayakar Bhawan, First Floor,5 EDC Complex, Patto Plaza,Panaji Goa. 2. THE COMMISSIONER OF INCOME TAX, Aayakar Bhawan, First Floor,5 EDC Complex, Patto Plaza,Panaji Goa. 3. THE ASSISTANT COMMISSIONER OF INCOME TAX/INCOME, Tax Officer, Ward (1)(4), Panaji Goa. …RESPONDENTS Mr. Hanumant D. Naik, Advocate for the Petitioners..Ms. Amira Razaq, Advocate for the Respondents CORAM:M. S. SONAK &M. S. JAWALKAR, JJ.Reserved on:4[th] October 2021Pronounced on:6[th] October 2021 JUDGMENT: (Per M. S. Sonak, J.) 1.Heard Mr. Hanumant Naik for the Petitioners andMs. Amira Razaq for the Respondents. Rule. With the consent of and at the request of the 2. learned counsel for the parties, the Rule is made returnableforthwith. Even otherwise, the learned counsel for the parties hadrequested that this petition be disposed of finally at the stage ofadmission itself, since, the pleadings were complete. The challenge in this petition is to the notices dated 3.The challenge in this petition is to the notices dated24.03.2017 and 31.03.2017 issued under Section 148 of theIncome Tax Act (said Act) seeking to reopen the assessment forthe Assessment Year 2010-2011. 4.Ms. Razaq, at the outset, submitted that the petitionis premature insofar as petitioner no.2 is concerned. Shesubmitted that the procedure prescribed by the Hon'ble Supreme Court in G.K.N. Driveshaft (India) Limited v. Income TaxOfficer – 259 ITR 19 was never followed insofar as thepetitioner no.2 is concerned. 5. Technically, Ms. Razaq may have a point, but in thepeculiar facts of the present case, there is no point in relegatingpetitioner no.2 to follow the said procedure. This is because itwas even admitted by Ms. Razaq that there is no differencewhatsoever, either on facts or in law insofar as the positions of thetwo petitioners are concerned. She pointed out that petitionerno.2 is the husband of petitioner no.1 and having regard to theprovisions of Section 5A of the said Act, which are peculiar to thepersons from Goa, the Department had to issue separate noticesto both the petitioners. 6.Since, there is no difference whatsoever in thepositions of the two petitioners, either on facts or in law, webelieve that no purpose would be served by bifurcating the matterand relegating petitioner no.2 to follow the prescribed procedureat this belated stage. Besides, it was conceded that the fate of thesecond petitioner's case will almost entirely depend upon the fateof the first petitioner's case. Ms. Razaq also fairly pointed out thatthough there was no stay granted in respect of the notice issued topetitioner no.2, the Department stayed its hands in deference to the interim order made in favor of petitioner no.1. This wasbecause the factual, as well as legal position concerning both thenotices, was the same. Having regard to all these factors, nopurpose will be served in upholding the objection raised by Ms.Razaq qua the case of the second petitioner. There is no disputethat the procedure prescribed in G.K.N. Driveshaft (India)Limited (supra) was followed insofar as the first petitioner isconcerned. the interim order made in favor of petitioner no.1. This wasbecause the factual, as well as legal position concerning both thenotices, was the same. Having regard to all these factors, nopurpose will be served in upholding the objection raised by Ms.Razaq qua the case of the second petitioner. There is no disputethat the procedure prescribed in G.K.N. Driveshaft (India)Limited (supra) was followed insofar as the first petitioner isconcerned. 7.A brief reference to some factual aspects is necessaryto appreciate the challenges raised in this petition. Admittedly,petitioner no.1 purchased a property bearing Survey No.26/2 atBaiguinim in a public auction held by the Goa State Co-operativeBank for a consideration of `1.36 crores or thereabouts. This isevidenced by the Sale Certificate dated 17.05.2006 issued by thecompetent authority. This Sale Certificate has been dulyregistered before the competent Sub-Registrar. 8.By sale deed dated 02.02.2010 the petitioner no.1purported to transfer the suit property in favor of NagueshwarPandey for total consideration of `3 crores. Pandey issued fourcheques to cover this amount out of which two cheques werepost-dated. The sale deed dated 02.02.2010 specifically states that the sale was subject to realization of the cheques issued bysaid, Pandey. 9.There is no dispute that the cheques amounting to `2crores were dishonored and the petitioner no.1, ultimatelyreceived an amount of only `1 crore. There is also no disputethat petitioner no.1 filed a Civil Suit bearing No.43/2012/Cbefore the Civil Judge, Junior Division at Panaji seekingcancellation of the registration of sale deed dated 02.02.2010urging inter alia that the transfer was subject to realization of thecheque amount and in the absence of realization, there was nosale of the said property. 10.Parallelly, M/s. Amina Developers Pvt. Ltd. (ADPL)claimed to have purchased the very same property bearing SurveyNo.26/2, Baiguinim from one Shri Ravindra Navelkar. ADPLinstituted Special Civil Suit No.22/2010/A in the court of theCivil Judge, Senior Division at Mapusa to challenge the sale deeddated 02.02.2010. This suit was disposed of by a consent decreebased on consent terms signed by ADPL and Pandey. Thepetitioner no.1 though a party to this suit did not sign theconsent terms. Pandey then proceeded to enter into adevelopment agreement dated 28.06.2013 with another companyM/s. Ocean View Properties LLP (OVP). 11.OVP then instituted Special Civil Suit No.22/2014/Binter alia for enforcement of agreement dated 28.06.2013. OVPultimately agreed to purchase rights of petitioner no.1, herhusband petitioner no.2, and Pandey to put an end to litigationand to be in a position to own and develop the said property. 12.Therefore, a deed of sale dated 12.12.2014 wasentered into by and between the various parties as aforesaid. Interms of this deed, OVP paid to the petitioner no.1 considerationof `2 crores, representing the amount that Pandey had failed topay under the sale deed dated 02.02.2010. OVP paid anadditional amount of `2.36 crores towards the share of petitionerno.2 and by way of compensation. In short, the petitioners, bythe year 2014, received total consideration of `5.36 crores for thesale of the said property. 13.For the Assessment Year 2015-2016 therefore, thepetitioners filed their return of income disclosing the entireconsideration of `5.36 crores received by them and offered thisentire income to tax. The petitioners, in fact, paid the necessarytax against capital gains received by them for the Assessment Year2015-2016. This return was duly accepted by the Departmentand at least presently, there is no dispute raised about the same. 13.For the Assessment Year 2015-2016 therefore, thepetitioners filed their return of income disclosing the entireconsideration of `5.36 crores received by them and offered thisentire income to tax. The petitioners, in fact, paid the necessarytax against capital gains received by them for the Assessment Year2015-2016. This return was duly accepted by the Departmentand at least presently, there is no dispute raised about the same. 14.On 24.03.2017 however, notices were served underSection 148 of the said Act to the petitioners alleging that theincome had escaped assessment for the Assessment Year 2010-2011. On 09.10.2017, petitioner no.1 demanded reasons andthen filed objections. On 27.10.2017 objections were rejected.Hence the present petition. 15.Mr. Hanumant Naik submitted that thejurisdictional parameters necessary for invoking powers underSection 147/148 of the said Act do not exist in the present case.He submitted that this was a case of reopening after four yearsand there was no basis to hold that any material fact had not beendisclosed by the assessees in the relevant assessment year. Hesubmitted that there was no reason to believe that any incomehad escaped assessment particularly because the entire income wasdisclosed in the Assessment Year 2015-2016 and even tax waspaid and accepted by the Department without any demur. Hesubmitted that even otherwise the perusal of the sale deed dated02.02.2010 made it very clear that the transfer was subject torealization of the cheque amount. Upon the dishonor of cheques,the assessees instituted a suit seeking cancellation of the sale deed.He, therefore, submits that the impugned notices are vitiated forfailure to comply with essential jurisdictional parameters. 16.Mr. Naik also submitted that there is no disputewhatsoever that the assessees had not received the amount of `3crores during the Assessment Year 2010-2011. The reasonsindicated by the Department proceeded on the basis that suchamount was in fact received by the assessees. He submits that theDepartment has to stand or fall on such reason and it is not opento the Department to now contend that income was “accrued”though not received during the relevant assessment year. Hesubmits that the reasons once supplied, can never be varied norsupplemented in this manner. He submits that this is anadditional ground for striking down the impugned notices. 17.Mr. Naik has relied upon several decisions in supportof his contentions including, but not restricted to. - (i)TheCommissioner of Income Tax-8 Mumbai v. Mrs. Hemal RajuShete – Income Tax Appeal No.2348/2013 decided on29.03.2016, (ii) Smt. Raj Rani Devi Ramna v.Commissioner of Income Tax – 1992 (2) BLJR 1207, (iii)Commissioner of Income Tax v. Excel Industries Ltd., (iv)Mira Ananta Naik and others v. Deputy Commissioner ofIncome Tax (Investigation) & Ors. - (2009) 221 CTR (Bom)149, (v) Nilamben Sandipbhai Parikh v. AssistantCommissioner of Income Tax, Circle 4(2) – (2019) 266Taxman 191 (Guj), (vi) Commissioner of Income Tax v. Balbir Singh Maini – (2018) 12 SCC 354, (vii) GKN SinterMetals Ltd. v. Ramapriya Raghavan - (2015) 371 ITR 225(Bom) and (viii) Nivi Trading Ltd. v. Union of India –.(2015) 64 Taxman.com 92 (Bombay) 18.Ms. Razaq defended the impugned notices inter aliarelying upon the decisions in (i) John Sebastian Zezito Lobo v.Assistant Commissioner of Income Tax, Circle-2(1), Panaji &2 Ors. - Writ Petition No.1066 of 2019 decided on17.08.2021, (ii) Assistant Commissioner of Income Tax v.Rajesh Jhaveri Stock Brokers (P.) Ltd. - (2017) 161 Taxman316 (SC), (iii) Income-tax Officer v. Lakhmani Mewal Das –(1976) 103 ITR 437 (SC), (iv) Chaturbhuj DwarkadasKapadia v. Commissioner of Income Tax – (2003) 260 ITR0491, (v) Morvi Industries Ltd. v. Commissioner of IncomeTax – (1971) 82 ITR 835 (SC), (vi) The Commissioner ofIncome Tax-111 Pune v. Dr. Arvind S. Phake – Income taxAppeal No.139 of 2015 decided on 20.11.2017 and (vii)Commissioner of Income-tax, Delhi v. Kelvinator of IndiaLtd. - (2010) 187 Taxman 312 (SC). 18.Ms. Razaq defended the impugned notices inter aliarelying upon the decisions in (i) John Sebastian Zezito Lobo v.Assistant Commissioner of Income Tax, Circle-2(1), Panaji &2 Ors. - Writ Petition No.1066 of 2019 decided on17.08.2021, (ii) Assistant Commissioner of Income Tax v.Rajesh Jhaveri Stock Brokers (P.) Ltd. - (2017) 161 Taxman316 (SC), (iii) Income-tax Officer v. Lakhmani Mewal Das –(1976) 103 ITR 437 (SC), (iv) Chaturbhuj DwarkadasKapadia v. Commissioner of Income Tax – (2003) 260 ITR0491, (v) Morvi Industries Ltd. v. Commissioner of IncomeTax – (1971) 82 ITR 835 (SC), (vi) The Commissioner ofIncome Tax-111 Pune v. Dr. Arvind S. Phake – Income taxAppeal No.139 of 2015 decided on 20.11.2017 and (vii)Commissioner of Income-tax, Delhi v. Kelvinator of IndiaLtd. - (2010) 187 Taxman 312 (SC). 19.She submitted that in this case, the assessees failed todisclose the sale deed dated 02.02.2010 and the income of `1crore admittedly received by them in the relevant assessment year. She submits that this was more than a sufficient reason to reopenthe assessment. She submits that sufficiency of reasons cannot begone into at this stage. She submits that the issue as to whetherthe capital gains were indeed payable or not in the AssessmentYear 2010-2011 is quite irrelevant at this stage. She submits thatthe assessees can file their detailed response before the assessingofficer who is bound to adjudicate the matter in great detail. Shesubmits that there is no infirmity whatsoever in the impugnednotices and therefore, this petition may be dismissed, if necessary,leaving open all defenses on merits. 20.Ms. Razaq submits that the transfer of the saidproperty was complete on the date of execution of the sale deeddated 02.02.2010 and the amount of `3 crores was accrued to theassessees on the said date itself. She submits that it was incumbentupon the assessees to have disclosed these transactions in theAssessment Year 2010-2011 itself and the subsequent disclosuresfor the Assessment Year 2015-2016 were not sufficient or werepossibly not made in the proper assessment year. She, therefore,submits that this petition is liable to be dismissed. 21.The rival contentions now fall for our determination. 22.At the very outset, we deem it appropriate to refer tothe reasons recorded by the assessment officer for reopening theassessment under Section 147 of the said Act. The same read asfollows: “The assessee had filed return of income for A.Y.2010-11 declaring total income of Rs.2,50,985/- and theassessment was completed u/s. 143(3) r.w.s. 153C of I.T.Act, 1961 on 27.12.2011 accepting the return income ofthe assessee. It is noticed that assessee has sold one property videsale deed dt 02.02.2010 for a sum of Rs. 3,00,000/- to Sri.Nagueshwar Pande. The sale deed was registered in the sub-registrar Ilhas, Panaji which states that the assessee hasreceived the sale consideration of Rs.3,00,00,000/- asunder:- Rs.1,00,00,000/- Cheque No. 030519 dt. 10.02.2010 Rs.1,00,00,000/- Cheque No. 030520 dt. 15.02.2010 Rs. 45, 00,000/- DD dt. 02.02.2010 of Indian Overseas Bank Rs. 55,00,000/- Cheque No. 030521 dt. 02.02.2010 The assessee has not declared the above transaction inher return of income for the AY 2010-11. It is learnt fromthe information received that the said property waspurchased in 2006 for Rs.1,36,52,400/-. Thus there isconcealment/ escapement of income (Long Term CapitalGain) for the AY 2010-11 as below : Particulars Amount (In Rs.) In view of the above facts, it is abundantly clear thatthere is failure on the part of the assessee to disclose fullyand truly all material facts necessary for her assessments forthe AY 2010-11. Therefore, I have a reason to believe thatincome chargeable to tax amounting to Rs.1,33,75,113/-has escaped the assessment, within meaning of provision ofsection 147 of the Income Tax Act, 1961. Accordingly,assessment for A.Y. 2010-11 is proposed to be reopened byissuing notice u/s 148 of the I.T. Act, 1961.” 23.This Court, in a catena of decisions beginning from Particulars Amount (In Rs.) In view of the above facts, it is abundantly clear thatthere is failure on the part of the assessee to disclose fullyand truly all material facts necessary for her assessments forthe AY 2010-11. Therefore, I have a reason to believe thatincome chargeable to tax amounting to Rs.1,33,75,113/-has escaped the assessment, within meaning of provision ofsection 147 of the Income Tax Act, 1961. Accordingly,assessment for A.Y. 2010-11 is proposed to be reopened byissuing notice u/s 148 of the I.T. Act, 1961.” 23.This Court, in a catena of decisions beginning from Hindustan Lever Ltd. v. R.B. Wadkar, Asstt. Cit (No. 2) –268 ITR 332 has held that the notice for reopening ofassessment would stand or fall based on the reasons recorded atthe time of issuing notice for reopening of assessment. ThisCourt has held that the reasons are required to be read as recordedby the assessing officer and the same cannot be improved uponeither by substitution, addition, or deletion. This Court held thatthe reasons recorded by the assessing officer cannot besupplemented by filing an affidavit or making any oralsubmission, otherwise, the reasons which were lacking in thematerial particulars would get supplemented, by the time the matter reaches the Court, on the strength of the affidavit or oralsubmissions. Thus, the legal position is quite clear that thevalidity of notice for reopening of an assessment is to be examinedbased on the reasons recorded at the time of issuing the noticeand the impugned notice cannot be supported by any additionalmaterial which does not find a place in the reasons recorded whileissuing the notice. 24.Now, in this case, the reasons recorded by theassessment officer are based on the alleged receipt of saleconsideration of `3 crores by the assessees in terms of the saledeed dated 02.02.2010. Reference is to the actual receipt of thisconsideration and not to the accrual of this consideration of `3crores. Even the capital gain workings in the reasons are entirelybased on the premise that the entire consideration of `3 croreswas received by the assessees during the Assessment Year 2010-11and not on the basis that this income was only accrued to theassessees during the relevant assessment year. All this wassupposed to be based on the disclosures made by the assesseesduring the Assessment Year 2015-16 itself when the assessees,placed on record the sale deed dated 12.12.2014 which in turn,had referred to the sale deed dated 02.02.2010. 25.In fact, the sale deed dated 12.12.2014 supersedes thesale deed dated 02.02.2010 and records the compromise reachedbetween the petitioners, Pandey and OVP. This deed very clearlyrefers to the receipt of only `1 crore by petitioner no.1 inpursuance of sale deed dated 02.02.2010 and certainly not to thereceipt of `3 crores during the Assessment Year 2010-11.Perhaps, realizing this difficulty, submission was now made beforethis Court that the consideration of `3 crores was “accrued” tothe petitioners during the Assessment Year 2010-11 and therefore,there were capital gains during the said assessment year which hadescaped assessment due to the failure on the part of the assesseesto disclose the transaction dated 02.02.2010. As noted earlier, the reasons proceeded on the basis 26.As noted earlier, the reasons proceeded on the basisthat an amount of `3 crores was in fact received by the petitionersduring the Assessment Year 2010-11. The submission now madebefore the Court is not based on any factum of receipt but rather,based on “accrual”. This was not at all the reason that promptedthe assessing officer to reopen the assessment. A fresh reason or anew reason, cannot be advanced either orally or by filing anaffidavit to add to or supplement to the reasons already recorded.This is impermissible in terms of the law laid down in HindustanLever Ltd. (supra). This decision was reiterated in GKN Sinter As noted earlier, the reasons proceeded on the basis 26.As noted earlier, the reasons proceeded on the basisthat an amount of `3 crores was in fact received by the petitionersduring the Assessment Year 2010-11. The submission now madebefore the Court is not based on any factum of receipt but rather,based on “accrual”. This was not at all the reason that promptedthe assessing officer to reopen the assessment. A fresh reason or anew reason, cannot be advanced either orally or by filing anaffidavit to add to or supplement to the reasons already recorded.This is impermissible in terms of the law laid down in HindustanLever Ltd. (supra). This decision was reiterated in GKN Sinter Metals Ltd. (supra). Applying this principle, therefore, theimpugned notices are required to be quashed and set aside. 27.Apart from the aforesaid, we find that there was noomission on the part of the assessees to disclose fully or truly allthe material facts necessary for the assessment Year 2010-11.There is no dispute that the assessees had purchased the propertyin question for `1.36 crores or thereabouts in the year 2006.Even in terms of the reasons furnished by the assessing officer theindexed cost for the Assessment Year 2010-11 came to `1.66crores or thereabouts. From the material relied upon by therespondents, only an amount of `1 crore was actually received bythe assessees during the Assessment Year 2010-11. Thus, for thesaid assessment year, there was no question of any capital gainsand consequently, no question of any income escapingassessment. 28.There was nothing on record to suggest that theassessees were following the accounting system based on accrualsrather than receipts. Rather, the material on record placed by theassessees themselves before the Department indicated that the salein the deed dated 02.02.2010 was subject to realization of thecheque amount. Further, once the cheques were dishonored, theassessees instituted a suit seeking cancellation of the sale deed and not for the recovery of the balance amount. The ultimate saledeed dated 12.12.2014 has to be construed pragmaticallybecause, by that stage, the parties had settled their disputes,compromised the litigations and the entire objective was to vestfull ownership rights in the suit property in OVP free from allencumbrances or claims from other parties. 29.Even in Rajesh Jhaveri Stock Brokers (P.) Ltd. (supra)the Hon'ble Supreme Court has held that the function of theassessing officer is to administer the statute with solicitude for thepublic exchequer with an inbuilt idea of fairness to taxpayers.True, at this stage, what is required is "reason to believe", but notthe established fact of escapement of income. Even sufficiency ofmaterial is not to be gone into at this stage but at the same time,as was explained in Lakhmani Mewal Das (supra) it is open to theassessee to contend that the assessing officer did not hold thebelief that there had been non-disclosure. The existence of thebelief could always be challenged though not the sufficiency ofthe reasons for the belief. The expression “reason to believe” doesnot mean a purely subjective satisfaction. The reason must beheld in good faith. It cannot be merely a pretense. Moreimportantly, it is open to the Court to examine whether thereasons for the formation of the belief have a rational connectionwith or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the section. To this extent, theaction of the assessing officer is open to challenge in a Court oflaw. 30.In Oriental Insurance Co. v. Commissioner of not extraneous or irrelevant for the section. To this extent, theaction of the assessing officer is open to challenge in a Court oflaw. 30.In Oriental Insurance Co. v. Commissioner of Income-tax – 378 ITR 421 (Delhi), it was held that powersunder Section 147 of the said Act can be invoked only in caseswhere the assessing officer has reason to believe that incomechargeable to tax has escaped assessment. The reason to believemust be based on tangible material and cogent facts. The powerscannot be exercised merely on suspicion or apprehension. Abonafide reason to believe is a necessary pre-condition thatclothes the assessing officer with the power to reopen theassessment that has otherwise attained finality. The reason tobelieve must have a direct nexus and a live link with theformation of the opinion that taxable income has escapedassessment. Therefore, where notice of reopening was based onan erroneous assumption of fact, such notice was quashed. 31.In Dr. Ajit Gupta v. Assistant Commissioner of Income Tax – 383 ITR 361 (Delhi), the reason for reopeningthe assessment was a mistaken factual premise that the assesseehad changed the system of accounting from the mercantile tocash system. Since this factual premise was found to be erroneous, the reopening of the assessment was heldunsustainable. 32.In Calcutta Discount Co. v. ITO – 41 ITR 191(SC), the Hon'ble Supreme Court has explained thecircumstances in which a writ petition can be entertained toquestion a notice seeking to reopen the assessment. It was held bythe Bench of five judges that where the jurisdictional parameterswere not satisfied, it became the duty of the courts to grant reliefto the assessee and the courts would be failing to perform theirduty if relief were refused. In Jeans Knit Private Ltd. v. DeputyCommissioner of Income Tax – 390 ITR 10 (SC), the Hon'bleSupreme Court distinguished CIT V. Chhabil Das Agarwal357 ITR 357 (SC) and relying on Calcutta Discount (supra) setaside the High Court's order dismissing petitions challengingnotices under Section 148 of the said Act seeking to reopenassessment that had attained finality. 33.By applying the aforesaid restrictive parameters aswell, we find that the only material relied upon by the assessingofficer, in this case, is the material supplied by the assesseesthemselves along with their return for the Assessment Year 2015-16. There is nothing in this material that could constitute aground for a reason to believe that there was a failure to disclose a material fact and further, that an income had escaped assessmentfor the Assessment Year 2010-11. The reasons stated by theassessing officer speak about the receipt of `3 crores by theassessees during the Assessment Year 2010-11. However, basedon the very material relied upon by the assessing officer, thiscontention was virtually given up and a new reason about“accrual” was sought to be put forward. 34.Reliance was placed on the decision of the Hon'bleSupreme Court in the case of Morvi Industries Ltd. (supra) tosubmit that certain accounting systems contemplate income onan accrual basis. While it is true that certain systems indeedadmit income on an accrual basis, this was not even the reasonrecorded by the assessing officer for the reopening of theassessment. As noted earlier, neither can new reasons befurnished nor can there be any additions to the reasons alreadydisclosed or the reasons already existing and recorded at the timeof the issuance of the impugned notices. Therefore, MorviIndustries Ltd. (supra) can be of no assistance to the Departmentin the present case. 35.Other decisions relied upon by Mr. Naik need not beconsidered in detail. In Smt. Raj Rani Devi Ramna (supra) theDivision Bench of Patna High Court, relying on the decision of 35.Other decisions relied upon by Mr. Naik need not beconsidered in detail. In Smt. Raj Rani Devi Ramna (supra) theDivision Bench of Patna High Court, relying on the decision of the Division Bench of Calcutta High Court in Nita ChandraNaskar v. Smt. Champahlnta Debi – (1919) 29 CLJ 250 hasheld that the true test of determining whether there is a transferof ownership or not is the intention of the parties to thetransaction. If the intention is that the title should passimmediately, even though the consideration has not been paid,the title passes, i.e., failure to pay the consideration for aconveyance does not defeat the conveyance except where there isan agreement that it should take effect only if the consideration isfirst paid. This decision is considered in several other decisionswhich take the view that title does not pass on mere execution ofa document but what is important is the intention of the partieswhich is to be gathered from the document itself. Based uponsuch principles, the Division Bench held that the parties before ithad clearly intended that despite the execution and registration ofthe sale deeds, transfer was to be effective only on payment of theentire consideration amount and since, there was no such entirepayment, there was no liability for capital gains tax under Section45 of the Income Tax Act. 36.In the facts of the present case, there is no necessity toeven rely upon the aforesaid principles laid down by the DivisionBench of the Patna High Court. Even without adverting to such principles, the reasons referred to above are quite sufficient toquash the impugned notices. 37.The other decisions relied upon by Ms. Razaq do notassist the case of the Department in this matter. The factualposition in John Lobo (supra) was entirely different. There, nosooner than the objections were filed, a petition was institutedbefore this Court and it is in that context that we held that thepetition was premature. Similarly, Chaturbhuj Kapadia (supra)concerns the case of a transfer within the meaning assigned to thisterm under Section 2(47)(v). Such an issue is not directlyinvolved in the present case. Besides, this decision will now haveto be considered in the light of the subsequent decisions of theHon'ble Supreme Court in Balbir Singh Siyami (supra) as well asM/s. Sheshasai Steels Pvt.Ltd v. Assistant Commissioner ofIncome Tax – Civil Appeal No.9209/2019 decided on04.12.2019. 38.The decision in Dr. Arvind S. Phake (supra) alsoturns on facts that are not at all comparable to the fact situationin the present case. The issue involved in the said matter wasentirely different. 39.The decision in Kelvinator of India Ltd. (supra)assists the case of the petitioners because this decision holds thatthe assessing officer has the power to reopen the assessmentprovided there is tangible material to conclude that there isescapement of income from assessment and further, the reasonsmust have a live link with the formation of the belief. A merechange in opinion cannot be a reason to reopen. This decisionholds that there is a conceptual difference between power toreview and power to reassess and that the assessing officer has nopower to simply review. For all the aforesaid reasons we allow this petition 40.For all the aforesaid reasons we allow this petitionand quash and set aside the impugned notices. There shall be noorder for costs. M. S. JAWALKAR, J. M. S. SONAK, J.