Kausalya Maruthachalam v. The Deputy Commissioner Of Income Tax Circle-1(1),2Nd Floor, Trichy-Main Building, Williams Road,Contonment, Trichy-620 015

BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED : 30.11.2022 CORAM THE HONOURABLE MR.JUSTICE MOHAMMED SHAFFIQ W.P.(MD).No.8010 of 2022andWMP.(MD).Nos.5999 of 2022 and 6000 of 2022 Kausalya Maruthachalam ... Petitioner Vs. The Deputy Commissioner of Income Tax Circle-1(1),2nd Floor, Trichy-Main Building, Williams Road,Contonment, Trichy-620 015.... Respondent Prayer Writ Petition filed under Article 226 of the Constitution of India, praying to issue a Writ of Certiorari calling for the records of the Respondent with regard to the impugned notice dated 31.03.2015 passed under Section 148 of the Income Tax Act, 1961, issued by the Respondent to the petitioner (bearing PAN: ) read with the order passed by the Respondent dated 20.04.2022 for the assessment year 2008-09 bearing DIN in order No.ITBA/COM/F/17/2022-23/104287708(1) read with Show causenoticedated20.04.2022in ITBA/AST/F/147(SCN)/2022-23/1042787471(1), passed by the Respondent herein, and quash the same as unreasonable, illegal and wholly without jurisdiction. For Petitioner : Mr.Vaibhav R.Venkatesh for M/s. Nithyaesh and Vaibhav 1/51 For Respondent : Mr.N.Dilip Kumar Senior Standing Counsel W.P.(MD)No.8010 of 2022 ORDER The writ petition has been filed challenging the impugned notice dated 31.03.2015, issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as "the Act") read with the order dated 20.04.2022 rejecting the objections filed by the petitioner in response to the reasons provided for reopening under Section 147 of the Act for the Assessment year 2008-2009. The impugned proceeding is challenged insofar as it treats a sum of Rs. 4.73 Crores as representing the sale consideration of land liable to Capital Gains tax, rejecting the petitioner's objection that the land in question / subject land/ is agricultural land and thus outside the purview of Section 45 of the Act. The present writ petition is filed challenging the impugned order rejecting the petitioner's objection invoking Section 147 read with 148 of the Act on the premise that reopening of assessment is made on a mere change of opinion and that the impugned proceedings also stands vitiated inasmuch as there is no finding that the assessee/ petitioner had failed to disclose fully and truly the material particulars while invoking the extended period of limitation. 2/51 W.P.(MD)No.8010 of 20222. According to the petitioner, the issue as to whether the subject land is agricultural in nature and thus outside the purview of Section 45 of the Act has been considered on two earlier occasions vide assessment order under Section 143(3) of the Act dated 24.12.2009 and assessment order under Section 147 of the Act dated 23.12.2011. The impugned proceedings is the third occasion when the very same issue is being revisited and thus bad for want of jurisdiction. 3. I shall now set out briefly the history of assessment / statutory proceedings leading to the present writ petition: a. The Petitioner is an individual assessee under the Act and falls within the jurisdictional limits of the Respondent. The petitioner filed her return of income for the Assessment year 2008-09, admitting a total income of Rs.17,49,630/- and paid a sum of Rs.5,32,951/- as taxes. b. There was a search on 29.08.2007 in terms of Section 132 of the Act of “Rohini Housing Developers Pvt. Ltd.", in which the petitioner was one of the directors. c. On completion of the above search, a notice was issued under Section 153C of the Act to the petitioner on 13.01.2009 followed by a 3/51 W.P.(MD)No.8010 of 2022notice dated 29.09.2009 and a questionnaire dated 05.10.2009. The petitioner responded to the same on 02.11.2009. Importantly, the queries raised included one relating to the sale of agricultural land by the petitioner during the assessment year 2008-09. Thereafter, a show cause notice dated 13.11.2009 was issued seeking explanation as regards the consideration of b. There was a search on 29.08.2007 in terms of Section 132 of the Act of “Rohini Housing Developers Pvt. Ltd.", in which the petitioner was one of the directors. c. On completion of the above search, a notice was issued under Section 153C of the Act to the petitioner on 13.01.2009 followed by a 3/51 W.P.(MD)No.8010 of 2022notice dated 29.09.2009 and a questionnaire dated 05.10.2009. The petitioner responded to the same on 02.11.2009. Importantly, the queries raised included one relating to the sale of agricultural land by the petitioner during the assessment year 2008-09. Thereafter, a show cause notice dated 13.11.2009 was issued seeking explanation as regards the consideration of Rs.4,73,80,000/- received towards sale of land admeasuring 4.12 Acres situated at Thaiyur Village, Chengalpattu Taluk, Kanchipuram District while proposing to treat the same as liable to capital gains tax. The notice also called upon the petitioner to demonstrate that the above land was only agricultural land and thus not liable to tax under the Income Tax Act, 1961. d. The petitioner submitted a reply dated 07.12.2009 stating that the land which was sold was only agricultural land and thus not liable to capital gains tax. The petitioner also submitted evidence/ records in the form of copies of Chitta and Adangal issued by Village Administrative Officer and endorsed by Tahsildar to substantiate that the land in question was only agricultural land. The certificate issued by Village Administrative Officer was also submitted to show that the land in issue is situated beyond the limit of municipality/municipal corporation, Town Area or Cantonment Board and was situated almost 23 Kms away from Tiruporur Panchayat, the 4/51 W.P.(MD)No.8010 of 2022certificate also contained details regarding the population of the village. e. Thereafter, an order of assessment under Section 143(3) of the Act dated 24.12.2009, came to be passed wherein after referring to Group case search under Section 132 of the Act, it was stated that the income returned is accepted and assessment completed accordingly. Importantly, the assessment under Section 143 of the Act was completed after raising queries relating to the nature of the land and which as stated above was responded to by the petitioner along with documents/ evidence. f. Thereafter, a notice dated 19.11.2010 was issued under Section 148 of the Act, along with reasons for reopening, wherein the question as to whether the land sold by the petitioner was agricultural land or otherwise was raised again on the premise that evidence was not produced to show that the land was agricultural in nature. Reliance was sought to be placed on the judgment of the Hon'ble Supreme Court in the case of Sarifabibi Mohammed Ibrahim and others vs. CIT reported in 204 ITR 631 (SC), while proposing to levy capital gains tax on the sale of the said land in terms of Section 45 read with 2(47) of the Act, read with Section 53A of the Contract Act. g. The petitioner submitted its objection by stating that she had vide 5/51 W.P.(MD)No.8010 of 2022 letter dated 07.12.2009 furnished the Sale Agreement, Adangal Extract and VAO Certificate, while reiterating that the subject property was 23 kms away from Tiruporur Panchayat and is agricultural land. It was submitted that the proceedings are bad as it is made on mere change of opinion which is impermissible. It was submitted that the decision of the Hon'ble Supreme Court in Sarifabibi's case is inapplicable to the facts of the present case, inasmuch as the Apex Court found as a matter of fact that the land sold by the assessee therein was not agricultural land on the date of sale. To the contrary, the documents produced by the assessee would show that the land in question is agricultural in nature on the date of sale. W.P.(MD)No.8010 of 2022 letter dated 07.12.2009 furnished the Sale Agreement, Adangal Extract and VAO Certificate, while reiterating that the subject property was 23 kms away from Tiruporur Panchayat and is agricultural land. It was submitted that the proceedings are bad as it is made on mere change of opinion which is impermissible. It was submitted that the decision of the Hon'ble Supreme Court in Sarifabibi's case is inapplicable to the facts of the present case, inasmuch as the Apex Court found as a matter of fact that the land sold by the assessee therein was not agricultural land on the date of sale. To the contrary, the documents produced by the assessee would show that the land in question is agricultural in nature on the date of sale. h. The Respondent proceeded to pass an order of assessment dated 23.12.2011 under Section 143 (3) read with Section 147 of the Act, wherein it was found that the lands were agricultural in nature and not liable to capital gains tax under Section 45 of the Act. Importantly, the assessment was made after obtaining and on the basis of the report of Deputy Director of Income Tax (hereinafter referred to as "DDIT"), which found that the lands are agricultural in nature and situated beyond Municipal limits and not liable to Capital gains Tax under Section 45 of the Act. Thus, the authorities under the Act have examined the issue of nature of the land for the second 6/51 W.P.(MD)No.8010 of 2022 time and concluded that the lands are in fact agricultural lands and thus not liable to Capital Gains Tax under the Act. i. Whileso, the petitioner was visited with one more notice under Section 148 of the Act dated 31.03.2015 followed by a notice under Section 143(2) of the Act, calling upon the petitioner to produce documents, accounts and other evidence while stating that the case was selected for scrutiny. On 18.02.2016, a notice was issued wherein it was stated that the Adangal contained the remark “puncture” for the Fasli Years 1418 and 1419 which denotes that no agricultural activity had taken place during the said period and that no prudent agriculturist would invest such huge sums on land for agricultural purpose and that the petitioner has sold the land to a building promoter who was not an agriculturist and relying upon the judgment of the Hon'ble Supreme Court in Sarifabibi's case, it was once again proprosed to treat the sale proceeds from the land as liable to capital gains tax under the Act. j. The petitioner submitted its objection vide its letter dated 25.02.2016 inter alia submitting that all the reasons set out now has been already examined and assessments completed finding that the property in question is agricultural land and not liable to Capital Gains tax under 7/51 W.P.(MD)No.8010 of 2022 Section 45 of the Act on two earlier occasions. Thus, the reassessment proceedings is made on a mere change of opinion which is impermissible. k. A writ petition in W.P.(MD)No.5110 of 2016 was filed challenging the notice dated 31.03.2015 and the consequential communication dated 18.02.2016, primarily on the ground that there is no new tangible material to exercise the powers of reassessment and the same stands vitiated for being initiated on mere change of opinion. The writ petition in W.P.(MD)No.5110 of 2016 was disposed of vide its order dated 18.03.2021 stating that it was only the stage of notice and that it was open to the petitioner to raise all contentions before the authority. l. Thereafter, another notice under Section 142 (1) of the Act was issued, wherein it was stated that the assessee has not offered to tax any agricultural income nor claimed any agricultural rebate, it was thus observed that no agricultural operation had been carried on the said land and thus the transfer of the said land would attract capital gains tax under Section 45 of the Act. exercise the powers of reassessment and the same stands vitiated for being initiated on mere change of opinion. The writ petition in W.P.(MD)No.5110 of 2016 was disposed of vide its order dated 18.03.2021 stating that it was only the stage of notice and that it was open to the petitioner to raise all contentions before the authority. l. Thereafter, another notice under Section 142 (1) of the Act was issued, wherein it was stated that the assessee has not offered to tax any agricultural income nor claimed any agricultural rebate, it was thus observed that no agricultural operation had been carried on the said land and thus the transfer of the said land would attract capital gains tax under Section 45 of the Act. m. The petitioner submitted its objection on 23.11.2021 and reiterated that the above issue viz., whether the land which is the subject matter of transfer is agricultural land or non-agricultural land, had been considered 8/51 W.P.(MD)No.8010 of 2022 both at the time of making the assessment under Section 143 (3) vide order dated 24.12.2009 and again while making an assessment under Section 143(3) read with 147 vide order 23.11.2021 and 17.12.2021, thus the proceedings for reassessment is clearly without jurisdiction. Further, reliance was sought to be placed on the judgment of this Court reported in 292 ITR 481 wherein it was held that to decide the nature/character of the land, it does not matter as to how the subsequent purchaser intends to use the same. Rejecting the above objections order of assessment came to be passed holding that the lands transferred by the petitioner was not agricultural land but one which is liable to capital gains tax vide order dated 20.12.2021. n. Aggrieved by the above orders of assessment, the petitioner filed a writ petition in W.P.(MD). No. 2053 of 2022, inter alia raising the plea that the procedure contemplated in terms of the judgment of the Hon’ble Supreme Court in GKN Drive Shafts was not followed. This Court, set aside all proceedings post the petitioner's objections dated 23.11.2021, solely on the ground that the principle laid down in the case of GKN Driveshafts has not been strictly adhered to. The relevant portion of the order dated 03.02.2022 is extracted hereunder:-9/51 W.P.(MD)No.8010 of 2022 "10. The conclusion is, all proceedings post petitioner's /assessee's objections dated 23.11.2021 are set aside solely on the ground that GKN Driveshafts principle has not been strictly adhered to. The first respondent Assessing Officer shall proceed from this 23.11.2021 objection stage, pass a speaking order, complete the re-assessment as expeditiously as his business would permit and in any event within 12 weeks from today i.e., on or before 28.04.2022." o. Thereafter, the impugned proceedings rejecting the objections raised by the assessee was made on 20.04.2022, wherein the objections raised by the assessee with regard to the jurisdiction to make reassessment was rejected inter alia for the following reasons viz., i) Perusal of Village Adangal Extract, revealed no agricultural operation during the years 2006-09 and that the petitioner was not an agriculturist nor any agricultural income offered in the return. ii) That the very purchase of land against such huge consideration itself would reveal that it was not meant for agricultural purpose and that the subsequent sale to a builder also revealed that the land was not agricultural land. iii) Reliance was again sought to be placed on the judgment of the Hon'ble Supreme Court in Sarifabibi’s case. 10/51 W.P.(MD)No.8010 of 2022 Pursuant to the rejection of the objections a show cause notice was issued on 20.04.2022. It is this order rejecting the petitioner's objection and consequential issuance of show cause notice which is challenged in this writ petition. 3. Case of the petitioner: ii) That the very purchase of land against such huge consideration itself would reveal that it was not meant for agricultural purpose and that the subsequent sale to a builder also revealed that the land was not agricultural land. iii) Reliance was again sought to be placed on the judgment of the Hon'ble Supreme Court in Sarifabibi’s case. 10/51 W.P.(MD)No.8010 of 2022 Pursuant to the rejection of the objections a show cause notice was issued on 20.04.2022. It is this order rejecting the petitioner's objection and consequential issuance of show cause notice which is challenged in this writ petition. 3. Case of the petitioner: The writ petition has been filed challenging the initiation of the impugned proceeding inter alia on the following grounds: i) That the re-opening of the assessment proceedings is barred by limitation inasmuch as the impugned notice seeking to reopen the assessment proceedings under Section 148 of the Act dated 31.03.2015 is contrary to Section 147 of the Act, wherein it is stipulated/provided that a notice under Section 148 of the Act has to be issued within a period of four (4) years from the end of relevant assessment year and it is permissible to invoke the extended period of 6 years if the assessee had failed to disclose fully and truly all material facts. It is the case of the petitioner that failure to disclose fully and truly all material facts is a jurisdictional fact/condition 11/51 W.P.(MD)No.8010 of 2022 precedent to invoke the extended period and failure to render a finding on the above aspect vitiates the impugned proceeding invoking Section 147 read with Section 148 of the Act. ii) That the impugned order has failed to consider the objections submitted by the petitioner that reopening of assessment proceedings on mere change of opinion is impermissible and frowned upon by the Hon'ble Supreme Court on several occasions including the case of Commissioner of Income Tax, Delhi vs. Kelvinator India reported in 2010 187 Taxman 132 (SC). iii) That the impugned notice under Section 148 of the Act suffers from the vice of lack of jurisdiction inasmuch as the original assessment orders were passed by the Assistant Commissioner of Income Tax, while the impugned notice for reopening of assessment under Section 148 of the Act has been issued by an Income Tax Officer. 4. In response, the learned Senior Standing Counsel for the Respondent made the following submissions: i) That pursuant to the orders of this Court in W.P.(MD) No.2053 of 2022, and after considering the objections raised by the petitioner, the 12/51 W.P.(MD)No.8010 of 2022 Respondent rejected the objections and issued a show-cause notice consequent thereto and it is open to the petitioner to respond/ resist the show-cause notice. ii) It was further submitted that the petitioner must participate in the assessment proceedings and if any adverse order is passed, the same can always be challenged by way of an appeal. iii) That the impugned order was passed in compliance with the general guidelines/ principles laid down in the judgment of the Hon'ble Supreme Court in the case of GKN Driveshafts. iv) That the re-opening of assessment proceedings was done in compliance with the procedure as contemplated under the Act and after obtaining the approval of the competent authority viz., the Principal Commissioner of Income Tax holding jurisdiction over the case for reopening the assessment beyond four years. 5. Heard both sides. Perused the materials available on record. 6. I shall now proceed to deal with the two grounds on the basis of which it was submitted that the impugned proceedings lacks jurisdiction 13/51 W.P.(MD)No.8010 of 2022 i) There is no finding that there has been a failure on the part of the assessee to fully and truly disclose material particulars. ii) The reassessment has been made on change of opinion. iv) That the re-opening of assessment proceedings was done in compliance with the procedure as contemplated under the Act and after obtaining the approval of the competent authority viz., the Principal Commissioner of Income Tax holding jurisdiction over the case for reopening the assessment beyond four years. 5. Heard both sides. Perused the materials available on record. 6. I shall now proceed to deal with the two grounds on the basis of which it was submitted that the impugned proceedings lacks jurisdiction 13/51 W.P.(MD)No.8010 of 2022 i) There is no finding that there has been a failure on the part of the assessee to fully and truly disclose material particulars. ii) The reassessment has been made on change of opinion. a. Absence of finding of failure on the part of the assessee to fullyand truly disclose material particulars: Before I proceed to address the above issues, it may be relevant to refer to the relevant portions of Section 147 of the Act, as it stood during the relevant period: "147. Income escaping assessment.— 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): Providedthat 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 afterthe expiry of four years from the end of the relevant assessmentyear, unless any income chargeable to tax has escapedassessment for such assessment year by reason of the failure onthe part of the assessee to make a return under Section 139 or in-response to a notice issued under subsection (1) of Section 142 14/51 W.P.(MD)No.8010 of 2022 or Section 148 or to disclose fully and truly all material factsnecessary for his assessment, for that assessment year: A reading of the above provision would show that while it is open to the Assessing Officer to invoke Section 147 of the Act within a period of four years, if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment, subject to the provisions of Sections 148 to 153 of the Act. The proviso to Section 147 of the Act, enables the Assessing Officer to make reassessment even after the expiry of four years from the end of the relevant assessment year but within six years from the relevant assessment year, if the income chargeable to tax has escaped assessment under the following circumstances, viz., a. Failure of the assessee to make a return under Section 139 of the Act. b. Does not make a return in response to a notice issued under Sub-Section (1) to Section 142 or Section 148 of the Act. c. Failure of the assessee to disclose fully and truly all material facts necessary for assessment. In the present case, admittedly, the extended period of six years is being invoked not under clause (a) or (b) set-out above but only in view of clause 15/51 W.P.(MD)No.8010 of 2022(c) i.e., failure to disclose fully and truly all material facts necessary for assessment. The jurisdictional fact to invoke the extended period is failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Existence of ''jurisdictional fact'' is a sine qua non for the exercise of power. Absent the jurisdictional fact the proceedings would stand vitiated. In this regard, it may be relevant to refer to the judgment of the Hon'ble Supreme Court in the case of Arun Kumar v. Union of India reported in (2007) 1 SCC 732, whichreads as under: In the present case, admittedly, the extended period of six years is being invoked not under clause (a) or (b) set-out above but only in view of clause 15/51 W.P.(MD)No.8010 of 2022(c) i.e., failure to disclose fully and truly all material facts necessary for assessment. The jurisdictional fact to invoke the extended period is failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. Existence of ''jurisdictional fact'' is a sine qua non for the exercise of power. Absent the jurisdictional fact the proceedings would stand vitiated. In this regard, it may be relevant to refer to the judgment of the Hon'ble Supreme Court in the case of Arun Kumar v. Union of India reported in (2007) 1 SCC 732, whichreads as under: ''74. A “jurisdictional fact” is a fact which must existbefore a court, tribunal or an authority assumes jurisdiction overa particular matter. A jurisdictional fact is one on existence ornon-existence of which depends jurisdiction of a court, a tribunalor an authority. It is the fact upon which an administrative'agencys power to act depends. If the jurisdictional fact does notexist, the court, authority or officer cannot act. If a court orauthority wrongly assumes the existence of such fact, the ordercan be questioned by a writ of certiorari.The underlying principle is that by erroneously assuming existence of such jurisdictional fact, no authority can confer upon itself jurisdiction which it otherwise does not possess.'' 75. In Halsbury's Laws of England, it has been stated: “Where the jurisdiction of a tribunal is dependent on the existence of a particular state of affairs, that state of affairs may 16/51 W.P.(MD)No.8010 of 2022be described as preliminary to, or collateral to the merits of, the issue. If, at the inception of an inquiry by an inferior tribunal, a challenge is made to its jurisdiction, the tribunal has to make up its mind whether to act or not and can give a ruling on the preliminary or collateral issue; but that ruling is not conclusive.” 76. The existence of jurisdictional fact is thus sine qua nonor condition precedent for the exercise of power by a court of"limited jurisdiction. (emphasis supplied) The Hon'ble Supreme Court in the case of Arun Kumar,thereafter proceeded to rely upon the decision in the case of White & Collins vs. Minister of Health reported in (1939) 2 BK 838 and observed as under: “80. The Court relied upon a decision in White & Collins v.Minister of Health [(1939) 2 KB 838 : 108 LJ KB 768 : (1939) 3 All ER 548 (CA) sub nom Ripon (Highfield) Housing Order, 1938, Re] wherein a question debated was whether the court had jurisdiction to review the finding of administrative authority on a question of fact. The relevant Act enabled the local authority to acquire land compulsorily for housing of working classes. But it was expressly provided that no land could be acquired which at the date of compulsory purchase formed part of park, garden or pleasure ground. An order of compulsory purchase was made which was challenged by the owner contending that the land was 17/51 W.P.(MD)No.8010 of 2022 a part of park. The Minister directed public inquiry and on the basis of the report submitted, confirmed the order. 81.Interfering with the finding of the Minister and setting aside the order, the Court of Appeal stated; "The first and the most important matter to bear in mind is thatthe jurisdiction to make the order is dependent on a finding offact; for, unless the land can be held not to be part of a park ornot to be required for amenity or convenience, there is nojurisdiction in the borough council to make, or in the Minister toconfirm, the order.''� (emphasis supplied) 7. Keeping in mind the significance of existence of jurisdictional fact for 17/51 W.P.(MD)No.8010 of 2022 a part of park. The Minister directed public inquiry and on the basis of the report submitted, confirmed the order. 81.Interfering with the finding of the Minister and setting aside the order, the Court of Appeal stated; "The first and the most important matter to bear in mind is thatthe jurisdiction to make the order is dependent on a finding offact; for, unless the land can be held not to be part of a park ornot to be required for amenity or convenience, there is nojurisdiction in the borough council to make, or in the Minister toconfirm, the order.''� (emphasis supplied) 7. Keeping in mind the significance of existence of jurisdictional fact for the validity of any proceeding, it may be relevant to refer to the following judgments, wherein while dealing with Section 147 of the Income Tax Act, it was held that failure to render a finding as to the existence of the above circumstance viz., failure to disclose fully and truly all material facts, while invoking the extended period in terms of the proviso to Section 147 of the Act would vitiate the entire proceedings. 18/51 a) Duli Chand Singhania vs ACIT (269 ITR 192) (Punjab and Haryana High Court): ...that the reasons recorded for issue of notice showed that the satisfaction recorded therein wes merely about the escapement of income. There was not even a whisper of an allegation that such escapement had occurred by reason of failure on the part of the 19/51 W.P.(MD)No.8010 of 2022 assessee to disclose fully and truly all the material facts necessary for his assessment. Absence of this finding which is a "sine qua non" for assuming jurisdiction under section 147 of the Act in a case falling under the proviso thereto, made the action taken by the Assessing Officer wholly without jurisdiction. The notice was not valid and was liable to be quashed. " (Emphasis Supplied) b) Commissioner of Income Tax vs. Eigi Ultra industries Ltd. (296 ITR 573): "...the reopening of the assessment under s. 148 beyond the period of four years at the end of the relevant assessment year can be sustained only if it is established that there is a failure on the part of the assessee to disclose fully and truly all material facts. in this case there is no finding that there is failure on the part of the assessee to disclose fully and truly all material facts". (Emphasis supplied) c) Commissioner of Income-Tax v. Premier Mills Ltd., 2007 SCC OnLine Mad 1058 : (2008) 296 ITR 157 at page 160: "6. In case where the assessment is completed under section 143(3) of the Income-tax Act, the reopening of the assessment undersection 148 beyond the period of four years at the end of the relevantassessment year can be sustained only if it is established that there is afailure on the part of the assessee to disclose fully and truly allmaterial facts. In this case there is no finding that there is failure on thepart of the assessee to disclose fully and truly all material facts. Further, all the material facts are available at the time of making original assessment. The Tribunal has correctly followed the principles enunciated in the Supreme Court judgment reported in CIT v. Foramer France, [2003] 264 ITR 566, as well as this court judgment reported in the case of CIT v. Elgi Finance Ltd., [2006] 286 ITR 674 and came to the correct conclusion." (emphasis supplied) d) Commissioner of Income-Tax v. A.V. Thomas Exports Ltd., 2007 SCC OnLine Mad 1078 : (2008) 296 ITR 603 : (2007) 212 CTR 164 at page 606 "6. The Tribunal has applied the correct principle of law and held as follows: But whether recourse to section 147 could be made beyond four years is the real question in the present appeal. Circumstances for extending limitation beyond four years do not exist in the facts of the present case. As such on the ground of limitation assumption of jurisdiction W.P.(MD)No.8010 of 2022 (emphasis supplied) d) Commissioner of Income-Tax v. A.V. Thomas Exports Ltd., 2007 SCC OnLine Mad 1078 : (2008) 296 ITR 603 : (2007) 212 CTR 164 at page 606 "6. The Tribunal has applied the correct principle of law and held as follows: But whether recourse to section 147 could be made beyond four years is the real question in the present appeal. Circumstances for extending limitation beyond four years do not exist in the facts of the present case. As such on the ground of limitation assumption of jurisdiction W.P.(MD)No.8010 of 2022 under section 147 is bad. In the case of CIT v. Foramer France, [2003] 264 ITR 566 (SC), it was held that if there is no failure to file return or to disclose fully and truly all material facts, issuance of notice beyond the period of four years is barred by limitation. In the case of CIT v. Annamalai Finance Ltd., [2005] 275 ITR 451 (Mad) 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. It is incumbent on the Assessing Officer to provethat there was a failure to disclose material facts necessary for theassessment for the issuance of notice beyond the period of four years." (emphasis supplied) e) Caprihans India Ltd. v. Tarun Seem, Deputy Commissioner of Income-Tax, 2003 SCC OnLine Bom 692 : (2004) 266 ITR 566 : (2003) 6 Bom CR 559 : (2003) 185 CTR 157 at page 569 "8.The Assessing Officer seeks to reopen the assessment after a period of four years from the end of the assessment year and in view of the judgment of this court in the case ofIPCA Laboratories Ltd.v.Gajanand Meena, Deputy CIT (No. 2)[2001] 251 ITR 416, the Assessing Officer cannot act in the matter of reopening of assessment beyond four years, unless he has reason to believe that income has escaped assessment by reason of the failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. He submitted that a bare reading of the reasons shows that reopening is sought to be effected only on the basis of the case records. He submitted that on two out of three points mentioned in the reasons, the Assessing Officer merely states “that the issue needs to be looked into”. That, on those two issues regarding subsidy and provident fund being disallowed, the Assessing Officer does not even say that there is escapement of income from assessment. He therefore submits that the proviso to section 147 is not attracted. That, on the said two points, there is nothing to indicate escapement of income. That, on the said two points, there isnothing to indicate failure on the part of the assessee to disclose fully and trulyall material facts.That, on these two points, there is nothing to show as to on what basis the Assessing Officer has formed his belief regarding escapement of income from assessment. It is submitted that on the face of the given reasons, there is a total non-application of mind on the part of the Assessing Officer. (emphasis supplied) The above position is reiterated by a judgment of the Division Bench of this Court in the case of Durr India Private Limited vs. Principal Commissioner of Income Tax and others in W.A.Nos.1081 and 1083 of 2021 20/51 dated 29.08.2022. W.P.(MD)No.8010 of 2022 8.1. The impugned proceedings invoking Section 147 read with Section 148 of the Act, under challenge suffers from the infirmity of not rendering any finding of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. This would be evident from a perusal of the following proceedings relating to the impugned proceeding for reassessment viz., i) Notice under Section 148 of the Act dated 21.08.2015. ii) Reason for reassessment dated 18.02.2016. iii) Notice under sub-section (1) to Section 142 of the Act dated 12.11.2021. iv) Show cause notice under Section 147 of the Act dated 16.12.2021.v) Order of assessment dated 20.12.2021. dated 29.08.2022. W.P.(MD)No.8010 of 2022 8.1. The impugned proceedings invoking Section 147 read with Section 148 of the Act, under challenge suffers from the infirmity of not rendering any finding of failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment. This would be evident from a perusal of the following proceedings relating to the impugned proceeding for reassessment viz., i) Notice under Section 148 of the Act dated 21.08.2015. ii) Reason for reassessment dated 18.02.2016. iii) Notice under sub-section (1) to Section 142 of the Act dated 12.11.2021. iv) Show cause notice under Section 147 of the Act dated 16.12.2021.v) Order of assessment dated 20.12.2021. vi) Impugned proceedings rejecting the petitioner's rejection in response to the reasons provided for reassessment dated 20.04.2022. vii) The show cause notice dated 20.04.2022 issued consequent to the rejection of the objection of the petitioner. 21/51 W.P.(MD)No.8010 of 20228.2. In none of the above proceedings is there any finding that the assessee has failed to disclose fully and truly all material facts necessary for assessment. The above being a jurisdictional fact which would enable the assessing authority to invoke the extended period of limitation, failure to render a finding as to the existence of the above jurisdictional fact renders the impugned proceedings bad for want of jurisdiction and thus cannot be sustained. b. Re-assessment on mere change of opinion – Impermissible: It is trite law that the power to assess the escaped income under Section 147 of the Act, though stands broadened/expanded over the years through periodical amendments, one feature which has remained constant/unchanged and prevailed during the relevant assessment year is the limitation on the power to reassess on a mere change of opinion. Keeping the above position in mind, I find that the question as to whether the property/ land in issue is agricultural land or land which would attract capital gains tax has been considered by the assessing officer on two earlier occasions before the impugned proceedings for reassessment was initiated. To appreciate the same it may be relevant to refer to the earlier proceedings in relation to the orders of assessments dated 24.12.2009, 22/51 https://www.mhc.tn.gov.in/judis W.P.(MD)No.8010 of 202223.12.2011 and the impugned proceedings from its commencement until the impugned order. –I. Order of Assessment under Section 143 (3) of the Act Passedafter raising queries on the nature of the land: The issue whether the subject land is agricultural land was examined even prior to the order of assessment under Section 143 (3) of the Act, dated 24.12.2009. A query was raised vide letters dated 02.11.2009 and 13.11.2009 as to whether the land was agricultural land, to which the petitioner responded vide letter dated 07.12.2009, relying upon relevant documents. The orders of assessment was made under Section 143(3) of the Act dated 24.12.2009, subsequent thereto, where there is no reference to the issue of sale of land attracting capital gains tax. The relevant portions of the proceeding are extracted below: a. Letter by the petitioner to the Respondent dated 02.11.2009wherein reference is made to the sale of the land in question, the relevantportion of the letter reads as under: "6. The assessee has sold her agricultural lands at Thaiyur Village, Kanchipuram District of 4.12 acres for a sum of Rs.4,73,80,000/- on 16.10.2007 and the payment was received by Cheque." 23/51 b. Communication dated 13.11.2009 issued by the Respondent calling for details / evidence to show that the land is agricultural land as could be seen from the following extract: "Assessment year 2008-09: It is seen from the records that you have sold a property at Thaiyur Village, Chengalpattu Taluk, Kancheepuram District, measuring 4.12 acres out of a. Letter by the petitioner to the Respondent dated 02.11.2009wherein reference is made to the sale of the land in question, the relevantportion of the letter reads as under: "6. The assessee has sold her agricultural lands at Thaiyur Village, Kanchipuram District of 4.12 acres for a sum of Rs.4,73,80,000/- on 16.10.2007 and the payment was received by Cheque." 23/51 b. Communication dated 13.11.2009 issued by the Respondent calling for details / evidence to show that the land is agricultural land as could be seen from the following extract: "Assessment year 2008-09: It is seen from the records that you have sold a property at Thaiyur Village, Chengalpattu Taluk, Kancheepuram District, measuring 4.12 acres out of for a consideration of Rs.4,73,80,000/-. You have claimed that this isan agricultural land and hence not offered any Capital Gains overthe sale of the said land. Please furnish evidence to claim that this land is agriculturaland not being a land situate, a) In any area which is comprised within the jurisdiction of a municipality (whether known as a municipality, municipal 24/51 W.P.(MD)No.8010 of 2022corporation, notified area committee, town area committee, town committee, or by any other name) or a cantonment board and which has a population of not less than ten thousand according to the last proceeding census of which the relevant figures have been published before the first day of the previous year; or b) In any area within such distance, not being more than eight kilometres, from the local limits of any municipality or cantonment board referred to in item (a), as the Central Government may, having regard to the extent of, and scope for, urbanisation of that area and other relevant considerations, specify in this behalf by notification in the Official Gazette." c. Response of the assessee dated 07.12.2009: "In this regard, the assessee submits that the agricultural land is situated beyond the municipal limit and population is also less than 10000. Further, the area is not notified by the Central Government. In support of the above claim the assessee enclosesherewith copy of the chitta and adangal issued by VillageAdministrative Officer and endorsed by Tahsildar, Chengalput Talukto prove that they are agricultural lands. The assessee also enclosescertificate issued by Village Administrative Office with regard tototal population. The assessee submits that the agricultural lands issituated beyond the limit of Municipality or municipal corporation,town area or cantonment board. It is situated 23 kms away fromThiruporur Panchayat in route of Thiruporur to Kancheepuram. Hence, the assessee submits that the profit on sale of 25/51 W.P.(MD)No.8010 of 2022 d. Extracts from assessment order under Section 143(3) of the Actdated 24.12.2009: After the enquiry with regard to the nature of the land viz., whether it is agricultural land, the order of assessment is passed after the petitioner had submitted his reply responding to the said query, the order of assessment dated 24.12.2009 was passed. "In this group case, search under Section 132 wasconducted on 29.08.2007. The assessee is the wife of Shri M.V.Maruthachalam and the assessee's residence was covered under Section 132 on 29.08.2007. In response to this office notice under Section 153 C dated 13.01.2009, the assessee has filed her return of Income for the assessment year 2008-09 on 22.09.2008 admitting the total income of Rs.17,49,630/-. The return was processed and the questionnaire dated 05.10.2009. Notice under Section 143(2) was served on the assessee on 29.09.2009. In response to the Notice, the Assessee's representative Shri V.Jayaraman, F.C.A., appeared on various dates. After discussing with him, the income returned by the assessee is accepted and assessment completed accordingly." 8.3. The assessment having been completed after raising queries 26/51 8.3. The assessment having been completed after raising queries 26/51 W.P.(MD)No.8010 of 2022relating to the nature of the land sold viz., whether agricultural land or otherwise and the petitioner having responded to it and the orders of assesssment having been made without any additions, the same is indicative of the fact that the Assessing officer applied his mind and dropped the proposal. Once a query is raised during the assessment proceedings and an assessee submits its reply/responds to it and assessments are completed thereafter, it follows that the said issue has been considered by the Assessing Officer. Mere fact that the assessment order may not contain reference / discussion with regard to the same would not dilute or take away the fact that the issue was in fact examined and decided upon by the assessing officer. It is not necessary that an assessment order should contain reference and / or discussion to disclose its satisfaction in respect of the query raised. Thus, a revisit/reassessment on such issues would constitute change of opinion which is impermissible. In this regard, it may be relevant to refer to the following decisions: a)CIT vs. Usha International Limited [2012] 25 taxmann.com 200(Delhi (FB): The Full Bench of the Hon'ble Delhi High Court had held that ''reassessment proceedings will be invalid in case an issue or query is27/51 W.P.(MD)No.8010 of 2022 raised and answered by assessee in original assessment proceedings and the assessing officer does not make any addition in the assessment order." b)Aroni Commercials Ltd., vs. Deputy Commissioner of Income-Tax and Another reported in [2014] 362 ITR 403 (Bom): 16. Be that as it may, even if one examines the audit report dated September 29, 2011, from the internal audit department, it would be noticed that the basis of the audit report is the interpretation/inference drawn by the auditors from the accounts submitted by the petitioner to the Department during the course of its assessment proceedings. The r