M/S.cognizant Technology Solutions India P. Ltd.,6[Th] Floor, New v. The Deputy Commissioner Of Income Tax, Large Taxpayer Unit

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 10.08.2021 CORAM THE HONOURABLE MR.JUSTICE S.M.SUBRAMANIAM W.P.No.31962 of 2017andW.M.P.No.35112 of 2017 M/s.Cognizant Technology Solutions India P. Ltd.,6[th] Floor, New No.165/Old No.110,Menon Eternity Building,St.Mary's Road,Chennai – 600 018. ...Petitioner Vs 1. The Deputy Commissioner of Income Tax, Large Taxpayer Unit, 1775, Jawaharlal Nehru Inner Ring Road, Anna Nagar Western Extension, Chennai – 600 101 (Now at 7[th] Floor, Wanaparthy Block, Aayakar Bhavan, Chennai – 600 034. 2. The Joint Commissioner of Income Tax, Large Taxpayer Unit, 1775, Jawaharlal Nehru Inner Ring Road, Anna Nagar Western Extension, Chennai – 600 101 (Now at 7[th] Floor, Wanaparthy Block, Aayakar Bhavan, Chennai – 600 034. ... Respondents PRAYER : Writ Petition filed Under Article226 of theConstitution of India to issue of Writ of Certiorari, callingfor the records of the 1st respondent pertaining to the reopeningnotice bearing No.PAN: /2011-12 dated 28.03.2016 forthe Assessment Year 2011-12 and consequential order bearing No.PAN: dated 25.10.2017 issued by the 1st respondentherein and quash the same. For Petitioner: Mr.Srinath Sridevan https://hcservices.ecourts.gov.in/hcservices/ For Respondents : Mr.A.P.SrinivasSenior Standing counsel[For Income Tax] O R D E R The writ on hand is instituted, questioning the legalvalidity of the notice issued under Section 148 of the IncomeTax Act, 1961 [hereinafter referred to as the 'Act'] to thepetitioner and also the order, disposing of the objections filedby the writ petitioner in proceedings dated 25.10.2017. 2. The petitioner is a Private Limited company engaged inthe business of development of computer software and relatedservices and its export. It provides various software solutionsto a variety of industries. The petitioner carried out thebusiness activities through various units set up in SoftwareTechnology Parks (STPs) and Special Economic Zones (SEZ's) andclaims deduction under Section 10A and 10AA of the Act. CertainSEZ Units of the petitioner had incurred losses, which were set-off against other taxable income of the petitioner. 3. The petitioner had filed its return of income for theAssessment Year 2011-12 on 30.11.2011, which was subsequentlyrevised on 28.03.2013. The return of income was processed underSection 143(1) of the Act on 06.07.2012. The case of thepetitioner was selected for scrutiny under Section 143(2) of theAct on 02.08.2012 and details were called for by the respondentsunder Section 142(1) of the Act on 24.09.2014 and 08.01.2015.Detailed submissions were made by the petitioner before theAssessing Officer from time to time. The case of the petitionerwas referred to the Transfer Pricing Officer for necessaryverification under Section 92CA of the Act, as the petitionerhad international transactions with its group companies abroad.The Transfer Pricing Officer accepted the arm's length price ofthe international transactions entered into by the petitionercompany for the subject year. Consequently, no Transfer Pricingadjustments were made by the second respondent. The secondrespondent thereafter took up the case of the petitioner forassessment and an assessment order was passed on 26.03.2015under Section 143(3) read with Section 92CA of the Act for theAssessment Year 2011-12. 4. Suddenly, the first respondent issued a notice dated28.03.2016 under Section 148 of the Act to initiate proceedingsfor reassessment under Section 147 of the Act. The petitionerresponded to the notice requested for reasons, which werefurnished by the Assessing authority. Detailed objections weresubmitted by the petitioner regarding the reasons furnished and the said objections were also disposed of by the Assessingauthority. Challenging the said disposal of objections, thepetitioner is constrained to move the present writ petition. 4. Suddenly, the first respondent issued a notice dated28.03.2016 under Section 148 of the Act to initiate proceedingsfor reassessment under Section 147 of the Act. The petitionerresponded to the notice requested for reasons, which werefurnished by the Assessing authority. Detailed objections weresubmitted by the petitioner regarding the reasons furnished and the said objections were also disposed of by the Assessingauthority. Challenging the said disposal of objections, thepetitioner is constrained to move the present writ petition. 5. The learned counsel appearing on behalf of the writpetitioner mainly raised three grounds, stating that there isabsolutely no application of mind on the part of the Assessingauthority, while initiating reopening proceedings under Section147 of the Act. Secondly, the materials relied upon includingthe Audit party objection for the purpose of reopening ofassessment, is nothing but change of opinion. Thirdly, the auditobjection perse cannot be a reason for reopening of assessment.In the present case, the audit objection verbatim is taken intoconsideration for the purpose of reopening of assessment, whichamounts to non-application of mind and further, impermissibleunder the provisions of the Act. Thus, the jurisdictional noticeissued under Section 148 of the Act is untenable. 6. To substantiate the said grounds, the learned counselfor the petitioner drawn the attention of this Court withreference to the notice issued under Section 141(1) of the Actand the details regarding the scrutiny assessment proceedings inthe case of the petitioner assessee. 7. In respect of deduction claimed under Section 10A and10AA of the Act for the Assessment Year 2011-12, the Assessingauthority sought for details from the petitioner in proceedingsdated 24.09.2014. In the said letter, there is a specific queryon the point that in earlier Assessment Year(s), loss of 10A /10AA units were not allowed to be set off against profits ofother units. Show cause why similar stand should not be takenfor the year under consideration. In Sl.No.14, anotherclarification is sought for, which the petitioner to provide thedetails of current year losses in connection with all STPI andSEZ units of Cognizant Technology Solutions India PrivateLimited. When the details are called for in respect of thedisallowances and lossess in connection with STPI and SEZ unitsof the petitioner and the petitioner has submitted details aswell as the relevant documents and the Assessing Officer hadtaken note of all the details during the scrutiny proceedingsand passed the final assessment order on merits and inaccordance with law on 26.03.2015. While so, the very samematerial as well as the questions raised is relied on for thepurpose of reopening of assessment under Section 147/148 of theAct and therefore, the very initiation amounts to change ofopinion. It is contended that the assessment order also speaksabout all these details and further, out of 10 units, except 1Unit at Pune, all other units had incurred loss. Therefore, forthe Unit at Pune, Section 10A is to be considered and in respectof other units incurred losses, Section 10AA is to be taken into consideration for disallowance of loss for the computation oftotal income. 8. The learned counsel for the petitioner relied on theassessment order originally passed and the issues decided by theAssessing authority and contended that the initiation ofreopening proceedings establishes total non-application of mindon the part of the respondents and the materials relied upon ischange of opinion. Further, audit objections perse cannot be asource for reopening of assessment as the Assessing authorityhas not pulled out any new materials from and out of the saidaudit objections relied on for the purpose of reopening ofassessment. consideration for disallowance of loss for the computation oftotal income. 8. The learned counsel for the petitioner relied on theassessment order originally passed and the issues decided by theAssessing authority and contended that the initiation ofreopening proceedings establishes total non-application of mindon the part of the respondents and the materials relied upon ischange of opinion. Further, audit objections perse cannot be asource for reopening of assessment as the Assessing authorityhas not pulled out any new materials from and out of the saidaudit objections relied on for the purpose of reopening ofassessment. 9. The reasons furnished in proceedings dated 14.07.2016 aswell as the objections submitted by the petitioner on issuebasis are relied upon. The disposal of objection is questionedby the petitioner on the ground that the last, but one paragraphitself would show that the authority has not applied their mind,while considering the objections. There is no independentopinion formed by the respondents for the purpose of reopeningof assessment. They have extracted the objections and has statedsimply that the income chargeable to tax has escaped assessmentand therefore, the reopening proceedings are to be continued. Inthe absence of any independent opinion for reopening ofassessment, the proceedings itself is untenable as the mandatoryrequirements contemplated under Section 147 of the Act is to becomplied with. In the present case, the pre-requisite conditioncontemplated has not been complied with by the respondents.Contrarily, they have relied upon the audit objections andfurther, the materials already adjudicated and considered by theAssessing Officer at the time of passing the original assessmentorder and reopened the assessment and therefore, the exercise inentirety is bad in law. 10. In support of the contentions, the learned counsel forthe petitioners relied on the judgments in the case of IncomeTax Officer Vs. Techspan India Private Limited and another,reported in (2018) 6 SCC 685, wherein it is held as follows:“14. The language of Section 147 makes it clearthat the assessing officer certainly has the power toreassess any income which escaped assessment for anyassessment year subject to the provisions of Sections148 to 153. However, the use of this power isconditional upon the fact that the assessing officerhas some reason to believe that the income has escapedassessment. The use of the words “reason to believe” inSection 147 has to be interpreted schematically as theliberal interpretation of the word would have theconsequence of conferring arbitrary powers on the assessing officer who may even initiate suchreassessment proceedings merely on his change ofopinion on the basis of same facts and circumstanceswhich has already been considered by him during theoriginal assessment proceedings. Such could not be theintention of the legislature. The said provision wasincorporated in the scheme of the IT Act so as toempower the assessing authorities to reassess anyincome on the ground which was not brought on recordduring the original proceedings and escaped hisknowledge; and the said fact would have materialbearing on the outcome of the relevant assessmentorder. 15. Section 147 of the IT Act does not allow thereassessment of an income merely because of the factthat the assessing officer has a change of opinion withregard to the interpretation of law differently on thefacts that were well within his knowledge even at thetime of assessment. Doing so would have the effect ofgiving the assessing officer the power of review andSection 147 confers the power to reassess and not thepower to review. 15. Section 147 of the IT Act does not allow thereassessment of an income merely because of the factthat the assessing officer has a change of opinion withregard to the interpretation of law differently on thefacts that were well within his knowledge even at thetime of assessment. Doing so would have the effect ofgiving the assessing officer the power of review andSection 147 confers the power to reassess and not thepower to review. 16. To check whether it is a case of change ofopinion or not one has to see its meaning in literal aswell as legal terms. The words “change of opinion”imply formulation of opinion and then a change thereof.In terms of assessment proceedings, it meansformulation of belief by an assessing officer resultingfrom what he thinks on a particular question. It is aresult of understanding, experience and reflection.” (b) In the case of Cholamandalam Investment and FinanceCompany Limited Vs. Assistant Commissioner of Income Tax, theHon'ble High Court of Madras passed an order on 12.12.2017 inW.P.No.19375 of 2017, wherein the following observations aremade: “4.The impugned re-opening proceedings is on thebasis of an audit objection, which was communicated tothe Department. On receipt of the audit objection, theCentral Board of Direct Taxes vide letter dated10.06.2015, addressed the Director (RA), office of theC&AG of India, New Delhi, stating that the auditobjection made by their Department has not beenaccepted by the Ministry (Ministry of Finance) for thereasons given in Annexure-A to the said letter dated10.06.2015. The Annexure-A is a note submitted by theassessing officer of the petitioner. In the saidAnnexure, the assessing officer has clearly stated asto how the claim of the Revenue audit that Rs.323.53crore was to be treated as a revenue receipt is not correct and unacceptable. Thus, the matter should havebeen allowed to rest at that stage, but however, theassessing officer thought fit to issue the impugnednotice under Section 148 of the Act. The petitionersought for reasons for re-opening vide letter dated03.03.2017. On such request, the assessing officerfurnished the reasons for reopening vide communicationdated 10.03.2017. 5.What is interesting to note is that the reasonsfor reopening is verbatim repetition of the auditobjections filed by the audit party. This position wasclearly demonstrated by the learned counsel for thepetitioner by comparing the audit objection and thereasons for re-opening. Thus, it is clear that theassessing officer did not have any independent materialto re-open the assessment, but merely proceeded to re-open the assessment on the ground that there was anaudit objection. Thus, two issues arise forconsideration. Firstly, whether the re-openingproceedings have been made solely based upon the auditobjection. Secondly, when CBDT had taken a stand thatthey do not accept the audit objection whether therespondent could proceed to initiate re-openingproceedings.” (c) In the case of Principal Commissioner of Income Tax Vs.K.R.Jayaram, reported in 2020 SCC Online Mad 1511, the Hon'bleHigh Court of Madras made the following observations: (c) In the case of Principal Commissioner of Income Tax Vs.K.R.Jayaram, reported in 2020 SCC Online Mad 1511, the Hon'bleHigh Court of Madras made the following observations: “26. It would be worthwhile to remind ourselvesabout the decision of the Hon'ble Supreme Court in thecase of Calcutta Discount Co., Ltd., vs. ITO [1961] 41ITR 191 (SC), wherein the Hon'ble Supreme Court heldthat the duty of the assessee is to make full and truedisclosure of all primary facts and once it is done, itis for the Assessing Authority to decide what inferenceof fact or law could be drawn there from. The law doesnot require the assessee to state the conclusion thatcould reasonably be drawn from the primary facts and ifthere were, in fact, some reasonable grounds forthinking that there had been any non-disclosure asregards any primary facts, which could have a materialbearing on the question of “under assessment”, thatwould be sufficient to give jurisdiction to the ITO toissue notices under Section 34 (1922 Act) and whetherthese grounds are adequate or not for arriving at aconclusion that there was a non-disclosure of materialfacts could not be opened for the Court'sinvestigation.” (d) In the case of M/s.Seshasayee Paper & Boards Limited Vs. Commissioner of Income Tax, the Hon'ble Division Bench ofthis Court delivered a judgment on 21.12.2020 in W.A.Nos.1632,1633 & 1635 of 2019 and the paragraph relied on by thepetitioner is as follows: “36. In the decision of this Court in the case ofFenner (India) Ltd., it was pointed out that the dutyof an assessee is limited to fully and truly discloseall material and he is not required to prepare a draftassessment order. We find that the assessee disclosedall relevant facts and the Assessing Officer consideredthem and after the search, which was conducted on08.7.1996, the block assessment was framed, which wasultimately set aside. Parallelly, the regular scrutinyassessments were done under Section 143(3) of the Actand thereafter the CIT exercised his power underSection 263 of the Act and passed an order, which wasalso set aside. 37. Therefore, the material, which was alreadyplaced on record, and considered in earlier two roundsof litigation can hardly be a reason to reopen theassessment and all that we can say is that the attemptof the Department is to reopen a settled issue solelybased upon change of opinion. The Department is silentand has not disclosed as to what is the tangiblematerial, which is now available with them more thanthose that were available with the Department in theearlier two rounds of litigation. Therefore, we cansafely hold that what the Department seeks to do is notto reopen the assessment, but to review the earlierorders, which had attained finality. That apart, thetax case appeals filed by the assessee having beenallowed by judgment dated 03.12.2013, the decision isbinding upon the Department and the same reasons, forwhich, the CIT exercised his power under Section 263 ofthe Act, cannot be used for issuing the notices forreopening.” 11. Relying on the above judgments, the learned counsel forthe petitioner reiterated that the case on hand and its factssquarely falls under the principles laid down in the abovejudgments and the writ petition is to be allowed. 12. The learned Senior Standing counsel appearing on behalfof the respondents opposed the contentions raised by thepetitioners by stating that the case of the petitioner is aregular case, where the authority has 'reason to believe' forreopening of assessment and by following the procedures, thereopening proceedings are progressed. Thus, there is noirregularity or illegality in reopening the assessmentproceedings and the grounds raised by the petitioners in their objections are considered by the authority competent and reasonsare also furnished. 12. The learned Senior Standing counsel appearing on behalfof the respondents opposed the contentions raised by thepetitioners by stating that the case of the petitioner is aregular case, where the authority has 'reason to believe' forreopening of assessment and by following the procedures, thereopening proceedings are progressed. Thus, there is noirregularity or illegality in reopening the assessmentproceedings and the grounds raised by the petitioners in their objections are considered by the authority competent and reasonsare also furnished. 13. The learned Senior Standing counsel contended that, ifthe Assessing Officer has 'reason to believe' that the incomechargeable to tax has escaped assessment, such reason would besufficient for the purpose of initiation of proceedings underSection 147/148 of the Act. In the present case, the reasonsfurnished are independent and cannot be construed as verbatim ofthe audit objections. The Assessing Officer could able to traceout certain reasons for reopening of assessment and such reasonsare formulated independently by considering the informations andmaterials made available. The audit objections undoubtedly maybe a source for reopening of assessment. However, therequirement would be that the Assessing Officer must have'reason to believe' that the income chargeable to tax hasescaped assessment. In the present case, the reasons arefurnished to the petitioner, which would reveal that theauthority has taken an independent decision for reopening ofassessment. The reasons furnished perse reveals that theinformation gathered by the Assessing Officer recorded in thefirst four lines and thereafter, findings of the AssessingOfficer is recorded and finally, the effect and consequences andthe implications under the provisions of the Act was alsoconsidered. Thus, there is a definite 'reason to believe' forthe purpose of reopening of assessment by the competentauthority. Once the reasons furnished reveals that theinformations received by the Assessing Officer is considered andhe could able to give a finding, which is to be construed as newmaterial and the effect and consequences under the Act finallyand if these three are satisfied, then the reopening is to beheld as valid and rest of the grounds raised are to beadjudicated during the course of the proceedings. 14. The learned Senior Standing counsel emphasized that thecomplete adjudication of facts at the stage of reopening in awrit proceedings may not be proper and the assessee has to availthe opportunity and establish his case on merits before theAssessing Officer. Once the Assessing Officer has 'reason tobelieve', such reasons are within the ambit of Section 147 ofthe Act, then it is sufficient for the purpose of thecontinuance of reopening proceedings and rest of the grounds onmerits are to be adjudicated by the Assessing Officer during thecourse of proceedings for forming a final opinion and to passassessment / reassessment orders. 15. The objections submitted by the petitioner would revealthat they have not raised any vital grounds, except by statingthat the reasons are change of opinion and the audit objectionsverbatim relied upon and there is no application of mind on the part of the assessee. Such general grounds are raised commonly,and the petitioner has not substantiated the said grounds withsufficient materials. However, the Assessing Officer hasconsidered all such grounds independently and disposed of theobjections filed by the petitioner. What is required is theconsideration to be deliberated, while disposing of theobjections and not adjudication of the entire facts andevidences. Therefore, in the present case, the petitioner hasnot established any valid ground for the purpose of assailingthe reopening proceedings and thus, the writ petition is to berejected. part of the assessee. Such general grounds are raised commonly,and the petitioner has not substantiated the said grounds withsufficient materials. However, the Assessing Officer hasconsidered all such grounds independently and disposed of theobjections filed by the petitioner. What is required is theconsideration to be deliberated, while disposing of theobjections and not adjudication of the entire facts andevidences. Therefore, in the present case, the petitioner hasnot established any valid ground for the purpose of assailingthe reopening proceedings and thus, the writ petition is to berejected. 16. The learned Senior Standing counsel relied on the verysame judgments cited by the writ petitioner i.e., Techspan IndiaPrivate Limited (Cited supra), wherein in paragraph 13, theHon'ble Supreme Court made a finding is as follows: “13. To appreciate the present controversy betweenthe parties, it would be appropriate to refer toSections 147 and 148 of the IT Act. For readyreference, relevant portions of Sections 147 and 148 ofthe Act are reproduced below:“147. Income escaping assessment.— If the assessingofficer, has reason to believe that any incomechargeable to tax has escaped assessment for anyassessment year, he may, subject to the provisions ofSections 148 to 153, assess or reassess such income andalso any other income chargeable to tax which hasescaped assessment and which comes to his noticesubsequently in the course of the proceedings underthis section, or recompute the loss or the depreciationallowance or any other allowance, as the case may be,for the assessment year concerned (hereafter in thissection and in Sections 148 to 153 referred to as therelevant assessment year):Provided that where an assessment under sub-section (3)of Section 143 or this section has been made for therelevant assessment year, no action shall be takenunder this section after the expiry of four years fromthe end of the relevant assessment year, unless anyincome chargeable to tax has escaped assessment forsuch assessment year by reason of the failure on thepart of the assessee to make a return under Section 139or in response to a notice issued under sub-section (1)of Section 142 or Section 148 or to disclose fully andtruly all material facts necessary for his assessmentfor that assessment year:***148. Issue of notice where income has escapedassessment.—(1) Before making the assessment, reassessment or recomputation under Section 147, theassessing officer shall serve on the assessee a noticerequiring him to furnish within such period, as may bespecified in the notice, a return of his income or theincome of any other person in respect of which he isassessable under this Act during the previous yearcorresponding to the relevant assessment year, in theprescribed form and verified in the prescribed mannerand setting forth such other particulars as may beprescribed, and the provisions of this Act shall, sofar as may be, apply accordingly as if such return werea return required to be furnished under Section 139:*** (2) The assessing officer shall, before issuing anynotice under this section, record his reasons for doingso.” 17. Relying on the above judgment, the learned SeniorStanding counsel contended that the Income Tax officer mustdetermine for himself what is the effect and consequences of lawmentioned in the audit note and whether any consequences, whichis now comes to his notice and the income has escapedassessment. Therefore, the audit objection is also a ground forinitiation of reopening proceedings. What is required is thesatisfaction of the Assessing Officer and if he has 'reason tobelieve', then reopening is permissible. (2) The assessing officer shall, before issuing anynotice under this section, record his reasons for doingso.” 17. Relying on the above judgment, the learned SeniorStanding counsel contended that the Income Tax officer mustdetermine for himself what is the effect and consequences of lawmentioned in the audit note and whether any consequences, whichis now comes to his notice and the income has escapedassessment. Therefore, the audit objection is also a ground forinitiation of reopening proceedings. What is required is thesatisfaction of the Assessing Officer and if he has 'reason tobelieve', then reopening is permissible. 18. The learned Senior Standing counsel referred the caseof Raymond Woollen Mills Vs. Income Tax Officer, reported in[1999] 236 ITR 34 (SC), wherein the Hon'ble Supreme Court ofIndia made the following observations: “In this case, we do not have to give a finaldecision as to whether there is suppression of materialfacts by the assessee or not. We have only to seewhether there was prima facie some material on thebasis of which the Department could reopen the case.The sufficiency or correctness of the material is not athing to be considered at this stage. We are of theview that the court cannot strike down the reopening ofthe case in the facts of this case. It will be open tothe assessee to prove that the assumption of facts madein the notice was erroneous. The assessee may alsoprove that no new facts came to the knowledge of theIncome-tax Officer after completion of the assessmentproceeding. We are not expressing any opinion on themerits of the case. The questions of fact and law areleft open to be investigated and decided by theassessing authority. The appellant will be entitled totake all the points before the assessing authority. Theappeals are dismissed. There will be no order as to costs.” 19. Finally, in the case of Jayaram Paper Mills Limited Vs.Commissioner of Income Tax, Chennai, reported in [2010] 191Taxman 38 (Madras), the following observations are made:“25. Thus it is clear that the scope of thedeeming fiction which was found in Explanation 1 undersection 147, before its amendment, was enlarged in theform of Explanation 2, by the amendment under Act No. 4of 1988. The effect of this deeming fiction did notfall for consideration in any of the decisions thatarose even up to Sri Krishna Private Ltd.. Therefore,even while keeping in mind the elementary principleslaid down in the aforesaid decisions, we may have toapply them to the extent that they are now permissiblein view of Explanation 2. 27. In the light of the above deeming fiction, ifwe now look at the order dated August 31, 2009, passedby the second respondent, overruling the objections ofthe petitioner to the initiation of proceedings, it isseen that the petitioner admittedly earned incomesolely from interest on fixed deposits andintercorporate deposits and debited significant amountof expenditure. The Assessing Officer has taken astand, prima facie, that the expenditure debited to theprofit and loss account under various heads is notincidental to the earning of interest income. Thereforethe stand taken by the second respondent that he hasreason to believe that certain income chargeable to taxescaped assessment, cannot be said to be vague,irrational or devoid of any basis. 31. In any event, the petitioner is only at thethreshold. Once it is found that the Assessing Officerhad reason to believe that there was income escapingassessment, it is not open to this court to make aroving enquiry, since the reasons are not justiciable.All that can happen, by allowing the proceedings tocontinue, is that the Assessing Officer may pass anorder of assessment or reassessment. The petitionerwould then have a spate of statutory remedies.Therefore, the case on hand, in my opinion, is not onethat warrants interference at this stage.” 31. In any event, the petitioner is only at thethreshold. Once it is found that the Assessing Officerhad reason to believe that there was income escapingassessment, it is not open to this court to make aroving enquiry, since the reasons are not justiciable.All that can happen, by allowing the proceedings tocontinue, is that the Assessing Officer may pass anorder of assessment or reassessment. The petitionerwould then have a spate of statutory remedies.Therefore, the case on hand, in my opinion, is not onethat warrants interference at this stage.” 20. Relying on the above judgments, the learned SeniorStanding counsel is of an opinion that the case on hand is alsoa regular case of reopening of assessment based on the tangiblematerials available on record and therefore, the AssessingOfficer may be allowed to continue the proceedings and passassessment / reassessment orders by following the procedures ascontemplated. 21. Considering the arguments as advanced by the respectivelearned counsels appearing on behalf of the petitioner as wellas the learned Senior Standing counsel, this Court is of theconsidered opinion that the case on hand is a case, whereinreopening proceedings are initiated within a period of fouryears. Therefore, the conditions stipulated in Proviso Clause toSection 147 are not applicable. Thus, it is sufficient if theAssessing Officer has 'reason to believe' that any incomechargeable to tax has escaped assessment. However, whether theAssessing Officer has 'reason to believe' or the reasonsfurnished for reopening of assessment has no substance for thepurpose of continuance of reopening of proceedings are theconsideration to be shown in the present writ petition. 22. Let as now consider the reasons furnished for reopeningof assessment in proceedings dated 14.07.2016 and the reasonsare recorded as under: Reasons for Reopening “Perusal of the records revealed that as per sec.115JB(6), provisions of Sec.115JB will not apply to theincome from business carried on by an entrepreneur inan SEZ. Claiming deduction u/s 10AA or opting out ofbenefit of sec.10AA is not a criterion to enforce thissection. In line with the above sub-section, whilecomputing income u/w115JB, you have added back expensesrelated to some SEZ units and reduced the revenue fromsuch units. However expenses and revenue in relation tothe 9 SEZ units were not given similar treatment. Sinceloss incurred by these 9 units amount toRs.13,06,30,230, adding back of expenses incurred bythese 9 units and reducing revenue from such units willresult in income u/s.115JB going up by sum of13,06,30,230. Therefore, I have a reason to believe that Incomehas escaped assessment within the meaning of Sec.147 ofthe IT Act, 1961. The reasons for reopening the assessment as perthe records of this office were not provided verbatimto the assessee but the reasons communicated to theassessee vide letter dated 14.07.2016 didn't change thecontent or meaning of the reasons to believe formed bythe erstwhile officer. Thus, as the notice was issuedand the reasons for reopening were formed by theerstwhile officer there is no lack of 'reason tobelieve'. The successor is duty bound to continue theassessments initiated by his predecessors and thus theobjection of the assessee is rejected.” 23. The petitioner submitted their objections and theobjections were disposed of by the authority in proceedingsdated 25.10.2017. The reasons furnished would reveal thatperusal of the records revealed that as per Section 115JB(6),provisions of Sec.115JB will not apply to the income frombusiness carried on by an entrepreneur in an SEZ. Claimingdeduction u/s 10AA or opting out of benefit of sec.10AA is not acriterion to enforce this section. 23. The petitioner submitted their objections and theobjections were disposed of by the authority in proceedingsdated 25.10.2017. The reasons furnished would reveal thatperusal of the records revealed that as per Section 115JB(6),provisions of Sec.115JB will not apply to the income frombusiness carried on by an entrepreneur in an SEZ. Claimingdeduction u/s 10AA or opting out of benefit of sec.10AA is not acriterion to enforce this section. 24. Therefore, the Assessing Officer has considered theissue relating to the claiming of deduction under Section 10AAand based on the informations collected from the records, heforms an opinion that claiming of deduction under Section 10AAor opting out of benefit of Section 10AA is not a criterion toenforce this section. Further, he proceeds by stating that inline with the above sub-section, while computing incomeu/w115JB, the petitioner have added back expenses related tosome SEZ units and reduced the revenue from such units. 25. This exactly is the findings of the Assessing Officerwith reference to the informations collected for the purpose ofreopening. Thus, the informations are made available and basedon the informations, clear findings are also given. Thereafter,the Assessing Officer states that Since loss incurred by these 9units amount to Rs.13,06,30,230/- adding back of expensesincurred by these 9 units and reducing revenue from such unitswill result in income u/s.115JB going up by sum of13,06,30,230/-. The effect and consequences, which resultedincome chargeable to tax has escaped assessment is also recordedin the order, furnishing reasons. Thus, the three components aremade available in the reasons furnished for reopening ofassessment. Regarding the informations, an independent findingis recorded and thereafter, the effect and consequences of theincome escaped assessment was also taken into consideration forthe purpose of reopening of assessment. On these reasons, theAssessing Officer arrived a conclusion that he has 'reason tobelieve' that the income has escaped assessment and accordingly,issued notice under section 148 of the Act. 26. Regarding the objections submitted, no doubt thepetitioner has raised the ground of change of opinion and theaudit objections as well as the non-application of mind. Theobjections raised in this regard were also considered by theauthority, while disposing of the objections. The disposal ofthe objections would reveal that the reason for reopening ofassessment was considered and the petitioner's/assessee'sobjections, raising four grounds are specifically recorded andconsidered by the respondents in the impugned order, disposingof the objections. Thereafter, the impugned order, proceeds by stating that the ground taken by the assessee regarding changeof opinion is untenable. 26. Regarding the objections submitted, no doubt thepetitioner has raised the ground of change of opinion and theaudit objections as well as the non-application of mind. Theobjections raised in this regard were also considered by theauthority, while disposing of the objections. The disposal ofthe objections would reveal that the reason for reopening ofassessment was considered and the petitioner's/assessee'sobjections, raising four grounds are specifically recorded andconsidered by the respondents in the impugned order, disposingof the objections. Thereafter, the impugned order, proceeds by stating that the ground taken by the assessee regarding changeof opinion is untenable. 27. In this regard, a finding is given that at the time offinalizing the assessment under section 143(3) read with Section92CA on 26.03.2015, the then Assessing Officer had not formedany opinion on this issue leading to reassessment under Section147 and thus, it does not amount to change of opinion and alsoto review of the assessment already completed. The findings aregiven with reference to the reasons furnished for reopening ofassessment. Further, the findings in the order impugned proceedsby stating that it is clear that the reassessment ispermissible, when Assessing Officer did not form opinion on anyissue during first assessment and if any reason to believe isformed for escapement of income chargeable to tax that itself issufficient enough to initiate reassessment proceedings.Recording the findings, the respondents came to the conclusionthat the ground raised regarding change of opinion is untenable.Regarding the second ground raised by the petitioners,reassessment proceedings based on audit objections is bad inlaw, the objections are recorded and the respondents arrived aconclusion that the assessee's objection is carefullyconsidered, however, it is not accepted as the reopening wasinitiated on the basis of factual information and the same hadbeen communicated to the assessee vide letter dated 14.07.2016.In this regard, the Revenue relied on the judgment of theHon'ble Supreme Court of India in the case of CIT Vs. PVSBeedies P Ltd (SC), 237 ITR 3, wherein the Apex Court made thefollowing observations: “.............There can be no dispute that theaudit party is entitled to point out a factual error oromission in the assessment. Reopening of the case onthe basis of a factual error pointed out by the auditparty is permissible under law. In view of that we holdthat reopening of the case under Section 147(b) in thefacts of this case was on the basis of factualinformation given by the internal audit party and wasvalid in law. The judgment under appeal is set aside tothis extent.” 27a. Further, in the case of M/s.Larsen & Toubro LimitedVs. State of Jharkhand and Ors (SC), in Civil Appeal No.5390 of2007, the Hon'ble Supreme Court has held that: “...........The contention whether finding theinformation from the very facts that were alreadyavailable on record amounts to information for thepurpose of Section 19 of the State Act, it would be sufficient to refer to a judgment of this Court inAnandjiharidas & Co. vs. S.P. Kasture AIR 1968 SC 565wherein it was held that a fact which was already therein records doesn’t by its mere availability becomes anitem of “information” till the time it has been broughtto the notice of assessing authority. Hence, the auditobjections were well within the parameters of beingconstrued as ‘information’ for the purpose of section 19 of the State Act. “...........The contention whether finding theinformation from the very facts that were alreadyavailable on record amounts to information for thepurpose of Section 19 of the State Act, it would be sufficient to refer to a judgment of this Court inAnandjiharidas & Co. vs. S.P. Kasture AIR 1968 SC 565wherein it was held that a fact which was already therein records doesn’t by its mere availability becomes anitem of “information” till the time it has been broughtto the notice of assessing authority. Hence, the auditobjections were well within the parameters of beingconstrued as ‘information’ for the purpose of section 19 of the State Act. (27) The expression ‘information’ means instruction orknowledge derived from an external source concerningfacts or parties or as to law relating to and/or afterbearing on the assessment. We are of the clear viewthat on the basis of information received and if theassessing officer is satisfied that reasonable groundexists to believe, then in that case the power of theassessing authority extends to re-opening ofassessment, if for any reason, the whole or any part ofthe turnover of the business of the dealer has escapedassessment or has been under assessed and theassessmentinsuchacasewouldbevalid...............” 28. Relying on the above judgment of the Hon'ble Apex Courtof India, the Assessing Officer arrived a conclusion that thereassessment is permissible when assessing officer has factualinformation indicating the escapement of income. In the instantcase, the reasons for reopening have been duly recorded and theyhave also been conveyed to the assessee. In view of the abovediscussion, the said objection was also rejected. 29. Regarding the other ground raised that reasons onreopening has not been provided within a reasonable time thatwas also not substantiated. The learned counsel for thepetitioner states that the findings in this regard are vague.However, this Court is of the considered opinion that the order,disposing of the objections, cannot be construed as a finalorder of assessment and the mandatory requirement of 'reason tobelieve' if satisfied with reference to Section 147 of the Act,then the authority shall be allowed to continue the reassessmentproceedings. The reasons to the satisfaction are contemplatedand the 'sufficiency' of the reasons need not be gone into bythe High Court. Thus, if the Revenue could able to establishthat the Assessing Officer has 'reason to believe' that theincome chargeable to tax has escaped assessment, the same wouldbe sufficient for reopening of assessment and rest of thegrounds on merits may be adjudicated elaborately during thecourse of proceedings. Thus, High Court cannot conduct anelaborate enquiry in respect of such disputed facts andcircumstances relatable to the documents and evidences. Only if any jurisdictional error is established on reopening ofassessment, then alone, a writ proceedings are entertainable andnot otherwise. Regarding the ground raised by the assessee thatthe condition of 'reason to believe' is not satisfied, theAssessing Officer has made a finding that the reasons forreopening was recorded by the erstwhile officer as per therecords of the office: Reasons for Reopening any jurisdictional error is established on reopening ofassessment, then alone, a writ proceedings are entertainable andnot otherwise. Regarding the ground raised by the assessee thatthe condition of 'reason to believe' is not satisfied, theAssessing Officer has made a finding that the reasons forreopening was recorded by the erstwhile officer as per therecords of the office: Reasons for Reopening “Perusal of the records revealed that as per sec.115JB(6), provisions of Sec.115JB will not apply to theincome from business carried on by an entrepreneur inan SEZ. Claiming deduction u/s 10AA or opting out ofbenefit of sec.10AA is not a criterion to enforce thissection. In line with the above sub-section, whilecomputing income u/w115JB, you have added back expensesrelated to some SEZ units and reduced the revenue