M/S.mbi Kits International, Rep. By Its v. The Income-Tax Officer, Non-Corporate Ward-1(3), Room

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED: 04.10.2018 Reserved on 12.09.2018Delivered on 04.10.2018C O R A M THE HON'BLE Mr.JUSTICE K.RAVICHANDRABAABUW.P.No.7416 of 2017andWMP No.8070 of 2017 M/s.MBI Kits International,Rep. by its Partner,Sri.D.Chandrasekar,Son of Dr.M.N.Dhandapani,Park View, 3rd Floor,85, G.N.Chetty Road,Chennai 600 017....Petitionervs The Income-tax Officer,Non-Corporate Ward-1(3),Room No.307, III Floor,New Block AayakarBhavan,121, Mahatma Gandhi Road,Chennai 600 034. ...Respondent Prayer:Writ petition filed under Article 226 of the Constitutionof India for issuance of a writ of certiorari to call for therecords in NCW1(3)/AAFFM2374Q dated 13.02.2017 on the file ofthe respondent relating to the assessment year 2010-11 and quashthe same. For petitioner : Mr.M.P.SenthilkumarFor Respondents: Mrs.Hema Muralikrishnan Senior Standing Counsel (I.T) O R D E R The petitioner is aggrieved against the proceedings of therespondent dated 13.02.2017 in rejecting the objections filed bythe petitioner against the reopening of the assessment underSection 148 of the Income Tax Act, in respect of the Assessment https://hcservices.ecourts.gov.in/hcservices/ Year 2010-11. 2. The case of the petitioner is as follows: Prayer:Writ petition filed under Article 226 of the Constitutionof India for issuance of a writ of certiorari to call for therecords in NCW1(3)/AAFFM2374Q dated 13.02.2017 on the file ofthe respondent relating to the assessment year 2010-11 and quashthe same. For petitioner : Mr.M.P.SenthilkumarFor Respondents: Mrs.Hema Muralikrishnan Senior Standing Counsel (I.T) O R D E R The petitioner is aggrieved against the proceedings of therespondent dated 13.02.2017 in rejecting the objections filed bythe petitioner against the reopening of the assessment underSection 148 of the Income Tax Act, in respect of the Assessment https://hcservices.ecourts.gov.in/hcservices/ Year 2010-11. 2. The case of the petitioner is as follows: The petitioner is an assessee under the respondent. Thepetitioner firm was formed under Partnership Deed dated20.03.2000 with an object to carry on the business ofmanufacturing and testing chemicals. The Madras ExportProcessing Zone issued a letter of permission dated 28.03.2000.The Government of India, Ministry of Commerce by letter dated29.03.2000, granted permission to the petitioner to carry on itsbusiness of manufacturing of test kits used for checking iodizedsalt. The petitioner was granted permanent RegistrationCertificate by the Director of Industries and Commerce dated31.05.2000. The petitioner commenced its business of productionon 25.05.2000. The petitioner filed its return of income forthe Assessment Year 2010-11 on 24.09.2010, claiming deductionunder Section 10B of the said Act to the tune of Rs.97,34,667/-.After scrutiny, an order of assessment under Section 143(3) waspassed on 28.01.2013, accepting the claim of deduction underSection 10B, however by making minor additions. The petitionerfiled an appeal as against the additions and the AppellateAuthority, through his order dated 30.06.2016, deleted theadditions and allowed the appeal. Thereafter, a notice underSection 148 dated 03.01.2017 was served on the petitioner forreopening of the assessment, on the reason that the income ofthe petitioner chargeable to tax for the assessment year 2010-11has escaped assessment. The petitioner filed its return on19.01.2017, declaring its taxable income at nil, as was declaredin original return. The petitioner through the letter dated19.01.2017, also sought reasons for reopening the assessment.The respondent, through the communication dated 25.01.2017,informed the reasons for reopening of the assessment. It wasstated that the petitioner has extended its 10B holiday periodto the eleventh year and hence, become ineligible for deductionunder Section 10B. The petitioner, through the letter dated02.02.2017, objected to the reopening on the ground that thesame was beyond four years of the end of the relevant assessmentyear and that the petitioner firm commenced its business ofmanufacturing activity only after 01st April 2000 andconsequently, the initial year, when the undertaking commencedmanufacturing activity being the assessment year 2001-02, theclaim of deduction under Section 10B was well on the tenth yearitself. The petitioner also contended that the reopening wasmade merely based on change of opinion without there being newtangible material to deny the claim under Section 10B. However,the respondent, through the impugned communication, rejected theobjection filed by the petitioner. Hence the present writpetition. stated as follows:The petitioner was an assessee under the respondent. Thepetitioner was formed under Partnership Deed dated 20.03.2000.The petitioner had executed a legal agreement with MEPZ dated28.03.2000, pursuant to the letter of permission granted by thesaid Authority on 28.03.2000. The petitioner was grantedpermission to carry on business by the Ministry of Commerce,Government of India, on 29.03.2000. The petitioner was grantedpermanent Registration Certificate by the Directorate ofIndustries and Commerce dated 31.05.2000. The petitionercommenced its business of production on 28.03.2000 and not on25.05.2000, as claimed by the petitioner. The same is evidencedby the relevant entry in column No.7 of Annexure A to FormNo.56G in support of claim of deduction under Section 10B forthe assessment year 2010-11. The petitioner filed its returnfor the assessment year 2010-11 on 24.09.2010, claimingdeduction under Section 10B to the tune of Rs.97,34,667/-. Thesame was allowed incorrectly in the order under Section 143(3)dated 28.01.2013 due to failure on the part of the AssessingOfficer to verify the relevant content of Form No.56G thatrelates to the date of commencement of production. Proceedingsunder Section 147 was initiated, since the relevant assessmentyear 2010-11 happens to be the eleventh year from the date ofcommencement of production, while the tax holiday is permissibleto 10 assessment years at the maximum. Therefore, the benefitof deduction under Section 10B could not be extended. TheAssessing Officer, while completing the original assessment, hadfailed to take cognizance about the date of commencement ofmanufacture incorporated in Form No.56G. The petitioner in allthe Audit Reports under Section 56G had mentioned the date ofcommencement of production to be 28.03.2000. Therefore, therespondent had ample reason to believe that the income of thepetitioner had escaped assessment. The respondent had notrelied on any external material but based on the recordsavailable in the form of Annexure to Form No.56G. Thecorrectness of the claim of the date of manufacture can only beascertained if the process of reassessment is allowed to gofurther. Such process of enquiry cannot be undertaken in writproceedings, more particularly, when the feature as expressed inForm No.56G is not in dispute. The qualified CharteredAccountant of the petitioner had incorporated the date ofmanufacture in the Audited Report in Form 56G to be 28.03.2000.Any deviation cannot be accepted on the face value of thedocument submitted. Necessary enquiries have to be undertakenwith MEPZ before entertaining the claim of the petitioner.Therefore, the respondent is right in rejecting the objectionsand ensuring the continuance of reassessment proceedings. Therespondent is well within the jurisdiction to reopen theassessment beyond four years. 4. Mr.M.P.Senthilkumar, learned counsel for the petitionermade his submission. A written submission is also filed onbehalf of the petitioner. The sum and substance of thesubmissions made on behalf of the petitioner are as follows:a) The petitioner was granted permission to carry on thebusiness by the Ministry of Commerce only on 29th March 2000 andthus, the petitioner commenced the manufacturing activities on25th May 2000. Thus, during the financial year ended on31.03.2000, there was no manufacturing activity. The quarterlyprogress report and the annual progress report submitted toMEPZ, would reflect the date of commencement of production as25.05.2000. The reopening of the assessment is beyond fouryears, since notice under Section 148 was issued only on03.01.2017, when the four years from the end of the assessmentyear 2010-11 fell on 31.03.2015. Even for assuming jurisdictionbeyond four years on the ground of escaped assessment, theAssessing Officer has to ascertain any failure on the part ofthe assessee to make full and true disclosure of the facts andmaterials. The assessee had filed complete details in thereturn of income and therefore, the reopening after four years,is barred by limitation. The very fact that the respondentpassed an order of assessment under Section 143(3) based on thereturn filed by the petitioner would show that the petitionerhad filed and furnished full and complete details in theoriginal assessment proceedings. The Assessing Officer hadcompleted the assessment only after taking into consideration ofall those details. Therefore, it cannot be said that theAssessing Officer had reason to believe that the income hadescaped assessment. The reopening is merely on change ofopinion in the absence of any fresh materials with the AssessingOfficer to exercise jurisdiction under Section 147. In theorder under Section 143(3) for the assessment year 2010-11, theAssessing Officer had disallowed exemption under Section 10Bonly to the extent of Rs.1,01,819/- and thus, allowed exemptionin respect of the balance claim. This clearly shows that theAssessing Officer had applied his mind to the allowability ofexemption under Section 10B. Therefore, there cannot be areassessment on the issue of exemption. Therefore, there is nocase for reason to believe that the income had escapedassessment, that too, when there is no default or failure on thepart of the assessee to disclose the material facts. In thisconnection, the following decisions are relied on:1. (2010) 320 ITR 561 SC, CIT v. Kelvinator of India Ltd.2. (2008) 11 DTR (Chen) 73, CIT vs Tube Investments of India Ltd.3. (2018) 404 ITR 10 (SC), ITO vs Techspan India P. Ltd. = (2018) 6 SCC 685. b) The respondent relied on column No.7, wherein the dateof commencement of production was stated as 28th March 2000 to b) The respondent relied on column No.7, wherein the dateof commencement of production was stated as 28th March 2000 to reopen the assessment without noting column No.8, thereinshowing the year where the deduction claimed as "tenth year".If the petitioner commenced its manufacturing activities on28.03.2000, then in Form 56G for the Assessment Year 2001-02would have been filed by the petitioner stating the consecutiveyear for which the deduction is claimed as second year not firstyear. The respondent had exceeded his jurisdiction by issuingnotice under Section 148, as the petitioner had claimedexemption under Section 10B, which is legally available to thepetitioner and hence, no income has escaped assessment withinthe meaning of Section 147. The date wrongly mentioned in thefirst year of claim made in the assessment year 2001-02inadvertently gets carried over for future years too. Thepetitioner filed all the evidences to show that commencement ofbusiness was only on 25.05.2000 and that the date mentioned incolumn No.7 was not correct. The date mentioned in column No.7was only typographical error and it will not amount to any nonfiling of full and true material facts. 5. Mrs.Hema Muralikrishnan, learned counsel appearing forthe respondent made her submission. She has also filed a writtensubmission. The sum and substances of the submissions are asfollows: The proceedings impugned in this writ petition is an'intermediate' order rejecting the petitioner's objections tothe reasons for reopening. The action of the respondent inreopening the assessment under Section 148 vide notice dated03.01.2017, has not been challenged by the petitioner.Therefore, they cannot dispute that the respondent has no powerto reopen the assessment. In any event, the respondent has notpassed any orders on merits of the issue as to whether thepetitioner is entitled to exemption under Section 10B of thesaid Act or not. Where the reassessment proceedings are stillin the nascent stage, what has to be seen is whether there isany prima facie material to support the reopening and whetherthe reassessment is within the period of limitation. It is notin dispute that Annexure to Form 56G submitted for theassessment year 2010-11 contained contradictory statement incolumn No.7 and 8. While Column 7 referred the date ofcommencement of manufacture as 28.03.2000, Column 8 referred theyear of claim for deduction as tenth year. If the petitionerhad commenced the production on 28.03.2000, then 2010-11 cannotbe tenth year of production and in fact, it is the eleventhyear. Therefore, it is clear that there has not been a full andtrue disclosure. Consequently, the respondent is entitled toproceed with the reassessment after the period of four years aswell and within the period of six years from the relevantassessment year. The contention of the petitioner that amistake has been crept in, while filling Column 7, cannot betreated simply as a mistake, especially when such mistake continued repeatedly for ten years. In any event, thecontention of the petitioner with regard to the date ofmanufacture based on all documents, has not been decided tillthis date by the respondent. There has been escapement ofincome inasmuch as if the deduction under Section 10B of the Actis disallowed, then the amount will be added to the taxableincome. The respondent had only called upon the petitioner tofile further reply and the merits of the issue will be decidedthereafter. 6.Heard both sides and perused the materials placed beforethis Court. continued repeatedly for ten years. In any event, thecontention of the petitioner with regard to the date ofmanufacture based on all documents, has not been decided tillthis date by the respondent. There has been escapement ofincome inasmuch as if the deduction under Section 10B of the Actis disallowed, then the amount will be added to the taxableincome. The respondent had only called upon the petitioner tofile further reply and the merits of the issue will be decidedthereafter. 6.Heard both sides and perused the materials placed beforethis Court. 7.The petitioner is aggrieved against the reopening of theassessment in respect of the Assessment Year 2010-11. I havealready narrated in detail, the facts warranting the petitionerto file the present writ petition and the rival contention ofthe parties for and against the reopening of the assessment.Therefore, I am not reiterating the same once again hereunder,while rendering my findings. 8.The petitioner is engaged in manufacturing of testchemicals. They got approval from the Development Commissioner,Madras Export Processing Zone on 29.03.2000. It is claimed bythe petitioner that they commenced the manufacturing activitiesonly on 25.05.2000 and not on 28.03.2000, as has been wronglystated in Form 56G, an Auditor's Report filed for claimingdeduction under Section 10B of the Income Tax Act. Section 10Bentitles newly established 100% export oriented undertakings, adeduction of such profits and gains as are derived from theexport of articles or things or computer software for a periodof ten consecutive assessment years beginning with theassessment year relevant to the previous year which theundertaking begins to manufacture or produce articles or thingsor computer software. Accordingly, the petitioner claimed thededuction under Section 10B of the said Act by enclosing Form56G, the report of the Auditor, mentioning therein the date ofcommencement of manufacture or production as 28.03.2000 and thenumber of consecutive years for which the deduction claimed astenth year. The amount of deduction claimed by the assessee wasRs.97,34,667/-. The Assessing Officer, after considering suchclaim made under Section 10B, partly disallowed such claim onlyto the tune of Rs.1,01,819/- on the reason that the exemptionclaimed under the Foreign Exchange to the tune of Rs.1,64,936/-obtained beyond one year without the approval of the competentAuthority cannot be allowed. The Assessing Officer passed theorder of assessment on 28.01.2013 and derived a taxable incomeas Rs.1,01,819/- and consequently, a demand of Rs.42,170/-towards tax was raised. In other words, the Assessing Officerhas evidently accepted the claim of the assessee for Section 10B deduction and allowed the same for the balance claim. TheAssessee went on appeal before the Commissioner of Income Tax(Appeals) as against such partial disallowance and the AppellateAuthority allowed the appeal thereby deleting the additions madeby the Assessing Officer of the unrealised amounts of foreignexchange remittances. Therefore, the net result was that boththe Assessing Officer as well as the Appellate Authority haveconsidered the claim of the assessee for deduction under Section10B, based on the materials placed before them, which includesForm 56G and have allowed such claim. In other words, it isevident that based on those documents filed by the Assesseeincluding Form 56G, the Assessing Officer got satisfied with thematerial details stated therein and thus formed an opinion infavour of the petitioner on their entitlement for deductionunder Section 10B. At this juncture, it is relevant to notethat though Column 7 in the Form 56G submitted by the petitionerreferred the date of commencement of manufacture or productiononly as 28.03.2000, the number of consecutive years for whichthe deduction claimed was referred as tenth year in Column 8.Based on those details, the Assessing Officer has chosen to formthe opinion and granted the deduction. 9. While that being so, a notice under Section 148 of thesaid Act was issued on 03.01.2017 for reopening by stating thatthe Assessing Officer has reasons to believe that the incomechargeable to tax for the Assessment Year 2010-11 had escapedassessment. On receipt of such notice, the petitioner filedtheir Nil return. They also sought for reasons for reopeningthe assessment. Accordingly, the respondent issued the impugnedcommunication dated 25.01.2017, wherein it is stated as follows:"The order of assessment u/s143(3) was passedwith minor addition on 28.01.2013, accepting the claimof deduction u/s 10B. The addition was subsequentlydeleted in appeal.The claim of deduction u/s 10B for the year ofRs.97,34,667/- is allowed, based on Form No.56G. TheForm states in Column No.8 that it is the 10th year ofclaim. But, Column 7 specifies that the date ofcommencementofmanufacturingis28.03.2000.Therefore the year under consideration happens to bethe eleventh year. Even in the record provided tosubstantiate the claim on the eligibility by way ofcopy of Form 56G for Ay 2001-02 the same is found.Column No.7 maintains that the date of commencement ofmanufacture is 28.03.2000 but Column No.8 states thatAY 2001-02 is its first year of claim.Therefore it is clear that the assessee hasexclusively extended its 10B holiday period to theeleventh year and hence become ineligible fordeduction of 10B. It is clear from the above details that theincome of the assessee has escaped assessment withinthe meaning of section 147. Since the AO has not eventaken a faint notice of this essential aspect thatdetermines the allowability of deduction, Explanation(1) to section 147 comes into operation and firstproviso to section 147 becomes redundant and hencethere is a reason to believe that the income ofRs.97,34,567/- has escaped assessment." 10.Perusal of the impugned communication would undoubtedlyshow that the reason for reopening the assessment was solelybased on the statement or entry made in Column No.7 and 8 ofForm 56G, which according to the respondent, is not a true andfull disclosure. Thus, the initiation of proceedings underSection 147, after the expiry of four years from the date of therelevant assessment year, is sought to be justified. At thisjuncture, it is relevant to quote Sections 147, 148 and 149 ofthe Income Tax Act, 1961, which deal with reopening ofassessment as follows: "Income Escaping Assessment: 10.Perusal of the impugned communication would undoubtedlyshow that the reason for reopening the assessment was solelybased on the statement or entry made in Column No.7 and 8 ofForm 56G, which according to the respondent, is not a true andfull disclosure. Thus, the initiation of proceedings underSection 147, after the expiry of four years from the date of therelevant assessment year, is sought to be justified. At thisjuncture, it is relevant to quote Sections 147, 148 and 149 ofthe Income Tax Act, 1961, which deal with reopening ofassessment as follows: "Income Escaping Assessment: 147. If the Assessing Officer has reason tobelieve that any income chargeable to tax has escapedassessment for any assessment year, he may, subjectto the provisions of sections 148 to 153, assess orreassess such income and also any other incomechargeable to tax which has escaped assessment andwhich comes to his notice subsequently in the courseof the proceedings under this section, or recomputethe loss or the depreciation allowance or any otherallowance, as the case may be, for the assessment yearconcerned (hereafter in this section and in sections148 to 153 referred to as the relevant assessmentyear) :Provided that where an assessment under sub-section (3) of section 143 or this section has beenmade for the relevant assessment year, no action shallbe taken under this section after the expiry of fouryears from the end of the relevant assessment year,unless any income chargeable to tax has escapedassessment for such assessment year by reason of thefailure on the part of the assessee to make a returnunder section 139 or in response to a notice issuedunder subsection (1) of section 142 or section 148 orto disclose fully and truly all material factsnecessary for his assessment, for that assessment year: Issue of notice where income has escapedassessment.148. (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 returnwere a return required to be furnished under section139 : Time limit for notice.149. (1) No notice under section 148 shall beissued for the relevant assessment year,—(a) if four years have elapsed from the end of therelevant assessment year, unless the case falls underclause (b); (b) if four years, but not more than six years, haveelapsed from the end of the relevant assessment yearunless the income chargeable to tax which has escapedassessment amounts to or is likely to amount to onelakh rupees or more for that year." 11. Going by the above provisions, let me considerwhether the reopening is legally sustainable. Admittedly, theorder of assessment under Section 143(3) for the Assessment Year2010-11 was passed on 28.01.2013. Therefore, the end of fouryears from the Assessment Year 2010-11 fell on 31.03.2015.However, the notice under Section 148 was issued on thepetitioner only on 03.01.2017. Therefore, it is evident thatthe proceeding under Section 147 was initiated after a period offour years, as required under Section 147. However, firstproviso to Section 147 entitles the respondent to initiate suchproceedings for reopening the assessment beyond the period offour years also and within a period of six years, providedanyone of the following conditions are satisfied: 11. Going by the above provisions, let me considerwhether the reopening is legally sustainable. Admittedly, theorder of assessment under Section 143(3) for the Assessment Year2010-11 was passed on 28.01.2013. Therefore, the end of fouryears from the Assessment Year 2010-11 fell on 31.03.2015.However, the notice under Section 148 was issued on thepetitioner only on 03.01.2017. Therefore, it is evident thatthe proceeding under Section 147 was initiated after a period offour years, as required under Section 147. However, firstproviso to Section 147 entitles the respondent to initiate suchproceedings for reopening the assessment beyond the period offour years also and within a period of six years, providedanyone of the following conditions are satisfied: i) Any income chargeable to tax has escaped assessment forsuch Assessment Year by reason of failure on the part of theassessee to make a return under Section 139 or in response to anotice issued under Section 142(1) or Section 148.ii)the assessee failed to disclose fully and truly allmaterial facts necessary for the assessment year. 12. To put it to more precisely, the first proviso toSection 147, for extending the period of limitation of fouryears, can be taken shelter, only when the assessee eitherfailed to make a return in response to the notice under Sub https://hcservices.ecourts.gov.in/hcservices/ Section 142(1)/Section 148 or failed to disclose fully and trulyall material facts necessary for his assessment. 13. In this case, it is not in dispute that the petitionerhas filed their original return and nil return in response tothe notice issued under Section 148. Therefore, the firstcondition is not attracted to invoke the proviso to Section 147. 14. Whether the other condition is satisfied, is the nextquestion. Admittedly, the petitioner has furnished the detailsin coloumn 7 and 8 of Form 56G. 15. According to the Revenue, if the date of commencementof manufacture or production referred to in the Column No.7 inForm No.56G as 28.03.2000 is taken as true, the deductionclaimed was at the eleventh year and not at the tenth year. Thepetitioner seeks to explain that the entry made in Column No.7of Form 56G was by mistake and on the other hand, the actualdate of commencement of manufacture was only on 25.05.2000. Atthe same time, Column No.8, which deals with number ofconsecutive year for which the deduction claimed, was rightlystated as tenth year. Therefore, the question that arises forconsideration, under the above stated circumstances, is as towhether these contradictory statement made by the petitioner canbe brought under the purview of non disclosure of fully andtruly all material facts necessary for his assessment, toattract the extended period of limitation. 16. No doubt, Column No.7 and 8 contradicts each otherwith regard to the commencement of manufacture. However, whenone of such column has specifically referred the number ofconsecutive year as the tenth year to claim 10B deduction andwhen the Assessing Officer has also considered and allowed suchdeduction, it has to be construed that such deduction wasgranted by the Assessing Officer by forming his opinion based onthe conjoined consideration of materials already placed. Inother words, it cannot be stated that the petitioner has availedthe benefit under Section 10B by giving false details. If thedate of manufacture as referred to in Form 56G is taken as theright date, the Assessing Officer ought not to have allowed thededuction. Likewise, if the number of consecutive year referredto in Form 56G as tenth year is taken as the true statement, theAssessing Officer was right in allowing the deduction.Therefore, it is evident that by furnishing the wrong date ofmanufacture as 28.03.2000, the petitioner has not eitherdeceived or suppressed any material fact before the AssessingOfficer to claim deduction under Section 10B. If the exact dateof manufacturing could be ascertained or gathered from theconjoined consideration of other material documents, such asrelevant certificates of registration by the competentauthority, mere wrong mentioning of the date in Column 7 cannot be construed as non disclosure of true and material facts,especially when column 8 of statement supports the claim. Onecan understand and appreciate the stand of the Revenue forreopening the assessment, if the assessee, by giving a falseinformation regarding the date of commencement of manufactureas 28.03.2000 alone, had obtained deduction under Section 10B.Thus, it is seen that the Assessing Officer, who has originallychosen to allow the deduction based on the materials filedalready, has now changed his opinion and has chosen to reopenthe assessment, which in my considered view, cannot be doneafter a period of four years. be construed as non disclosure of true and material facts,especially when column 8 of statement supports the claim. Onecan understand and appreciate the stand of the Revenue forreopening the assessment, if the assessee, by giving a falseinformation regarding the date of commencement of manufactureas 28.03.2000 alone, had obtained deduction under Section 10B.Thus, it is seen that the Assessing Officer, who has originallychosen to allow the deduction based on the materials filedalready, has now changed his opinion and has chosen to reopenthe assessment, which in my considered view, cannot be doneafter a period of four years. 17. If, by furnishing incorrect particulars or facts, theassessee got benefited, then one can understand that there wasno true and full disclosure by the assessee. On the otherhand, if the benefit, in this case the deduction, was granted orallowed inspite of such furnishing of incorrect particulars orfacts, then it could, at the best, be called only as theescapement of income from the consideration of the AssessingOfficer for being assessed and not the escapement of income byany of the act or omission by the assessee. At this juncture,the admission made by the respondent in the counter affidavit,more particularly, at paragraph No.10 is relevant to be quoted.He had admitted that while completing the original assessment,the Assessing Officer failed to take cognizance about the dateof commencement of manufacture incorporated in Form No.56G.Thus, it is evident that it is by the mistake or fault of theAssessing Officer in not taking cognizance about the date ofcommencement of manufacture, according to the Revenue, theincome escaped assessment. If that be the case, the AssessingOfficer is entitled to reopen the assessment before the expiryof four years only and correct the mistake and make theaddition. In other words, the term "any income chargeable totax has escaped assessment" referred to under Section 147 has tobe understood to mean that such alleged escapement of assessmentis based on the belief of the Assessing Officer with somereasons and that such reasons may include his own omission ordefault. On the other hand, the very same term "any incomechargeable to tax has escaped assessment" referred to in thefirst proviso to Section 147, certainly not to be construed tomean that such belief of the Assessing Officer with reason willalso fit into such proviso to invoke the extended period oflimitation. On the other hand, as stated supra, such escapementof assessment can be brought into tax by way of reopen only wheneither of the two ingredients referred to in the proviso, asdiscussed supra, is satisfied. In other words, the AssessingOfficer's omission or mistake does not have a role to play forinvoking proviso to Section 147 and on the other hand, suchinvoking should stand or fall solely depending upon thesatisfaction of those conditions stipulated therein. 18. Every non disclosure of material facts will not orcannot be a justifiable reason for reopening sustainable underjudicial scrutiny. On the other hand, such non disclosure of amaterial fact must be of such nature that, but for such nondisclosure, the income, relatable to such material fact, wouldnot have escaped assessment. In other words, it should lead toan irrebuttable conclusion that by the conduct of the assessee,either by providing wrong or incorrect particulars or by notproviding the full and correct particulars, he should have madethe Assessing Officer not to bring a particular income to tax,which is otherwise liable to be taxed. If this test is appliedto the present case, I am of the view that the Revenue has tofail. 18. Every non disclosure of material facts will not orcannot be a justifiable reason for reopening sustainable underjudicial scrutiny. On the other hand, such non disclosure of amaterial fact must be of such nature that, but for such nondisclosure, the income, relatable to such material fact, wouldnot have escaped assessment. In other words, it should lead toan irrebuttable conclusion that by the conduct of the assessee,either by providing wrong or incorrect particulars or by notproviding the full and correct particulars, he should have madethe Assessing Officer not to bring a particular income to tax,which is otherwise liable to be taxed. If this test is appliedto the present case, I am of the view that the Revenue has tofail. 19. It is settled law that mere change of opinion on theexisting material cannot be a ground for reopening theassessment in the absence of any new material that had come tothe possession of the Assessing Officer. In this case, there isno tangible material available before the Assessing Officer toreopen the assessment and on the other hand, it was purely outof his change of opinion on the material already existed. Inthis connection, the following decisions can be relied on: 20. In 2010) 320 ITR 561, the Apex Court has held atparagraph No.4 as follows:"4. On going through the changes, quoted above,made to s.147 of the Act, we find that, prior toDirect Tax Laws (Amendment) Act, 1987, reopening couldbe done under above two conditions and fulfillment ofthe said conditions alone conferred jurisdiction onthe AO to make a back assessment, but in S.147 of theAct (w.e.f. 1st April, 1989), they are given a go byand only one condition has remained, viz., that wherethe AO has reason to believe that income has escapedassessment, confers jurisdiction to reopen theassessment. Therefore, post 1st April, 1989, power toreopen is much wider. However, one needs to give aschematic interpretation to the words "reason tobelieve" failing which, we are afraid, s.147 wouldgive arbitrary powers to the AO to reopen assessmentson the basis of "mere change of opinion", which cannotbe per se reason to reopen. We must also keep in mindthe conceptual difference between power to review andpower to reassess. The AO has no power to review; hehas the power to reassess. But reassessment has to bebased on fulfillment of certain pre-condition and ifthe concept of "change of opinion" is removed, ascontended on behalf of the Department, then, in thegarb of reopening the assessment, review would take place. One must treat the concept of "change ofopinion" as an in-built test to check abuse of powerby the AO." 21. In (2008) 11 DTR (Chen) 73, CIT vs Tube Investments ofIndia Ltd., the Division Bench of this Court has held atparagraphs 6 and 7 as follows: "6.Having recorded the above findings, the Tribunalhad also referred to the judgment of this Court in thecase of Apollo Hospitals Enterprises Limited Vs. ACIT(287 ITR 25) to sustain their view point. Thefindings so recorded are also fortified by therevisional order wherein in para.4 of the assessmentorder, the Assessing Officer has stated as follows:-"Assessee has claimed this interest as revenue forincome tax purpose. For the assessment year 1996-1997, the interest amount was disallowed as it is incapital nature. The decision for assessment year1996-1997 has not become final. Applying the sameratio, the interest income of Rs.378.06 lakhs isdisallowed and added to total income." "6.Having recorded the above findings, the Tribunalhad also referred to the judgment of this Court in thecase of Apollo Hospitals Enterprises Limited Vs. ACIT(287 ITR 25) to sustain their view point. Thefindings so recorded are also fortified by therevisional order wherein in para.4 of the assessmentorder, the Assessing Officer has stated as follows:-"Assessee has claimed this interest as revenue forincome tax purpose. For the assessment year 1996-1997, the interest amount was disallowed as it is incapital nature. The decision for assessment year1996-1997 has not become final. Applying the sameratio, the interest income of Rs.378.06 lakhs isdisallowed and added to total income." 7. From the above, it is manifestly clear thatparticulars about the claim of interest amount arevery much available before the Assessing Officer whilehe framing the original assessment, and after takinginto consideration the claim on interest in respect ofthe above said amount, the original assessment wasframed. The subsequent re-opening of the assessmentis nothing but in our considered view also a merechange of opinion to follow the earlier yearassessment order, which is not the reason forreopening of the assessment under Section 147 of theIncome-tax Act. Further, the re-opening of theassessment cannot also be brought within the exemptionstated therein for reopening after the period of fouryears. 22. In (2018) 404 ITR 10 (SC), ITO vs Techspan India P. Ltd.Equivalent citation: (2018) 6 SCC 685, the Apex has held atparagraphs 14 to 18 as follows: "14.The language of Section 147 makes it clear thatthe assessing officer certainly has the power to re-assess 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’ in Section 147 has to be interpreted schematically asthe liberal interpretation of the word would have theconsequence of conferring arbitrary powers on theassessing officer who may even initiate such re-assessment proceedings merely on his change of opinionon the basis of same facts and circumstances which hasalready been considered by him during the originalassessment 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 re-assess 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 there-assessment of an income merely because of the factthat the assessing officer has a change of opinionwith regard to the interpretation of law differentlyon the facts that were well within his knowledge evenat the time of assessment. Doing so would have theeffect of giving the assessing officer the power ofreview and Section 147 confers the power to re-assessand not the power to review. 16. To check whether it is a case of change ofopinion or not one has to see its meaning in literalas well as legal terms. The words "change of opinion"implies formulation of opinion and then a changethereof. In terms of assessment proceedings, it meansformulation of belief by an assessing officerresulting from what he thinks on a particularquestion. It is a result of understanding, experienceand reflection. 17. It is well settled and held by this court ina catena of judgments and it would be sufficient torefer to Commissioner of Income Tax, Delhi vs.Kelvinator of India Ltd. (2010) 320 ITR 561(SC)wherein this Court has held as under:- 16. To check whether it is a case of change ofopinion or not one has to see its meaning in literalas well as legal terms. The words "change of opinion"implies formulation of opinion and then a changethereof. In terms of assessment proceedings, it meansformulation of belief by an assessing officerresulting from what he thinks on a particularquestion. It is a result of understanding, experienceand reflection. 17. It is well settled and held by this court ina catena of judgments and it would be sufficient torefer to Commissioner of Income Tax, Delhi vs.Kelvinator of India Ltd. (2010) 320 ITR 561(SC)wherein this Court has held as under:- “5….where the Assessing Officer has reason tobelieve that income has escaped assessment, confersjurisdiction to re-open the assessment. Therefore,post 1-4-1989, power to re-open is much wider.However, one needs to give a schematic interpretationto the words "reason to believe"….. Section 147 wouldgive arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of 6. We must also keep in mind the conceptualdifference between power to review and power to re-assess. The Assessing Officer has no power to review;he has the power to re-assess. But re-assessment hasto be based on fulfilment of certain pre-conditionand if the concept of "change of opinion" is removed,as contended on behalf of the Department, then, inthe garb of re-opening the assessment, review wouldtake place. 7. One must treat the concept of "change ofopinion" as an in-built test to check abuse of powerby the Assessing Officer. Hence, after 1-4-1989,Assessing Officer has power to reopen, provided thereis "tangible material" to come to the conclusion thatthere is escapement of income from assessment.Reasons must have a live link with the formation ofthe belief.” 18. Before interfering with the proposed re-opening of the assessment on the ground that the sameis based only on a change in opinion, the court oughtto verify whether the assessment earlier made haseither expressly or by necessary implication expressedan opinion on a matter which is the basis of thealleged escapement of income that was taxable. If theassessment order is non-speaking, cryptic orperfunctory in nature, it may be difficult toattribute to the assessing officer any opinion on thequestions that are raised in the proposed re-assessment proceedings. Every attempt to bring to tax,income that has escaped assessment, cannot be absorbedby judicial intervention on an assumed change ofopinion even in cases where the order of assessmentdoes not address itself to a given aspect sought to beexamined in the re-assessment proceedings." 23. No doubt, the learned counsel for the respondentcontended that the present writ petition is not maintainable,since the impugned proceedings is only giving reasons forreopening and therefore, it is an intermediate order. I do notthink that such objection can be raised by the Revenue when thereopening itself is questioned on the ground of limitation. Only when the respondent crosses the hurdle of limitation issue,then the question as to whether the petitioner has to face theassessment proceedings or not would arise. In this case, asdiscussed supra, the petitioner has questioned the reopening onthe ground of limitation and this Court, based on the reasoningsand findings rendered supra, is fully convinced that thereopening is beyond the period of limitation, since it was basedon mere change of opinion and not due to the failure on the partof the assessee in not disclosing fully and truly all materialfacts. 24. Accordingly, the writ petition is allowed and theimpugned proceedings of the respondent in reopening theassessment for the assessment year 2010-11 is set aside. Nocosts. The connected miscellaneous petition is closed. Sd/- Assistant Registrar(CS-IX) //True Copy// Sub Assistant Registrar vri 24. Accordingly,