M/S.south Asia Fm Limited v. The Assistant Commissioner Of Income Tax, Non-Corporate Circle-15, Aayakhar Bhavan

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 10-10-2018 CORAM THE HON'BLE MR.JUSTICE S.M.SUBRAMANIAMW.P. Nos.10257, 44312 and 44313 of 2016AndW.M.P.Nos.9080, 38178 and 38179 of 2016 M/s.South Asia FM Limited,Represented by its Authorised Signatory,Mr.K.S.Rajesh,Murasoli Maran Towers,No.73 MRC Nagar Main Road,MRC Nagar,Chennai-600 028. .. Petitioner in all WPsvs The Assistant Commissioner of Income Tax,Non-Corporate Circle-15, Aayakhar Bhavan,No.121, Mahatma Gandhi High Road,Nungambakkam, Chennai-600 034. .. R-1 in WP.10257/2016 The Deputy Commissioner of Income Tax,Corporate Circle-6(2),Aayakhar Bhavan,No.121, Mahatma Gandhi High Road,Nungambakkam,Chennai-600 034. .. R-2 in WP No.10257/2016 The Assistant Commissioner of Income Tax,Non-Corporate Circle-15, Room No.208, II Floor,Aayakhar Bhavan, No.121, Mahatma Gandhi High Road,Nungambakkam, Chennai-600 034. .. Respondent in WP.44312 & 44313 of 2016 WP No.10257 of 20176 is filed under Article 226 of theConstitution of India praying to issue a Writ of Certiorari,calling for the records relating to the notice issued by thesecond respondent dated 27.3.2015 under Section 148 of theIncome Tax Act, 1961 and the consequential order No.ACIT/NCC-15/AY08-09/dated 4.3.2016 passed by the first respondent andquash the same. https://hcservices.ecourts.gov.in/hcservices/ WP No.44312 of 2016 is filed under Article 226 of theConstitution of India praying to issue a Writ of Certiorari,calling for the records relating to the notice issued by therespondent in PAN: /ACIT/NCC-15/AY10-11 dated30.3.2016 under Section 148 of the Income Tax Act, 1961 and theconsequential order dated 9.12.2016 in No.ACIT/NCC-15/AY2010-11of the respondent and quash the same. WP No.44313 of 2016 is filed under Article 226 of theConstitution of India praying to issue a Writ of Certiorari,calling for the records relating to the notice issued by therespondent in PAN: /ACIT/NCC-15/AY11-12 dated30.3.2016 under Section 148 of the Income Tax Act, 1961 and theconsequential order dated 9.12.2016 in No.ACIT/NCC-15/AY2011-12of the respondent and quash the same. The notice issued by the second respondent inproceedings dated 27.3.2015 under Section 148 of the Income TaxAct, 1961 (hereinafter referred to as the 'Act') and theconsequential order dated 4.3.2016 passed by the firstrespondent, are under challenge in WP No.10257 of 2016. 2. WP No.44312 of 2016 is filed challenging the noticedated 30.3.2016 issued under Section 148 of the Income Tax Actin respect of the assessment year 2010-2011 and theconsequential order dated 9.12.2016 and WP No.44313 of 2016 isfiled challenging the notice dated 30.3.2016 issued underSection 148 of the Income Tax Act in respect of the assessmentyear 2011-2012 and the consequential order dated 9.12.2016. 3. In all these writ petitions the writ petitioner isM/s.South Asia FM Ltd., represented by its Authorised SignatoryMr.K.S.Rajesh. Thus, all the three writ petitions are filedchallenging the notices issued under Section 148 of the Act inrespect of the three different assessment years. Thus, the factsin respect of all the three writ petitions are common.PLEADINGS OF THE PETITIONER AS WELL AS THE ARGUMENTS: 3. In all these writ petitions the writ petitioner isM/s.South Asia FM Ltd., represented by its Authorised SignatoryMr.K.S.Rajesh. Thus, all the three writ petitions are filedchallenging the notices issued under Section 148 of the Act inrespect of the three different assessment years. Thus, the factsin respect of all the three writ petitions are common.PLEADINGS OF THE PETITIONER AS WELL AS THE ARGUMENTS: 4. The impugned notices for reopening of theassessments are issued with reference to the assessment years2008-2009, 2010-2011 and 2011-2012. The writ petitioner-Companystates that they have filed the return of income on 24.9.2008,admitting an income of Rs.33,24,51,590/-. The return wasprocessed under Section 143(1) of the Income Tax Act, acceptingthe return of income. After a lapse of six and half years andafter filing and accepting the return by the first respondent on27.3.2015, the impugned notice has been issued for reopening ofthe assessment on the ground that the Assessing Officer hadreason to believe that the income had escaped assessment withinthe meaning of Section 147 of the Act and required the writpetitioner-Company to file one more return of income for thesame assessment year i.e., 2008-2009. 5. In response to the notice impugned, the writpetitioner-Company by their letter dated 28.4.2015, requestedthe first respondent to treat the return already filed on24.9.2008 as a return in response to the notice issued underSection 148 of the Act and also requested the first respondentto furnish the reasons for reopening the above assessment. Therespondents on 23.2.2016, furnished the reasons for reopeningthe assessment. Immediately on 29.2.2016, the writ petitionerfiled the objections on the alleged reasonings recorded forreopening the assessment. On 4.3.2016, just before 27 days forthe completion of reassessment, the first respondent by an orderallegedly to be a speaking order, dismissing the petitioner'sobjections in a mechanical manner and thereby reopened theassessment of the petitioner for the assessment year 2008-2009.It is contended that the respondents had not considered theobjections raised by the writ petiioner. An order of rejectionhas been issued mechanically and without considering the legalgrounds raised by the writ petitioner. 6. In WP No.10257 of 2016, the reasons, in brief,recorded by the respondents for reopening of the assessment forthe year 2008-2009 are:- (a) The Assessee M/s.South Asia FM Ltd., receivedinvestment in the form of shares to the tune of Rs.193.54 croresduring the year 2007 to 2010; (b) As per the CBI charge sheet, Shri Dayanithi Maran,while functioning as Minister for Communications and InformationTechnology had facilitated the takeover of Aircel Ltd and inreturn Shri T.Anandakrishnan, through his group company investedRs.193.54 crores in M/s.South Asia FM Ltd.; (c) This payment of share capital received by M/s.SouthAsia FM Ltd is not in the nature of capital receipts but theyare revenue receipts camouflaged as capital receipts as foundout by CBI; (d) Hence the assessment in the writ petitioner's case https://hcservices.ecourts.gov.in/hcservices/ for the AY 2008-2009 was reopened under Section 147 of the Act,to verify the genuineness of the investment of Rs.193.54 croresin the writ petitioner's company. 7. The objections raised by the writ petitioner in WP10257 of 2016 on 29.2.2016 are as under:- (a) The notice is ab initio void; (b) There is no 'information' within the meaning ofSection 147 of the Act, for coming to the belief that any incomehad escaped assessment; (c) There is no concept of income involved as thetransactions were capital in nature and when there is no incomeinvolved, there cannot be any escapement of such alleged income;(d) The assessment cannot be reopened to verify thetransactions; and (d) Hence the assessment in the writ petitioner's case https://hcservices.ecourts.gov.in/hcservices/ for the AY 2008-2009 was reopened under Section 147 of the Act,to verify the genuineness of the investment of Rs.193.54 croresin the writ petitioner's company. 7. The objections raised by the writ petitioner in WP10257 of 2016 on 29.2.2016 are as under:- (a) The notice is ab initio void; (b) There is no 'information' within the meaning ofSection 147 of the Act, for coming to the belief that any incomehad escaped assessment; (c) There is no concept of income involved as thetransactions were capital in nature and when there is no incomeinvolved, there cannot be any escapement of such alleged income;(d) The assessment cannot be reopened to verify thetransactions; and (e) No application of mind in the reasonings recordedand its mechanical approval by the immediate Higher Authority. 8. The writ petitioner in WP Nos.44312 and 44313 of2016 have filed their return of income within the time limitstipulated. The assessments were taken up for compulsoryscrutiny and the assessments were completed under Section 143(3)of the Act by making disallowances of Rs.4,10,17,643/- andRs.91,03,884/- by invoking the provisions of Section 14-A readwith Rule 8-D. 9. The contentions of the writ petitioners are that asagainst the legally completed assessments, the writ petitionershave received a notice under Section 148 of the Act dated30.3.2016, after four years from the end of the relevantassessment year. The writ petitioners by their letter dated19.4.2016 sought for the reasons for reopening the reopening ofthe assessment for the years 2010-2011 and 2011-2012 are:- (a) The claim of depreciation at 25% was not for thefirst time but was subjected to scrutiny assessments from the AY2006-2007 and in all the earlier assessment years 2006-2007 to2008-2009 the petitioner's claim of depreciation was allowed bythe department in the scrutiny assessments; (b) In so assuming its jurisdiction to issue noticeunder Section 148 of the Act, the Assessing Officer failed torecord a finding that the income chargeable to tax has escapedassessment by reason for the failure on the part of the taxpayerto disclose fully and truly all material facts necessary for theassessment which is a legal necessity as the original assessmentwas completed under Section 143(3) of the Act. On the contrarynot only all the information was fully disclosed in the returnand its supporting enclosures but also tested in a scrutinyassessment right from the AY 2006-2007, including the assessmentyear under consideration, and hence the issue of notice underSection 148 of the Act is ab initio void. The Assessment Officer's kind attention was invited to the case laws on thesubject; (c) It was also objected to stating that, the reopeningof the assessment for the AY 2008-2009 by the self-sameAssessing Officer and his own reopening notice under Section 148of the Act, dated 23.2.2016 where the issue of alleged excessdepreciation on licence fee was not at all taken up. In thereassessment order, also such issue was neither taken nor anyadjustment made. Therefore, it is crystal clear that theAssessing Officer was convinced that the petitioner is entitledfor depreciation as claimed in the assessment and for that inthe reassessment also, for the AY 2008-2009. Hence, it isarbitrary and illegal to say that for the AY 2010-2011 and AY2011-2012 that the petitioner is not entitled for depreciationas claimed and allowed in the original scrutiny assessment. 10. The objections raised by the writ petitioner in WPNos.44312 and 44313 of 2016 on 9.12.2016 are as under:- 10. The objections raised by the writ petitioner in WPNos.44312 and 44313 of 2016 on 9.12.2016 are as under:- (a) The reason furnished to the petitioner forreopening of the assessment is that the petitioner is noteligible for depreciation under Section 35 of the Act. However,in the rejection order, it was stated that there was atypographical error in the Section in the reasons recorded andthat the correct Section would be 35-ABB. This tantamount tochange of reasons or coming to a belief that any income hasescaped assessment and the proceedings under Section 147 cannotbe continued as fresh reason cannot be brought after the issueof a notice and furnishing of reasons. The respondent cannotstate that it is typographical error. It ought to have issued afresh notice under Section 148 of the Act and assessmentproceedings cannot be continued in the old notice issued underSection 148 of the Act; (b) Completion of all the assessment from AY 2006-2007to AY 2010-2011 under Section 143(3) of the Act withoutdisturbing the claim of depreciation does not bar for reopeningthe assessments. 11. The writ petitioner states that the issuance ofnotice under Section 148 of the Act, is prima facie illegal forthe fact that the reasons recorded for reopening of theassessment were communicated only on 23.2.2016 after the end ofsix years i.e., 31.3.2015. The writ petitioner brought to thenotice of the respondents about the judgments given in the pointof limitation and the same had not been considered at all. 12. The writ petitioner's case is governed by statutoryaudit under Section 44-AB of the Act, where all investments arerevealed in the returns filed. In fact, it is the firstrespondent in his reasons had categorically admitted that thewrit petitioner had received the investments in the form of https://hcservices.ecourts.gov.in/hcservices/ shares during the year 2007-2010. Thus, it is crystal clear thatall the informations were readily available with the respondentsin the return filed by the writ petitioner. The fact ofinvestment was revealed in the return filed by the writpetitioner. While being so, the first respondent had not comeforward in the reasons as to the basis for the issuance ofSection 148 notice after lapse of six years. All the materialsrequired are there before the first respondent. Therefore, it isnot known what information the first respondent had, for comingto believe that any income had escaped assessment. Thus, thereis no information other than what is already available in thereturn filed, available with the respondents before recordingalleged reasons for reopening the assessment. It is not the caseof the respondents that the said investments cited in thereasons were not at all revealed by the writ petitioner. Theother reasons furnished by the respondents are totallyunconnected with the writ petitioner. The CBI charge sheet inthe case of one Shri Dayanidhi Maran, who is in no way connectedwith the writ petitioner. Thus, it is clear that these allegedreasons were recorded solely on the basis of CBI charge sheet inthe case of another legal entity Shri Dayanidhi Maran, which hasno relevance whatsoever in respect of the case of the writpetitioner. Even if it is a fact that there is a CBI chargesheet in the other case, there is no finding in the reasonsrecorded to show any application of mind on the informations ofthe authorities in respect of such informations. Thus, the verybasis for the issuance of the notice under Section 148 of theAct, is untenable. 13. It is further stated that the reasons for reopeningof the assessment is that the share capital received is not acapital receipt but a revenue receipt. It is a legally admittedposition that only when there is an income there can beescapement of income. In the case of the writ petitioner whatwas received was capital influx after going through all thelegal norms including approval by FIPB and RBI. Therefore,unless the Assessing Officer proves before initiating actionunder Section 147 of the Act, what was received is revenue innature, there cannot be any income or for that matterinformation within the meaning of Section 148 for reopening theassessment. 14. The learned Senior Counsel for the writ petitioner,forcibly contended that the nature of the transaction occurredand revealed in the returns filed by the writ petitioner is acapital income and certainly not a revenue receipt. Thus, aninference is to be drawn in respect of the capital incomereceived in the form of a share by the writ petitioner-Company.It is not a capital receipt. Thus, the same cannot be designatedas a revenue receipt, so as to impose tax under the provisions of the Income Tax Act, 1961. The capital income received by thewrit petitioner-Company is a one time investment and in respectof the returns filed by the writ petitioner, the scrutiny wascompleted. Thus, there is no question of escaped assessment andthe very action of the respondents are nothing but a "change ofopinion". The writ petition is maintainable in view of the factthat the ingredients of Section 147of the Act, have not beensatisfied in view of the fact that the impugned notice forreopening of the assessment has been issued based on the "changeof opinion" and not on the basis of the principle of "reason tobelieve". Thus, "change of opinion" cannot constitute a groundto reopen the assessment which was already finalised. Therefore,the writ petition is also maintainable in view of the judgmentof the Supreme Court in the case of Jeans Knit Private Ltd.,Bangalore vs. Deputy Commissioner of Income Tax, Bangalore [2016SCC Online SC 1536], wherein the Apex Court set aside theimpugned judgments and remit the cases to the respective HighCourts to decide the writ petitions on merits on the ground thatthe case of Commissioner of Income Tax vs. Chhabil Dass Agarwal[(2013) ITR 357 (SC)] does not apply to those cases. 15. The learned Senior Counsel for the writ petitionercontended that there is no appeal against the notice issuedunder Section 148 of the Income Tax Act. Thus, the writ petitionis maintainable if the ingredients of Section 147 of the Act,are not met out or not satisfied, then the aggrieved persons areentitled to move the High Court under Article 226 of theConstitution of India. 16. In the case of the writ petitioner, the capitalmoney alone had been received. The receipt of capital money cannever be construed as a revenue receipt. Thus, the suspicioncannot be a ground for initiation of reopening of assessment inrespect of the alleged escaped income. "Change of Opinion" nowforms the basis for issuance of notice, cannot be a ground forreopening of the assessment which was assessed in accordancewith the provisions of the Act long back. Thus, the impugnedorders are liable to be scrapped. 17. Section 147 of the Act, states that “if theAssessing Officer has reason to believe that any incomechargeable to tax has escaped assessment for any assessmentyear, he may, subject to the provisions of Sections 148 to 153,assess or reassess such income and also any other incomechargeable to tax which has escaped assessment and which comesto his notice subsequently in the course of the proceedingsunder this section, or recompute the loss or the depreciationallowance or any other allowance, as the case may be, for theassessment year concerned. Provided that where an assessment 17. Section 147 of the Act, states that “if theAssessing Officer has reason to believe that any incomechargeable to tax has escaped assessment for any assessmentyear, he may, subject to the provisions of Sections 148 to 153,assess or reassess such income and also any other incomechargeable to tax which has escaped assessment and which comesto his notice subsequently in the course of the proceedingsunder this section, or recompute the loss or the depreciationallowance or any other allowance, as the case may be, for theassessment year concerned. Provided that where an assessment under sub-section (3) of section 143 or this Section has beenmade for the relevant assessment year, no action shall be takenunder this Section after the expiry of four years from the endof the relevant assessment year, unless any income chargeable totax has escaped assessment for such assessment year by reason ofthe failure on the part of the Assessee to make a return underSection 139 or in response to a notice issued under subsection(1) of Section 142 or Section 148 or to disclose fully and trulyall material facts necessary for his assessment, for thatassessment year." 18. The learned Senior Counsel, while elaborating theamended phrase by the Direct Tax laws (Amendment) Act, 1989 witheffect from 1.4.1989 that "has reason to believe" emphasisesthat the right to get reason for reopening the assessment is thevested right of an Assessee. It is contended that such a vestedright provided by way of a Statute, more specifically, byamendment, cannot be taken away by the Assessing Officer. Thus,the vested right contemplated in respect of the reasons to beprovided at the time of reopening of the assessment is mandatoryand the same cannot be tinkered with by the respondents in orderto harass the Assessees, who had already filed their returnslong back and the same was assessed during the relevant point oftime under the provisions of the Income Tax Act, 1961. 19. Section 147 of the Act, mandates the reasons to berecorded at the time of issuance of notice for reopening of theclosed assessment. In the absence of recording the reasons forreopening the notice is to be construed as non est in law. Theexecutive power conferred under the Act to the Executives,cannot be interpreted, so as to take away the vested right of anAssessee in respect of the closed assessments. Reopening of theassessment is not a routine affair or a normal event. Only incase of suppression of fact or the availability of new materialson record, then alone, the executive power can be exercisedunder Section 147 of the Act, for reopening the escapedassessment. The reasonsings are mandatory. In the absence ofadequate reasons, the notice issued under Section 148 isinvalid. Thus, the notice itself must contain the reasons andthe Assessing Officer must have a reason to believe that thereis a suppression of material facts or the availability of anynew materials for the purpose of reopening the closedassessment. 20. In all such cases, the subjective satisfaction ofthe Assessing Officer is contemplated under Section 147 of theAct, when the language employed in Section 147, "if theAssessing Officer has reason to believe". Therefore, there is noambiguity in respect of the recording of reasons by theAssessing Officer for invoking Sections 147 and 148. Only if the 20. In all such cases, the subjective satisfaction ofthe Assessing Officer is contemplated under Section 147 of theAct, when the language employed in Section 147, "if theAssessing Officer has reason to believe". Therefore, there is noambiguity in respect of the recording of reasons by theAssessing Officer for invoking Sections 147 and 148. Only if the Assessing Officer has recorded the reasons as contemplated underSection 147, he is empowered to issue notice to the Assesseeunder Section 148 by recording the reasons and communicating thesame to the Assessee, enabling the Assessee to furnish his replyand defend his case in respect of reopening of the allegedescaped assessment. Thus, the very ingredients of Section 147have not been satisfied in respect of the actions of therespondents in the present writ petitions. In view of the factthat the notice does not satisfy the requirements of themandatory provisions of "reason to believe" and recording thereasons and communicate the same to the Assessee, the impugnednotice issued under Section 148 is liable to be scrapped as inviolation of the provisions of Sections 147 and 148 of the Act. 21. The learned Senior Counsel further urged this Courtby stating that if a notice is decided to be issued by theAssessing Officer under Section 148 of the Act, then the reasonsfor reopening of the escaped assessment must be stated andcommunicated to the Assessee. The learned Senior Counsel is of afirm opinion that providing reasons subsequently after issuanceof notice is not sufficient. The learned Senior Counsel furthercontended that it is a precondition that in the event of anyreason to believe and a decision is taken by the CompetentAuthorities, then, the reasons must be recorded in the noticeand the same should be communicated to the Assessee. Thus, thetwin requirements as per the Act is that the Assessing Officermust have a reason to believe and such reasons which forms thebasis for the reopening of the escaped assessment must bereduced in writing and communicated to the Assessee at the timeof issuance of the notice. Thus, subsequent communication of thereasons will not save the defective notice issued by theAssessing Officer under Section 148 of the Act. 22. Section 148 defines issue of notice where theincome has escaped assessment. Thus, even the decision is takenunder Section 147 of the Act by the Assessing Officer. Suchreasons must be communicated to the Assessee along with thenotice issued under Section 148 of the Act. 23. Section 149 deals with time limit for notice, whichreads as under:-"(1) No notice under section 148 shallbe issued for the relevant assessment year,—(a) if four years have elapsed from the endof the relevant assessment year, unless thecase falls under clause (b); (b) if fouryears, but not more than six years, haveelapsed from the end of the relevantassessment year unless the income chargeableto tax which has escaped assessment amounts to or is likely to amount to one lakh rupeesor more for that year.Explanation.—Indeterminingincomechargeable to tax which has escapedassessment for the purposes of this sub-section, the provisions of Explanation 2 ofsection 147 shall apply as they apply forthe purposes of that section." 24. Section 149(1)(b) states that six years time limitis fixed from the end of the relevant assessment year unless theincome chargeable to tax which has escaped assessment amounts toor is likely to amount to one lakh rupees or more for that year. Thus, the case of the writ petitioner falls under the saidcategory and accordingly, the time limit prescribed forreopening of the closed assessment is six years. to or is likely to amount to one lakh rupeesor more for that year.Explanation.—Indeterminingincomechargeable to tax which has escapedassessment for the purposes of this sub-section, the provisions of Explanation 2 ofsection 147 shall apply as they apply forthe purposes of that section." 24. Section 149(1)(b) states that six years time limitis fixed from the end of the relevant assessment year unless theincome chargeable to tax which has escaped assessment amounts toor is likely to amount to one lakh rupees or more for that year. Thus, the case of the writ petitioner falls under the saidcategory and accordingly, the time limit prescribed forreopening of the closed assessment is six years. 25. Section 151 speaks about the sanction for issue ofnotice. "(1) In a case where an assessment under sub-section (3)of Section 143 or Section 147 has been made for the relevantassessment year, no notice shall be issued under Section 148 byan Assessing Officer, who is below the rank of AssistantCommissioner or Deputy Commissioner, unless the JointCommissioner is satisfied on the reasons recorded by suchAssessing Officer that it is a fit case for the issue of suchnotice: Provided that, after the expiry of four years from theend of the relevant assessment year, no such notice shall beissued unless the Chief Commissioner or Commissioner issatisfied, on the reasons recorded by the Assessing Officeraforesaid, that it is a fit case for the issue of such notice." 26. Thus, it is made clear that in the event ofreopening of the closed assessment, the Competent Authoritiesare bound to follow all the procedures contemplated underSections 147 to 153 of the Act. 27. Referring the above provisions of the Act, thelearned Senior Counsel for the writ petitioner contended thatthe impugned notice issued under Section 148 is barred by theperiod of limitation. As per the writ petitioner, the period oflimitation is six years. However, in the present cases on hand,the notice under Section 148 of the Act, was issued before theexpiry of the period of six years. However, the reasons forreopening of the assessments were provided after the expiry ofthe six years. Thus, the learned Senior Counsel for the writpetitioner is of an opinion that the date of communication ofthe reasons for reopening of the assessment must be taken intoconsideration for the purpose of reckoning the period oflimitation. In other words, the reasons communicated to the writpetitioner after the expiry of the period of limitation of six https://hcservices.ecourts.gov.in/hcservices/ years will vitiate the entire proceedings. Since law requiresthat along with the notice, the reasons must be communicated. Ifthe reasons are communicated belatedly, then also the actionsbecome null and void. Thus, the impugned notice under Section148 of the Act, is hit by the law of limitation prescribed underSection 149(1)(b) of the Act. 28. The learned Senior Counsel for the writ petitioneris of an opinion that the writ petitioner is not implicated inthe criminal case by the CBI. Therefore, there is no reason toreopen the assessment already concluded in respect of the writpetitioner-Company. 29. In the case of Shri Balwant Rai Wadhva vs. ITO,decided by the Income Tax Appellate Tribunal, Delhi Bench on14.1.2011 in I.T.A.No.4806/Del/10, the period of limitation wasconsidered and paragraph-4 of the judgment, is partly extracted:- 28. The learned Senior Counsel for the writ petitioneris of an opinion that the writ petitioner is not implicated inthe criminal case by the CBI. Therefore, there is no reason toreopen the assessment already concluded in respect of the writpetitioner-Company. 29. In the case of Shri Balwant Rai Wadhva vs. ITO,decided by the Income Tax Appellate Tribunal, Delhi Bench on14.1.2011 in I.T.A.No.4806/Del/10, the period of limitation wasconsidered and paragraph-4 of the judgment, is partly extracted:- "4. We have duly considered the rivalcontention and gone through the recordcarefully. Admittedly the reasons were notsupplied to the assessee by 31st March, 2008i.e. within a period of 6 years from the endof the asstt. year. The question before us iswhether valid service of notice has beenserved upon the assessee within thelimitation provided u/s 149 (1) (b) of theAct. According to this section the noticeought to be served within 6 years from theend of the asstt. year. The contention of theassessee is that Hon’ble Delhi High Court hasheld that if the reasons recorded by the AOfor reopening of assessment has not beensupplied or served within 6 years then itwill be construed that no valid notice hasbeen served upon the assessee within 6years." 30. In the case of Haryana Acrylic Manufacturing Co.vs. Commissioner of Income Tax [(2008) 175 Taxman 262 (Delhi)],wherein the Hon'ble High Court of Delhi, in paragraphs-20 and24, it has been held as follows:-"20. In the reasons supplied to thepetitioner, there is no whisper, what tospeak of any allegation, that the petitionerhad failed to disclose fully and truly allmaterial facts necessary for assessment andthat because of this failure there has beenan escapement of income chargeable to tax.Merely having a reason to believe thatincome had escaped assessment, is not sufficient to reopen assessments beyond thefour year period indicated above. Theescapement of income from assessment mustalso be occasioned by the failure on thepart of the assessee to disclose materialfacts, fully and truly. This is a necessarycondition for overcoming the bar set up bythe proviso to section 147. If thiscondition is not satisfied, the bar wouldoperate and no action under section 147could be taken. We have already mentionedabove that the reasons supplied to thepetitioner does not contain any suchallegation. Consequently, one of theconditions precedent for removing the baragainst taking action after the said fouryear period remains unfulfilled. In ourrecent decision in Wel Intertrade (P.)Ltd.’s we had agreed with the view taken bythe Punjab and Haryana High Court in thecase of Duli Chand Singhania that, in theabsence of an allegation in the reasonsrecorded that the escapement of income hadoccurred by reason of failure on the part ofthe assessee to disclose fully and truly allmaterial facts necessary for his assessment,any action taken by the Assessing Officerunder section 147 beyond the four yearperiod would be wholly without jurisdiction.Reiterating our viewpoint, we hold that thenotice dated 29-3-2004 under section 148based on the recorded reasons as supplied tothe petitioner as well as the consequentorderdated2-3-2005arewithoutjurisdiction as no action under section 147could be taken beyond the four year periodin the circumstances narrated above.24.............This means that a notice under section 148,in the present case, could not, in anyevent, have been issued after six years fromthe end of the assessment year 1998-99,i.e., after 31-3-2005. In whichever way welook at it, a notice under section 148without the communication of the reasonstherefor is meaningless inasmuch as theAssessing Officer is bound to furnish thereasons within a reasonable time. In a case,where the notice has been issued within thesaid period of six years, but the reasons have not been furnished within that period,in our view, any proceedings pursuantthereto would be hit by the bar oflimitation inasmuch as the issuance of thenotice and the communication and furnishingof reasons go hand-in-hand. The expression‘within a reasonable period of time’ as usedby the Supreme Court in GKN Driveshafts(India) Ltd.’s case cannot be stretched tosuch an extent that it extends even beyondthe six years stipulated in section 149. Forthis reason also, even assuming that weoverlook all that has happened between 11-5-2004, when the petitioner sought thereasons, and 5-11-2007, when the said formannexed to the counter-affidavit was filedin this court, the validity of the noticesunder section 148 issued on 29-3-2004 andany proceedings pursuant thereto cannot beupheld." 31. In respect of exhausting the alternate remedy, thelearned Senior Counsel for the writ petitioner relying on thecase of Union of India vs. Ajit Jain [(2003) 129 Taxman 74(SC)], wherein the Hon'ble Supreme Court held as follows:-"The availability of an alternativeremedy is not an absolute bar to theentertainment of a petition under Article 226of the Constitution, though on account ofavailability of statutory remedies Courtsnormally do not entertain the writ petitionsbut where an action is wholly withoutjurisdiction and results in the infringementof any fundamental right, the plea ofalternative remedy is of no avail. Theinstant case did fall in that category." 32. In the case of Principal Commissioner of Income Taxvs. Meenakshi Overseas (P) Ltd [(2017) 82 Taxmann.com 300(Delhi)], wherein the Hon'ble High Court of Delhi, in paragraphs23, 24 and 26, held as follows:-"23. Thus, the crucial link between theinformation made available to the AO and theformation of belief is absent. The reasonsmust be self evident, they must speak forthemselves. The tangible material whichforms the basis for the belief that incomehas escaped assessment must be evident froma reading of the reasons. The entirematerial need not be set out. However, something therein which is critical to theformation of the belief must be referred to.Otherwise the link goes missing. 24. The reopening of assessment underSection 147 is a potent power not to belightly exercised. It certainly cannot beinvoked casually or mechanically. The heartof the provision is the formation of beliefby the AO that income has escapedassessment. The reasons so recorded have tobe based on some tangible material and thatshould be evident from reading the reasons.It cannot be supplied subsequently eitherduring the proceedings when objections tothe reopening are considered or even duringthe assessment proceedings that follow. Thisis the bare minimum mandatory requirement ofthe first part of Section 147 (1) of theAct. 26. The first part of Section 147 (1)of the Act requires the AO to have "reasonsto believe" that any income chargeable totax has escaped assessment. It is thusformation of reason to believe that issubject matter of examination. The AO beinga quasi judicial authority is expected toarrive at a subjective satisfactionindependently on an objective criteria.While the report of the Investigation Wingmight constitute the material on the basisof which he forms the reasons to believe theprocess of arriving at such satisfactioncannot be a mere repetition of the report ofinvestigation. The recording of reasons tobelieve and not reasons to suspect is thepre- condition to the assumption ofjurisdiction under Section 147 of the Act.The reasons to believe must demonstrate linkbetween the tangible material and theformation of the belief or the reason tobelieve that income has escaped assessment." Relying on the abovesaid judgment, the learned Senior Counselurged this Court by stating that in any angle, the impugnedorder cannot survive for want of legal support and accordingly,the same is liable to be quashed. 33. In the case of Commissioner of Income Tax andOthers vs. Chhabil Dass Agarwal [(2014) 1 SCC 603], wherein theHon'ble Supreme Court in paragraphs 3 and 5, held as follows:-"3. It has come on record that the assessee did not comply with the aforesaidnotices issued under Section 148 of the Actand thus, a letter dated 19-1-2001 came tobe issued to the assessee as a reminder tofile his return of income for theassessment years clearly mentioning thatfailure to do so would lead to an ex parteassessment under Section 144 of the Act.Thereafter, upon filing of writtensubmissions by the assessee, notice underSection 142(1) of the Act dated 25-6-2001was issued for Assessment Year 1995-1996along with final show-cause fixingcompliance for hearing dated 9-7-2001. Theassessee sought for an adjournment whichwas not granted and the assessments werecompleted ex parte under Section 144 of theAct raising a tax demand of Rs 2,45,87,625and Rs 6,32,972 for Assessment Years 1995-1996 and 1996-1997, respectively by ordersdated 9-7-2001 and 28-3-2001, respectively.Further, penalty proceedings under Section271(1)(c) of the Act were also initiatedfor both assessment years. 5. It is in the aforesaid backdropthat the assessing authority has passed theassessment order against the assesseeconfirming the earlier notices issued forAssessment Years 1995-1996 and 1996-1997respectively and held that the assessee isliable to pay the income tax as demanded bydemand notice dated 11-12-2009." 34. In the case of Income Tax Officer, Ward No.16(2)vs. Techspan India Private Limited and Another [(2018) 6 SCC685], the Apex Court in paragraph 14, observed as under:-"14. The language of Section 147 makesit clear that the assessing officercertainly has the power to reassess anyincome which escaped assessment for anyassessment year subject to the provisions ofSections 148 to 153. However, the use ofthis power is conditional upon the fact thatthe assessing officer has some reason tobelieve that the income has escapedassessment. The use of the words “reason tobelieve” in Section 147 has to beinterpreted schematically as the liberalinterpretation of the word would have theconsequence of conferring arbitrary powers on the assessing officer who may eveninitiate such reassessment proceedingsmerely on his change of opinion on the basisof same facts and circumstances which hasalready been considered by him during theoriginal assessment proceedings. Such couldnot be the intention of the legislature. Thesaid provision was incorporated in thescheme of the IT Act so as to empower theassessing authorities to reassess any incomeon the ground which was not brought onrecord during the original proceedings andescaped his knowledge; and the said factwould have material bearing on the outcomeof the relevant assessment order." 35. In the case of State of Uttar Pradesh and Othersvs. Aryaverth Chawal Udyog and Others [(2015) 17 SCC 324],wherein the Hon'ble Supreme Court, in paragraphs 28 and 29, heldas under:- 35. In the case of State of Uttar Pradesh and Othersvs. Aryaverth Chawal Udyog and Others [(2015) 17 SCC 324],wherein the Hon'ble Supreme Court, in paragraphs 28 and 29, heldas under:- "28. This Court has consistently heldthat such material on which the assessingauthority bases its opinion must not bearbitrary, irrational, vague, distant orirrelevant. It must bring home theappropriate rationale of action taken by theassessing authority in pursuance of suchbelief. In case of absence of such material,this Court in clear terms has held the actiontaken by the assessing authority on such“reason to believe” as arbitrary and bad inlaw. In case of the same material beingpresent before the assessing authority duringboth, the assessment proceedings and theissuance of notice for reassessmentproceedings, it cannot be said by theassessing authority that “reason to believe”for initiating reassessment is an errordiscovered in the earlier view taken by itduring original assessment proceedings.(See Delhi Cloth and General Mills Co.Ltd. v. State of Rajasthan [Delhi Cloth andGeneral Mills Co. Ltd. v. State of Rajasthan,(1980) 4 SCC 71 : 1980 SCC (Tax) 348] .) 29. The standard of reason exercised bythe assessing authority is laid down as thatof an honest and prudent person who would acton reasonable grounds and come to a cogentconclusion. The necessary sequitur is that amere change of opinion while perusing the same material cannot be a “reason to believe”that a case of escaped assessment existsrequiring assessment proceedings to bereopened.(See BinaniIndustriesLtd. v. CCT [Binani Industries Ltd. v. CCT,(2007) 15 SCC 435] ; A.L.A. Firm v. CIT [A.L.A. Firm v. CIT, (1991) 2 SCC 558] .) If aconscious application of mind is made to therelevant facts and material available orexisting at the relevant point of time whilemaking the assessment and again a differentor divergent view is reached, it wouldtantamount to “change of opinion”. If anassessing authority forms an opinion duringthe original assessment proceedings on thebasis of material facts and subsequentlyfinds it to be erroneous; it is not a validreason under the law for reassessment. Thus,reason to believe cannot be said to be thesubjective satisfaction of the assessingauthority but means an objective view on thedisclosed information in the particular caseand must be based on firm and concrete factsthat some income has escaped assessment." 36. The Supreme Court found that the necessary sequituris that a mere change of opinion while perusing the samematerial cannot be a “reason to believe” that a case of escapedassessment exists requiring assessment proceedings to bereopened. The conscious application of mind is made to therelevant facts and material available or existing at therelevant point of time while making the assessment and again adifferent or divergent view is reached, it would tantamount to“change of opinion”. 37. Referring the said judgment, the learned SeniorCounsel for the writ petitioner is of an opinion that theprinciples laid down by the Supreme Court in the above judgmentsquarely follows in respect of the facts and circumstances ofthe present writ petitions. 38. The writ petitioner-Company had submitted theirreturns within the time stipulated and the same was assessed bythe Assessing Officer and it was concluded. Thus, the CBI chargesheet in which the writ petitioner has not even implicated,cannot provide a ground for issuance of notice under Section 148of the Act for reopening of the assessment which was closed. 39. In the case of Income Tax Officer, I Ward, DistrictVI, Calcutta and others vs. Lakhmani Mewal Das [(1976) 3 SCC https://hcservices.ecourts.gov.in/hcservices/ 757], wherein the Hon'ble Supreme Court, in paragraphs 11 and12, held as follows:- 38. The writ petitioner-Company had submitted theirreturns within the time stipulated and the same was assessed bythe Assessing Officer and it was concluded. Thus, the CBI chargesheet in which the writ petitioner has not even implicated,cannot provide a ground for issuance of notice under Section 148of the Act for reopening of the assessment which was closed. 39. In the case of Income Tax Officer, I Ward, DistrictVI, Calcutta and others vs. Lakhmani Mewal Das [(1976) 3 SCC https://hcservices.ecourts.gov.in/hcservices/ 757], wherein the Hon'ble Supreme Court, in paragraphs 11 and12, held as follows:- "11.As stated earlier, the reasons forthe formation of the belief must have arational connection with or relevant bearingon the formation of the belief. Rationalconnection postulates that there must be adirect nexus or live lin