M/S.sun Direct Tv Pvt Ltd v. The Assistant Commissioner Of Income Tax,Non-Corporate Circle-20(1),Room

IN THE HIGH COURT OF JUDICATURE AT MADRAS M/s.SUN Direct TV Pvt Ltd.,Represented by its Vice President-Finance/Authorised Singatory,No.73, Murasoli Maran Towers,MRC Nagar Main Road,MRC Nagar,Chennai-600 028... Petitioner vs The Assistant Commissioner of Income Tax,Non-Corporate Circle-20(1),Room No.311, III Floor,Aayakhar Bhavan,#121, Mahathma Gandhi Road,Chennai-600 034... Respondent WP No.44311 of 2016 is filed under Article 226 of theConstitution of India praying to issue a Writ ofCertiorari, calling for the records relating to the noticeissued by the respondent in PAN: dated 30.3.2016under Section 148 of the Income Tax Act, 1961 and theconsequential order dated 16.12.2016 in F.No. SCR.119/A/AAICS7671L/A.Y.2009-10/ACIT/NCC-20(1)/CHNoftherespondent and quash the same.For Petitioner : Mr.P.S.Raman,Senior Counsel for Ms.M.Sneha. For Respondent : M/s.J.Narayanaswamy https://hcservices.ecourts.gov.in/hcservices/ The writ petitioner filed this writ petition,challenging the notice issued by the respondent dated30.3.2016 under Section 148 of the Income Tax Act, 1961(hereinafter referred to as the 'Act') in respect of theassessment year 2009-2010 and the consequential order dated16.12.2016. 2. In this writ petition, the writ petitioner isM/s.Sun Direct TV Pvt Ltd., represented by its VicePresident-Finance/Authorised Signatory. PLEADINGS OF THE PETITIONER AS WELL AS THE ARGUMENTS:3. The writ petitioner filed the returns of incomefor the assessment years 2009-2010 within the prescribedtime limit. The returns were selected for compulsoryscrutiny under CASS and scrutinised under Section 143(3) ofthe Act and the assessments were completed in respect ofthe returns. While-so, the impugned notice has been issuedby the respondent in proceedings dated 30.3.2016 underSection 148 of the Act to reopen the assessment years 2009-2010. 4. The grievance of the writ petitioner is thatthe returns filed by the writ petitioner had been assessedunder Section 143(1) of the Act and again as a special caseunder Section 143(3) by way of complete scrutiny ofaccounts. Under those circumstances, the completedassessments are sought to be reopened after a lapse of sixyears without any basis or reasons by the respondent. Thewrit petitioner by its letter dated 19.4.2016 sought forreasons for reopening of the assessments. The respondent bytheir letter dated 31.8.2016 furnished the writ petitionerwith reasons for reopening of the assessments. The reasonscited for the reopening of the assessments, in brief, are:-(a) We have received money from South AsiaEntertainment Holdings Limited in the name of sharesubscription along with share premium – Rs.203.98 crores;(b) Shri Kalanithi Maran and his wife Mrs.KaveriKalanithi Maran were allotted shares only at Rs.10 pershare without any premium;(c) Hence the share premium invested by M/s.SouthAsia Entertainment Holding Limited is clearly excess valuereceived and has to be treated as income of the Assesseeand the same should be brought to tax;(d) The fact that this value has been received inexcess has not been disclosed in the return of income;(e) The high value of share premium with respectto South Asia Entertainment Holdings Limited, is not agenuine transaction details of which was not fully disclosed by the Assessee;(f) Thus, there is a failure on the part of theAssessee to disclose fully and truy all the material factsnecessary for assessment, for the AY 2009-2010;(g) The above transaction is not a genuinetransaction and is required to be assessed to tax underSection 68 of the Income Tax Act, 1961. 5. In response to the reasonings furnished by therespondent for reopening of the assessments, the writpetitioner submitted the following objections on22.11.2016:- disclosed by the Assessee;(f) Thus, there is a failure on the part of theAssessee to disclose fully and truy all the material factsnecessary for assessment, for the AY 2009-2010;(g) The above transaction is not a genuinetransaction and is required to be assessed to tax underSection 68 of the Income Tax Act, 1961. 5. In response to the reasonings furnished by therespondent for reopening of the assessments, the writpetitioner submitted the following objections on22.11.2016:- (a) The receipt of share application money, on ahigher premium, from South Asia Entertainment HoldingLimited, a foreign investment regulated through SEBI, RBI,Registrar of Companies and the Ministry of FinanceApprovals, is a fact, which is available in the Financialssubmitted during the course of scrutiny assessment, on thebasis of which the questionnaire was issued and finally theassessment was completed after satisfying about thecorrectness and completeness of the accounts; (b) It was not reasonably explained in therecorded reasons as to how the excess premium received fromSouth Asia; (c) Entertainment Holding Limited, which wasreceived as a capital receipt, could be treated as'income', being in the revenue nature. Even according tothe respondent, the amount of share application money onpremium was 'invested' by M/s.South Asia EntertainmentHolding Limited. If it was so, then an investment by alegal foreign entity, which is a capital receipt in thehands of petitioner, could never be income in the hands ofthe petitioner. Therefore, the respondent's reasoning intreating the same as income is totally untenable in law; (d) The respondent without taking intoconsideration that the entire investment is reflected inthe financial accounts, which in fact was the reasons forissuing of questionnaire during the course of originalassessment had stated that the increase in shareapplication money on premium was not disclosed. Ifaccording to the respondent if the same has not beendisclosed, which is not true, then it is the duty of therespondent to record as from where such information wasreceived. The alleged information for reopening was alreadyavailable before the Assessing Officer during the course ofscrutiny assessment and there was no fresh information forhim to hold that the transaction as not genuine or acapital receipt has escaped assessment as income.Therefore, it was only a change of opinion that a capitalreceipt is an income as against the earlier decision in avalidly concluded scrutiny assessment that the receipt of share application money on premium from M/s.South AsiaEntertainment Holding Limited, was only a capitalinvestment by a foreign legal entity in an Indian LegalEntity, going through a spate of approvals and legalchannels, and hence accepted the income returned withoutmaking any adjustment on this issue; (e) The last alleged reason is that thetransaction is not genuine and required to be assessedunder Section 68 of the Act. The transaction which was agenuine transaction in the original scrutiny assessment hasnow become a non-genuine transaction without any freshmaterial/information/investigationcomingintoyourpossession or done by you and such 'fresh information' notforming part of the reasons recorded for believing that anyincome has escaped assessment which has to be brought totax under Section 68 of the Income Tax Act, 1961, andconsequently to issue a notice under Section 148 of the Act; (f) It was also objected that the issuance of thenotice under Section 148 of the Act, is prima facie illegalfor the fact that the alleged reasons recorded forreopening the assessment were communicated after the end ofsix years i.e., after 31.3.2016. (f) It was also objected that the issuance of thenotice under Section 148 of the Act, is prima facie illegalfor the fact that the alleged reasons recorded forreopening the assessment were communicated after the end ofsix years i.e., after 31.3.2016. 6. Without considering the objections submitted bythe writ petitioner, the respondent rejected the samethrough their order dated 16.12.2016 on the followinggrounds:-(a) The Assessee did not inform the details ofshare premium in the return of income filed and hence theAssessee failed to disclose fully and truly all thematerial facts necessary for its assessment; (b) There is no change of opinion, relying on certain decisions; (c) Stated that the Apex Court decision in thecase of Lovely Exports, is not applicable to the facts ofthe case. 7. The writ petitioner contended that theAssessing Officer in his reasons recorded for reopening ofthe assessment states that there was no disclosure of fullyand truly all material facts necessary for assessment.However, the Assessing Officer in his order dated 6.12.2016had not disclosed the details from where share premiumdetails were derived from. The non-disclosure of the sourcewill clearly establish the fact that, the abovesaid entiredetails were readily available in the financials and formedpart of records during the course of original assessmentand there are no new materials which came to the possessionof the Assessing Officer after completing and accepting theassessment. This will clearly establish the fact that thereason for reopening of the assessment is nothing but mere https://hcservices.ecourts.gov.in/hcservices/ 'change of opinion' without any new material factors. Inthe case of the petitioner also the petitioner had filedits return under Section 143(1) of the Act and thereafter,as a special case it was directed to file the return underSection 143(3) of the Act, after issuing a questionnairewhich was answered and the returns were accepted. Whenentire investment is reflected in the financial accounts,which in fact was the reasons for issuing of questionnaireduring the course of original assessment and the same beingaccepted, the present reasons for reopening of theassessment is nothing but change of opinion. 8. In support of the said submission, thepetitioner has cited certain judgments which we will deallittle later. The contention of the petitioner is thatrespondent deliberately failed to take into considerationthe judgment with regard to the limitation provided underthe Act for issuance of notice under Section 148 withreference to the Law of Limitation prescribed under the Act. 9. The learned Senior Counsel, appearing on behalfof the writ petitioner, forcibly contended that theimpugned notice dated 30.3.2016 and the rejection ofobjections by the respondent are clearly barred bylimitation prescribed under the provisions of the IncomeTax Act, 1961. The failure on the part of the respondent innot producing the reasons along with the impugned noticecaused a stigma and has got certain civil consequences. 10. In the present cases, it is contended that itis a “change of opinion by the Assessing Officer”. It isnot a case of “reason to believe” contemplated underSection 147 of the Act. “Change of opinion” isimpermissible in view of the fact that the very same meritswere considered at the time of concluding the assessmentsduring the relevant point of time in respect of the returnsfiled by the writ petitioner for the respective assessmentyears, namely, 2009-2010, 2010-2011 and 2011-2012. Formingsecond opinion in respect of the closed assessments areimpermissible under the Act. 10. In the present cases, it is contended that itis a “change of opinion by the Assessing Officer”. It isnot a case of “reason to believe” contemplated underSection 147 of the Act. “Change of opinion” isimpermissible in view of the fact that the very same meritswere considered at the time of concluding the assessmentsduring the relevant point of time in respect of the returnsfiled by the writ petitioner for the respective assessmentyears, namely, 2009-2010, 2010-2011 and 2011-2012. Formingsecond opinion in respect of the closed assessments areimpermissible under the Act. 11. On a perusal of the rejection order issued bythe respondent, it is unambiguous that the opinion formedby the respondent is nothing but the reappraisal of thefact which were already disclosed and assessed by theAssessing Officer deuring the relevant point of time. Thewrit petitioner-Company explained the nature oftransactions and issue of shares and other details. No salehappened actually. Transfer of shares with reference to theCompanies Act, 1956 is permissible and therefore, such atransaction can never be construed as a new material or a suppressed material, so as to reopen the closed assessmentunder Section 148 of the Act. All these particulars inrelation to the issuance of shares were communicated alongwith the returns filed by the writ petitioner. The workingsheets valuation and other details were also furnished. Itis relevant to cite that the foreign investment promotionboard, Reserve Bank of India, Ministry of Finance and allother Governmental officials had approved the transactionsand necessary clearances also were given to in respect ofall such transactions. Thus, the impugned notice issuedunder Section 148 of the Act, now after a lapse of sixyears, is nothing but a “change of opinion”, can never beconstrued as a “reason to believe”. 12. There was no suppression of fact absolutely inrespect of the returns filed by the writ petitioner withreference to the transactions now they are cited in thereasonings. Thus, the impugned notices are amounts to abuseof power warranting quashing of the notice. The respondenthas not established any fresh material or identifiedsuppression of fact, in the absence of any one of theseingredients, the Assessing Officer has no authority toinvoke Section 148 by issuing the impugned notice. 13. Section 143 of the Act, deals with“assessment”. In the case of the writ petitioner, theassessment had been completed with reference to Section 143(3) of the Act. The Tax Questionnaire issued to the writpetitioners were answered properly and the AssessingOfficer considered the same and concluded the assessment.This being the factum, there is no reason to believe forreopening of the assessments, which were closed. 14. At the outset, the learned Senior Counsel isof an opinion that “change of opinion” in the absence ofany new material or suppression of fact is impermissibleunder the Act. The reopening of assessments and the noticesunder Section 148 of the Act, were issued in respect offour different Assessees. Therefore, the principles of “oneincome”, “one tax” had not been considered by the AssessingOfficer. Thus, the very action is mala fide, perverse andin violation of the provisions of the Act. 15. The learned Senior Counsel, with reference tothe point raised by the Additional Solicitor General ofIndia that the writ petition is not maintainable, contendedthat the Hon'ble Division Bench of this Court passed anorder in the writ appeal in W.A.No.347 to 349 of 2014 etc.batch, on 4.7.2014. In the writ appeals the issues raisedbefore the Hon'ble Division Bench were answered against theAssessees and in favour of the revenue and the writ https://hcservices.ecourts.gov.in/hcservices/ 15. The learned Senior Counsel, with reference tothe point raised by the Additional Solicitor General ofIndia that the writ petition is not maintainable, contendedthat the Hon'ble Division Bench of this Court passed anorder in the writ appeal in W.A.No.347 to 349 of 2014 etc.batch, on 4.7.2014. In the writ appeals the issues raisedbefore the Hon'ble Division Bench were answered against theAssessees and in favour of the revenue and the writ https://hcservices.ecourts.gov.in/hcservices/ petitions were dismissed against the Division Bench Order.An appeal was filed before the Supreme Court of India inCivil Appeal No.11189 of 2016, the Hon'ble Supreme Court ofIndia by citing the judgment of Calcutta Discount LimitedCompany vs. Income Tax Officer, Companies District I,Calcutta [(1961) 41 ITR 191 (SC)], set aside the cases andremanded the matters back to the High Court. It is furtherobserved that each case shall be examined on its own meritskeeping in view the scope of judicial review whileentertaining such matters, as laid down by the Hon'bleSupreme Court in various judgments. The Supreme Courtfurther observed that “we are conscious of the fact thatthe High Court has referred to the judgment of this Courtin Commissioner of Income Tax vs. Chhabil Dass Agarwal[(2013) ITR 357 (SC)]. We find that the principle laid downin the said case does not apply to these cases.” Relyingon the observations, the learned Senior Counsel is of anopinion that the present writ petition is also to bedecided on merits and the same cannot be dismissed merelyon the ground of maintainability as raised by therespondent that the writ petitioners are having alternateremedy under the provisions of the Act. 16. A mere suspicion in respect of certaintransactions cannot constitute a cause of action for therespondent to reopen the closed assessments. The chargesheet filed by the CBI alone cannot constitute a ground forthe purpose of reopening of the closed assessments andtherefore, the impugned orders are to be set aside. 17. In the case of Shri Balwant Rai Wadhva vs.ITO, decided by the Income Tax Appellate Tribunal, DelhiBench on 14.1.2011 in I.T.A.No.4806/Del/10, the period oflimitation was considered and paragraph-4 of the judgment,is partly extracted:- "4. We have duly considered therival contention and gone through therecord carefully. Admittedly the reasonswere not supplied to the assessee by31st March, 2008 i.e. within a period of6 years from the end of the asstt. year.The question before us is whether validservice of notice has been served uponthe assessee within the limitationprovided u/s 149 (1) (b) of the Act.According to this section the noticeought to be served within 6 years fromthe end of the asstt. year. Thecontention of the assessee is thatHon’ble Delhi High Court has held thatif the reasons recorded by the AO for reopening of assessment has not beensupplied or served within 6 years thenit will be construed that no validnotice has been served upon the assesseewithin 6 years." "4. We have duly considered therival contention and gone through therecord carefully. Admittedly the reasonswere not supplied to the assessee by31st March, 2008 i.e. within a period of6 years from the end of the asstt. year.The question before us is whether validservice of notice has been served uponthe assessee within the limitationprovided u/s 149 (1) (b) of the Act.According to this section the noticeought to be served within 6 years fromthe end of the asstt. year. Thecontention of the assessee is thatHon’ble Delhi High Court has held thatif the reasons recorded by the AO for reopening of assessment has not beensupplied or served within 6 years thenit will be construed that no validnotice has been served upon the assesseewithin 6 years." 18. In the case of Haryana Acrylic ManufacturingCo. vs. Commissioner of Income Tax [(2008) 175 Taxman 262(Delhi)], wherein the Hon'ble High Court of Delhi, inparagraphs-20 and 24, it has been held as follows:-"20. In the reasons supplied tothe petitioner, there is no whisper,what to speak of any allegation, thatthe petitioner had failed to disclosefully and truly all material factsnecessary for assessment and thatbecause of this failure there has beenan escapement of income chargeable totax. Merely having a reason to believethat income had escaped assessment, isnot sufficient to reopen assessmentsbeyond the four year period indicatedabove. The escapement of income fromassessment must also be occasioned bythe failure on the part of the assesseeto disclose material facts, fully andtruly. This is a necessary conditionfor overcoming the bar set up by theproviso to section 147. If thiscondition is not satisfied, the barwould operate and no action undersection 147 could be taken. We havealready mentioned above that thereasons supplied to the petitioner doesnot contain any such allegation.Consequently, one of the conditionsprecedent for removing the bar againsttaking action after the said four yearperiod remains unfulfilled. In ourrecent decision in Wel Intertrade (P.)Ltd.’s we had agreed with the viewtaken by the Punjab and Haryana HighCourt in the case of Duli ChandSinghania that, in the absence of anallegation in the reasons recorded thatthe escapement of income had occurredby reason of failure on the part of theassessee to disclose fully and trulyall material facts necessary for hisassessment, any action taken by theAssessing Officer under section 147 beyond the four year period would bewhollywithoutjurisdiction.Reiterating our viewpoint, we hold thatthe notice dated 29-3-2004 undersection 148 based on the recordedreasons as supplied to the petitioneras well as the consequent order dated2-3-2005 are without jurisdiction as noaction under section 147 could be takenbeyond the four year period in thecircumstances narrated above.24.............This means that a notice under section148, in the present case, could not, inany event, have been issued after sixyears from the end of the assessmentyear 1998-99, i.e., after 31-3-2005. Inwhichever way we look at it, a noticeunder section 148 without thecommunication of the reasons thereforis meaningless inasmuch as theAssessing Officer is bound to furnishthe reasons within a reasonable time.In a case, where the notice has beenissued within the said period of sixyears, but the reasons have not beenfurnished within that period, in ourview, any proceedings pursuant theretowould be hit by the bar of limitationinasmuch as the issuance of the noticeand the communication and furnishing ofreasons go hand-in-hand. The expression‘within a reasonable period of time’ asused by the Supreme Court in GKNDriveshafts (India) Ltd.’s case cannotbe stretched to such an extent that itextends even beyond the six yearsstipulated in section 149. For thisreason also, even assuming that weoverlook all that has happened between11-5-2004, when the petitioner soughtthe reasons, and 5-11-2007, when thesaid form annexed to the counter-affidavit was filed in this court, thevalidity of the notices under section148 issued on 29-3-2004 and anyproceedings pursuant thereto cannot beupheld." 19. In respect of exhausting the alternate remedy,the learned Senior Counsel for the writ petitioner relying on the case of Union of India vs. Ajit Jain [(2003) 129Taxman 74 (SC)], wherein the Hon'ble Supreme Court held asfollows:- "The availability of an alternativeremedy is not an absolute bar to theentertainment of a petition underArticle 226 of the Constitution, thoughon account of availability of statutoryremedies Courts normally do notentertain the writ petitions but wherean action is wholly without jurisdictionand results in the infringement of anyfundamental right, the plea ofalternative remedy is of no avail. Theinstant case did fall in that category." 20. In the case of Principal Commissioner ofIncome Tax vs. Meenakshi Overseas (P) Ltd [(2017) 82Taxmann.com 300 (Delhi)], wherein the Hon'ble High Court ofDelhi, in paragraphs 23, 24 and 26, held as follows:- "23. Thus, the crucial linkbetween the information made availableto the AO and the formation of beliefis absent. The reasons must be selfevident,theymustspeakforthemselves. The tangible material whichforms the basis for the belief thatincome has escaped assessment must beevident from a reading of the reasons.The entire material need not be setout. However, something therein whichis critical to the formation of thebelief must be referred to. Otherwisethe link goes missing.24. The reopening of assessmentunder Section 147 is a potent power notto be lightly exercised. It certainlycannotbeinvokedcasuallyormechanically. The heart of theprovision is the formation of belief bythe AO that income has escapedassessment. The reasons so recordedhave to be based on some tangiblematerial and that should be evidentfrom reading the reasons. It cannot besupplied subsequently either during theproceedings when objections to thereopening are considered or even duringthe assessment proceedings that follow.This is the bare minimum mandatoryrequirement of the first part of Section 147 (1) of the Act. Section 147 (1) of the Act. 26. The first part of Section 147(1) of the Act requires the AO to have"reasons to believe" that any incomechargeabletotaxhasescapedassessment. It is thus formation ofreason to believe that is subjectmatter of examination. The AO being aquasi judicial authority is expected toarrive at a subjective satisfactionindependently on an objective criteria.While the report of the InvestigationWing might constitute the material onthe basis of which he forms the reasonsto believe the process of arriving atsuch satisfaction cannot be a mererepetitionofthereportofinvestigation. The recording of reasonsto believe and not reasons to suspectis the pre- condition to the assumptionof jurisdiction under Section 147 ofthe Act. The reasons to believe mustdemonstrate link between the tangiblematerial and the formation of thebelief or the reason to believe thatincome has escaped assessment." Relying on the abovesaid judgment, the learned SeniorCounsel urged this Court by stating that in any angle, theimpugned order cannot survive for want of legal support andaccordingly, the same is liable to be quashed.21. The learned Senior Counsel referred the caseof Commissioner of Income Tax, Delhi vs. Kelvinator ofIndia Ltd (now known as Whirlpool of India Ltd.) [(2010)187 Taxman 312 (SC)], wherein the Hon'ble Supreme Court, inparagraph-4 of the judgment, held as follows:-"4. On going through the changesquoted, made to Section 147 of the Act,we find that, prior to Direct Tax Laws(Amendment) Act, 1987, reopening couldbe done under above two conditions andfulfillment of the said conditions aloneconferred jurisdiction on the AssessingOfficer to make a back assessment, butinsection 147of the Act [with effectfrom 1st April, 1989], they are given ago-by and only one condition hasremained, viz., that where the AssessingOfficer has reason to believe thatincome has escaped assessment, confersjurisdiction to re- open the assessment. Therefore, post-1st April, 1989, powerto re-open is much wider. However, oneneeds to give a schematic interpretationto the words "reason to believe" failingwhich, we are afraid,Section 147wouldgive arbitrary powers to the AssessingOfficer to re-open assessments on thebasis of "mere change of opinion", whichcannot be per se reason to re-open. Wemust also keep in mind the conceptualdifference between power to review andpower to re-assess. The AssessingOfficer has no power to review; he hasthe power to re-assess. But re-assessment has to be based onfulfillment of certain pre-condition andif the concept of "change of opinion" isremoved, as contended on behalf of theDepartment, then, in the garb of re-opening the assessment, review wouldtake place. One must treat the conceptof "change of opinion" as an in-builttest to check abuse of power by theAssessing Officer. Hence, after 1stApril, 1989, Assessing Officer has powerto re-open, provided there is "tangiblematerial" to come to the conclusion thatthere is escapement of income fromassessment. Reasons must have a livelink with the formation of the belief.Our view gets support from the changesmade toSection 147of the Act, asquoted hereinabove. Under the Direct TaxLaws (Amendment) Act, 1987, Parliamentnot only deleted the words "reason tobelieve" but also inserted the word"opinion" inSection 147of the Act.However, on receipt of representationsfrom the Companies against omission ofthe words "reason to believe",Parliament re-introduced the saidexpression and deleted the word"opinion" on the ground that it wouldvest arbitrary powers in the AssessingOfficer. We quote hereinbelow therelevant portion of Circular No.549dated 31st October, 1989, which reads asfollows: "7.2 Amendment made by theAmendingAct, 1989, to reintroduce the expression`reason to believe' inSection 147.--A "7.2 Amendment made by theAmendingAct, 1989, to reintroduce the expression`reason to believe' inSection 147.--A 23. In the case of Commissioner of Income Tax VI,New Delhi vs. Usha International Ltd [(2012) 253 CTR 113 (Delhi)], the term "change of opinion" has been explainedin paragraph-6 as under:- "6. The questions of law at serialNos. 1 to 3 referred to the Full Benchare inter-connected. They deal with theterm and facets of the term -change ofopinion?. The expression -change ofopinion? postulates formation of opinionand then a change thereof. In thecontext of Section 147 of the Act itimplies that the Assessing Officershould have formed an opinion at thefirst instance, i.e., in the proceedingsunder Section143(3) andnowbyinitiationofthereassessmentproceeding, the Assessing Officerproposes or wants to take a differentview." 24. Further in paragraphs 12, 13 and 14, the powerto review by the Assessing Officer has been stated asunder:-"12. The said observations havebeen rightly held to be contrary to theFull Bench decision of the Delhi HighCourt in Kelvinator of India Limited(supra) in Eicher Limited (supra). Thesaid decision in Eicher Limited (supra)makes reference to the decision of KLMRoyal Dutch Airlines vs. AssistantCommissioner of Income Tax [2007] 292ITR 49 (Delhi). KLM Royal case (supra)deals with some other issues on whichwe do not express or make anyobservation approving or disapproving.Some of these aspects have beenconsidered and explained in otherdecisions in light of the judgment ofthe Supreme Court in the case of RajeshJhaveri Stock Brokers Pvt. Ltd.(supra).13. It is, therefore, clear fromthe aforesaid position that:(1) Reassessment proceedings canbe validly initiated in case return ofincome is processed under Section 143(1) and no scrutiny assessment isundertaken. In such cases there is nochange of opinion; (2) Reassessment proceedings willbe invalid in case the assessment orderitself records that the issue wasraised and is decided in favour of theassesse. Reassessment proceedings inthe said cases will be hit by principleof -change of opinion?. (3) Reassessment proceedings willbe invalid in case an issue or query israised and answered by the assessee inoriginal assessment proceedings butthereafter the Assessing Officer doesnot make any addition in the assessmentorder. In such situations it should beaccepted that the issue was examinedbut the Assessing Officer did not findany ground or reason to make additionor reject the stand of the assessee. Heforms an opinion. The reassessment willbe invalid because the AssessingOfficer had formed an opinion in theoriginal assessment, though he had notrecorded his reasons.14. In the second and thirdsituation, the Revenue is not withoutremedy. In case the assessment order iserroneous and prejudicial to theinterest of the Revenue, they areentitled to and can invoke powerunder Section 263 of the Act. Thisaspectandpositionhasbeenhighlighted in CIT vs. DLF PowersLimited, ITA 973/2011 decided on 29thNovember, 2011 and BLB Limited vs. ACITWrit Petition (Civil) No. 6884/2010decided on 1st December, 2011. In thelast decision it has been observed: "13. Revenue had the option, butdid not take recourse to Section 263 ofthe Act, inspite of audit objection.Supervisory and revisionary powerunder Section 263 of the Act isavailable, if an order passed by theAssessing Officer is erroneous andprejudicial to the interest of theRevenue. An erroneous order contrary tolaw that has caused prejudiced can be correct,whenjurisdictionunder Section 263 is invoked." 25. Relying on the abovesaid judgment, the learnedSenior Counsel for the writ petitioner, urged this Court bystating that in any angle, the impugned orders cannotsustain for want of legal support and accordingly liable tobe scrapped. "13. Revenue had the option, butdid not take recourse to Section 263 ofthe Act, inspite of audit objection.Supervisory and revisionary powerunder Section 263 of the Act isavailable, if an order passed by theAssessing Officer is erroneous andprejudicial to the interest of theRevenue. An erroneous order contrary tolaw that has caused prejudiced can be correct,whenjurisdictionunder Section 263 is invoked." 25. Relying on the abovesaid judgment, the learnedSenior Counsel for the writ petitioner, urged this Court bystating that in any angle, the impugned orders cannotsustain for want of legal support and accordingly liable tobe scrapped. PLEADINGS OF THE RESPONDENT AS WELL AS THE ARGUMENTS:-26. The respondent raised a preliminary objectionwith regard to the maintainability of the writ petition inview of the fact that an alternate remedy is available andprovided under the Income Tax Act itself. Without exhausingthe remedies provided under the Statute, the present writpetition cannot be entertained and accordingly, they areliable to be rejected in limine. 27. In this regard, reliance is placed on thejudgment of the Allahabad High Court in the case of DOKINandan Singhania vs. CIT [190 ITR 289], Zigma Commodity PLtd vs. ITO, Ward-5(3), Kolkatta [46 Taxmann.com 339],Dr.Nedunchezhian vs. CIT [279 ITR 342 (Madras)], CIT vs.Chhabil Das Agarwal [357 ITR 357 SC] and that of KoneElevators India Ltd [35 Taxmann.com 102 (Madras)]. 28. It is contended that the information providedby the CBI would fall under the category of new informationbased on which the Assessing Officer has reason to believeand formed his opinion. It is pertinent to state that incase of Mrs.Rama Sinha vs. CIT [(2003) 130 Taxman 139(P&H)] has held that the reassessment proceedeings cannotbe questioned since the Assessing Officer initiated thereassessment proceedings on the basis of the definiteinformation received from the CBI about the Assessee.Further, in the case of Balram Jagar vs. CIT [(2002) 120Taxman 464 (P&H)], it was held that the question whetherthe petitioner could held liable for an offence under thePrevention of Corruption Act or any other contemporaneousStatute could not have any bearing on his liability to betaxed under the Act and the Competent Authority constitutedunder the Act would not be denuded of his jurisdiction todetermine the petitioner's liability to pay tax in relationto the particular assessment year simply because in acriminal case, charge had not been framed. 29. The settled position of law is that there isno mandatory requirement as per the Income Tax Act, 1961,furnishing the reasons to the Assessee at the time of theissuance of the notice. As per the decision of the Apex Court, in the case of GKN Driveshaft [259 ITR 19], it washeld that the due procedure to be followed during reopeningproceedings was that once the notice is served the Assesseewould have to necessarily file its return and then onrequest, the Assessing Officer should furnish the reasonsfor reopening of the assessment. The time limit providedunder the Act is therefore, only for proper issue andservice of notice which had been duly followed in thepresent cases. 30. The writ petitioner questioned the sufficiencyof the reasons and the modus operandi of the investigationif any conducted which is not for the writ petitioner toquestion. The fact that scrutiny proceedings were conductedin a different entity does not absolve the writ petitionerof the proceedings being initiated against him in the lightof the new information concerning the writ petitioner'scase. Further, in the following cases, the Courts have heldthat the information received from the Investigation Wingwould constitute material based on which reason to believecould be formed. [See AGR Investment Ltd vs. Additional CITand Another [333 ITR 146 (Del); and Salimar Builtcon P. Ltdvs. ITO-ITAT, Jaipur [136 TTJ 701]. 30. The writ petitioner questioned the sufficiencyof the reasons and the modus operandi of the investigationif any conducted which is not for the writ petitioner toquestion. The fact that scrutiny proceedings were conductedin a different entity does not absolve the writ petitionerof the proceedings being initiated against him in the lightof the new information concerning the writ petitioner'scase. Further, in the following cases, the Courts have heldthat the information received from the Investigation Wingwould constitute material based on which reason to believecould be formed. [See AGR Investment Ltd vs. Additional CITand Another [333 ITR 146 (Del); and Salimar Builtcon P. Ltdvs. ITO-ITAT, Jaipur [136 TTJ 701]. 31. The settled position of law regardingsufficiency of the reason is not up for questioning whenthe Assessing Officer has formed his belief for the same.Substantive proof for escapement of income in order to makeany additions can only be made after verification ofdetails during the proceedings. The writ petitioner hadquoted from the speaking order but had conveniently omitteda line in between there by changing the context of thesentence with the intention to mislead this Court. Courtshave consistently held that at the time of reopening, theAssessing Officer should possess of some material and isnot required to establish the escapement of income, thevalidity of the reassessment on the basis of the finaloutcome of the reassessment proceeding on that item couldnot be proper. [See Sri Krishna P. Ltd vs. CIT [221 ITR 538(SC)] and in the case of Central Province Manganese Ore Co.Ltd vs. ITO [191 ITR 662], which support the stand of theDepartment. 32. The Assessee contends that foreign investmentswere brought into the country after obtaining variousapproval from the Government Agency. However, the CBIreport suggest that the Assessee has used his personalinfluence and had obtained illegal gratification during thesaid process. Further, during the relevant time, when thewrit petitioner was holding a key position in theGovernment of India and therefore, the transaction cannot be simply brushed aside sighting that it was approved invarious stages by the Government. The writ petitioner canprove the same by availing this opportunity for due hearingduring the scrutiny proceedings. The writ petitioner isentering into the shoes of the Assessing Officer and wasciting method of investigations which should be carried outfor forming a reason which is an entirely subjectiveposition provided under the Statute. 33. The proceedings under the Income Tax Act andthe proceedings conducted by CBI are different and distinctfrom each other. The Income Tax Act provides for limitationof time, for reopening of the assessment upto six yearsfrom the relevant assessment year whereas the proceedingsunder the CBI would take more time for Courts to decide andif the Department has to wait till the outcome of theproceedings of the CBI then the proceedings under theIncome Tax Act would get time barred leading to a potentialleakage of revenue for the Nation. Thus, both are differentand distinct proceedings and the level of evidence vary. Anotice under Section 148 can be issued once the reason forbelief is formed on the information in the possession ofthe Assessing Officer. Proceedings are initiated to verifythe same and the writ petitioner would be given a fairopportunity for defending his case by submitting proof andarguments. In fact the Hon'ble Apex Court in a casereported in 103 ITR 437 has held that Court cannot go intoadequacy of material if reason for information of believeshas a rational connection with the formation of belief. 34. In the case of Raymond Woolen Mills reportedin 236 ITR 34, the Hon'ble Supreme Court had reiterated theposition that Courts can only consider whether there was aprima facie case for reassessment and that sufficiency ofmaterial or correctness of the material is not to beconsidered at that stage. 35. The learned Additional Solicitor General ofIndia, at the first instance, made a submission that inrespect of WP No.3405 of 2016, the order of assessment hadalready been passed by the Assessing Officer and the samehas not given effect to on account of the pendency of thepresent writ petition. In respect of WP No.43944 of 2016,the order passed by the Assessing Officer is kept under thesealed cover, so also the assessment order passed withreferrence to WP No.44311 of 2016 has not given effect to. 36. The learned Additional Solicitor General ofIndia, at the outset, disputed the interpretations providedby the learned Senior Counsel appearing for the writ https://hcservices.ecourts.gov.in/hcservices/ petitioner with reference to Sections 147 and 148 of theIncome Tax Act, 1961. In respect of maintainability of thepresent writ petition, it is contended that the writpetitioner is bound to participate in the process ofassessment based on the notice issued by the CompetentAuthority under Section 148 of the Act and after passing ofthe assessment order, the writ petitioner is havingappellate remedy under the provisions of the Act. 37. Pursuant to the amendment made on 1.4.1989,there is a change in the provisions of the Income Tax Actand the original term "reasons to be recorded in writing"has been amended as "has reason to believe". Thus, it isthe subjective satisfaction of the Assessing Officerwhether there is any reason to believe for the purpose ofreopening the escaped assessment. The Assessing Officer,undoubtedly, has to record the reasons for reopening of theescaped assessment. However, the sufficiency of thematerials available with the Assessing Officer cannot bequestioned nor provide a cause of action for the writpetitioner to challenge the very notice by way of a writpetition under Article 226 of the Constitution of India.There is an application of mind on the part of theCompetent Authorities while recording the reasons as theprovision warrants such an exercise. However, the same neednot be communicated at the notice stage and the reasonswere already communicated in respect of the writ petitionerat his request. Thus, the procedures contemplated under theAct, are followed scrupulously by the Competent Authoritiesand there is no infirmity or irregularity. 38. The learned Additional Solicitor General ofIndia once again gone through the ingredients of Section147. The language employed in Section 147 of the Act isthat "If the Assessing Officer 'has reason to believe' thatany income may, subject to the provisions of Sections 148to 153, assess or reassess such income and also any otherincome chargeable to tax which has escaped assessment andwhich comes to his notice". 39. The learned Additional Solicitor General ofIndia is of an opinion that it is the subjectivesatisfaction of the Assessing Officer in respect of therequirement that he has a reason to believe. Secondly, theAssessing Officer is empowered to assess or reassess suchincome and also any other income chargeable to tax whichhas escaped assessment. The intention of the Section isunambiguous that the Assessing Officer is empowered to makean assessment or reassess the assessment already reachedfinality. Thus, the fresh assessment in respect of certainmaterials is also permissible under Section 147 as well as 39. The learned Additional Solicitor General ofIndia is of an opinion that it is the subjectivesatisfaction of the Assessing Officer in respect of therequirement that he has a reason to believe. Secondly, theAssessing Officer is empowered to assess or reassess suchincome and also any other income chargeable to tax whichhas escaped assessment. The intention of the Section isunambiguous that the Assessing Officer is empowered to makean assessment or reassess the assessment already reachedfinality. Thus, the fresh assessment in respect of certainmaterials is also permissible under Section 147 as well as reassessment is also permissible under the Act. Whenassessment as well as the reassessment is permissible andif the Assessing Officer has got a reason to believe thatthere are some materials for reopening of the assessment,then he can issue notice under Section 148 of the Act. 40. Explanation 1 to Section 147 states that"production before the Assessing Officer of account booksor other evidence from wh