Ranbaxy Laboratories Ltd v. Deputy Commissioner Of Incometax And Anr

THE HIGH COURT OF DELHI AT NEW DELHI %Judgment delivered on: 24.01.2013 + W.P.(C) 6728/2011 RANBAXY LABORATORIES LTD ... Petitioner versus DEPUTY COMMISSIONER OF INCOMETAX AND ANR ... Respondents Advocates who appeared in this case:For the Petitioner: Mr M. S. Syali, Sr Advocate with Mr V. P. Gupta,Mr Mayank Nagi and Mrs Husnal Syali NagiFor the Respondents : Mr Abhishek Maratha with Ms Anshul Sharma CORAM:-HON’BLE MR JUSTICE BADAR DURREZ AHMEDHON’BLE MR JUSTICE R.V.EASWAR JUDGMENT BADAR DURREZ AHMED, J (ORAL) 1.By way of this writ petition, the petitioner is challenging the noticedated 29.03.2010 issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as ‘the said Act’), whereby the Assessing Officer hasproposed to re-open the assessment for the assessment year 2003-04. Earlier,the assessment had been framed under Section 143(3) by virtue of anassessment order dated 28.03.2004. 2.The purported reasons for re-opening the assessment for the assessment year 2003-04 are as under:- “Reasons for the belief that income has escaped assessment: Incorrect allowance of deduction in respect of royalty receivedfrom foreign enterprise. The assessment of M/s Ranbaxy Laboratories Ltd. for theassessmentyear2003-04wascompletedu/s250/143(3)01.08.2004 determining an income of ` 3,10,79,46,649/- afterallowing deduction under Section 80-O. It was later observedthatthedeductionwasallowedongrossreceiptsof` 49,96,75,364/- without deducting the proportionate expensesto such income after considering the total expenses debited tothe relevant profit and loss account allocated on pro-rata basisbetween the receipts from foreign enterprise and other incomethe admissible deduction worked out to ` 2,69,82,469/- against` 9,99,35,082/- allowed by the department. The incorrectallowance of deduction resulted in under assessment of incomeof ` 7,29,52,603/- involving tax effect of ` 2,68,10,082/,- Incorrect allowance of deduction in respect of export profits The assessment of M/s Ranbaxy Laboratories Ltd. forassessment year 2003-04 was completed u/s 143(3) 250 on01.08.05 determining on income of` 3107946649/-. It waslater observed that while computing the deductions tradediscount and R&D (Capital) expenses was not incurred in theindirect cost.The omission resulted in excess allowance ofdeduction of ` 45741309 involving tax effect of ` 16809930/-. Incorrect allowance of deduction in respect of profit and gainsfrom newly established undertakings. The assessment of M/s Ranbaxy Laboratories Ltd. for theassessment year 2003-04 was completed u/s 250/143(3) on01.08.05 determining an income of ` 3,10,79,46,649/-. It was later observed that while claiming deduction under section 80IB, the assessee had apportioned allowed by AO and was 30percent of R&D (Revenue) expenses and 75 percent of headofficeexpensesintheseparateaccountsofindividualundertaking in the ratio of sales whereas 100 percent expenseswere required to be apportioned. The omission resulted inexcess allowance of deductions of ` 29,00,11,919/- involvingtax effect of ` 10,65,79,380/-. Incorrect allowance of deduction in respect of profit and painsfrom newly established industrial undertakings. The assessment of M/s Ranbaxy Laboratories Ltd. for theassessment year 2003-04 was completed u/s 250/143(3) on1.08.05 determining an income of ` 3,10,79,46,649/-. It waslater observed that while allowing deductions under section 80IB, the assessee had apportioned allowed by AO and was 30percent of R&D (Revenue) expenses and 75 percent of headofficeexpensesintheseparateaccountsofindividualundertaking in the ratio of sales whereas 100 percent expenseswere required to be apportioned. The omission resulted inexcess allowance of deductions of ` 17,20,35,049/- involvingtax effect of ` 6,32,22,880/-. Incorrect allowance of non-business expenditure. Incorrect allowance of deduction in respect of profit and painsfrom newly established industrial undertakings. The assessment of M/s Ranbaxy Laboratories Ltd. for theassessment year 2003-04 was completed u/s 250/143(3) on1.08.05 determining an income of ` 3,10,79,46,649/-. It waslater observed that while allowing deductions under section 80IB, the assessee had apportioned allowed by AO and was 30percent of R&D (Revenue) expenses and 75 percent of headofficeexpensesintheseparateaccountsofindividualundertaking in the ratio of sales whereas 100 percent expenseswere required to be apportioned. The omission resulted inexcess allowance of deductions of ` 17,20,35,049/- involvingtax effect of ` 6,32,22,880/-. Incorrect allowance of non-business expenditure. The assessment of Ranbaxy Laboratories Ltd. for theassessment year 2003-04 and 2004-05 was completed u/s250/143(3) and 154/143(3) on 27.4.04 and 5.4.05 determiningan income of` 3,63,45,44,931/- and` 3,10,79,46,649/-respectively. It was later observed that as per 3 CD reportannexed to the return, an amount of` 10,77,769/- and` 27,95,827/- for the assessment years 2003-04 and 2004-05were debited to the profit and loss account on account of‘expenditureincurredatclubs’whichwereallowedasdeduction. As the said expenditure were personal in nature andnot related to the assessee’s business, the entire amount shouldhave been disallowed. Omission to do so resulted in under assessment of income of ` 38,73,596/-. Involving tax effect of` 13,99,081/-. From the preceding paras it is evident that theassessee has failed to disclose all material facts truly and fullythat were necessary for assessment. Here it is relevant tomention the explanation 1 in section 147 that states that“production before the AO of account books or other evidencefrom which material evidence could with the diligence havebeen discovered by the AO will not necessarily amount todisclosure with the meaning of the foregoing proviso”. 3.After receipt of a copy of the said purported reasons on 10.08.2010, thepetitioner filed its objections on 06.09.2010. Detailed objections comprising ofabout 48 pages were given by the petitioner explaining each of the purportedreasons.However, the Assessing Officer did not accept the objections andrejected the same by virtue of an order dated 29.07.2011/ 01.08.2011. The saidorder reads as under:- “Order against Objection for issuing notice u/s 147 r.w. sec.148of the Income Tax Act, 1961 in the case of M/s RanbaxyLaboratories Ltd. for A.Y. 2003-04. Assessment in the case of M/s Ranbaxy Laboratories Ltd. forthe A.Y 2003-04 was completed on 26.03.2004 u/s 143(3) at anincome of Rs.315,80,98,132/- undernormal provision andRs.270,59,86,259 u/s 115313 of the Income Tax Act. Theincome was further revised vide order u/s 250/143(3) dated30.03.2006 at Rs.310,72,35,131/- under normal provisions andat Rs.570,19,15,570/- u/s 115313. The case was reopened u/s147 read with section 148 of the Act. The Assessing officer hadreasons to believe that income has escaped assessment andrecorded the reasons in writing for reopening of assessment.Notice u/s 147 read with section 148 of the Act dated29.03.2010 was served upon the assessee. The assessee complied with the notice and asked for a copy of reasonsrecorded. The reasons vide letter dated 10.08.2010 weresupplied to the assessee on 16.08.2010. Vide its letter dated 06.09.2010, the assessee filed objectionsand the same are discussed as under:- 1.Assessee raised the objection that there was no freshmaterial on the basis of which belief was formed by AO thatsome income has escaped assessment. Assessee's objection isnot acceptable as the AO had fresh material in the form ofAudit Memos which were analyzed by the AO and only afterproperly recording the reasons for the same, AO issued noticeu/s 148 of The Act. The Hon'ble Apex Court in the case of CITVs P.V.S. Beedies Ltd. 237 ITR 13, has held the reopeningdone u/s 147, on the basis of factual error pointed out by theAudit, as valid in law. complied with the notice and asked for a copy of reasonsrecorded. The reasons vide letter dated 10.08.2010 weresupplied to the assessee on 16.08.2010. Vide its letter dated 06.09.2010, the assessee filed objectionsand the same are discussed as under:- 1.Assessee raised the objection that there was no freshmaterial on the basis of which belief was formed by AO thatsome income has escaped assessment. Assessee's objection isnot acceptable as the AO had fresh material in the form ofAudit Memos which were analyzed by the AO and only afterproperly recording the reasons for the same, AO issued noticeu/s 148 of The Act. The Hon'ble Apex Court in the case of CITVs P.V.S. Beedies Ltd. 237 ITR 13, has held the reopeningdone u/s 147, on the basis of factual error pointed out by theAudit, as valid in law. 2.Assessee raised the objection that each of the itemsmentioned in the reasons recorded were duly considered by theAO while passing the order u/s 143(3). These items werespecifically claimed as deduction in the Return of income andsimilar claims were also made in earlier years and the samewere allowed in earlier years. The assessee objected thatreasons recorded by the AO reflect a change of opinion. Assessee's objection is not acceptable as after the conclusion ofassessment proceedings, AO had fresh material, from theRevenue Audit and the reasons recorded cannot be termed aschange of opinion. The reasons of reopening have beenrecorded in detail while arriving at reasons to believe thatincome has escaped assessment. Excerpts of referred case lawby Supreme Court in the case of CIT Vs PVS Beedies isreproduced below:- “We are of the view that both the Tribunal and the High Courtwere in error in holding that the information given by theinternal audit party could not be treated as information within the meaning of section 147(b) of the IT Act. The audit party hasmerely pointed out a fact which has been overlooked by the ITOin the assessment The dispute as to whether reopening ispermissible after the audit party expresses an opinion on aquestion of law is now being considered by a larger Bench ofthis Court. There can be no dispute that the audit party ISentitled to point out a factual error or omission in theassessment. Reopening of the case on the basis of a factualerror pointed out by the audit party is permissible under law. Inview of that we hold that reopening of the case under section147(6) in the facts case was on the basis of factual informationgiven by the internal audit party and was valid in law.” 3.Next issue raised by the Assessee relates to pendency ofproceedings u/s 154 at the time of issue of notice u/s 148 on theissues mentioned in the reasons recorded for reopening. Assessee’s objection is not acceptable as the proceedings u/s154 stands automatically filed once proceedings u/s 147 areinitiated as elaborated in the G.P. Aggarwal Vs. ACIT (1994)208 ITR 795 (Allahabad). Section 154 of the Act is applicableonly for mistakes apparent from record and accordingly, theissues raised vide notices u/s 154 dated 06.10.2005 and16.11.2005 stood automatically filed after issue of notice u/s148. Assessee has further raised objections against the specificsissue mentioned in the reasons for reopening. Apart from theobjections discussed earlier, Assessee has taken a common pleathat the deductions have been allowed in earlier years and thefacts remaining the same, the same cannot be the basis forreopening. Since the principle of Res Judicata is not applicableto Income Tax proceedings, the objection is not acceptable. In view of the same the objections filed by the assessee arerejected and area held to be devoid of any merits.” Assessee has further raised objections against the specificsissue mentioned in the reasons for reopening. Apart from theobjections discussed earlier, Assessee has taken a common pleathat the deductions have been allowed in earlier years and thefacts remaining the same, the same cannot be the basis forreopening. Since the principle of Res Judicata is not applicableto Income Tax proceedings, the objection is not acceptable. In view of the same the objections filed by the assessee arerejected and area held to be devoid of any merits.” 4.Mr Syali, the learned senior counsel appearing on behalf of thepetitioner, submitted that the impugned notice dated 29.03.2010 under Section148 of the said Act is invalid inasmuch as it has been issued beyond the periodof four years and there has been no failure on the part of the petitioner to fullyand truly disclose all material facts necessary for the assessment. Mr Syali alsosubmitted that although the purported reasons merely state that there wasfailure on the part of the assessee to fully and truly disclose all material factsnecessary for the assessment, the reasons do not disclose as to which facts werenot pointed out by the assessee for the purposes of the assessment in respect ofthe assessment year 2003-04. He further submitted that even the order dated29.07.2011/ 01.08.2011 rejecting the objections, does not point out as to whichfact was not disclosed by the assessee which was necessary for his assessmentunder Section 143(3) of the said Act. He also submitted that all the points,which have been sought to be raised in the purported reasons, had beenconsidered by the Assessing Officer at the time of the original assessment andwhat is sought to be done by issuance of the said notice under Section 148 ismerely a review of what has already been examined and would, in any event,amount to nothing but a mere change of opinion. 5.Mr Syali took us through the purported reasons and demonstrated as tohow each of them had been considered by the Assessing Officer at the time of the original assessment.He, first of all, took us to the purported reason ofincorrect allowance of deduction in respect of royalty received from foreignenterprises. This was an issue with regard to the deduction under Section 80-Oof the said Act in respect of gross receipts from the foreign enterprise inconvertible foreign exchange without considering expenses on a pro rata basis.The learned counsel for the petitioner pointed out that a specific claim in thereturn supported by a certificate in Form No. 10HA along with copies ofFIRC/TAR/ accounts had been submitted by the assessee. A copy of the list ofenclosures to the return has been annexed at page 53 of the paper book and wefind that serial No. 18 has a specific reference to certificates in Form 10HA insupport of deduction claimed under Section 80-O.Thus, according to MrSyali, there was a complete disclosure on the part of the assessee. Moreover,the Assessing Officer had raised a specific query in his detailed questionnaireissued on 27.02.2004, wherein question No. 23 was as under:- “23.Details of expenses incurred during the year for earningroyalty income eligible for deduction u/s 80-O. Why not thededuction u/s 80-O should be allowed on net income afterdeducting expense incurred during the year to earn suchroyalty.” A specific and detailed reply was given to this query by a letter dated19.03.2004 and it had been specifically dealt with in Annexure-C to the saidletter, which was a detailed note on the deduction under Section 80-O on “23.Details of expenses incurred during the year for earningroyalty income eligible for deduction u/s 80-O. Why not thededuction u/s 80-O should be allowed on net income afterdeducting expense incurred during the year to earn suchroyalty.” A specific and detailed reply was given to this query by a letter dated19.03.2004 and it had been specifically dealt with in Annexure-C to the saidletter, which was a detailed note on the deduction under Section 80-O on royalty income.Although a reference had been made to the Bombay HighCourt decision in the case ofCIT v. Asian Cable Corporation: 262 ITR 535for the proposition that deduction under Section 80-O is allowable on the grossamount received in convertible foreign exchange, the assessee had taken analternative plea in paragraph (f) of the said note to the effect that only expenseswhich were directly or indirectly related to earning of income could bededucted provided the same had been incurred during the year in question. Itwas the plea of the petitioner that there was no direct expenditure during theyear relating to earning from the foreign enterprise. The point that was madeby the learned counsel for the petitioner was that the issue of deduction underSection 80-O was specifically considered by the Assessing Officer and thequery which was raised had been replied to in detail. It was after consideringthe reply given by the assessee that the Assessing Officer had allowed thededuction in the assessment order on 28.03.2004. Thus, it was contended thatnot only had the assessee disclosed all the material facts that were necessary forthe claim of the deduction under Section 80-O of the said Act but that theAssessing Officer had also raised a specific query with regard to the same andit is only after receipt of a detailed reply from the assessee that the deductionwas allowed. 6.Similarly, with regard to the purported reason of incorrect allowance of deduction in respect of export profits, a specific claim had been made bythe assessee in the return duly supported by the report of the CharteredAccountant/ Tax Audit Report/ accounts. The list of enclosures to thereturn of income which we have referred to above, mentions the audit report under Section 80HHC(4) of the Act at serial No. 15. Thus, theclaim was specifically supported by the audit report which was annexedto the return. In any event, a specific query was also raised in the saidquestionnaire dated 27.02.2004 by virtue of question No. 20, which reads as under:- “20.Please justify the deduction made on export profits u/s80HHC. Also explain why the entire research & developmentexpenditure were not considered as a part of indirect cost whilecomputing the said deduction. Also confirm as to whether 90%of interest income credited to Profit & Loss Account has beendisallowed as per explanation (baa) below section 80HHC(4B)of the Act, while computing business income for deduction u/s80HHC.” A specific reply was also given by the petitioner/ assessee in the followingterms:- “7. As regards deduction made on export profits u/s 80HHC,your goodself has asked to explain as to why the entireResearch & Development expenses were not considered as apart of indirect cost, while computing the said deduction. Yourgoodself has also desired to know as to whether the 90% of as under:- “20.Please justify the deduction made on export profits u/s80HHC. Also explain why the entire research & developmentexpenditure were not considered as a part of indirect cost whilecomputing the said deduction. Also confirm as to whether 90%of interest income credited to Profit & Loss Account has beendisallowed as per explanation (baa) below section 80HHC(4B)of the Act, while computing business income for deduction u/s80HHC.” A specific reply was also given by the petitioner/ assessee in the followingterms:- “7. As regards deduction made on export profits u/s 80HHC,your goodself has asked to explain as to why the entireResearch & Development expenses were not considered as apart of indirect cost, while computing the said deduction. Yourgoodself has also desired to know as to whether the 90% of interest income has been disallowed as per explanation (baa)below Section 80HHC (4B) of the Act, while computingbusiness income for deduction u/s 80HHC. In this respect, wewould like to submit that deduction u/s 80HHC in respect ofprofitsandgainsderivedfromexportsoftradedandmanufactured products is computed in accordance with theprovisions of Section 80HHC(3). The R&D expenditure isincurred by the assessee for discovery of, new drugs and thesame is not related directly or indirectly to the export activity,which relates to existing products. Accordingly the expenditureincurred on R&D has not been deducted from profits and gainsas an indirect cost. It is confirmed that while computingbusiness income for the purposes of deduction u/s 80HHC, 90%of the interest amounting to Rs.5,15,51,926 has been reducedfrom the business income as provided in explanation (baa)below section 80HHC(4B) of the Act.” “15.The details of discount allowed are enclosed. The tradediscounts are allowed to the dealers against the sale price anddeducted from the bill. The cash discount is allowed for timelypayment. The other discounts are also allowed as per thepharma industry practice to boost the company's sales andtherefore, the same is allowable as a business expenditure.” 7.Thereafter, it was pointed out by Mr Syali that there was discussion of the claim under Section 80HHC in the assessment order itself in paragraphs 5.5and 5.6 of the said assessment order. The claim was ultimately allowed, asindicated in paragraph 6 of the assessment order as per annexure-A thereto.Therefore, it was contended by Mr Syali that here also, the assessee had fullydisclosed all the material facts and the Assessing Officer had also applied hismind to the point in issue. 8.We find that there are similar submissions made with regard to thepurported reasons for incorrect allowance of deduction in respect of profitand gains from newly established undertakings, both on the capitalaccount as well as on the revenue account and the research anddevelopment expenses both on the capital account as well as on therevenue account as also the question of apportionment insofar as theresearch and development expenses and head office expenses on therevenue account are concerned. These were also specifically claimed bythe assessee in his return as also indicated in the tax audit report andaccounts submitted along with the return.Specific queries had beenraised in respect of these items also which had been answered by theassessee in detail and it is only thereafter that the Assessing Officer hadcompleted the assessment on 28.03.2004. 9.The last purported reason for re-opening has been indicated to bethe incorrect allowance of non-business expenditure.Essentially, thisrelates to the expenditure incurred on clubs, which, according to thepurported reasons, ought not to have been allowed as a deduction, whereas, the Assessing Officer in the first round had allowed the same asa deduction. 10.Mr Syali pointed out that in the tax audit report in Form 3-CD atserial No. 17(d), the expenditure incurred on clubs has been specificallymentioned and the break-up with regard to the expenditure on entrance 9.The last purported reason for re-opening has been indicated to bethe incorrect allowance of non-business expenditure.Essentially, thisrelates to the expenditure incurred on clubs, which, according to thepurported reasons, ought not to have been allowed as a deduction, whereas, the Assessing Officer in the first round had allowed the same asa deduction. 10.Mr Syali pointed out that in the tax audit report in Form 3-CD atserial No. 17(d), the expenditure incurred on clubs has been specificallymentioned and the break-up with regard to the expenditure on entrance fee and subscriptions as also cost for club services and facilities usedhave also been specified.Therefore, according to Mr Syali, there hasbeen no failure to disclose the said expenditure at clubs. Furthermore,Mr Syali invited our attention to the document at page 249, which is areply given by the Assessing Officer to the Deputy Director (RevenueAudit) in respect of the audit memo No. 56 dated 06.09.2005 for, interalia, assessment year 2003-04. The said audit memo was as under:- “Audit scrutiny revealed that as per 3CD report annexed to thereturn an amount of Rs.10,77,769 and Rs.27,95,827 for A.Y.2003-04 and 2004-05 were debited to the profit & loss accounton account of expenditure incurred at clubs and were allowed asdeduction. As the said expenditure were personal in nature / notrelated to assessee’s business, the entire amount should havebeendisallowed.Omissiontodosoresultedinunderassessment of income of Rs.38,73,596 involving tax effect ofRs.13,99,081.” In response to the said audit memo, the Assessing Officer submitted hisreply to the Deputy Director (Revenue Audit) on 10.02.2006 which, interalia, reads as under:- “In this connection, it is pointed out that the assessee companyis engaged in the business of manufacturing and sale of varioustypes of pharmaceutical products. The business necessarilyrequires advertisement, publicity through different platforms.One of these platforms is club where executives and officers ofthe company develop contacts with potential customers. Theassessee company is a corporate member of some of the clubsto promote its business interest through its employees. As perthe tax audit report u/s 44AB filed by the assessee, theseexpenses mainly represent club subscription fee. Secondly, theassessee's employees in terms of their appointment are alsorequired to become members of clubs and payment ofsubscription is included in the amount having been paid under acontractual obligation. The club fee paid is considered by theassessee as additional compensation and tax at source has beendeducted out of the employee's salary on the same. Suchexpenses are taxed as perquisites in the hands of employees andtherefore, the additional compensation paid to the employeesunder a contractual obligation has been rightly allowed as abusiness deduction. Thus the clubs expenses incurred forpromoting company business is not a personal expense of thecompany. The Hon'ble courts including the Bombay High Courtin the case of Oits Elevator Co. (India) Ltd. vs. CIT, 195 ITR682 and Gujarat High Court in the case of Gujarat State ExportCorporation Ltd. vs. CIT, 209 ITR 649 have also held thatpayment of club fee made to promote business interests isallowable as a business expenditure. In view of the above, the objection is not accepted andthe same may kindly be dropped.” 11.It is apparent that the Assessing Officer has defended himself byvirtually stating the case of the petitioner. This also raises doubts as towhether the Assessing Officer could, on the one hand, have had reasonsto believe that there was escapement of income when on the very samepoint on the other hand he had virtually defended the petitioner in hisresponse to the audit memo No. 56. 12.For all these reasons, the learned counsel for the petitionersubmitted that the notice under Section 148 was bad in law and was liableto be quashed. In view of the above, the objection is not accepted andthe same may kindly be dropped.” 11.It is apparent that the Assessing Officer has defended himself byvirtually stating the case of the petitioner. This also raises doubts as towhether the Assessing Officer could, on the one hand, have had reasonsto believe that there was escapement of income when on the very samepoint on the other hand he had virtually defended the petitioner in hisresponse to the audit memo No. 56. 12.For all these reasons, the learned counsel for the petitionersubmitted that the notice under Section 148 was bad in law and was liableto be quashed. 13.Mr Maratha appearing on behalf of the respondents, vehementlysupported the re-opening of the assessment in respect of the assessmentyear 2003-04 and submitted that there was failure on the part of theassessee to fully and truly disclose all material facts which werenecessary for assessment. He strongly relied upon the 4[th]reason, that is,of club expenses by stating that the assessee had not disclosed this at thetime of the assessment. On a pointed query, Mr Maratha could not showas to which particular information or material fact had not been disclosedby the assessee at the time of the original assessment proceedings. He only sought to place reliance on Explanation 1 to Section 147 which readsas under:- “Explanation 1: Production before the Assessing Officer ofaccount books or other evidence from which material evidencecould with due diligence have been discovered by the AssessingOfficer will not necessarily amount to disclosure within themeaning of the foregoing proviso.” However, we do not see as to how Mr Maratha could place reliance onthe said Explanation. Insofar as all the purported reasons other than thereason pertaining to club expenses are concerned, specific queries hadbeen raised and the Assessing Officer had considered the material placedby the petitioner before him.As regards club expenses, Mr Marathastates that since no specific query had been raised, Explanation 1 wouldget triggered. We do not agree with this submission. This is so becausethe club expenses were specifically mentioned at serial No. 17(d) of thetax audit report in Form No. 3CD which was annexed along with thereturn. This was a clear statutory disclosure on the part of the assesseewith regard to the claim of club expenditure. It was not a piece ofevidence which was hidden in some books of accounts from which theAssessing Officer could have possibly, with due diligence, discovered thesame. On the contrary, this was material which was placed before the Assessing Officer along with the return which the Assessing Officer wasduty bound to go through before completing the assessment. Clearly thisdoes not fall in the category of material which is referred to inExplanation 1 to Section 147 of the said Act. 14.Having considered the matter at length, we find that this is clearlynot a case of failure on the part of the assessee to fully and truly discloseall material facts necessary for the assessment.This is of materialsignificance because the notice under Section 148 has been issued afterexpiry of four years from the end of the relevant assessment year.Therefore, the notice is time barred. Apart from this, we also feel that itamounts to a mere change of opinion. On both counts, the petitioner isentitled to succeed. Consequently, the impugned notice dated 29.03.2010is quashed and all proceedings pursuant thereto are also quashed. Thewrit petition is allowed. There shall be no order as to costs. BADAR DURREZ AHMED, J R.V.EASWAR, J JANUARY 24, 2013SR