W.m.p.nos.6554, 6556 And 6558 Of 2019 v. Assistant Commissioner Of Income Tax Non-Corporate Circle – 20(1), Room

In the High Court of Judicature at Madras Reserved on: 20.03.2019 Pronounced on: 16.04.2019 Coram The Honourable Dr.JUSTICE ANITA SUMANTH W.P.Nos.25328, 25331 and 25336 of 2018and W.M.P.Nos.29486, 29485, 29475, 29476, 29479 & 29478, of 2018 M/s.Asianet Star Communications Private LimitedNo.15, Jaganathan Road, Vijay TV, Office Building, 3[rd] FloorNungambakkam, Chennai – 600 034,Tamil Nadu. (Cause title amended vide Order dated 20.03.2019 made in W.M.P.Nos.6554, 6556 and 6558 of 2019 .... Petitioner in the above W.PsVs. Assistant Commissioner of Income Tax Non-Corporate Circle – 20(1),Room No.311, 3[rd] Floor,Wanaparthy Block, Aayakar Bhavan,121, Mahatma Gandhi Road,Chennai – 600 034. .... Respondent in the above W.Ps PETITIONs filed under Article 226 of The Constitution ofIndia praying for the issuance of Writ of Certiorari calling forthe records of the respondent herein pertaining to Notice Nos.(ITBA/AST/S/148/2017-18/1009466009(1) dated 27[th] March 2018),ITBA/AST/S/148/2017-18/10095121160 (1) dated 28[th] March 2018 &AAACA2460P/A.Y. 2013-14/ACIT/NCC-20(1)/CHN dated 31 March, 2018,consequential letter No.F.No.31/AAACV4918P/A.Y/2011-12/ACIT-NCC-20(1)/Chennai dated 9 May 2018, 36/AAACV4918P/A.Y/2013-14/ACIT-NCC-20(1)/Chennai dated 9 May 2018 & 59/AAACA2460P/A.Y.2013-14/ACIT-NCC-20(1)/Chennai dated 9[th]May 2018 and orderNo.F.No.AAACV4918P/A.Y.2013-14/ACIT/NCC-20(1)/CHNdated12September 2018, AAACV4918P/A.Y.2013-14/ACIT/NCC-20(1)/CHN dated12 September 2018 & AAACV4918P/A.Y.2013-14/ACIT/NCC-20(1)/CHNdated 28[th] August 2018, quash the same. For Petitioner : Mr.Porus Kaka, S.C. For Mr.Srinath Sridevan For Respondent : Mr.J.Narayanasamy, Sr.Standing Counsel C O M M O N O R D E R These three Writ Petitions challenge orders rejectingobjections filed by the assessee in regard to assumption ofjurisdiction by the Assessing Officer for re-assessment undersection 147 of the Income Tax Act, 1961 (in short ‘Act’). 2. The Petitioner is a company engaged in the business ofproduction, procurement and broadcasting of movies andprogrammes over satellite channels. Asianet CommunicationLimited (petitioner in W.P.No. 25336 of 2018 ) merged with VijayTelevision Private Limited (petitioner in W.P.Nos.25328 & 25331of 2018) vide order of the Mumbai Bench, National Company LawTribunal dated 30.07.2018 in CP(CCA) 9/230-232/NCLT/MB/MAH/2018,approved by the Ministry of Information and Broadcasting on17.12.2018. Thereafter, the name, Vijay Television PrivateLimited, stood changed to Asianet Star Communications PrivateLimited w.e.f. 7.1.2018. The petitioners sought amendment ofcause title and the miscellaneous petitions were ordered on20.03.2019. Common submissions in regard to the three mattershave been advanced by both sides and thus a single order ispassed in regard to all three Writ Petitions. 3. I first take up W.P.No.25328 of 2018 pertaining toassessment year 2011-12. The facts relevant to appreciate andadjudicate upon the lis before me are as follows: (i) A return of income was filed by the petitioner inrespect of assessment year 2011-12 on 28.11.2011 and a revisedreturn filed on 28.03.2013. The petitioner amortised certainexpenditures incurred on programme costs and film rights. Thereturn of income was accompanied by the required auditedfinancials including profit and loss account and balance sheetreflecting all details of the aforesaid claim. 3. I first take up W.P.No.25328 of 2018 pertaining toassessment year 2011-12. The facts relevant to appreciate andadjudicate upon the lis before me are as follows: (i) A return of income was filed by the petitioner inrespect of assessment year 2011-12 on 28.11.2011 and a revisedreturn filed on 28.03.2013. The petitioner amortised certainexpenditures incurred on programme costs and film rights. Thereturn of income was accompanied by the required auditedfinancials including profit and loss account and balance sheetreflecting all details of the aforesaid claim. (ii) Schedule 14 of the profit and loss account set out thedetails of operating and other expenses in respect of therelevant financial as well the earlier years asRs.61,49,64,000/- and 37,31,69,000/- respectively. (iii) The notes on accounts contained a note from theChartered Accountant in regard to the valuation of theinventories as follows:‘Inventories1) Program/Film rightsProgram/Film rights are stated at lower ofunamortised cost or net realizable value.(i) Cost of programs are amortised based ontheexpectedpatternofrealisation of economic benefits.(ii)Film rights are amortised on the https://hcservices.ecourts.gov.in/hcservices/ straight-line basis over the licenseperiod of sixty months from thecommencement of rights whichever isshorter. Film rights with limitation onthe number of telecast during the licenseperiod are amortised on a straight-linebasis over the license period or ontelecast basis whichever is earlier.Management regularly reviews and revises,wherever necessary, its estimates of totalrevenues by program/film rights, which mayresult in the change in the rate ofamortisation. 2) Programs pending completion are carried at cost.Cost comprises production cost and direct overheads.3) Inventory of tapes are stated at lower of cost andnet realizable value. Cost is determined on ‘FirstIn First Out’ basis. Net realizable value is theestimated selling price in the ordinary course ofbusiness, less estimated cost of completion andestimated cost necessary to make the sale’(iv) The financials also included Form 3CD duly certifiedby the Chartered Accountant confirming that there had been nochange in the method of accounting employed in the presentassessment year as compared with the immediate preceding years. (v) The method of valuation of closing stock was detailedin point 12 of the Form No.3CD (Statement of particularsrequired to be furnished under section 44 AB of the Income taxAct, 1961), as under: 12(a) Method of valuation of closing stock employedin the previous year1) Program/Film rights are stated at lower ofunamortised cost or net realizable value.i) Cost of programs are amortised based on theexpected pattern of realisation of economicbenefits.ii) Film rights are amortised on the straight-linebasis over the license period of sixty monthsfrom the commencement of rights whichever isshorter. Film rights with limitation on thenumber of telecast during the license periodare amortised on a straight-line basis over thelicense period or on telecast basis whicheveris earlier. 2) Programs pending completion are carried atcost. Cost comprises production cost anddirect overheads. 3) Inventory of tapes are stated at lower of costand net realizable value. . . . . (vi) A notice under section 143(2) was issued picking thereturn up for scrutiny and questionnaires under section 142(1)were issued to the assesssee calling for objections in regard toseveralproposedadditions/disallowances.Thepetitioner/assessee appeared before the Assessing Authority withits responses to the issues raised by the officer as well asthose discussed in the course of assessment proceedings. (vii) Vide submissions dated 21.03.2014, specific detailscalled for and documents sought were furnished including a copyof the tax audit report called for by the Assessing Officer. . . . . (vi) A notice under section 143(2) was issued picking thereturn up for scrutiny and questionnaires under section 142(1)were issued to the assesssee calling for objections in regard toseveralproposedadditions/disallowances.Thepetitioner/assessee appeared before the Assessing Authority withits responses to the issues raised by the officer as well asthose discussed in the course of assessment proceedings. (vii) Vide submissions dated 21.03.2014, specific detailscalled for and documents sought were furnished including a copyof the tax audit report called for by the Assessing Officer. (viii) Then again, a break-up of the details ofamortisation of the expenses incurred on television programmes,movie telecast rights and events was sought and the petitionerbrought to the notice of the respondent that the break-up wasset out in schedule 14 of the financial statements. The schedulewas annexed separately, again, for the attention of the officeralong with the written reply. (ix) The petitioner also furnished separately thedemarcation in respect of the expenses on amortisation oftelevision programmes, movie telecast rights and events inAnnexure-7 to the submission along with the name of the specificprogramme/movie/event/serial and the cost attributed thereto.Thus, the entire break-up for the expenditures incurred ofRs.61,49,66,084/- was before the Assessing officer along withthelistofnamesoftheindividualprogramme/movie/event/serial. (x) The Revenue does not dispute that the material asaforesaid was furnished by the petitioner along with the returnof income or in the course of assessment and constituted part ofthe records of the assessing officer. 4. Upon consideration of the aforesaid voluminous anddetailed material, an order of assessment under the provisionsof section 143(3) of the Act came to be passed on 27.03.2004.The Assessing Authority notes therein that the assessee had beencalled upon to produce various details and every allowance anddisallowance that arose in the computation of its income wasdiscussed with the authorised representative. He also confirmsthat the assessee had produced all the details called for andthe same were verified. The valuation and the cost ofamortisation in respect of television programmes, movie telecastrights, events and serials was found to be in order and theclaim of the petitioner accepted. 5. While this is so, a notice under section 148 of the Actwas issued on 27.03.2018 after the elapse of six(6) years fromthe end of the assessment year in question wherein the AssessingAuthority states that he had reasons to believe that incomechargeable to tax had escaped assessment and that he proposed tore-assess the same, and calling for a return of income to befiled by the assessee. 6. The Supreme Court in the case of GKN Drive Shafts PrivateLimited V. Income Tax Officer (259 ITR 19) has set out theprocedure to be adopted in the matter of re-assessments asfollows: We see no justifiable reason to interferewith the order under challenge. However, weclarify that when a notice underSection 148ofthe Income tax Act is issued, the proper courseof action for the noticee is to file return andif he so desires, to seek reasons for issuingnotices. The assessing officer is bound tofurnish reasons within a reasonable time. Onreceipt of reasons, the noticee is entitled tofile objections to issuance of notice and theassessing officer is bound to dispose of the sameby passing a speaking order. In the instant case,as the reasons have been disclosed in theseproceedings, the assessing officer has to disposeof the objections, if filed, by passing aspeaking Order before proceeding with theassessment in respect of the abovesaid fiveassessment years. 7. In accordance with the above, the petitioner filed areturn of income and sought the reasons on the basis of whichthe assessment had been reopened. The reasons were supplied on09.05.2018 and read as follows: ‘The reasons for reopening of the assessment inyour case for the AY 2011-12 are hereby communicatedas under:1. It is noticed from the records thatprogramme/filmrightsamountingtoRs.61,49,64,000/- for the A.Y.2011-12 wereclaimed by the assessee under the head –“Operating and Other expenses”(Column -14).The same is required to be capitalized anddepreciation at the rate of 25% thereon is tobe allowed, since the asset comes under theCategory of “Intangible Asset”. 2. Therefore, for the reasons discussed in Para (1) above, I have reason to believe that thereis escapement of income within the meaning ofu/s147 of the income-tax Act, 1961, in theinstant case for the A.Y.2011-12 due to thefailure on the part of the assessee to disclosefully and truly all material facts necessaryfor his assessment”. 8. The petitioner has filed its objections on 06.07.2018 tothe proceedings initiated for re-assessment, interalia,objecting on the grounds of (i) expiry of limitation; (ii)reasons for initiation of re-assessment provided after expiry of six (6) months; iii) review of assessment made earlier underscrutiny; (iv) change of opinion on the part of the Income TaxDepartment and v) on merits, that the proposal to treat theclaim of expenditure as capital, granting depreciation instead,was erroneous in fact and law. 9. The Assessing Authority has rejected the objections bythe impugned order dated 12.09.2018. The order impugned israther brief, and, in summary, states that reasons to re-assess,only requires a prima facie belief of the Assessing Officer thatincome has escaped assessment. In a nut shell, the proposed re-assessment and the assumption of jurisdiction by the officer arejustified on the following basis as extracted from the impugnedorder: ‘. . . .The Assessing Officer had a reason to believethat there was escapement of income based on theinformation available.There was material tangible before the AssessingOfficer to form a belief.There was no change of opinion as this issue wasnot dealt with in the original assessmentcompleted.Before issue of notice u/s 148, the AssessingOfficer satisfied himself by recording thereasons, he relied on for having believed thatthere is escapement of income.. . . . ‘10. He concludes by stating that no details in regard tothe issue in question have been called for by the officer, nonefurnished by the assesssee and consequently no discussionwhatsoever in the order of assessment in regard to whether theexpenses incurred and claimed would be revenue or capital innature. Thus, according to him, and in the absence of anyapplication of mind to, or finding upon this issue, theassumption of jurisdiction in terms of Section 147 was valid. 11. The facts in W.P.No.25331 of 2018 relating toproceedings for re-assessment in regard to assessment year 2013-14, are identical in all respects to the facts in W.P.No.25328of 2018 excepting for the amounts involved. Since the amountsare not material for deciding the legal dispute in question, Ido not propose to repeat the facts yet again but adopt thenarration as above in regard to this assessment year as well.In law, the proceedings for re-assessment have been initiatedwithin a period of four (4) years as stipulated in terms ofSection 147. 12. Further, the petitioner has also placed on record acopy of a communication dated 15.11.2017, which, according toit, was furnished to it by the Assessing Officer. This note,signed by the Sr. Receipt Audit Officer/ITRA Review Party, is to the effect that the Audit Department has noticed thatprogramme/film rights for AY 2013-14 and AY 2012-13 were claimedas revenue, but was of the view that the expenditure ought tohave been capitalised with depreciation granted at the rate of25% as in the case of an intangible asset. According to thepetitioner, it is this audit note that forms the basis for thereasons recorded by the Assessing Officer, triggering theproceedings for re-assessment. 13. W.P.No.25336 of 2018 also relates to assessment year2013-14. The relevant facts are as follows: (i) A return of income was filed by the petitioner inrespect of assessment year 2013-14 on 28.11.2013 and a revisedreturn filed on 31.03.2015. The return was accompanied by therequired audited financials including profit and loss accountand balance sheet. (ii) Note 19 of the profit and loss account set out thedetails of operating and other expenses in respect of therelevant financial and earlier year at Rs.175,41,000/- andRs.1,55,17,700/- respectively. (iii) The notes on accounts also include a note from theChartered Accountant at point (f), in regard to the valuation ofthe inventories as follows:‘Program/Film rights and inventories 1) Program/Film rightsProgram/Film rights are stated at lower ofunamortised cost or net realizable value.(i)Cost of televised events including programsare fully expenses on telecast, which isbased on the expected pattern of realizationof economic benefits. (ii)In case of films whose right commence afterApril 1, 2008 are amortised equally over 5years or license period, whichever is less,which is based on the expected pattern ofreliazation of economic benefits. Filmswhose rights have commenced prior to April1, 2008 and which has value in inventory arewritten off based on the number oftelecasts. Management regularly reviews andrevises, wherever necessary, its estimatesof total revenues by film rights, which mayresult in the change in the rate ofamortisation. 2) Inventories of raw material (Tapes) are valued atcost is taken on FIFO basis. . . . . (iv) The Form 3CD duly certified by the CharteredAccountant confirmed that there had been no change in the methodof accounting employed in the present assessment year ascompared with immediate preceding years. https://hcservices.ecourts.gov.in/hcservices/ (v) A notice for scrutiny under section 143(2) was issuedand questionnaires under section 142(1) issued to the assessseecalling for responses on various issues that were duly provided.The scrutiny commenced with a personal hearing on 11.09.2014. (vi) The petitioner/assessee appeared before the AssessingAuthority with its responses as sought for in the course ofassessment proceedings. Vide reply dated 15.09.2014 copies ofthe audited financials as well as the Tax Audit Report underSection 44AB of the Act, Form 3CA and complete annexures ascalled for by the Assessing Officer were furnished to theofficer under acknowledgement. (vii) The officer had, in addition to the issue ofamortisation of expenses, also raised an issue in regard to taxdeduction under section 195 of Act on foreign remittances. Thepetitioner, vide its reply dated 30.03.2016 pointed out that theexpenditures incurred in foreign currency had been duly debitedto the profit and loss accounts. Moreover the remittance had, infact, been subject to tax deduction in all cases except wheresuch deduction was not required in law. To this effect,Certificates of the Accountant had been obtained in Form 15CB.All material in support of the aforesaid position was availableon record and, in any event, were yet again furnished for theperusal of the officer. 14. Upon consideration of the aforesaid material, an orderof assessment under the provisions of section 143(3) of the Actcame to be passed on 30.03.2016. The Assessing Authorityaccepted the revised return filed by the assessee and completedthe assessment. 14. Upon consideration of the aforesaid material, an orderof assessment under the provisions of section 143(3) of the Actcame to be passed on 30.03.2016. The Assessing Authorityaccepted the revised return filed by the assessee and completedthe assessment. 15. While this is so, a notice under section 148 of theAct was issued on 31.03.2018 wherein the Assessing Authoritystated that he had reasons to believe that income chargeable totax had escaped assessment, that he proposed to re-assess thesame and calling for a return to be filed by the assessee. 16. In accordance with the procedure set out by the SupremeCourt in the case of GKN Driveshafts (supra), the petitionerfiled a return of income and also sought the reasons on thebasis of which the assessment had been reopened. The reasonshave been supplied on 09.05.2018 as follows:‘The reasons for reopening of the assessment inyour case for the AY 2013-14 are herebycommunicated as under: It is verified from Annexure that foreignexpenditure debited to the P & L Account for theperiod April 2012 to March 2013 was GBP2,875(Rs.88 Approx.), USD 1,01,812 (Rs.59 Approx.) andAED 26,34,985 (Rs.55 Approx.) for which no taxwas withheld. However, tax is required to bededucted u/s 195. According to Section 40(a)(i)of the Income Tax Act, the entire expensesamounting to Rs.15,11,84,260/- is required to be disallowed. Further, it was noticed thatprogramme/filmrightsamountingtoRs.175,41,00,000/- for A.Y.2013-14 were claimedby the assessee under Note 19 – “Operating andOther Expenses”. The same is required to becapitalized and depreciation at the rate of 25%only to be allowed as the asset is in the natureof “intangible asset”. 17. The petitioner has filed its objections on 06.07.2018to the proceedings for re-assessment, interalia, objecting onthe grounds that: (i) there was no new or tangible material orinformation on record; (ii) the proceedings were a mere reviewof the earlier scrutiny assessment; (iv) the reassessmentproposed constituted a change of opinion on the part of theIncome Tax Department and v) on merits, (a) that theamortisation as revenue expenditure is correct; the PrincipalCommissioner had accepted this stand of by the assessee inrevision proceedings under section 263 of the Act for assessmentyear 2010-11 and (b) that tax had been deducted on all foreignremittances excepting the one made to the UAE that did not callfor any deduction in law. 18. The petitioner specifically drew attention to the factthat the issue of amortisation of the program cost/film rightshad been a subject matter of revision proceedings under section263 of the Act for assessment year 2010-11. The PrincipalCommissioner of Income Tax had examined the issue in detail andaccepted the stand adopted by the assessee. The copy of theorder was supplied to the officer in course of the proceedingsfor the proposed, impugned re-assessment. 19. The Assessing Authority rejected the objections by theimpugned order dated 28.08.2018. The impugned order, in summary,states that the officer, to initiate proceedings for re-assessment only requires prima facie belief that income hasescaped assessment that is present in the instant case. Hisjustification for the assumption of jurisdiction to re-assess,is extracted as follows: The Assessing Officer had a reason to believethat there was escapement of income based on theinformation available.that there was escapement of income based on theinformation available. 19. The Assessing Authority rejected the objections by theimpugned order dated 28.08.2018. The impugned order, in summary,states that the officer, to initiate proceedings for re-assessment only requires prima facie belief that income hasescaped assessment that is present in the instant case. Hisjustification for the assumption of jurisdiction to re-assess,is extracted as follows: The Assessing Officer had a reason to believethat there was escapement of income based on theinformation available.that there was escapement of income based on theinformation available. There was material tangible before the AssessingOfficer to form a belief.Officer to form a belief.There was no change of opinion as this issue wasnot dealt with in the original assessmentcompleted.not dealt with in the original assessmentcompleted.Before issue of notice u/s 148, the AssessingOfficer satisfied himself by recording thereasons, he relied on for having believed thatthere is escapement of income.Officer satisfied himself by recording thereasons, he relied on for having believed thatthere is escapement of income. 20. He concludes by stating that there is no discussionwhatsoever about any issue in the assessment order in regard tothe issues in question indicating nil application of mind and assuch, the assumption of jurisdiction for re-assessment wasvalid. He placed reliance on the decisions in A.L.A.Firm vs CIT(102 ITR 622), Ess Kay Engineering Co. (P) Ltd vs CIT (247 ITR818 and EMA India Ltd vs ACIT (30 DTR 82). 21. The petitioner has filed a return of income within timeenclosing all particulars in regard to amortisation ofexpenditure on programmes/film rights and foreign remittancesand tax deducted thereupon where applicable. These documentshave been taken into account by the Assessing Officer at thetime of scrutiny and there is no new material that has come tothe notice of the Assessing Authority, despite which he comes tothe conclusion that there is escapement of income. Themethodology of valuation of the assets and details of claim ofthe expenditure was reflected in the financial statements filedalong with the return of income as well as discussed in detailin the course of scrutiny assessment. The impugned proceedingsfor re-assessment are thus, nothing but a review of the originalorder of assessment apart from not being based on any new ortangible material. 22. That apart, the petitioner has placed on record twonotes signed by the Sr.Receipt Audit Officer/ITRA Review dated15/11/2017 pointing out modifications required to be made theassessment dated 30.03.2016 in regard to disallowance undersection 40(a)(i) for alleged non-deduction of tax at source anddisallowance of operating and other expenses and suggestingcapitalisation of the same with grant of depreciation. Thus,according to the petitioner, the proceedings are based on auditobjections and are liable to be quashed on this ground as well. 23. Heard Mr.Porus Kaka, learned senior counsel forMr.Srinath Sridevan, learned counsel for the petitioners andMr.J.Narayanasamy, learned Senior Standing Counsel for therespondent. 22. That apart, the petitioner has placed on record twonotes signed by the Sr.Receipt Audit Officer/ITRA Review dated15/11/2017 pointing out modifications required to be made theassessment dated 30.03.2016 in regard to disallowance undersection 40(a)(i) for alleged non-deduction of tax at source anddisallowance of operating and other expenses and suggestingcapitalisation of the same with grant of depreciation. Thus,according to the petitioner, the proceedings are based on auditobjections and are liable to be quashed on this ground as well. 23. Heard Mr.Porus Kaka, learned senior counsel forMr.Srinath Sridevan, learned counsel for the petitioners andMr.J.Narayanasamy, learned Senior Standing Counsel for therespondent. 24. The notice under section 148 in respect of AY 2011-12has been issued by the respondent after the expiry of four yearsbut before expiry of six years from the last date of theassessment year in question. The provisions of section 147 setout a limitation of four years for proceedings to be initiatedfor escapement of income, and a further period of two yearsprovided that the Revenue is in a position to establish that theescapement had been occasioned by virtue of failure on the partof the assessee to either file a return under section 139 or inresponse to a notice issued under sub-section (1) of section 142or 148 or to disclose fully and truly all material factsnecessary for the assessment for the relevant assessment year. 25. The question to be determined would thus be whetherthere has been a full and true disclosure of income by the assessee in the assessment year in question. The admitted facts,as narrated above, reveal that the assessee has been regularlyamortising expenditures incurred on programme and movies costsand a consistent method of accounting is being followed in thisregard over the years. All details of the claims, such as thebreak-upoftheamountsofthespecificprogrammes/events/movies that the expenditure relates to, havebeen provided along with the returns of income and at the timeof original assessment and are a matter of record. The aforesaidinformation has been duly noted by the assessing officer who hasspecifically called for the same during the original assessmentproceedings thus, confirming the disclosure made by thepetitioner. It is thus, amply clear that a full and truedisclosure has been made by the petitioner in the present case.The petitioner has been categorising and claiming expenditureincurred on programmes/film rights as revenue for several yearsand this stand has not been found fault with by the Department.Such expenses are also reflected faithfully in its financialsthat have been circulated specifically in the course of theoriginal assessment proceedings, notwithstanding that the samehave been filed along with the return of income. I am thus ofthe view that the statutory condition imposed for availment ofthe extended period of limitation has not been satisfied in thepresent case and as such, the proceedings for re-assessment forAY 2011-12 are barred by limitation. 26. In similar circumstances, the Supreme Court, in the caseof ACIT V. ICICI Securities Primary Dealership Ltd. ([2012] 348ITR 299) has held as follows: 26. In similar circumstances, the Supreme Court, in the caseof ACIT V. ICICI Securities Primary Dealership Ltd. ([2012] 348ITR 299) has held as follows: The assessee had disclosed full details inthe Return of Income in the matter of itsdealing in stocks and shares. According to theassessee, the loss incurred was a business loss,whereas, according to the Revenue, the lossincurred was a speculative loss. Rejection ofthe objections of the assessee to the re-openingof the assessment by the Assessing Officer videhis Order dated 23rd June, 2006, is clearly achange of opinion. In the circumstances, we areof the view that the order re-opening theassessment was not maintainable.27. The Supreme Court, in Commissioner of Income Tax Vs.Corporation Bank [254 ITR 791] has had occasion to consider asimilar issue holding as follows:Turning attention to the first question asregards the provisions underSection 147(a)beit noted and as the facts depict, there is nofailure on the part of the assessee infurnishing the particulars pertaining to theabove noted sum as not recoverable for the relevant accounting year and the statementsfiled along with the original return disclosedthe full details of the aforesaid account.There is, therefore, no failure on the part ofthe assessee to disclose fully and truly thematerial facts necessary for the assessmentyears for the respective years and assuchSection147(a)hasnomannerofapplication and is not attracted in the factsof the matter under consideration. The HighCourt on consideration of the facts came to theconclusion that the Tribunal was justified incoming to the said finding and we also recordour concurrence therewith. 28. The Supreme Court in the case of Commissioner of IncomeTax Vs. Kelvinator of India Ltd. and another [(2010) 320 ITR 561(SC)] has held thus: However, one needs to give a schematicinterpretation to the words "reason to believe"failing which, we are afraid,Section 147wouldgive arbitrary powers to the Assessing Officerto re-open assessments on the basis of "merechange of opinion", which cannot be per sereason to re-open. We must also keep in mindthe conceptual difference between power toreview and power to re-assess. The AssessingOfficer has no power to review; he has thepower to re-assess. But re-assessment has to bebased on fulfilment of certain pre-conditionand if the concept of "change of opinion" isremoved, as contended on behalf of theDepartment, then, in the garb of re-opening theassessment, review would take place. One musttreat the concept of "change of opinion" as anin-built test to check abuse of power by theAssessing Officer. Hence, after 1st April,1989, Assessing Officer has power to re-open,provided there is "tangible material" to cometo the conclusion that there is escapement ofincome from assessment. Reasons must have alive link with the formation of the belief. 29. I am thus of the view that, in the light of the provisoto section 147, the assessee having made a complete disclosureof all relevant facts along with the return of income, theimpugned proceedings are barred by limitation and alsoconstitute a review of the original order of assessment,impermissible in law. In fact, the Assessing Officer is seen tohave applied his mind to the issue in question and the originalorder of assessment confirms the position that various materialshave been called for, such as accounts, financials, tax audit report, etc. and the assessee has also engaged in discussionswith the Assessing Officer in regard to the issues that arisetherefrom. The full and true disclosure of the assessee is thusnot in doubt. 29. I am thus of the view that, in the light of the provisoto section 147, the assessee having made a complete disclosureof all relevant facts along with the return of income, theimpugned proceedings are barred by limitation and alsoconstitute a review of the original order of assessment,impermissible in law. In fact, the Assessing Officer is seen tohave applied his mind to the issue in question and the originalorder of assessment confirms the position that various materialshave been called for, such as accounts, financials, tax audit report, etc. and the assessee has also engaged in discussionswith the Assessing Officer in regard to the issues that arisetherefrom. The full and true disclosure of the assessee is thusnot in doubt. 30. I also draw support in this regard from the decisionsin the cases of the Bombay High Court in 3I Infotech Ltd. andAssistant Commissioner of Income-Tax and others [(2010) 329 ITR257] and Madras High Court in Cholamandalam Investment & FinanceCo. Ltd. Vs. Assistant Commissioner of Income Tax, CorporateCircle-1(2), Chennai [(2018) 89 Taxmann.com 337] and Mobis IndiaLtd. Vs. Deputy Commissioner of Income Tax, LTU-II, Chennai[(2018) 90 Taxmann.com 389]. 31. As regards AY 2013-14, (W.P.Nos. 25331 and 25336 of2018), the proceedings have been initiated within four (4) yearsfrom the end of the relevant assessment year. The argumentadvanced is that all materials in regard to the issues raisedfor re-assessment have been furnished to the officer even duringthe original assessment proceedings and thus the presentproceedings constitute a review of the original order ofassessment, impermissible in law. 32. Mr.Narayanaswamy counters that there is nothing in theorders of assessment, no discussion of any nature whatsoever, toindicate that there has been application of mind by theAssessing Officer to the issues in question and as such, theorders of assessment passed originally, though under section 143(3), cannot be said to have considered the issues at all. Thequestion of review of such an order does not arise in thesecircumstances. 33. I disagree. The records contain all relevant details inregard to the issues in question, being the expendituresamortised as well as foreign remittances and deduction of taxthereof. Counsel for the revenue has, very fairly, not disputedthis factual aspect even slightly. In the present case, the twoquestions proposed for reassessment, being amortisation ofprogramme/movie cost and deduction of tax on foreign remittance,arise from a perusal of the financials itself. The auditedfinancials, including the profit and loss accounts and auditreport, present clearly all details in regard to the aforesaidtwo issues. 34. An assessing officer, in the course of assessmentproceedings encounters several issues arising from a return ofincome filed by the assessee. Courts have consistently held,that the burden laid upon the assessee in the matter of framingof assessments and the extent of role to be played by it, wouldbe restricted to making a full disclosure of all relevant itemsand issues from its end. The mantle, thereafter, shifts to theAssessing Officer, who is expected to exercise due diligence inappreciating the material furnished by the Assessee and draw hisinferences from the same. It is a legitimate expectation thatthe assessing officer has done this, particularly in a situation such as the present, where all material particulars areavailable in open sight. The identical situation came to beconsidered by the Full Bench of the Delhi High Court in the caseof Kelvinator (I) Limited V. CIT Commissioner of Income Tax Vs.Kelvinator of India Ltd. (256 ITR 1) (affirmed in 320 ITR 651)where the Division Bench of the Delhi High Court held as under: such as the present, where all material particulars areavailable in open sight. The identical situation came to beconsidered by the Full Bench of the Delhi High Court in the caseof Kelvinator (I) Limited V. CIT Commissioner of Income Tax Vs.Kelvinator of India Ltd. (256 ITR 1) (affirmed in 320 ITR 651)where the Division Bench of the Delhi High Court held as under: The question posed for consideration ofthis Larger Bench is, as to whether even for amere change of opinion by the Income-taxOfficer (in short 'ITO') action underSection147of the Income-tax Act, 1961 can be broughtinto operation . . . . We also cannot accept submission of Mr.Jolly to the effect that only because in theassessment order, detailed reasons have notbeen recorded on analysis of the materials onthe record by itself may justify the AssessingOfficer to initiate a proceeding underSection147of the Act. The said submission isfallacious. An order of assessment can bepassed either in terms of Sub-section (1)ofSection 143or Sub-section (3) ofSection143. When a regular order of assessment ispassed in terms of the said Sub-section (3)ofSection 143a presumption can be raised thatsuch an order has been passed on application ofmind. It is well known that a presumption canalso be raised to the effect that in terms ofClause (e) ofSection 114of the IndianEvidence Act the judicial and official actshave been regularly performed. If it be heldthat an order which has been passed purportedlywithout anything further, the same would amountto giving premium to an authority exercisingquasi judicial function to take benefit of itsown wrong. 35. The Full Bench has specifically gone into the questionwhether an order of assessment must contain detailed discussionin regard to a specific issue in order that the AssessingAuthority may be said to have initially ‘considered the issue’.The Bench cites the provisions of section 114(e) of the IndianEvidence Act 1872 to bring home the position that all actsperformed by a Judicial Officer in the discharge of his regularfunctions would be legally presumed to have been properly andregularly performed and executed. Thus, even in cases wherethere is no discussion in regard to specific issues, if it isestablished by the assessee that all material relevant andgermane to that issue were available before the Assessing Officer, easily discernible and part of the record, reassessmentis impermissible. Then again, it does not stand to reason thatan officer, once convinced by the submissions of an assessee,will proceed to devote time to recording is agreement in adetailed and reasoned fashion. The legitimate and reasonableexpectation is that a detailed and speaking order is passed incases where he differs and dissents from the stand of theassessee. On this score, the arguments of Mr.J.Narayanasamy inthis regard have no merit and are rejected. 36. Mr.Narayanaswamy next relies on Explanation (1) tosection 147, which states that production of account books orother evidence from which material evidence could, with duediligence have been discovered by the Assessing Officer, willnot necessarily amount to disclosure within the meaning of theforegoing proviso. 37. However, I do not believe that the explanation is atall applicable in the present case. The Explanation targetsthose situations where relevant details are camouflaged in somepart of the voluminous documents filed so as to lead to theinference that the Assessing Authority would be justified havingin missing the same. This is, however, a case where theassessee has staked its claims and has produced alldocumentation in support thereof transparently and conclusively,right from the start. 37. However, I do not believe that the explanation is atall applicable in the present case. The Explanation targetsthose situations where relevant details are camouflaged in somepart of the voluminous documents filed so as to lead to theinference that the Assessing Authority would be justified havingin missing the same. This is, however, a case where theassessee has staked its claims and has produced alldocumentation in support thereof transparently and conclusively,right from the start. 38. In this regard, I draw useful reference, and quote fromthe judgement of the Supreme Court in the case of CalcuttaDiscount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC) that has becomelocus classicus as an exposition of the position in law inregard to re-assessments. ’The words used are 'omission or failure todisclose fully and truly all material factsnecessary for his assessment for that year'. Itpostulates a duty on every assessee to disclosefully and truly all material facts necessary forhis assessment. What facts are material andnecessary for assessment will differ from case tocase. In every assessment proceeding, theassessing authority will, for the purpose ofcomputing or determining the proper tax due froman assessee, require to know all the facts whichhelp him in coming to the correct conclusion.From the primary facts in his possession, whetheron disclosure by the assessee, or discovered byhim on the basis of the facts disclosed, orotherwise, the assessing authority has to drawinferences as regards certain other facts ; andultimately, from the primary facts and thefurther facts inferred from them, the authorityhas to draw the proper legal inferences, andascertain on a correct interpretation of the taxing enactment, the proper tax leviable. Does the duty, however, extend beyond the fulland truthful disclosure of all primary facts? Inour opinion, the answer to this question must bein the negative. Once all the primary facts arebefore the assessing authority, he requires nofurther assistance by way of disclosure. It isfor him to decide what inferences of facts can bereasonably drawn and what legal inferences haveultimately to be drawn.’ 39. I may also refer to the decision of the Division Benchof the Kerala High Court in the case of Pala Marketing (243 ITR499) that supports my view as aforesaid. The relevant portionof the judgment is extracted hereunder: taxing enactment, the proper tax leviable. Does the duty, however, extend beyond the fulland truthful disclosure of all primary facts? Inour opinion, the answer to this question must bein the negative. Once all the primary facts arebefore the assessing authority, he requires nofurther assistance by way of disclosure. It isfor him to decide what inferences of facts can bereasonably drawn and what legal inferences haveultimately to be drawn.’ 39. I may also refer to the decision of the Division Benchof the Kerala High Court in the case of Pala Marketing (243 ITR499) that supports my view as aforesaid. The relevant portionof the judgment is extracted hereunder: At this juncture it is to be taken note of thatExplanation 1 to Section 147 of the Act isexplicit and clear that books of account orother evidence has to be traced out to disclosefurther facts which could be discovered by theAssessing Officer. Nor will the assessee be ableto contend successfully that by disclosingcertain evidence, he should be deemed to havedisclosed other evidence which might have beendiscovered by the Assessing Officer if he hadpursued the investigation on the basis of whathas been disclosed. The position remains that sofar as primary facts are concerned, it is theassessee's duty to disclose all of them--including particular entries in account books,particular portions of documents and documents,and other evidence, which could have beendiscovered by the assessing authority, from thedocuments and other evidence disclosed. It is to be noted that Explanation 1 has nothingto do with inferences and deals only with thequestion whether primary material facts notdisclosed could still be said to beconstructively disclosed on the ground that withdue diligence the Assessing Officer could havediscovered them from the facts actuallydisclosed. The Explanation has not the effect ofenlarging the section, by casting a duty on theassessee to disclose infer