Wp/679/2013 Of Prashant M. Timblo v. Chief Commissioner Of Income-Tax And 4 Ors

1 wps678,679-13ssm. IN THE HIGH COURT OF BOMBAY AT GOA WRIT PETITIONS NO. 678 & 679 OF 2013 Prashant M. Timblo, a Citizen of Canada, a permanentresident of Dubai, residing at Flat No.610, Block B, Sky Towers, Dubai Land, U.A.E. through its duly authorised representative Mr. Pradyumna Pai Raikar, aged 38 years, Indian National, resident of “Kameshwari”, Sebastian D'Cunha Road, Aquem Alto, Margao, Goa 403601. …..... Petitioner. V/s. 1. Chief Commissioner of Income-tax,Panaji, Goa. 2. Commissioner of Income-tax, Panaji, Goa. 3. Dy. Director of Income-tax, International Taxation, Circle 2(1), Bangalore having their Office at Rashtrothana Bhavan, No.14/3, 6[th] Floor, Nrupathunga Road, Bangalore-560 001. 4. Assistant Commissioner of Income-tax, Circle 2, Margao, Goa. 5. Union of India, Through Secretary to Government of India, Ministry of Finance, New Delhi. ….... Respondents. 2 wps678,679-13ssm. Mr. J. Mistry, Senior Advocate with Mr. S. Karpe, Mr. Nishant Thakkerand Ms. Asmita Tirodkar, Advocates for the petitioner. Ms. Susan Linhares, Junior Central Govt. Standing Counsel for therespondents. No.1 to 4. CORAM :- F.M. REIS & NUTAN D. SARDESSAI, JJ. Date : - 25 JULY 2017 ORAL JUDGMENT : (PER F.M. REIS, J.) Heard Mr. J. Mistry, learned Senior Counsel appearing for the petitioner and Ms. Susan Linhares, learned Counsel appearing forthe respondents No.1 to 4. 2.The petitioner in the above petitions prays for a writ ofcertiorari or any other writ or appropriate orders, to set aside theNotices dated 28[th] March, 2012 and 29[th] March, 2012 and also to quashand set side the impugned Order dated 27/09/2013. 3.It is the case of the petitioner that the petitioner is a citizenof Canada from 1992 and a permanent resident of Dubai, since 2001and he is a Non-Resident Indian. Under the Income Tax Act, 1961 3 wps678,679-13ssm.(“Act” for short) for the Assessment Year 2005-06, the petitioner isentitled to the benefit of the Double Tax Avoidance Agreement (DTAA)between India and UAE. The respondent No.3 issued the impugnedNotice under Section 148 of the said Act dated 28/3/2012. Thepetitioner challenged the validity of the said notice whereby therespondent No.3 has proposed to reopen the assessment of thepetitioner for the Assessment Year 2005-06 as the respondent No.3 is ofthe belief that the petitioner's income chargeable to tax has escapedassessment. It is the contention of the petitioner that respondent No.3has no jurisdiction to issue such notice and that it is well settled lawthat before proceeding to issue such notice under Section 148 of thesaid Act, certain conditions, including the condition of assuming properjurisdiction has to be satisfied. It is further contention of the petitionerthat as such, the petitioner is governed by the Authority located in Goa.The petitioner also contends that on 26/7/2005, the petitioner filed hisreturn of income for the Assessment Year 2005-06 with the Asst.Commissioner of Income-tax, declaring a total income ofRs.55,37,400/-. The returns of the petitioner were processed underSection 143(1)(a) by the Asst. Commissioner of Income-tax andthereafter, issued a notice calling upon the petitioner to explain the 4 wps678,679-13ssm.difference in interest income shown in the returns. The petitioner, whoappeared before the Assistant Commissioner of Income-tax was,thereafter, asked to file copies of his passport and a computation of thenumber of days he was abroad, in addition to the interest reconciliationwas carried out. Table giving total number of days spent by himoutside the Country was submitted by the petitioner. In the meanwhile,the Asst. Commissioner of Income-tax, issued another show causenotice under Section 143(2) of the Act, calling upon the petitioner toappear before him on 18/7/2006. Accordingly, necessary details weresubmitted by the petitioner. Thereafter, by another show cause noticeissued under Section 143(2) of the said Act, respondent No.3 onceagain called upon the petitioner to appear before him. Subsequently, inview of the change of jurisdiction, an opportunity was given to appearbefore the respondent No.4 and an explanation was called for. It isfurther contended that on 24.12.2007, after thorough investigation andafter being satisfied with the explanation given by the petitioner, theassessment of the petitioner was concluded by an order dated24.12.2007 under Section 143(3) of the said Act, making no additionto the income declared by the petitioner. But, however, on 29/03/2012,the petitioner received a notice under Section 148 of the said Act for 5 wps678,679-13ssm.escapement of income and more so, from the respondent No.3. Thepetitioner responded to the said notice and requested the respondentNo.3 to consider the original returns filed by him on 26/07/2005, asreturns in response to the impugned notice and further requested therespondent No.3 to furnish the reasons for re-opening the assessment.After a lapse of 9 months, the petitioner was surprised to receive anotice under Section 142(1) of the said Act from the respondent No.3,disclosing reasons recorded and called upon the petitioner to producecopies of his passport and substantiate his claim for the benefit underthe DTAA. But, however, no reasons were in fact enclosed along withsuch notice. Thereafter, the petitioner, through his CharteredAccountant, once again requested the respondent No.3 to furnish tohim the reasons recorded by him prior to issuance of the notice dated28/2/2013, so as to enable the petitioner to make proper submissions.But, however, the respondent No.3 called upon the petitioner to replyto the notices dated 8/2/2013 and 28/2/2013, failing which bestjudgment assessment would be carried out. A writ petition wasthereafter filed raising objections to such exercise by the respondentNo.3. But, however, on the date of filing of such petition, reasons weregiven to the petitioner. Objections were accordingly filed by the 6 wps678,679-13ssm.petitioner before the respondent No.3, challenging the legality ofassumption of jurisdiction. The writ petition was disposed of by anorder dated 16/9/2013, directing the respondent No.3 to dispose of theobjections filed by the petitioner. Thereafter, by an order dated27/09/2013, the objections filed by the petitioner were disposed of bythe respondent No.3. Being aggrieved by the notices, as well as theimpugned order, the petitioner has filed the present writ petitions. 6 wps678,679-13ssm.petitioner before the respondent No.3, challenging the legality ofassumption of jurisdiction. The writ petition was disposed of by anorder dated 16/9/2013, directing the respondent No.3 to dispose of theobjections filed by the petitioner. Thereafter, by an order dated27/09/2013, the objections filed by the petitioner were disposed of bythe respondent No.3. Being aggrieved by the notices, as well as theimpugned order, the petitioner has filed the present writ petitions. 4.The respondents have filed their reply, inter alia,contending that the petitions are premature as the petitioner hasagitated all the issues during the course of assessment. It is furtherpointed out that though the assessee was a Non-Resident for theprevious year relevant to the assessment year, applicability of theDTAA will only arise when the assessee proves his tax residence statuswith any other country which is a DTAA partner of India. It is furtherpointed out that unless the claimant was tax resident of such country,the benefit cannot be made applicable to such claimants. It is furtherpointed out that for claiming the benefit of the Indo-UAE DTAA, theassessee was required to prove his residential status in the form of 'ecard' (an identity card issued by the UAE Government to foreigners as 7 wps678,679-13ssm.residency proof), Tax Residency Certificate or any other documentissued by the Government of UAE to substantiate his claim. It isfurther pointed out that the criteria to claim non-residency status isdifferent from claiming the benefit under the DTAA between Indiaand UAE. It is further pointed out that there is administrativearrangement to centralize groups of cases of particular types undercertain circulars. It is further pointed out that the contention that thereassessment proceedings started without giving reasons is incorrect, asthe records reveal that the reasons were provided to the petitioner. It isfurther stated that the reasons have been communicated at severalinstances vide letter dated 18[th] March, 2013 and also on 22/3/2013. Itis further pointed out that the contention that the change of opinioncannot be accepted as no opinion itself was formed by the AssessingOfficer regarding the petitioner's residency status in UAE. It is furthercontended that the first notice dated 28/3/2012 was issued to thepetitioner on Marine Drive, Mumbai address which was available withthe respondents. Thereafter, another notice dated 29[th] March, 2012was addressed to the petitioner at his Margao address which wasserved on 2/4/2012. The relevant provisions under the DTAA havebeen pointed out in the reply filed by the respondents. It was further 8 wps678,679-13ssm.pointed out that reopening of the assessment has been made on soundreasonings and not on mere suspicion as contended. The respondents,accordingly prayed that the petitions be rejected. 5.The petitioner, thereafter, filed rejoinder disputing theallegations made in the affidavit-in-reply filed by the respondents. 8 wps678,679-13ssm.pointed out that reopening of the assessment has been made on soundreasonings and not on mere suspicion as contended. The respondents,accordingly prayed that the petitions be rejected. 5.The petitioner, thereafter, filed rejoinder disputing theallegations made in the affidavit-in-reply filed by the respondents. 6.We have heard the learned Senior Counsel appearing forthe petitioner, as well as the learned Counsel appearing for therespondents. The learned Senior Counsel appearing for the petitionerhas raised different contentions, essentially submitting that therespondent No.3 had no jurisdiction to issue the impugned notices, aswell as to pass the impugned order under Section 148 of the said Act.The learned Senior Counsel further points out that in terms of Section153(2) of the said Act, the assessment ought to have been completedwithin one year from the end of the financial year in which the noticeunder Section 148 was served. It is further pointed out that the noticedated 28/3/2012 was served on the petitioner on 31.3.2012, which wasthe financial year 2011-12, which expired on 31.3.2012. It is furthercontended that the time limit to complete the assessment expired on 9 wps678,679-13ssm.31.3.2013 and, in the present case as no assessment was carried out inthe financial year 2011-12, which expired on 31.3.2012, theproceedings have become time-barred. It is further pointed out that therespondent No.3 has no jurisdiction over the petitioner, as he wasgoverned by the jurisdiction of the Officers in the State of Goa atMargao Goa. The learned Senior Counsel further points out that thereasons recorded in the impugned notice dated 28/3/2012 have beenessentially issued on account of failure to produce Tax ResidencyCertificate. The learned Senior Counsel further points out that suchrequirement was introduced by the Finance Act, 2012 w.e.f. 1.4.2013and, as such, on the date of filing of the returns such requirement wasnot in place. The learned Senior Counsel further points out that thecontention that the petitioner has failed to establish that he wasresident of UAE is totally erroneous as, according to him, the passportwas furnished by the petitioner before the respondent No.4 at thestage of his original assessment. It is further pointed out that it is onlyafter verifying the correct facts, the benefit of DTAA between India andUAE was granted to the petitioner. It is further pointed out that therespondents sought to initiated proceedings for reassessment for theyear 2005-06 after the expiry of four years of the end of the assessment 10 wps678,679-13ssm.year. It is further pointed out that beyond the period of four years, suchreassessment can be carried out only if there has been failure on thepart of the assessee to fully and truly disclose all material factsnecessary for assessment. It is further submitted that there is no failureon the part of the petitioner to disclose such material to avail of thebenefit of DTAA between India and UAE. The learned Senior Counselfurther submits that the requirement to furnish the Tax ResidencyCertificate was introduced w.e.f. 01/04/2013 which has no applicationto the assessment year under consideration 2005-06. In support of thecontention that there was no failure to fully and truly disclose theprimary facts, the learned Senior Counsel has relied upon a Judgmentreported in 294 ITR 101, in the case of Sesa Goa vs. JCIT & Ors..It is further pointed out that the records clearly disclose that thepetitioner has been frequently moving to Dubai and other places and,as such, meets the requirement to avail of the benefit. 7. On the other hand, the learned Counsel for therespondents-Revenue has pointed out that the petitioner during thecourse of regular assessment had only disclosed details of his stayabroad, but did not provide the material facts of being a resident of 7. On the other hand, the learned Counsel for therespondents-Revenue has pointed out that the petitioner during thecourse of regular assessment had only disclosed details of his stayabroad, but did not provide the material facts of being a resident of 11 wps678,679-13ssm.UAE and, as such, there was failure to disclose fully and truthfully allthe material facts which are required for reopening the assessment. Itis further pointed out that in terms of Article 1 of the DTAA, theconcerned Government has to issue a formal document to theforeigners clarifying their identity, purpose and period of their staywhich was also not disclosed by the petitioner. It is further pointed outthe resident permit issued by the UAE becomes invalid if the bearerresides out of UAE for more than six months. It is further pointed outthat as such, this itself would show that there was failure to disclosetruthfully all the materials at the time of filing of the returns. Thelearned Counsel thereafter has taken us through the provisions ofSection 147 of the said Act to point out that there was failure todisclose the material facts which entitle the respondents-Revenue toreopen the assessment. The learned Counsel has also pointed out thatthe contention that action is time barred is misconceived consideringthe notice which was served on the petitioner on the addressesavailable with the respondents. The learned Counsel has also disputedthe contention of the petitioner on jurisdiction as, according to therespondents, the concerned Officer had jurisdiction to issue the noticeson the petitioner. The learned Counsel further submits that as such, the 12 wps678,679-13ssm. petitioner has failed to show that the ingredients required for reopeningof assessment have not been complied with and consequently, there isno case made out for interference by this Court in the impugned order.The learned Counsel, as such, submits that the petition be accordingly,rejected. 8.We have duly considered the submissions of the learnedCounsel and we have also gone through the records. The reasons, asreflected in the communication dated 28/03/2012, read thus : We have duly considered the submissions of the learned “1. The income chargeable to tax has escaped theassessment and reopening of assessment u/s 148 of ITAct, 1961 is valid as per the law. 2.In the Return of income filed, you have claimedthe benefits of DTAA with UAE, without providingdetails regarding your residential status of UAE andyou have failed to make full and true disclosure offacts necessary for your assessment. In the orderpassed by the A.O. u/s 143(3) of IT Act, 1961, dated24.12.2007, this opinion was never formed that youare a resident of U.A.E. During the assessmentproceedings you provided details of your stay abroadof 185 days in F.Y. 2004-05 but never provided detailsof your residency status in U.A.E. Since A.O. did not give any specific opinion on your 13 wps678,679-13ssm.residency in UAE, the reopening of assessment cannotbe considered as “change of opinion”. 2.In the Return of income filed, you have claimedthe benefits of DTAA with UAE, without providingdetails regarding your residential status of UAE andyou have failed to make full and true disclosure offacts necessary for your assessment. In the orderpassed by the A.O. u/s 143(3) of IT Act, 1961, dated24.12.2007, this opinion was never formed that youare a resident of U.A.E. During the assessmentproceedings you provided details of your stay abroadof 185 days in F.Y. 2004-05 but never provided detailsof your residency status in U.A.E. Since A.O. did not give any specific opinion on your 13 wps678,679-13ssm.residency in UAE, the reopening of assessment cannotbe considered as “change of opinion”. Perusal of the said reasons clearly show that the only reason which ledto reopening of the assessment is because the Tax Residency Certificateor any other details were not supplied by the petitioner. It is to be notedthat the requirement to produce the Tax Residency Certificate wasintroduced in the Finance Act, 2012 with effect from 1[st] April, 2013.The present proceedings are in connection with the Assessment Year2005-06 and there was no need of producing such certificate as on thatdate. Besides that, the requirement of stay in UAE for a period of sixmonths, has been introduced in Article 4(b) of the amended DTAAbetween Indian and UAE which came into effect only from 28/11/2007.As already pointed out herein above, the subject Assessment Year is2005-06 and, as such, the question of applying the said requirement forthe subject assessment would not at all arise. In fact, it was pointedout that the details of residence were being sought to examine whetherthe petitioner would meet the requirement as provided in the DTAAbetween India and UAE. 9. Apart from that, on perusal of the original Returns filed bythe petitioner, it is seen that there is Note (1), which reads thus : 14 wps678,679-13ssm. “1) The assessee is a tax resident of the UAE andaccordingly the DTAA between UAE & India isapplicable. Tax on interest has been computed underArticle 11 of the DTAA.” 10.In the Assessment Order dated 24.12.2007 passed in theproceedings for scrutiny, Clause (1) and (3) read thus : “1. The assessee filed return of income (ROI) on26/07/2005 declaring total income of Rs.55,37,400/-.The assessee is Non-Resident and is governed byDTAA with UAE. 3. In response to the notices issued, assessee'sauthorized representative (A.R.) Mr. Suresh Paiattended from time to time and the case was discussedwith him. The details called for have been furnishedwhich are placed on record. From the passportsubmitted it is found that the assessee had stayed 185days abroad and hence, he qualifies as a Non-Resident.” The said observations clearly reveal that the petitioner had disclosed that he was governed by the DTAA with UAE. It further discloses thatdetails called for have been furnished and placed on record. Thepassport also was produced to establish the number of days thepetitioner was abroad to qualify to be a Non-Resident. In such 15 wps678,679-13ssm.circumstances, it cannot be said that the petitioner had not disclosed thefact to show that he was entitled for the benefits of DTAA with UAEand that for such qualification, the Assessing Officer had called upon toproduce the passport. 11.In the Judgment reported in [2016] 382 ITR 93 (Bom)., inthe case of Nirmal Bang Securities Pvt. Ltd., vs. AssistantCommissioner of Income-tax and ors., the Division Bench of thisCourt, relying upon the Judgments of the Apex Court, has observedthus : 15 wps678,679-13ssm.circumstances, it cannot be said that the petitioner had not disclosed thefact to show that he was entitled for the benefits of DTAA with UAEand that for such qualification, the Assessing Officer had called upon toproduce the passport. 11.In the Judgment reported in [2016] 382 ITR 93 (Bom)., inthe case of Nirmal Bang Securities Pvt. Ltd., vs. AssistantCommissioner of Income-tax and ors., the Division Bench of thisCourt, relying upon the Judgments of the Apex Court, has observedthus : “22. It is now well settled that the reasons which arerecorded by the Assessing Officer for re-opening anassessment are the only reasons which could beconsidered. No substitution or deletion is permissible.No addition can be made to those reasons and noinference can be allowed to be drawn based on reasonsnot recorded. The reasons which are recorded by theAssessing Officer for re-opening the assessment are theonly reasons which could be considered when theformation of the belief is impugned. The requirement ofrecording reasons is a check against arbitrary exerciseof power, for it is on the basis of the reasons recordedand those reasons alone that the validity of the noticefor re-opening an assessment can be sustained. The 16 wps678,679-13ssm. reasons cannot be allowed to grow with age andingenuity by devising and/or supplementing additionalreasons in replies and affidavits not envisaged in thereasons recorded for re-opening the assessment. To putit simply, the validity of a notice under section 148 ofthe Act has to be tested on the basis of the reasonsrecorded for initiating the re-assessment proceedings.The reasons recorded cannot be supplemented byaffidavits and other material. In this regard, Mr.Murlidharan's reliance upon the judgment of this Courtin the case of Hindustan Lever Ltd. v. R.B. Wadkar,Asst. CIT (No.1) (2004) 268 ITR 332 is well founded.At pages 337 and 338, this Court held as under:- "The reasons recorded by the Assessing Officernowhere state that there was failure on the part ofthe assessee to disclose fully and truly all materialfacts necessary for the assessment of thatassessment year. It is needless to mention that thereasons are required to be read as they wererecorded by the Assessing Officer. No substitutionor deletion is permissible. No additions can bemade to those reasons. No inference can be allowedto be drawn based on reasons not recorded. It is forthe Assessing Officer to disclose and open his mindthrough reasons recorded by him. He has to speakthrough his reasons. It is for the Assessing officerto reach the conclusion as to whether there wasfailure on the part of the assessee to disclose fullyand truly all material facts necessary for hisassessment for the concerned assessment year. It isfor the Assessing officer to form his opinion. It isfor him to put his opinion on record in black andwhite. The reasons recorded should be clear andunambiguous and should not suffer from any 17 wps678,679-13ssm. 17 wps678,679-13ssm. vagueness. The reasons recorded must disclose hismind. The reasons are the manifestation of themind of the Assessing Officer. The reasonsrecorded should be self-explanatory and should notkeep the assessee guessing for the reasons. Reasonsprovide the link between conclusion and evidence.The reasons recorded must be based on evidence.The Assessing Officer, in the event of challenge tothe reasons, must be able to justify the same basedon material available on record. He must disclosein the reasons as to which fact or material was notdisclosed by the assessee fully and truly necessaryfor assessment of that assessment year, so as toestablish the vital link between the reasons andevidence. That vital link is the safeguard againstarbitrary reopening of the concluded assessment.The reasons recorded by the Assessing Officercannot be supplemented by filing an affidavit ormaking an oral submission, whereas, the reasonswhich were lacking in the material particularswould get supplemented, by the time the matterreaches the court, on the strength of the affidavit ororal submissions advanced." 23. In fact, after relying upon the judgment of this Courtin Hindustan Lever Ltd. (supra), another DivisionBench of this Court in the case of Prashant S. Joshi v.Income Tax Officer and another : (2010) 324 ITR 154,held thus (page 158):-- " Section 147 provides that if the AssessingOfficer has reason to believe that any incomechargeable to tax has escaped assessment for anyassessment year, he may subject to the provisions ofsections 148 to 153, assess or reassess such incomeand also any other income chargeable to tax, which 18 wps678,679-13ssm. has escaped assessment and which comes to hisnotice subsequently in the course of the proceedingsunder the section. The first proviso to section 147has no application in the facts of this case. The basicpostulate which underlies section 147 is theformation of the belief by the Assessing Officer thatany income chargeable to tax has escapedassessment for any assessment year. The AssessingOfficer must have reason to believe that such is thecase before he proceeds to issue a notice undersection 147. The reasons which are recorded by theAssessing officer for reopening an assessment arethe only reasons which can be considered when theformation of the belief is impugned. The recordingof reasons distinguishes an objective from asubjective exercise of power. The requirement ofrecording reasons is a check against arbitraryexercise of power. For it is on the basis of thereasons recorded and on those reasons alone that thevalidity of the order reopening the assessmentcannot be allowed to grow with age and ingenuity,by devising new grounds in replies and affidavitsnot envisaged when the reasons for reopening anassessment were recorded. The principle of law,therefore, is well settled that the question as towhether there was reason to believe, within themeaning of section 147 that income has escapedassessment, must be determined with reference tothe reasons recorded by the Assessing Officer. Thereasons which are recorded cannot be supplementedby affidavits. The imposition of that requirementensures against an arbitrary exercise of powersunder section 148." (emphasis supplied) 24. In view of the aforesaid well settled legal positionand there admittedly being not even an allegation in thereasons recorded that there was any failure on the part ofthe Petitioner to disclose truly and fully any materialfact necessary for assessment, let alone the details 19 wps678,679-13ssm. thereof, the impugned notice dated 30th March, 2007and the impugned order dated 5th December, 2007 areliable to be quashed and set aside on this ground alone. 24. In view of the aforesaid well settled legal positionand there admittedly being not even an allegation in thereasons recorded that there was any failure on the part ofthe Petitioner to disclose truly and fully any materialfact necessary for assessment, let alone the details 19 wps678,679-13ssm. thereof, the impugned notice dated 30th March, 2007and the impugned order dated 5th December, 2007 areliable to be quashed and set aside on this ground alone. 25. In the facts of the present case, even otherwise fromthe record we find that the Petitioner had disclosedfully and truly all material facts relating to the dividendincome received by it. This is clear firstly from thereturn of income filed by the Petitioner on 27thNovember, 2000 where in the computation annexed tothe return, the Petitioner had stated that it had earneddividend income of Rs. 3,38,45,293/- which was fullyexempt from tax under section 10(33) of the Act.Secondly, in the profit and loss account, the Petitionerhad disclosed by way of Schedule 'M' that it had earneddividend income of the aforesaid amount. Thus therebeing a full and true disclosure of all material factsrelating to earning of dividend income from units ofmutual funds and the claim for exemption under section10(33) of the Act, the impugned notice is withoutjurisdiction as it fails to satisfy the criteria as set out inthe first proviso to section 147 of the Act. 26. We further find that during the assessmentproceedings under section 143(3) of the Act, theAssessing officer called for particulars and soughtexplanations from the Petitioner specifically on theissue of the dividend income earned by the Petitionerfrom mutual funds. By its letters dated 22nd November, 20 wps678,679-13ssm. 2002 and 18th December 2002, the Petitioner furnishedall the information and complied with the requisitionsof the Assessing Officer. As can be seen from the letterdated 22nd November, 2002 (at page 70, read withpage 134 of the paper-book), the dividend incomereceived by the Petitioner from the aforesaid threemutual funds was clearly disclosed and specificallybrought to the attention of the Assessing Officer. Aftertaking these disclosures into account, the AssessingOfficer passed his assessment order under section143(3) of the Act on 31st March, 2003 and which canbe found at page 147 of the paper-book. In thisassessment order, the Assessing Officer specificallyrefers to the names of the aforesaid three mutual funds,the number of units purchased by the Petitioner and thedividend received therefrom. In the computation ofincome, the Assessing Officer has specifically recordedthat the dividend income of Rs. 3,38,45,293/- is exemptfrom tax. It is on this basis that the total incomecomputed by the Assessing Officer came to Rs.6,81,54,960/-. All this material would clearly show thatthe Assessing Officer, during the regular assessmentproceedings under section 143(3) of the Act, hadspecifically applied his mind to the dividend incomeearned by the Petitioner during the A.Y. 2000-2001 andon due consideration of these facts, he passed hisassessment order under section 143(3) of the Act 21 wps678,679-13ssm. forming an opinion that the dividend income earned bythe Petitioner was exempt from tax. This would clearlyestablish that there was due application of mind to allrelevant facts and thereafter an opinion was formed thatdividend income earned from the aforesaid threemutual funds are exempt from tax under section 10(33)of the Act. We have therefore no hesitation in holdingthat the initiation of reassessment proceedings has beenundertaken merely on the basis of a change of opinion.Thus, the impugned notice is not sustainable also onthe ground that it proceeds on a mere change ofopinion.” 21 wps678,679-13ssm. forming an opinion that the dividend income earned bythe Petitioner was exempt from tax. This would clearlyestablish that there was due application of mind to allrelevant facts and thereafter an opinion was formed thatdividend income earned from the aforesaid threemutual funds are exempt from tax under section 10(33)of the Act. We have therefore no hesitation in holdingthat the initiation of reassessment proceedings has beenundertaken merely on the basis of a change of opinion.Thus, the impugned notice is not sustainable also onthe ground that it proceeds on a mere change ofopinion.” 12.Taking note of the said observations, in the present casewhilst taking the impugned action, we find that there are no specificreasons recorded what was the material which was not truthfullydisclosed. As pointed out herein above, the fact that the petitioner wasclaiming the benefit of the DTAA between India and UAE wouldclearly disclose that at the relevant time the requirement of period ofresidence in UAE was not necessary. Whilst completing the regularassessment the queries sought by the Assessing Officer were answeredby the petitioner and accordingly, being satisfied, the regularassessment came to be completed. In this background, whilst the 22 wps678,679-13ssm. action on the part of the respondents-Revenue is a change of opinion, itcannot be the reason for reopening the assessment under Section 148of the said Act. 13.In such circumstances, we find that the question ofreopening the assessment under Section 148 of the said Act would notat all be justified. Considering the view that we have taken on theaforesaid aspect, the contention of the learned Senior Counsel that therespondent No.3 had no jurisdiction or that the proceedings itself arebarred by limitation need not be gone into in the present petition. 14.In view of the above, we pass the following : O R D E R (I) The impugned Notices dated 28[th] March, 2012 and 29[th]March, 2012, as well as the impugned Order dated 27/09/2013 arequashed and set aside. (II)Rule is made absolute in the above terms. (III)No costs. NUTAN D. SARDESSAI, J. ssm. F.M. REIS, J.