SAI PRERNA CO-OP. CREDIT SOCIETY LTD,MUMBAI vs. ITO WD 17(3) (2) , MUMBAI

PER OM PRAKASH KANT, AM

This appeal by the assessee is directed against order dated 29.02.2022 passed by the Ld. Commissioner of Income-tax – National Faceless Appeal Centre, Delhi [in short ‘the Ld. CIT(A)’] for assessment year 2012-13, raising following grounds:

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"The assessee, Sal Prerna Co "The assessee, Sal Prerna Co-op. Credit Society Ltd., is op. Credit Society Ltd., is assessed to tax in this charge. Assessee e filed its return assessed to tax in this charge. Assessee e filed its return assessed to tax in this charge. Assessee e filed its return of income for AY 2012 of income for AY 2012-13 on 08.09.2012 showing income 13 on 08.09.2012 showing income of Rs Nil/-.The case was duly concluded vide order dated .The case was duly concluded vide order dated .The case was duly concluded vide order dated 19.3.2015 at Rs NIL/ 19.3.2015 at Rs NIL/-. Assessee is a co operative credit . Assessee is a co operative credit society.

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well as addition on merit. The Ld. CIT(A) di well as addition on merit. The Ld. CIT(A) disposed off the grounds sposed off the grounds challenging the validity of the reassessment order observing as challenging the validity of the reassessment order observing as challenging the validity of the reassessment order observing as under:

“7.1 Ground Nos. 1 & 2 challenge the initiation of 7.1 Ground Nos. 1 & 2 challenge the initiation of 7.1 Ground Nos. 1 & 2 challenge the initiation of proceedings proceedings proceedings u/s147. u/s147. u/s147. Notice Notice Notice us us us 148 148 148 was was was dated dated dated 18.02.2019. This obviously means that though four years 18.02.2019. This obviously means that though four years 18.02.2019. This obviously means that though four years had elapsed had elapsed but six years had not elapsed from the end of but six years had not elapsed from the end of the relevant A. Yr. and the concerned PCIT/CIT had the the relevant A. Yr. and the concerned PCIT/CIT had the the relevant A. Yr. and the concerned PCIT/CIT had the power to authorize re power to authorize re-opening of assessment. The opening of assessment. The necessary official formalities were duly completed before necessary official formalities were duly completed before necessary official formalities were duly completed before issue of the notice us 148. There were no short issue of the notice us 148. There were no short issue of the notice us 148. There were no shortcomings before the re before the re-assessment proceedings were initiated. assessment proceedings were initiated. Ground Ground Ground Nos. Nos. Nos. 1 1 1 & & & 2 2 2 are, are, are, therefore therefore therefore disposed disposed disposed as as as "DISMISSED" "DISMISSED" 3.1 On merit, the Ld. CIT(A) allowed deduction u/s 80P(2)(d) of the the Ld. CIT(A) allowed deduction u/s 80P(2)(d) of the the Ld. CIT(A) allowed deduction u/s 80P(2)(d) of the Act in respect of interest earned by the assessee Act in respect of interest earned by the assessee on on deposits from the co-operative bank operative bank, however did not allow the deduction allow the deduction of interest earned by the assessee from deposits kept with nationalized interest earned by the assessee from deposits kept with nationalized interest earned by the assessee from deposits kept with nationalized banks.

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the identical issue of validity of the reassessment proceedings in the the identical issue of validity of the reassessment proceedings in the the identical issue of validity of the reassessment proceedings in the case of the assessee for assessment year 2013 case of the assessee for assessment year 2013-14 has been allowed has been allowed in favour of the assessee observing as under: in favour of the assessee observing as under:

“6. We have heard rival submission of the parties on the We have heard rival submission of the parties on the We have heard rival submission of the parties on the issue-in-dispute and perused the relevant material on record. dispute and perused the relevant material on record. dispute and perused the relevant material on record. Regarding the Ground No. 1 and 2 of the appeal related to the Regarding the Ground No. 1 and 2 of the appeal related to the Regarding the Ground No. 1 and 2 of the appeal related to the reassessment reassessment reassessment proceeding, proceeding, proceeding, we we we find find find that that that in in in the the the case case case assessment has been reopened assessment has been reopened beyond the period of four beyond the period of four years from the end of the relevant assessment year. As per years from the end of the relevant assessment year. As per years from the end of the relevant assessment year. As per the provisions of the Act , an assessment cannot be reopened the provisions of the Act , an assessment cannot be reopened the provisions of the Act , an assessment cannot be reopened beyond the period of four years from end of the relevant beyond the period of four years from end of the relevant beyond the period of four years from end of the relevant assessment year unless there is a failure on the part assessment year unless there is a failure on the part assessment year unless there is a failure on the part of the assessee to disclose fully and truly all material facts assessee to disclose fully and truly all material facts assessee to disclose fully and truly all material facts necessary for completion of assessment. In the case, in the necessary for completion of assessment. In the case, in the necessary for completion of assessment. In the case, in the regular assessment year completed u/s 143(3) of the Act, the regular assessment year completed u/s 143(3) of the Act, the regular assessment year completed u/s 143(3) of the Act, the assessee was allowed deduction u/s 80P of the Act in respect assessee was allowed deduction u/s 80P of the Act in respect assessee was allowed deduction u/s 80P of the Act in respect of interest income earned from the nationalized as well as co t income earned from the nationalized as well as co- t income earned from the nationalized as well as co operative bank. The Assessing Officer has reopened the operative bank. The Assessing Officer has reopened the operative bank. The Assessing Officer has reopened the assessment based on the same material which was available assessment based on the same material which was available assessment based on the same material which was available before the Assessing Officer during original assessment before the Assessing Officer during original assessment before the Assessing Officer during original assessment proceedings, which is evident from proceedings, which is evident from the reasons recorded by the reasons recorded by the Assessing Officer ( i.e. reproduced by the Assessing Officer the Assessing Officer ( i.e. reproduced by the Assessing Officer the Assessing Officer ( i.e. reproduced by the Assessing Officer on page 1 of the assessment order). For ready reference same on page 1 of the assessment order). For ready reference same on page 1 of the assessment order). For ready reference same is reproduced as under: is reproduced as under: "The assessee, Sai Prerna Co "The assessee, Sai Prerna Co-op. Credit Society Ltd., is op. Credit Society Ltd., is assessed to tax in this c assessed to tax in this charge. Assessee e filed its return of harge. Assessee e filed its return of income for AY 2013 income for AY 2013-14 on 08.09.2012 showing income of Rs. 08.09.2012 showing income of Rs. Nil.The case was duly concluded vide order us 143(3) dated .The case was duly concluded vide order us 143(3) dated .The case was duly concluded vide order us 143(3) dated 07.03.2016 at Rs NIL/ 07.03.2016 at Rs NIL/-. Assessee is a co operative credit . Assessee is a co operative credit society. 2. Subsequently, in this case, it 2. Subsequently, in this case, it is found that assessee has is found that assessee has claimed deduction under section 80P(2) of the Act of R$ claimed deduction under section 80P(2) of the Act of R$ claimed deduction under section 80P(2) of the Act of R$ 97,49,7071- and the same was also allowed in the order. and the same was also allowed in the order. 3. As per the records from Profit & Loss Alc, it was noticed 3. As per the records from Profit & Loss Alc, it was noticed 3. As per the records from Profit & Loss Alc, it was noticed that assessee received interest on FD of Rs 163,45,298/ that assessee received interest on FD of Rs 163,45,298/ that assessee received interest on FD of Rs 163,45,298/-. The FD's as seen from the Balance sheet were mainty with co FD's as seen from the Balance sheet were mainty with co FD's as seen from the Balance sheet were mainty with co operative banks and not with co operative society. This clearly operative banks and not with co operative society. This clearly operative banks and not with co operative society. This clearly

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showed that assessee has earned income from co operative showed that assessee has earned income from co operative showed that assessee has earned income from co operative banks and not from society. Section 80P(2)(d) does not extend banks and not from society. Section 80P(2)(d) does not extend banks and not from society. Section 80P(2)(d) does not extend the benefit of deduction for interest received from investments of deduction for interest received from investments of deduction for interest received from investments made with co operative banks, hence the deduction was made with co operative banks, hence the deduction was made with co operative banks, hence the deduction was required to be disallowed. required to be disallowed. 4. Assessee claimed deduction u/s 800(2) which is clearly in 4. Assessee claimed deduction u/s 800(2) which is clearly in 4. Assessee claimed deduction u/s 800(2) which is clearly in contravention to provisions of the Act. The income from FD contravention to provisions of the Act. The income from FD contravention to provisions of the Act. The income from FD was required to be offered under the head "income from other s required to be offered under the head "income from other s required to be offered under the head "income from other sources" as per the provisions of the Act as, co operative bank sources" as per the provisions of the Act as, co operative bank sources" as per the provisions of the Act as, co operative bank is a urban commercial bank and does not fall under the is a urban commercial bank and does not fall under the is a urban commercial bank and does not fall under the purview of co operative society referred to section 80P(2)(d) of purview of co operative society referred to section 80P(2)(d) of purview of co operative society referred to section 80P(2)(d) of the Act. The the Act. The claim of assessee for deduction clearly shows claim of assessee for deduction clearly shows that there is failure on part of assessee in making true and full that there is failure on part of assessee in making true and full that there is failure on part of assessee in making true and full disclosure of its particulars of income for AY 2012 disclosure of its particulars of income for AY 2012- -13. 5. Section 147 of the Act states that If AO has reason to 5. Section 147 of the Act states that If AO has reason to 5. Section 147 of the Act states that If AO has reason to believe that any income chargeable to tax has escaped believe that any income chargeable to tax has escaped believe that any income chargeable to tax has escaped assessment for any assessment year, he may subject to assessment for any assessment year, he may subject to assessment for any assessment year, he may subject to provisions of section 148 to 153, assessee or reassess such provisions of section 148 to 153, assessee or reassess such provisions of section 148 to 153, assessee or reassess such income and also any other inco income and also any other income which has escaped me which has escaped assessment and which comes to his notice subsequently in assessment and which comes to his notice subsequently in assessment and which comes to his notice subsequently in the course of proceedings under this section." the course of proceedings under this section." 6.1 On perusal of the above reasons recorded, it is evident On perusal of the above reasons recorded, it is evident On perusal of the above reasons recorded, it is evident that there is no tangible new information or material from that there is no tangible new information or material from that there is no tangible new information or material from either ‘internal’ or ‘external’ source to form reasons to believe rnal’ or ‘external’ source to form reasons to believe rnal’ or ‘external’ source to form reasons to believe that income escaped assessment. The Assessing Officer has that income escaped assessment. The Assessing Officer has that income escaped assessment. The Assessing Officer has merely re-appreciated the information which was available appreciated the information which was available appreciated the information which was available before him in original assessment proceedings and therefore, before him in original assessment proceedings and therefore, before him in original assessment proceedings and therefore, the reasons recorded are the reasons recorded are based on merely ‘change of opinion’. based on merely ‘change of opinion’. In para 4 of the reasons recorded though the Assessing Officer In para 4 of the reasons recorded though the Assessing Officer In para 4 of the reasons recorded though the Assessing Officer mentioned that there was a failure on the part of the assessee mentioned that there was a failure on the part of the assessee mentioned that there was a failure on the part of the assessee in making true and fully disclosure, however, he has not in making true and fully disclosure, however, he has not in making true and fully disclosure, however, he has not pointed out which information was no pointed out which information was not disclosed fully and t disclosed fully and truly by the assessee. The interest income earned by the truly by the assessee. The interest income earned by the truly by the assessee. The interest income earned by the assessee from fixed deposits was duly explained before the assessee from fixed deposits was duly explained before the assessee from fixed deposits was duly explained before the Assessing Officer in original assessment proceedings and Assessing Officer in original assessment proceedings and Assessing Officer in original assessment proceedings and therefore, contention of the Assessing Officer in reason therefore, contention of the Assessing Officer in reason therefore, contention of the Assessing Officer in reason recorded of failure on the part of the assessee in making full rded of failure on the part of the assessee in making full rded of failure on the part of the assessee in making full and true disclosure,is devoid of merit and in the nature of an and true disclosure,is devoid of merit and in the nature of an and true disclosure,is devoid of merit and in the nature of an incorrect allegation only. Relying on the decision of the Hon’ble incorrect allegation only. Relying on the decision of the Hon’ble incorrect allegation only. Relying on the decision of the Hon’ble Jurisdictional High Court in the case of Sunjewels India (P.) Jurisdictional High Court in the case of Sunjewels India (P.) Jurisdictional High Court in the case of Sunjewels India (P.) Ltd. reported eported eported in in in [2022] [2022] [2022] 141 141 141 taxmann.com taxmann.com taxmann.com 72 72 72

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(Bombay)reassessments based on appreciating same facts, (Bombay)reassessments based on appreciating same facts, (Bombay)reassessments based on appreciating same facts, which which which were were were available available available during during during original original original assessment assessment assessment proceedings,is bad in law on the reason of ‘change of opinion’. proceedings,is bad in law on the reason of ‘change of opinion’. proceedings,is bad in law on the reason of ‘change of opinion’. In writ petition no. 3048 of 2022 in the case of Mu In writ petition no. 3048 of 2022 in the case of Mu In writ petition no. 3048 of 2022 in the case of Mumbai Postal Employees Co Employees Co-operative Credit Society Ltd Vs ITO, the Hon’ble operative Credit Society Ltd Vs ITO, the Hon’ble Bombay High Court held that satisfaction recorded by the AO Bombay High Court held that satisfaction recorded by the AO Bombay High Court held that satisfaction recorded by the AO in the reasons recorded was not based upon any material in the reasons recorded was not based upon any material in the reasons recorded was not based upon any material other than obtained on amount of ‘perusal of the record’, and other than obtained on amount of ‘perusal of the record’, and other than obtained on amount of ‘perusal of the record’, and hence it was based on change of opinion. The relevant finding e it was based on change of opinion. The relevant finding e it was based on change of opinion. The relevant finding of the Hon’ble High Court is reproduced as under: of the Hon’ble High Court is reproduced as under: “8. We have heard learned Counsel for the parties. 8. We have heard learned Counsel for the parties. 8. We have heard learned Counsel for the parties. 9. It is no longer res integra that the action of the A.O. 9. It is no longer res integra that the action of the A.O. 9. It is no longer res integra that the action of the A.O. ininitiating reassessment proceedings ininitiating reassessment proceedings have to be tested on the have to be tested on the touch stone of the reasons recorded. On a perusal of the touch stone of the reasons recorded. On a perusal of the touch stone of the reasons recorded. On a perusal of the reasons recorded as have been reproduced partially in the reasons recorded as have been reproduced partially in the reasons recorded as have been reproduced partially in the preceding paragraphs, it is clear that the A.O. felt that the preceding paragraphs, it is clear that the A.O. felt that the preceding paragraphs, it is clear that the A.O. felt that the claim of deduction under Section 80P(2)(d) of the Act claim of deduction under Section 80P(2)(d) of the Act claim of deduction under Section 80P(2)(d) of the Act which had been allowed in favour of the Petitioner was not in had been allowed in favour of the Petitioner was not in had been allowed in favour of the Petitioner was not in conformity with the provisions of the said section, which conformity with the provisions of the said section, which conformity with the provisions of the said section, which consequently had resulted in an under assessment of income consequently had resulted in an under assessment of income consequently had resulted in an under assessment of income of Rs.92,08,876/ of Rs.92,08,876/- and a consequent short levy of tax of and a consequent short levy of tax of Rs.28,45,542/ Rs.28,45,542/-. This satisfaction recorded by the A.O. in the satisfaction recorded by the A.O. in the reasons was not based upon any material other than obtained reasons was not based upon any material other than obtained reasons was not based upon any material other than obtained on account of ‘perusal of the record’. on account of ‘perusal of the record’. 10. It can be noticed that in the present case the assessment 10. It can be noticed that in the present case the assessment 10. It can be noticed that in the present case the assessment was under Section 143(3) of the Act, during which th was under Section 143(3) of the Act, during which th was under Section 143(3) of the Act, during which the Petitioner had been served with the notice under Section Petitioner had been served with the notice under Section Petitioner had been served with the notice under Section 142(1) of the Act dated 27th September, 2016 asking the 142(1) of the Act dated 27th September, 2016 asking the 142(1) of the Act dated 27th September, 2016 asking the Petitioner to explain with documentary evidence the claim of Petitioner to explain with documentary evidence the claim of Petitioner to explain with documentary evidence the claim of deduction under Chapter VI deduction under Chapter VI-A of the Act, reply thereto was A of the Act, reply thereto was submitted by the Peti submitted by the Petitioner on 10th October, 2016 with an tioner on 10th October, 2016 with an explanation that the Petitioner get fulflled the conditions of explanation that the Petitioner get fulflled the conditions of explanation that the Petitioner get fulflled the conditions of eligibility under Section 80P of the Act, whereafter the order of eligibility under Section 80P of the Act, whereafter the order of eligibility under Section 80P of the Act, whereafter the order of assessment came to be passed on 23rd November, 2016. It is assessment came to be passed on 23rd November, 2016. It is assessment came to be passed on 23rd November, 2016. It is therefore clear that the issue therefore clear that the issue stood considered as only a part stood considered as only a part ofthe deduction under Section 80P of the Act while disallowing the deduction under Section 80P of the Act while disallowing the deduction under Section 80P of the Act while disallowing the same in regard to income from holiday home charges. the same in regard to income from holiday home charges. the same in regard to income from holiday home charges. 11. The A.O. therefore did not have any tangible material with 11. The A.O. therefore did not have any tangible material with 11. The A.O. therefore did not have any tangible material with him based upon which he could form his re him based upon which he could form his reason to believe that ason to believe that income had escaped assessment. The entire basis for income had escaped assessment. The entire basis for income had escaped assessment. The entire basis for

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reopening is nothing but a change of opinion on the part of the reopening is nothing but a change of opinion on the part of the reopening is nothing but a change of opinion on the part of the A.O. that the beneft of deduction under Section 80P of the Act A.O. that the beneft of deduction under Section 80P of the Act A.O. that the beneft of deduction under Section 80P of the Act of Rs.92,08,876/ of Rs.92,08,876/- ought not to have been allowed at all. ought not to have been allowed at all. As between the date of the assessment order under Section between the date of the assessment order under Section between the date of the assessment order under Section 143(3) of the Act and the date when the reasons were 143(3) of the Act and the date when the reasons were 143(3) of the Act and the date when the reasons were recorded, there has been neither any change in law nor any recorded, there has been neither any change in law nor any recorded, there has been neither any change in law nor any new material has been shown to have come to the knowledge new material has been shown to have come to the knowledge new material has been shown to have come to the knowledge of the A.O.. This therefore of the A.O.. This therefore is nothing but a clear case of is nothing but a clear case of change of opinion as was rightly urged by Mr. Mistry and, change of opinion as was rightly urged by Mr. Mistry and, change of opinion as was rightly urged by Mr. Mistry and, therefore, impermissible for reopening the assessment. Apart therefore, impermissible for reopening the assessment. Apart therefore, impermissible for reopening the assessment. Apart from this, the assessment is sought to be reopened beyond the from this, the assessment is sought to be reopened beyond the from this, the assessment is sought to be reopened beyond the period of four years from the end of the re period of four years from the end of the relevant assessment levant assessment year 2014-15 and, therefore, it was incumbent upon the A.O. 15 and, therefore, it was incumbent upon the A.O. 15 and, therefore, it was incumbent upon the A.O. to establish that the Petitioner had failed to disclose fully and to establish that the Petitioner had failed to disclose fully and to establish that the Petitioner had failed to disclose fully and truly all material facts necessary for assessment during the truly all material facts necessary for assessment during the truly all material facts necessary for assessment during the relevant assessment proceedings. No such averment i relevant assessment proceedings. No such averment i relevant assessment proceedings. No such averment is made in the 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, 12. In the case of Hindustan Lever Ltd. V/s. R. B. Wadkar, Assistant Commissi Assistant Commissioner of Income-Tax and others 1 Tax and others 1, it was held: “…...The reasons recorded should be clear and unambiguous “…...The reasons recorded should be clear and unambiguous “…...The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons and should not suffer from any vagueness. The reasons and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the ed must disclose his mind. The reasons are the ed must disclose his mind. The reasons are the manifestation of the mind of the Assessing Offcer. The reasons manifestation of the mind of the Assessing Offcer. The reasons manifestation of the mind of the Assessing Offcer. The reasons recorded should be self recorded should be self-explanatory and should not keep the explanatory and should not keep the assessee guessing for the reasons. Reasons provide the link assessee guessing for the reasons. Reasons provide the link assessee guessing for the reasons. Reasons provide the link between conclusion and evi between conclusion and evidence. The reasons recorded must dence. The reasons recorded must be based on evidence. The Assessing Offcer, in the event of be based on evidence. The Assessing Offcer, in the event of be based on evidence. The Assessing Offcer, in the event of challenge to the reasons, must be able to justify the same challenge to the reasons, must be able to justify the same challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the based on material available on record. He must disclose in the based on material available on record. He must disclose in the reasons as to which fact or material was reasons as to which fact or material was not disclosed by the not disclosed by the assessee fully and truly necessary for assessment of that assessee fully and truly necessary for assessment of that assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the assessment year, so as to establish the vital link between the assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against reasons and evidence. That vital link is the safeguard against reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. arbitrary reopening of the concluded assessment. arbitrary reopening of the concluded assessment. In the aforementioned case the Court set aside the notice n the aforementioned case the Court set aside the notice n the aforementioned case the Court set aside the notice under Section 148 of the Act impugned therein, on the ground under Section 148 of the Act impugned therein, on the ground under Section 148 of the Act impugned therein, on the ground that the jurisdictional requirement of the proviso to Section that the jurisdictional requirement of the proviso to Section that the jurisdictional requirement of the proviso to Section 147 of the Act had not been complied with as the A.O. had 147 of the Act had not been complied with as the A.O. had 147 of the Act had not been complied with as the A.O. had nowhere stated in nowhere stated in the reasons recorded that there was failure the reasons recorded that there was failure

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on the part of the assessee to disclose fully and truly all on the part of the assessee to disclose fully and truly all on the part of the assessee to disclose fully and truly all material facts. Similar facts situation exists even in the material facts. Similar facts situation exists even in the material facts. Similar facts situation exists even in the present case where the reasons recorded do not at all alleged present case where the reasons recorded do not at all alleged present case where the reasons recorded do not at all alleged any such failure on the part of any such failure on the part of the assessee which was a the assessee which was a condition prerequisite for invoking jurisdiction for reopening in condition prerequisite for invoking jurisdiction for reopening in condition prerequisite for invoking jurisdiction for reopening in addition to the condition of ‘reasons tobelieve’ as this was a addition to the condition of ‘reasons tobelieve’ as this was a addition to the condition of ‘reasons tobelieve’ as this was a case of reopening beyond the period of four years. case of reopening beyond the period of four years. case of reopening beyond the period of four years. 13. For the reasons mentioned hereinabove, we hav 13. For the reasons mentioned hereinabove, we hav 13. For the reasons mentioned hereinabove, we have no hesitation in holding that in the facts and circumstances of the hesitation in holding that in the facts and circumstances of the hesitation in holding that in the facts and circumstances of the present present present case, case, case, the the the reopening reopening reopening of of of the the the assessment assessment assessment is is is unsustainable. Be that as it may, the present petition is unsustainable. Be that as it may, the present petition is unsustainable. Be that as it may, the present petition is allowed. The notice under Section 148 of the Act as also the allowed. The notice under Section 148 of the Act as also the allowed. The notice under Section 148 of the Act as also the order of assessmen order of assessment dated 30th March, 2022 passed under t dated 30th March, 2022 passed under Section 147 r/w Section 144B of the Act are set aside. Section 147 r/w Section 144B of the Act are set aside. Section 147 r/w Section 144B of the Act are set aside.” 6.2 Similar finding has been given by the Hon’ble Bombay Similar finding has been given by the Hon’ble Bombay Similar finding has been given by the Hon’ble Bombay High Court while deciding the writpetition no. 1809 of 2022 in High Court while deciding the writpetition no. 1809 of 2022 in High Court while deciding the writpetition no. 1809 of 2022 in the case of Tahnee Heights CHS Ltd Vs ITO. the case of Tahnee Heights CHS Ltd Vs ITO. The relevant The relevant finding of the Hon’ble High Court is reproduced as under: finding of the Hon’ble High Court is reproduced as under: finding of the Hon’ble High Court is reproduced as under: “8. In the present case although the A.O. has recorded in the 8. In the present case although the A.O. has recorded in the 8. In the present case although the A.O. has recorded in the reasons that there was failure on the part of the assessee to reasons that there was failure on the part of the assessee to reasons that there was failure on the part of the assessee to disclosefully and truly material facts, it failed to identi disclosefully and truly material facts, it failed to identi disclosefully and truly material facts, it failed to identify as to what was that material fact which was not disclosed by the what was that material fact which was not disclosed by the what was that material fact which was not disclosed by the assessee which if so disclosed could have prevented the assessee which if so disclosed could have prevented the assessee which if so disclosed could have prevented the escapement of income. The alleged failure to disclose appears escapement of income. The alleged failure to disclose appears escapement of income. The alleged failure to disclose appears to be nothing but a statement to somehow overcome the hurdle to be nothing but a statement to somehow overcome the hurdle to be nothing but a statement to somehow overcome the hurdle of reopening the assessment beyond four years. ing the assessment beyond four years. Apart from the above, the A.O. could have proceeded to reopen Apart from the above, the A.O. could have proceeded to reopen Apart from the above, the A.O. could have proceeded to reopen the assessment only if he had reason to believe that ‘income the assessment only if he had reason to believe that ‘income the assessment only if he had reason to believe that ‘income had escaped assessment’. had escaped assessment’. 9. In CIT V/s. Kelvinator of India Ltd. 2 the Supreme Court 9. In CIT V/s. Kelvinator of India Ltd. 2 the Supreme Court 9. In CIT V/s. Kelvinator of India Ltd. 2 the Supreme Court held: “ The Assessing Offcer has no power to review; he has the The Assessing Offcer has no power to review; he has the The Assessing Offcer has no power to review; he has the power to reassess. But reassessment has to be based on power to reassess. But reassessment has to be based on power to reassess. But reassessment has to be based on fulfllment of certain precondition and if the concept of “change fulfllment of certain precondition and if the concept of “change fulfllment of certain precondition and if the concept of “change of opinion” is removed, as contended on behalf of the of opinion” is removed, as contended on behalf of the of opinion” is removed, as contended on behalf of the Department, then, in the Department, then, in the garb of re-opening the assessment, opening the assessment, review would take place. One must treat the concept of review would take place. One must treat the concept of review would take place. One must treat the concept of “change of opinion” as an in “change of opinion” as an in-built test to check abuse of power built test to check abuse of power

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by the Assessing Offcer. Hence, after 1 by the Assessing Offcer. Hence, after 1-4-1989, Assessing 1989, Assessing Offcer has power to reopen, provided there i Offcer has power to reopen, provided there i Offcer has power to reopen, provided there is “tangible material” to come to the conclusion that there is escapement of material” to come to the conclusion that there is escapement of material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with income from assessment. Reasons must have a live link with income from assessment. Reasons must have a live link with the formation of the belief.” the formation of the belief.” 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of 10. In Jindal Photo Films Ltd. Vs. Deputy Commissioner of Income Tax 3 , the Court, in the Income Tax 3 , the Court, in the light of the facts before it and light of the facts before it and in the background of section 147 of the Act, observed : in the background of section 147 of the Act, observed : in the background of section 147 of the Act, observed : “……………….all that the Income “……………….all that the Income-tax Offcer has said is that he tax Offcer has said is that he was not right in allowing deduction under Section 80I because was not right in allowing deduction under Section 80I because was not right in allowing deduction under Section 80I because he had allowed the deductions wrongly and, th he had allowed the deductions wrongly and, th he had allowed the deductions wrongly and, therefore, he was of the opinion that the income had escaped assessment. was of the opinion that the income had escaped assessment. was of the opinion that the income had escaped assessment. Though he has used the phrase "reason to believe" in his Though he has used the phrase "reason to believe" in his Though he has used the phrase "reason to believe" in his order, admittedly, between the date of the orders of order, admittedly, between the date of the orders of order, admittedly, between the date of the orders of assessment sought to be reopened and the date of forming of assessment sought to be reopened and the date of forming of assessment sought to be reopened and the date of forming of opinion by the opinion by the Income-tax Offcer nothing new has happened. tax Offcer nothing new has happened. There is no change of law. No new material has come on There is no change of law. No new material has come on There is no change of law. No new material has come on record. No information has been received. It is merely a fresh record. No information has been received. It is merely a fresh record. No information has been received. It is merely a fresh application of mind by the same Assessing Offcer to the same application of mind by the same Assessing Offcer to the same application of mind by the same Assessing Offcer to the same set of facts. While passing the o set of facts. While passing the original orders of assessment riginal orders of assessment the order dated February 28, 1994, passed by the the order dated February 28, 1994, passed by the the order dated February 28, 1994, passed by the Commissioner of Income Commissioner of Income-tax (Appeals) was before the tax (Appeals) was before the Assessing Offcer. That order stands till today. What the Assessing Offcer. That order stands till today. What the Assessing Offcer. That order stands till today. What the Assessing Offce has said about the order of the Commissioner Assessing Offce has said about the order of the Commissioner Assessing Offce has said about the order of the Commissioner of Income-tax (Appeals) while recording reasons under Section tax (Appeals) while recording reasons under Section tax (Appeals) while recording reasons under Section 147 he could have said even in the original orders of 147 he could have said even in the original orders of 147 he could have said even in the original orders of assessment. Thus, it is a case of mere change of opinion assessment. Thus, it is a case of mere change of opinion assessment. Thus, it is a case of mere change of opinion which does not provide jurisdiction to the Assessing Offcer to which does not provide jurisdiction to the Assessing Offcer to which does not provide jurisdiction to the Assessing Offcer to initiate proceedings under S initiate proceedings under Section 147 of the Act. It is also equally well settled that if a notice under Section 148 It is also equally well settled that if a notice under Section 148 It is also equally well settled that if a notice under Section 148 has been issued without the jurisdictional foundation under has been issued without the jurisdictional foundation under has been issued without the jurisdictional foundation under Section 147 being available to the Assessing Offcer, the notice Section 147 being available to the Assessing Offcer, the notice Section 147 being available to the Assessing Offcer, the notice and the subsequent proceedings will be wi and the subsequent proceedings will be without jurisdiction, thout jurisdiction, liable to be struck down in exercise of writ jurisdiction of this liable to be struck down in exercise of writ jurisdiction of this liable to be struck down in exercise of writ jurisdiction of this court. If "reason to believe" be available, the writ court will not court. If "reason to believe" be available, the writ court will not court. If "reason to believe" be available, the writ court will not exercise its power of judicial review to go into the suffciency or exercise its power of judicial review to go into the suffciency or exercise its power of judicial review to go into the suffciency or adequacy of the material available. adequacy of the material available. However, the present one However, the present one is not a case of testing the suffciency of material available. It is not a case of testing the suffciency of material available. It is not a case of testing the suffciency of material available. It is a case of absence of material and hence the absence of is a case of absence of material and hence the absence of is a case of absence of material and hence the absence of

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jurisdiction in the Assessing Offcer to initiate the proceedings jurisdiction in the Assessing Offcer to initiate the proceedings jurisdiction in the Assessing Offcer to initiate the proceedings under Section 147/148 of the Act.” under Section 147/148 of the Act.” 11. Even in the present case there appears to be no tangible ven in the present case there appears to be no tangible ven in the present case there appears to be no tangible material with the A.O. as can be seen from the reasons material with the A.O. as can be seen from the reasons material with the A.O. as can be seen from the reasons recorded and that the reference was made only to the records recorded and that the reference was made only to the records recorded and that the reference was made only to the records of the assessment. It thus appears that between the date of of the assessment. It thus appears that between the date of of the assessment. It thus appears that between the date of the order of assessment the order of assessment and the date of the issuance of notice, and the date of the issuance of notice, nothing new had happened. There was no new information nothing new had happened. There was no new information nothing new had happened. There was no new information received by the Assessing Offcer nor was any reference made received by the Assessing Offcer nor was any reference made received by the Assessing Offcer nor was any reference made to any new material on record. The A.O. was simply to any new material on record. The A.O. was simply to any new material on record. The A.O. was simply attempting to attempting toaccord a fresh consideration on the i accord a fresh consideration on the issue of deduction under Section 80P of the Act claimed and allowed in deduction under Section 80P of the Act claimed and allowed in deduction under Section 80P of the Act claimed and allowed in favour of the Petitioner. favour of the Petitioner. 12. We cannot forget that the order of assessment passed in 12. We cannot forget that the order of assessment passed in 12. We cannot forget that the order of assessment passed in the case of the assessee was under Section 143(3) of the Act. the case of the assessee was under Section 143(3) of the Act. the case of the assessee was under Section 143(3) of the Act. The Petitioner had specifcally claime The Petitioner had specifcally claimed the deduction under d the deduction under Section 80P of the Act which was not only reflected in the Section 80P of the Act which was not only reflected in the Section 80P of the Act which was not only reflected in the return of income but also gone into specifcally as can be seen return of income but also gone into specifcally as can be seen return of income but also gone into specifcally as can be seen from the notice issued under Section 142(1) of the Act where from the notice issued under Section 142(1) of the Act where from the notice issued under Section 142(1) of the Act where by the details of various deductions and exemptions by the details of various deductions and exemptions by the details of various deductions and exemptions along with documentary evidence had been sought for by the A.O., with documentary evidence had been sought for by the A.O., with documentary evidence had been sought for by the A.O., which fnally led to the passing of the order of assessment which fnally led to the passing of the order of assessment which fnally led to the passing of the order of assessment where by while certain disallowances were made in respect to where by while certain disallowances were made in respect to where by while certain disallowances were made in respect to certain items, the claim of deduction under Section 80P was certain items, the claim of deduction under Section 80P was certain items, the claim of deduction under Section 80P was allowed. It is settled law that if a query is raised during the t is settled law that if a query is raised during the t is settled law that if a query is raised during the assessment proceedings and the assessee submits a reply assessment proceedings and the assessee submits a reply assessment proceedings and the assessee submits a reply thereto, leading to the passing of the order of assessment, a thereto, leading to the passing of the order of assessment, a thereto, leading to the passing of the order of assessment, a reopening in the absence of any new tangible material would reopening in the absence of any new tangible material would reopening in the absence of any new tangible material would be nothing but a change be nothing but a change of opinion, which would not furnish to of opinion, which would not furnish to the A.O. a basis for his ‘reasons to believe’ that income the A.O. a basis for his ‘reasons to believe’ that income the A.O. a basis for his ‘reasons to believe’ that income chargeable to tax had escaped assessment. chargeable to tax had escaped assessment. 13. Be that as it may, we are of the opinion that the impugned 13. Be that as it may, we are of the opinion that the impugned 13. Be that as it may, we are of the opinion that the impugned notice is unsustainable on account of these jurisdict notice is unsustainable on account of these jurisdict notice is unsustainable on account of these jurisdictional errors committed by the A.O.. Consequently, the petition is errors committed by the A.O.. Consequently, the petition is errors committed by the A.O.. Consequently, the petition is allowed. The impugned notice dated30th March, 2021 under allowed. The impugned notice dated30th March, 2021 under allowed. The impugned notice dated30th March, 2021 under Section 148 of the Act and the impugned order dated 10th Section 148 of the Act and the impugned order dated 10th Section 148 of the Act and the impugned order dated 10th March, 2022 are held to be unsustainable and are accordingly March, 2022 are held to be unsustainable and are accordingly March, 2022 are held to be unsustainable and are accordingly quashed.” 6.3 In the case of Surat District Co n the case of Surat District Co-op Milk Producers Union op Milk Producers Union Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat), Hon’ble high Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat), Hon’ble high Ltd Vs ITO in (2013) 29 taxmann.com 81 (Gujrat), Hon’ble high

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Court of Gujrat held that when the assessee had given full Court of Gujrat held that when the assessee had given full Court of Gujrat held that when the assessee had given full details details of dividend income, interest income, details of dividend income, interest of dividend income, interest income, essential income, essential essential requirement to reopen as requirement to reopen assessment after four years was not sessment after four years was not satisfied. The relevant finding of the Hon’ble High Court id satisfied. The relevant finding of the Hon’ble High Court id satisfied. The relevant finding of the Hon’ble High Court id reproduced asunder: reproduced asunder: “12. Having thus heard learned counsel for the parties and Having thus heard learned counsel for the parties and Having thus heard learned counsel for the parties and having perused the materials on record, we notice that in the having perused the materials on record, we notice that in the having perused the materials on record, we notice that in the return filed by the return filed by the petitioner, in addition to claiming deduction petitioner, in addition to claiming deduction of gross income of interest and dividend of Rs.1,81,27,606 of gross income of interest and dividend of Rs.1,81,27,606 of gross income of interest and dividend of Rs.1,81,27,606 under Section 80P(2)(d) of the Act, the petitioner further under Section 80P(2)(d) of the Act, the petitioner further under Section 80P(2)(d) of the Act, the petitioner further provided various details. For example, in the Annexure provided various details. For example, in the Annexure provided various details. For example, in the Annexure-VII to the return, such deduction und the return, such deduction under Section 80P(2)(d) was er Section 80P(2)(d) was bifurcated into dividend income of Rs.53,71,450 and interest bifurcated into dividend income of Rs.53,71,450 and interest bifurcated into dividend income of Rs.53,71,450 and interest income of Rs.1,27,56,156. Further, the petitioner had also income of Rs.1,27,56,156. Further, the petitioner had also income of Rs.1,27,56,156. Further, the petitioner had also supplied the full details of the statement showing dividend supplied the full details of the statement showing dividend supplied the full details of the statement showing dividend and interest income received from cooperative socie and interest income received from cooperative socie and interest income received from cooperative societies along with dividend counters in the original. Additionally, along with with dividend counters in the original. Additionally, along with with dividend counters in the original. Additionally, along with Tax Audit Report under Section 44AB of the Act the petitioner Tax Audit Report under Section 44AB of the Act the petitioner Tax Audit Report under Section 44AB of the Act the petitioner had given details of the dividend income, interest income as had given details of the dividend income, interest income as had given details of the dividend income, interest income as well as interest expenses for the said year, which includ well as interest expenses for the said year, which includ well as interest expenses for the said year, which included interest expenditure on fixed deposit, interest expenditure on interest expenditure on fixed deposit, interest expenditure on interest expenditure on fixed deposit, interest expenditure on the Society Savings, Employee Savings, etc. the Society Savings, Employee Savings, etc. 13. Thus, it can be seen that full details with respect to Thus, it can be seen that full details with respect to Thus, it can be seen that full details with respect to petitioner's claim for deduction under Section 80P(2)(d) of the petitioner's claim for deduction under Section 80P(2)(d) of the petitioner's claim for deduction under Section 80P(2)(d) of the Act was very much befo Act was very much before the Assessing Officer in the original re the Assessing Officer in the original return accompanied by the audited accounts of the petitioner return accompanied by the audited accounts of the petitioner return accompanied by the audited accounts of the petitioner society. There was, thus, no failure on the part of the society. There was, thus, no failure on the part of the society. There was, thus, no failure on the part of the petitioner to disclose fully and truly all the material facts petitioner to disclose fully and truly all the material facts petitioner to disclose fully and truly all the material facts necessary for assessment. The essent necessary for assessment. The essential requirement to ial requirement to enable the Assessing Officer to reopen the assessment and enable the Assessing Officer to reopen the assessment and enable the Assessing Officer to reopen the assessment and the period of four years is, thus, not satisfied. Therefore, the period of four years is, thus, not satisfied. Therefore, the period of four years is, thus, not satisfied. Therefore, without without without going going going into into into the further the further the further question question question of of of the the the very very very maintainability of the belief of the Assessing Officer that the maintainability of the belief of the Assessing Officer that the maintainability of the belief of the Assessing Officer that the assessee's income has escaped assessment within the sessee's income has escaped assessment within the sessee's income has escaped assessment within the meaning of section 147 of the Act, we find sufficient meaning of section 147 of the Act, we find sufficient meaning of section 147 of the Act, we find sufficient justification in thepetitioner's questioning the reopening the justification in thepetitioner's questioning the reopening the justification in thepetitioner's questioning the reopening the process only on the ground that there was no failure on the process only on the ground that there was no failure on the process only on the ground that there was no failure on the part of the petitioner to dis part of the petitioner to disclose truly and fully all the material close truly and fully all the material facts.

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6.4 The contention of the ld DR that explanation below the The contention of the ld DR that explanation below the The contention of the ld DR that explanation below the section 147 of the Act prescribing‘producing books of amount section 147 of the Act prescribing‘producing books of amount section 147 of the Act prescribing‘producing books of amount does not amount to full and true disclosure of material facts’, does not amount to full and true disclosure of material facts’, does not amount to full and true disclosure of material facts’, is not relevant in the cas is not relevant in the case as the AO has not pointed out any e as the AO has not pointed out any material fact, which was not disclosed during regular material fact, which was not disclosed during regular material fact, which was not disclosed during regular assessment proceedings. assessment proceedings. 6.5 In view of the above discussion, the reassessment In view of the above discussion, the reassessment In view of the above discussion, the reassessment proceedings cannot be sustained, firstly, due to the reason proceedings cannot be sustained, firstly, due to the reason proceedings cannot be sustained, firstly, due to the reason that reassessment proceedi that reassessment proceeding are based on mere ‘change of ng are based on mere ‘change of opinion’, secondly, no disclosure of full and true material facts opinion’, secondly, no disclosure of full and true material facts opinion’, secondly, no disclosure of full and true material facts by the assessee before the assessing officer, has not been by the assessee before the assessing officer, has not been by the assessee before the assessing officer, has not been substantiated by the Assessing officer, thirdly, there being no substantiated by the Assessing officer, thirdly, there being no substantiated by the Assessing officer, thirdly, there being no internal or external material to tr internal or external material to trigger the reopening of igger the reopening of assessment or for recording the reasons to believe that income assessment or for recording the reasons to believe that income assessment or for recording the reasons to believe that income escaped assessment, the action is a kind of review of escaped assessment, the action is a kind of review of escaped assessment, the action is a kind of review of assessment already completed, for which the AO is not assessment already completed, for which the AO is not assessment already completed, for which the AO is not permitted. Hence, the reassessment proceeding u/s 147 of the permitted. Hence, the reassessment proceeding u/s 147 of the permitted. Hence, the reassessment proceeding u/s 147 of the Act is quashed as void ab initio. The ground No. 1 and 2 of the ct is quashed as void ab initio. The ground No. 1 and 2 of the ct is quashed as void ab initio. The ground No. 1 and 2 of the appeal of the assessee are accordingly allowed. appeal of the assessee are accordingly allowed.” 5.1 The facts and circumstances of the year under consideration The facts and circumstances of the year under consideration The facts and circumstances of the year under consideration being identical to AY 2013 being identical to AY 2013-14, respectfully following the espectfully following the finding of the ITAT (supra) for AY 2013 (supra) for AY 2013-14 on the issue in dispute in the case on the issue in dispute in the case of the assessee itself, itself, the reassessment order passed by the AO is the reassessment order passed by the AO is held as invalid and void ab held as invalid and void ab-initio. The order of the Ld. CIT(A) on the order of the Ld. CIT(A) on the issue of validity of the reassessment is of the reassessment is accordingly set as set aside and the Ground No. 1 and 2 of the appeal of the assessee are allowed. 2 of the appeal of the assessee are allowed. 2 of the appeal of the assessee are allowed.

5.2 Since we have already Since we have already held the reassessment order passed u/s the reassessment order passed u/s 147 of the Act as in valid in valid and bad in law therefore, adjudication of and bad in law therefore, adjudication of the ground No. 3 in respect of deduction on acc the ground No. 3 in respect of deduction on account of interest ount of interest received from other than co received from other than co-operative bank i.e. nationalized bank is operative bank i.e. nationalized bank is merely rendered academic and same is dismissed as infructuous. merely rendered academic and same is dismissed as infructuous. merely rendered academic and same is dismissed as infructuous.

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