SHRI JITENDRA KUMAR GUPTA,BHARATPUR vs. INCOME TAX OFFICER, WARD-2, BHARATPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA No. 946 & 947/JP/2018 fu/kZkj.k o"kZ@Assessment Year : 2011-12 & 2012-13 cuke Shri Jitendra Kumar Gupta The ITO, Vs. Prop. M/s J.K. Enterprises Ward-2, Choburja Bazar, Old Hospital Road, Bharatpur. Bharatpur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AHBPG 8155 G vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri Rajendra Agarwal (C.A.) jktLo dh vksj ls@ Revenue by : Shri Anoop Singh (ACIT) lquokbZ dh rkjh[k@ Date of Hearing : 11/02/2019 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 26/02/2019 vkns'k@ ORDER

PER: VIJAY PAL RAO, J.M. These two appeals by the assessee are directed against two separate orders of the ld. CIT(A), Alwar both dated 29.05.2018 for the assessment years 2011-12 & 2012-13 respectively. The assessee has raised common grounds in these appeals except quantum of disallowance made U/s 40A(3) of the IT Act. The grounds raised for the assessment year 2011-12 are reproduced as under:-

ITA No. 946 &947/JP/2018 Shri Jitendra Kumar Gupta vs ITO

“On the facts and circumstances of the case, the learned CIT(A) has erred in confirming:- 1. Re-opening of the assessment 147; 2. Addition of Rs. 4,02,900/- u/s 40A(3) of the I.T. Act, 1961. The appellant reserves his right to amend, add, alter, change or delete any of the grounds of the appeal, either before or during the course of hearing.”

assessment. The ld. AR of the assessee has submitted that the original

assessment order was completed U/s 143(3) of the Act on 20.02.2014.

While completing scrutiny assessment, the AO has examined the books

of accounts, bills and vouchers etc. The trading results have been

perused and found that G.P. rate of the assessee’s proprietorship

concern had gone up in comparison to the preceding year. Therefore,

the AO has not made any adverse inference regarding G.P. rate of the

assessee. The AO has also proposed to make certain disallowances on

account of various expenses, therefore, after completing the

assessment U/s 143(3) of the Act the reopening of the assessment on

the basis of audit objection is nothing but change of opinion which is

not permissible under the provisions of the Act. The ld. AR has pointed

that the AO has initiated the proceedings U/s 147/148 of the Act in

pursuant of the audit objection, therefore, reopening is not based on

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the application of independent mind of the AO. In support of his

contention, he has relied upon the decision of Hon’ble Delhi High Court

in case of CIT vs. Kelvinator India Ltd. 320 ITR 561 as well as

decision of Hon’ble Jurisdictional High Court in case of CIT vs.

Hindustan Zinc Ltd. 393 ITR 264 and submitted that reopening based

on change of opinion is not permissible. The ld. AR has also relied upon

the decision of the Coordinate Bench of this Tribunal dated 12.04.2016

in case of Smt. Rama Goyal vs. ITO in ITA No. 465/JP/2016. He has

also referred to a number of decisions on this point and has submitted

that reopening on the basis of audit objection is not permissible when

the Assessing Officer has duly examined all the relevant record

including books of accounts as well as vouchers pertaining to the

expenditure at the time of original assessment and subsequently

proposed to disallow while reopening the assessment by invoking the

provisions of Section 40A(3) of the Act.

assessment was completed U/s 143(3) of the Act, however, the

Assessing Officer has not taken a view on the applicability of Section

40A(3) of the Act. Only when the audit party as pointed out that some

of the cash payments made by the assessee is exceeding Rs. 20,000/-

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and consequently the provisions of Section 40A(3) of the Act are

applicable. Thus, the audit objection has pointed out some crucial facts

which were not examined by the AO at the time of completing the

assessment and, therefore, it is not a case of reopening on change of

opinion but the Assessing Officer has not even examined the issue while

completing the scrutiny assessment. He has relied upon the order of ld.

CIT(A) in para 4.3 and submitted that the ld. CIT(A) has relied upon the

decision of Hon’ble Supreme Court in case of ACIT vs. Rajesh Jhaveri

Stock Brokers (P.) Ltd. 291 ITR 500 as well as decision of Raymond

Woollen Mills Ltd. Vs. ITO 236 ITR 34. Therefore, sufficiency or

correctness the material is not a thing to be considered at the stage of

reopening of the assessment. He has relied upon the orders of the

authorities below.

material on record. There is no dispute that the original assessment was

completed U/s 143(3) on 20.02.2014 thereafter there was audit

objection dated 26.06.2015 wherein it was pointed out that the

assessee has incurred expenditure of Dish Installation charges and taxi

fare payment in cash. Thus, it was pointed out that as per ledger details

the payments made in cash to various persons exceeds Rs. 20,000/-

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which is not allowability by virtue of Section 40A(3) of the Act. Pursuant

to the said audit objection the AO reopened the assessment by issuing

notice U/s 148 of the Act on 08.09.2015 by recording the reasons as

under:-

“The assessee was engaged in wholesale and retail trading of recharge coupons and mobile sets in the proprietary concern in the name and style of M/s J K Enterprise. On perusal of record of the assessee, it is observed that assessee had incurred expenditure on dish installation charges and taxi fare during the financial year 2010-11 relevant to the assessment year 2011-12 and payments were made in cash. The details available on record of the assessee in respect of payments made in cash exceeding twenty thousand to a person in a single day are as under:- TAXI FARE DISH INSTALLATION CHARGES S.No. Date Amount S.No. Date Amount 1 15.04.2010 Rs. 22500 1 31.05.2010 Rs. 28000 2 30.04.2010 Rs. 22500 2 31.07.2010 Rs. 28000 3 30.06.2010 Rs. 22500 3 31.08.2010 Rs. 36400 4 30.06.2010 Rs. 22500 4 31.01.2001 Rs. 40500 5 31.08.2010 Rs. 22500 Total Rs. 132900 6 Aug-10 Rs. 22500 7 Oct-10 Rs. 45000 8 30.11.2010 Rs. 45000 9 Jan-11 Rs. 45000 Total Rs. 270000

As per provisions of Section 40A(3) of the Act where the assessee incurs any expenditure in respect of which a payment or aggregate of payments made to a person in a day otherwise than by an A/c payee cheque drawn on a bank or account payee draft, exceeds twenty thousand Rupees no deduction shall be allowed in respect of such expenditure. In this case, the assessee has violated provisions of section 40A(3) of the Act. The assessee himself did not disallow such 5

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expenditure and added to the total income for the year under consideration. I have, therefore, reason to believe that the income to the extent of Rs. 4,02,900/- has escaped assessment within the meaning of section 147 of the IT Act, 1961 for the assessment year 2011-12. Therefore, it is a fit case to issue notice u/s 148 of the IT Act, 1961.” From the reasons recorded by the AO it is a clear case that the

Assessing Officer has considered the details of the expenditure incurred

by the assessee in cash which exceeds Rs. 20,000/- in each case.

Therefore the reopening is based on the facts in respect of the

expenditure incurred in cash and the payments made in cash were

exceeding Rs. 20,000/- and hence, it is not a case of reopening based

on the opinion of the audit party. But the AO has considered the facts

regarding the violation of provisions of Section 40A(3) of the Act while

recording reasons for reopening. Hence, we find that it is not a case of

reopening purely based on the opinion of the audit party but the

relevant facts pertaining to the violation of Section 40A(3) of the Act

were pointed out by the audit party which was considered by the AO. It

is also not in dispute the facts as pointed out by the audit party are not

in dispute and are part of the books of the assessee being ledger

account. Though the Assessing Officer has already completed the

assessment U/s 143(3) on 20.02.2014 however, while completing the

assessment U/s 143(3) of the Act the Assessing Officer had taken up 6

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various issue for scrutiny and conducted enquiry but he has not taken

up the issue of allowability of the expenditure incurred by the assessee

in cash and particularly the issue of violation of provisions of Section

40A(3) of the Act. The AO even not raised any query on this issue of

violation of provisions of Section 40A(3) of the Act. Therefore, it is

manifest from the record that the AO even did not take up the said

issue for examination hence, question of taking a decision or expressing

any opinion on the said issue does not arise. It is not a matter of

discretion of AO but it is a mandatory provisions of law to consider by

AO. Hence, when the AO has not taken up the said issue in the

assessment passed U/s 143(3) of the Act and the reopening is purely

based on the facts then, those relevant facts as pointed out by the audit

party constitute a tangible material for forming the opinion that the

income assessable to tax, to the extent of allowability claim of the

assessee which is in violation of provisions of Section 40A(3) of the Act,

has escaped assessment. There is no quarrel that at the time of

reopening of the assessment the correctness of the material and

sufficiency of the reasons to believe that the income assessable to tax

cannot be required to be established by the AO. Accordingly, we find

that when the reopening is within 4 years from the end of the

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assessment year under consideration then, the proviso to Section 147 is

not attracted in the case of the assessee. Hence, we do not find any

error or illegality in the reopening of the assessment by the AO in the

assessment year 2011-12.

40A(3) of the Act. The ld. AR of the assessee has submitted that the

expenditure in question was incurred for dish installation and taxi fare

charges which relates to the business activity of the assessee and in

consonance to the installation made by the assessee during the period.

Thus, the ld. AR of the assessee has submitted that the genuineness of

the payment is not in dispute and further the payment of each day to

each party is not exceeding Rs. 20,000/-. The AO has considered the

aggregate payment to a person during the entire period for the purpose

of making disallowance U/s 40A(3) of the Act. He has further submitted

that since these payments were made for installation of dish in the

remote areas which are mostly rural areas and therefore, the case of

the assessee falls in the exception as provided under Rule 6DD of the IT

Rules, 1962. The ld. AR has further contended that the AO has not

doubted the genuineness of the payment and recipient of the payment

then, the provisions of Section 40A(3) of the Act cannot be applied. In

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support of his contentions, he has relied upon the decision dated

04.09.2018 in case of Shri Ayub Ali vs. ACIT in ITA No. 1045/JP/2017

and submitted that the Tribunal has held that once the genuineness of

the expenditure is not a question and it is free from vice of any device

of evasion of tax then, the provisions of Section 40A(3) cannot be

invoked as the intent and purpose of the said provisions is to curb the

practice of evading tax by making the payment in cash not through

banking channel. Hence, the ld. AR has submitted that disallowance

made by the AO is not justified and may be deleted.

not disputed that the payment made to each party is exceeding Rs.

20,000/-. However, the assessee has pleaded before the ld. CIT(A) that

aggregate payment is comprising of numerous expenses but to one

person. He has further submitted that the assessee has pleaded that

the case falls in the exception under Rule 6DD of the IT Rules. He has

relied upon the orders of the authorities below.

material on record. The AO as noted that the assessee has paid a total

amount of Rs. 4,02,900/- in cash in violation of provisions of Section

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40A(3) of the Act. The details of the said payment of the expenditure

are as under:-

TAXI FARE DISH INSTALLATION CHARGES S.No. Date Amount S.No. Date Amount 1 15.04.2010 Rs. 22500 1 31.05.2010 Rs. 28000 2 30.04.2010 Rs. 22500 2 31.07.2010 Rs. 28000 3 30.06.2010 Rs. 22500 3 31.08.2010 Rs. 36400 4 30.06.2010 Rs. 22500 4 31.01.2001 Rs. 40500 5 31.08.2010 Rs. 22500 Total Rs. 132900 6 Aug-10 Rs. 22500 7 Oct-10 Rs. 45000 8 30.11.2010 Rs. 45000 9 Jan-11 Rs. 45000 Total Rs. 270000

After careful perusal of the record, we find that each amount given in

the table above represent an individual bill raised by the recipient.

Therefore, these payments are against each bill and not the

aggregation of various bills paid by the assessee. These are individual

transactions for which separate bills were raised though the bills were

raised for the service rendered by the recipient for span of period and

not for single day. Therefore, the provisions of Section 40A(3) of the

Act are attracted in these payments which stipulates the expenditure

incurred in cash and aggregate of payment made by the assessee is

exceeding Rs. 20,000/- other than through account payee cheque or

account payee bank draft. Therefore, the details recorded by the AO are

factually correct as each payment represent each bill to each party. 10

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Hence, the said expenditure is not allowable under the provisions of

Section 40A(3) of the Act.

find that the taxi fare and dish installation charges are not inevitable or

essential expenditure in respect of the business of the assessee as there

are various means of transport conveyance and therefore, it is always a

question of genuineness and correctness of the claim. Once the AO has

invoked the provisions of Sections 40A(3) of the Act and the

expenditure incurred by the assessee and payment made in cash is of

such nature that cannot be regarded as inevitable or essential to the

business activity of the assessee then, the decision of this Tribunal will

not help the case of the assessee. As regard dish installation charges

though the assessee has claimed the said expenditure and the

Assessing Officer has not made any disallowance on account of

genuineness of the expenditure however, since dish installation are not

the main business activity of the assessee. As the assessee is only a

distributor of mobile sim card, therefore, the installation of dish may be

an additional activity undertaken by the assessee however, once the

said activity is not directly generating the revenue then, the expenditure

incurred by the assessee in respect of such activity cannot be regarded

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as an essential which cannot be disputed. Hence, in the facts and

circumstances of the case, we do not find any error or illegality in the

impugned orders of the authorities below in making the disallowance

U/s 40A(3) of the Act.

validity of reopening of assessment. The ld. AR as well as ld. DR has

reiterated their contentions as advance on this issue for the assessment

year 2011-12. Further, the ld. AR has pointed out that during the

scrutiny assessment U/s 143(3) of the Act the AO has examined the

issue of allowability of the claim of the expenditure and made a

disallowance of 10% total expenses claimed in the profit and loss

account of conveyance expenses.

material on record. The reopening is on the basis of identical facts and

reasons recorded by the AO though the total payment made during this

year in cash is Rs. 1,17,000/- reproduced as under:-

TAXI FARE S.No. Date Amount 1 June, 2011 Rs. 39,000/- 2 July, 2011 Rs. 39,000/- 3 August, 2011 Rs. 39,000/- Total Rs. 1,17,000/-

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All other reasons recorded by the AO is identical to the reasons for the

assessment year 2011-12. We find that while passing the assessment

order U/s 143(3) on 13.02.2014. The Assessing Officer has examined

the issue of allowability of conveyance charges in para 3 of the

assessment order as under:-

“3. Conveyance Expenses:- During the course of assessment proceedings it is also noticed that the assessee has debited in the profit & loss account under the head of conveyance amounting to Rs. 2,16,000/-. On perusal of details regarding expenses under this head it is noticed that the assessee has made cash payment in various cases. Justification of these payments are not verifiable at this stage. On the facts and circumstances of the case genuineness of these expenses is also not verifiable is also not verifiable during the course of assessment proceedings. Personal use ofthese expenses is also cannot be ruled out. To cover up possible leakage, I make limp-sum disallowance of Rs. 21,600/- which is approximately 10% of the total expenses claimed in the profit & loss account.”

Thus, it is clear that the AO has taken up the issue of conveyance

expenses for scrutiny and examined the allowability of the claim. The

AO has also noticed that the assessee has made cash payment in

various cases. Therefore, the Assessing Officer has duly considered the

facts of cash payment, however, only 10% of the total conveyance

expenses were disallowed by the AO due to non compliance being the

payment made in cash and genuineness of the expenses. Apparently for 13

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the assessment year 2012-13 the AO while completing the assessment

U/s 143(3) of the Act has taken a decision on this issue and therefore,

subsequent reopening of the assessment was based on change of

opinion. The ld. AR of the assessee has relied upon the various

decisions on this issue including the decision of this Tribunal dated

29.01.2018 in case of Education and Rural Development Society vs.

ITO in ITA No. 1004/JP/2017 wherein it was held in para 5 to 5.2 as

under:-

“5. We have considered the rival contentions as well as the material available on record. The assessee trust is running an Educational Institutions and the objects and activities of the assessee trust were accepted as charitable in nature while granted registration u/s 12AA of the Act vide order dated 04.11.2004. For the year under consideration the assessee filed return of income on 15.10.2010 and declared nil income after claiming the benefit of Section 11 of the Act. The Assessing Officer while completed the assessment u/s 143(3) vide order dated 18.03.2013 has accepted the return income as under:- “ASSESSMENT ORDER The return or income declaring total Income at Rs. Nil was filed by the assessee on 15.10.2010 with ITO, Ward-3, Bharatpur. The same was processed u/s 143(1). The case was selected for scrutiny. Notice u/s 143(2) of the I.T. Act was issued on 22.09.2011 by ITO, Ward-3, Bharatpur and which was duly served upon the assessee. Due to change of jurisdiction of the case, record of the assessee received in this circle on transfer from ITO, Ward-3, Bharatpur and consequently notice u/s 143(2) & 142(1) alongwith questionnaires 30.05.2012. Incompliance thereto, Sh. Rajendra Agarwal, C.A. and A.R. of the assessee attended from time to time and furnished requisite 14

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details/Information/books of accounts etc. The assessee trust is running educational institutions namely Sir Chhotu Ram L.S.A. Training Institute and other charitable activities at Bharatpur and registered u/s 12AA of the I.T. Act by the worthy CIT, Alwar vide order dated 04.11.2004. The trust is working as per its by laws and carried out charitable activities. All the income of the trust is applied for fulfillment of the objects of the trust. The educational institutions are existing solely for educational purpose and not for purpose of profit. The trust has shown aggregate annual receipts of Rs. 36,05,243/- out of which an amount of Rs. 32,99,012/- incurred upon charitable activities during the year under consideration. Thus, after going through all details/information/books of accounts, bill/vouchers and written submission, the returned income declared by trust is accepted. Assessed, issue necessary forms.” 5.1 Thus, it is clear that the AO examined the relevant record furnished by the assessee as well as the requisite details and found that all income of the trust is applied for fulfillment of objects of the trust. The AO has given the details of the aggregate annual receipt of Rs. 36,05,243/- out of which an amount of Rs. 32,99,012/- was found to be incurred upon charitable activities during the year under consideration. Subsequently, the AO proposed to reopen the assessment by issuing a notice u/s 148 on 16.03.2015. The reassessment framed u/s 143(3) read with Section 147 of the Act the Assessing Officer has stated the reasons for reopening as surplus income of Rs. 12,34,179/- pertaining to other institutions namely ‘Sir Chhotu Ram Training Institute, Bharatpur’. The AO has not disputed the aggregate total annual receipt of Rs. 36,05,243/- and the total expenditure incurred by the assessee during the year of Rs. 32,99,012/-. However, the reopening is based on the ground that the assessee has not applied income to the extent of Rs. 12,34,179/- pertaining to ‘Sir Chhotu Ram Training Institute’ in respect of the charitable activities of the said institution. However, the Assessing Officer has not disputed the total expenditure incurred by the assessee of Rs. 32,99,012/-. 15

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Accordingly, it is manifest from the record that the reopening is based on reappreciation of the facts, materials and details available on the record at the time of assessment framed u/s 143(3) and therefore the AO has formed the believe only on the basis of the changed of opinion by re-appreciation of the material already on record. It is also not in dispute that after completion of assessment u/s 143(3) nothing new has come to the knowledge of the Assessing Officer and therefore the reassessment proceedings initiated by the AO or based on mere changed of opinion which is not sustainable. The Hon’ble Jurisdictional High Court in case of CIT vs. Hindustan Zinc Ltd. (Supra) while considering the identical issue as hold in para 4 to 13 as under:-

“4. We have considered the submissions of the learned counsel for the Revenue and perused the material on record.

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grounds for the Income-tax Officer to believe that there had been any non-disclosure as regards any fact, which could have a material baring on the question of under-assessment, that would be sufficient to give jurisdiction to the Income Tax Officer to issue the notice under section 34. Whether these grounds are adequate or not is not a matter for the court to investigate. In other words, the sufficiency of the grounds which induced the Income-tax Officer to act is not a justiciable issue. It is of course open for the assessee to contend that the Income-tax Officer did not hold the belief that there had been such non-disclosure. In other words, the existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the belief. Again the expression "reason to believe" in section 34 does not mean a purely subjective satisfaction on the part of the Income-tax Officer. The belief must be held in good faith: it cannot be merely a pretence. To put it differently, it is open to the court to examine whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the purpose of the section. To this limited extent, the action of the Income-tax Officer in starting proceedings under section 34 of the Act is open to challenge in a court of law.' (Emphasis Supplied)

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subsequently to be erroneous, mere change of opinion with regard to that inference would not justify initiation of action for reopening assessment. The grounds or reasons which lead to the formation of the belief contemplated by section 147 (a) of the Act must have a material bearing on the question of escapement of income of the assessee from assessment because of his failure or omission to disclose fully and truly all material facts. Once there exist reasonable grounds for the Income-tax Officer to form the above belief, that would be sufficient to clothe him with jurisdiction to issue notice. Whether the grounds are adequate or not is not a matter for the court to investigate. The sufficiency of the grounds which induce the Income-tax Officer to act is, therefore, not a justiciable issue. It is, of course, open to the assessee to contend that the Income-tax Officer did not hold the belief that there had been such non-disclosure. The existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the belief. The expression "reason to believe" does not mean a purely subjective satisfaction on the part of the Income tax Officer. The reason must be held in good faith. It cannot be merely a pretense. It is open to the court to examine whether the reasons for the formation of the belief have a rational connection with or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the purpose of the section. To this limited extent, the action of the Income-tax Officer in starting proceedings in respect of income escaping assessment is open to challenge in a court of law." The Hon'ble Supreme Court further observed :— "As stated earlier, the reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income -tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts." (Emphasis Supplied) 19

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the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. To that limited extent, the court may look into the conclusion arrived at by the Income-tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income-tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief." (Emphasis Supplied) 11. In the matter of CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561/187 Taxman 312 (SC), the Hon'ble Supreme Court held: "However, one needs to give a schematic interpretation to the words 'reason to believe', failing which section 147 would give arbitrary powers to the Assessing Officer to reopen assessments on the basis of 'mere change of opinion', which cannot be per se reason to reopen. One must also keep in mind the conceptual difference between power to review and power to reassess. The Assessing Officer has no power to review; he has the power to reassess, but the reassessment has to be based on fulfilment of certain pre-conditions and if the concept of 'change of opinion' is removed as contended on behalf of the department, then in the garb of reopening the assessment, review would take place. One must treat the concept of 'change of opinion' as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1-4-1989, the Assessing Officer has power to reopen, provided there is 'tangible material' to come to conclusion that there is escapement of income from assessment. Under the Direct Tax Laws (Amendment) Act, 1987, the Parliament not only deleted the words 'reason to believe', the Parliament reintroduced the said expression and deleted the word 'opinion' on the ground that it would vest arbitrary powers in the Assessing Officer." (Emphasis Supplied)

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also in respect of claim for grant of deduction under Section 80 IA. A separate audit report in the prescribed form 10CCB in support of the claim for deduction under Section 80IA/80IB was also duly submitted. The assessee had also submitted reply pursuant to all queries made by AO during the assessment proceedings under Section 143(3) of the Act. In this view of the matter, the contention sought to be raised by the Revenue about non-disclosure on the basis of the failure on the part of the assessee in mentioned bifurcated amount of additional depreciation allowable in the depreciation chart is absolutely baseless. It is to be noticed that all that has been said by the AO is that after scrutiny assessment, it was observed that assessee has made incorrect claim of additional depreciation on CPP whereas, the claim for additional depreciation on CPP was allowed by the AO while framing the assessment under Section 143(3) after conscious consideration of the material on record. It is not even the case of the Revenue that the formation of the belief regarding the escapement of the assessment by the AO is based on any new material coming on record. Apparently, the formation of the belief by the AO regarding escapement of the assessment is based on reappreciation of the material already available on record at the time of scrutiny assessment which amounts to mere change of opinion. Obviously, in the garb of purported exercise of the power to reassess, the AO cannot be permitted to review his own order or the order passed by his predecessor. Thus, the finding arrived at by the ITAT that the reassessment proceedings initiated by the AO by mere change of opinion is patently illegal, cannot be faulted with.

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5.2 In view of the facts and circumstances of the case when the Assessing Officer has reopened the assessment by forming the believe an re-appreciation of material already available on record as well as in view of the decision of Hon’ble Jurisdictional High Court in case of CIT vs. Hindustan Zinc (supra), we hold that reopening is not valid as the AO had no jurisdiction to invoke the provision of Section 148 of the Act. We may point out that the provisions of Section 148 cannot be used for reviewing the decision taken by the AO u/s 143(3) of the Act. There is a demarcation and separation of jurisdiction even for revision for an order suffering from error and therefore the remedy for such erroneous order is provided u/s 263 of the Act. Hence, the reopening of the assessment is set aside. Since, we have set aside the reopening of the assessment; therefore, the other grounds raised by the assessee become infructuous.

Therefore, the Tribunal after considering the decision of Hon’ble

Jurisdictional High Court in case of CIT vs. Hindustan Zinc Ltd. (supra)

has held that the Assessing Officer has reopening assessment by

forming the believe on the basis of re-appreciation of material already

considered while passing scrutiny assessment which is not permissible.

In the case in hand, the AO has already considered all the details and

facts including the payment of expenditure in cash therefore, the

reopening of the assessment would amount to reviewing its decision

taken while passing U/s 143(3) of the Act. Accordingly, reopening is not

valid and liable to set aside, we order accordingly. Since though we

have already set aside the reopening of the assessment therefore, the 24

ITA No. 946 &947/JP/2018 Shri Jitendra Kumar Gupta vs ITO ground no. 2 is already decided for the assessment year 2011-12 but become infructuous. In the result, the appeals for the assessment year 2011-12 is dismissed and for the assessment year 2012-13 is allowed.

Order pronounced in the open court on 26/02/2019

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vikram Singh Yadav) (Vijay Pal Rao) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 26/02/2019. *Santosh. आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- Shri Jitendra Kumar Gupta, Bharatpur. 2. izR;FkhZ@ The Respondent- ITO, Ward-2, Bharatpur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File {ITA No. 946 & 947/JP/2018} vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत