ACIT, CIRCLE 1(1), CHANDIGARH vs. M/S SML ISUZU LTD., CHANDIGARH

At the outset the Registry has pointed out that the appeal filed by the Revenue is time barred by 05 days for which Revenue has filed a condonation of delay application.

Delay of 05 days is condoned for which Revenue has shown sufficient cause for purpose of condonation of delay. Appeal is therefore taken up for final hearing. Factual Matrix

The assessee is engaged in the business of manufacturing of commercial vehicles and is a public limited company. For the year under consideration

The original assessment proceedings in the case of the assessee was completed vide order dt. 30/11/2017 which was issued under section 143(3) of the Act, whereby the total income of the assessee company was assessed at Rs. 57,03,70,400/- after making addition on account of alleged under valuation of closing work in progress.

That the aforesaid addition made by the AO was deleted by the CIT(A) and the order of Ld. CIT(A) was thereafter affirmed by the Tribunal vide order dt. 20/03/2019. 7. Subsequently, the proceedings under the Section 147 were initiated in the case of the assessee vide notice dt. 10/02/2020 issued under section 148 of the act. The said reassessment proceedings were completed vide order dt. 27/09/2021 passed under section 147 of the Act, whereby reassessment was done of the assessee at Rs. 57,65,85,400/- after making the disallowance of bad debts written off during the year. The order of Ld. AO bears No. ITBA/AST/S/147/2021-22/10359/30321(1) and is dated 27/09/2021. 8. That the assessee challenged the validity of the reassessment proceedings and the disallowance made by the AO in the aforesaid reassessment order dt. 27/09/2021 passed under section 147 of the Act, by preferring an appeal before CIT(A). The CIT(A) by the “impugned order” dt. 27/07/2022 however quashed the reassessment proceedings as being bad in law and not sustainable. Since the reassessment proceedings itself was quashed, no specific finding was rendered by the CIT(A) on merits on the issue of disallowance of claim of bad debts written off.

That being aggrieved by the impugned order the Revenue is in appeal before this Tribunal and has raised following grounds of appeal in Form No. 36 before us:

Regarding (a) (supra) with regard to no escapement of income – Reassessment without juri iction and illegal :- It is submitted by the assessee company is that during the relevant assessment year 2015-16, the assessee had in terms of Section 36(1)(vii) of the Act, claimed deduction for bad debts written off aggregating to Rs. 62,15,000/- viz(1) Bank guarantee invoked by the Jalandhar City Transport Services Ltd. – Rs. 50,00,000/- [Fifty Lakhs] (ii) Trade receivable from Viking Motors (P) Ltd. – Rs. 12,15,594/-, which was duly debited in the statement of profit and loss account under the head “ provision of doubtful trade receivable / advances” [ Reliance on Note 26 at page 22 of paper book] [ provision for doubtful trade receivable / advances → 62.15 lakhs dt. 31/03/2015 – Rs. 53.95 Lakhs dt. 31/03/2014]

The assessee company submits that the aforesaid amounts are “actually written off” as bad debt in so far as or in as much as the said amount of bad debts was correspondingly reduced from “trade receivable / advances” in the balance sheet for the relevant period. Please see above entry (supra).

The assessee company submitted that the aforesaid amounts were receivable / advanced by them in the regular course of business, which undisputedly constituted a debt in so far as: (i) Jalandhar City Transport Services Ltd. [JCTS)- The assesse had undertaken business transaction of sale of vehicles with the said party and proceeds thereof was duly offered to tax in the past and relevant assessment year(s). In terms of the business agreement entered into by the assessee with JCTS, in the event there was any delay in the delivery of vehicles beyond a stipulated time period, JCTS was entitled to invoke the bank guarantee maintained with Canara Bank Ltd. During the year under consideration, due to delay in delivery of certain vehicles beyond the stipulated time period, JCTS invoked the bank guarantee to the extent of Rs. 50,00,000/- (Fifty Lakhs) (three instalments refer pages 96 – 99 of paper book) and the said amount was debited from the bank of the assessee company on 23/02/2015 (page 100-101 of paper book), It is further averred by the assessee company that the condition stipulated in Section 36(1)(vii) of the Act is that the debt on part thereof should have been taken into account for computing income. In other words even if a part of the debt (and not the whole debt) has been taken into account for computing income, the write off of the whole debt is allowable deduction.

It is emphatically submitted that the fact, that the aforesaid amounts constitute “debt” in the regular course of business has not at all been disputed by the AO.

The contention of the AO in disallowing the claim of bad debt as stated in the reasons recorded and the impugned assessment order is (i) the assessee had incorrectly claimed deduction in respect of “Provision” for bad debt as against actual write off {Note:- From perusal of profit and loss account (other expenses) note ‘26’ provisions of doubtful trade receivables / advances has been claimed at Rs. 62.15 lacs, which is not allowable to the assessee u/s 36 of the Act, being these debts were not written off / taken into account – No evidence or clarification regarding written off bad debts are available on record} and (ii) the assessee was unable to establish that the debt had become bad { Note- The assessee produced bank statement and a letter to support the claim that Rs 50,00,000/- corresponds to invocation to bank guarantee. It is to be noted that there is no confirmation from the third party regarding the assessee's claim that the said amount was invoked by the customer as guarantee. Also, the assessee did not produce bank statement of the recipient to prove the claim. With respect to the letter submitted by the assessee, it is a copy of email sent by the assessee to citybusjalandhar@gmail.com. Mere email sent by the assessee cannot be accepted as substantial evidence since there is no acknowledgement from the recipient. Also, the assessee submitted relevant extracts from financial statements. The same cannot be accepted without supporting documentary evidence. Therefore, the assessee's contention that the amount was irrecoverable cannot be accepted) … With respect to Rs 12,15,594/- [ Viking Motors Private Ltd. (Viking ) (supra)written off, the assessee submitted an extract of financial statement. The reason for re-opening the case clearly states that no evidence or clarification was available on record regarding the amount written off. The assessee stated

The assessee contention on core issue (supra) is that there is incorrect appreciation of facts and position of law. Re(i):- (Actual write off of bad debt)

Once a provision is made (books of account) by reducing the same from the relevant asset investment account in the balance sheet, it would be regarded as provision or actual write off of debt / asset [ Vijaya Bank Vs. CIT : 323 ITR 166 relied upon]. The assessee further relies upon the judgment of Supreme Court of India in case of southern Technologies Ltd. Vs. JCIT 320 ITR 577 and states that in Instant case besides debiting the P&L account they have correspondingly reduced the amount from debtors account on the asset side of the balance sheet and consequently, at the end of the year, the figure shown on the asset side was net of the alleged provision. Such treatment amounted to actual write off for the purpose of availing benefit of deduction under the section.

That the assessee is squarely covered by the precedent law as they have debited the profit and loss account with provision for bad and doubtful debts and reduced the said provision from the total debtor account.

That since the deduction is rightly claimed under section 36(1)(vii) of the Act, it cannot be said that there is no income escaping assessment thereby warranting the reassessment proceedings. Re(ii) No requirement to establish non recoverability of debt

There is no requirement to establish that the debt written off was actually irrecoverable and once the amount is written off in the books of account of the assessee, then the claim of deduction is admissible.

Reliance on CBDT Circular No. 12/2016 dt. 30/05/2016 wherein it is stated that the claim of deduction u/s 36(1)(vii) of the Act shall be admissible if it has been written off as irrecoverable in the books of the assessee and fulfils the conditions stipulated in sub section (2) of Section 36 of the Act.

That it is not prudent / nor permissible in law to question the decision of the assessee to write off the debts which are not recoverable and neither the assessee is required in law to prove / establish that the debt had actually become bad before writing off the same in its books. Deduction even otherwise allowable u/s 28/37 of the Act.

Even otherwise amount written off qualities a business loss allowable as deduction under section 28 of the Act.

Payment towards invocation of bank guarantee, being merely a business settlement or compensation motivated purely by commercial purpose, there was sufficient commercial expediency on the part of the assessee to make the said payment, in order to safeguard its business interests and thus allowable as business deduction u/s 37 (1) of the Act.

Write off of trade receivable was a commercial decision taken in the best business interest of the business and constitutes expenses in terms of section 37(1) of the Act.

Thus, expenditure is even otherwise allowable as business loss / expense in terms of section 28/37 of the Act.

Accordingly, the reassessment proceedings initiated by the AO for mere verification of details without there being any evidence / material to indicate that the deduction was wrongly claimed by the assessee is without juri iction illegal and bad in law.

Though the powers under section 147/148 are vide, the same are not unfettered or plenary, in so far as AO in the garb of reassessment cannot seek to review the earlier assessment framed under section 143(3) of the Act on account of mere “change of opinion”. 29. that the Reassessment cannot be initiated unless some new additional fact come on record leading to the belief of escapement of income.

That reasons recorded refers to “Perusal of records” or similar observations is indicative of the fact that the reassessment proceedings are initiated on reappraisal of existing facts and not on basis of any new tangible material which is not permissible in law.

That the return of income filed by the assesee for the year under consideration was picked for regular assessment vide notice dt. 19/09/2016 issued under section 143(2) of the Act.

That all the information as sought for by the AO inclusive of audited financial statement for the year under consideration were provided for. The aforesaid fact finds strength from the fact that the AO has, in the original assessment order dt. 30/11/2017, duly recorded in para 4 that “ On perusal of final accounts of the assessee” That above is clearly indicative of the fact that the original assessment proceedings was completed by the AO after detailed examination of the accounts of the assessee, wherein the bad debts written off was duly disclosed / reflected. Basis above the action of the AO in reopening the case of the assessee for the year under consideration solely based on disclosure made in the audited

That no new information / material came to the possession of the AO subsequent to the completion of assessment, in as much as in the reasons recorded the AO has merely mentioned that “ from the perusal as profit and loss account (other expenses) note ‘26’ provisions of doubtful trade receivable / advances has been claimed at Rs. 62.15 lacs which is not allowable to the assessee u/s 36 of the Act, being these debts were not written off / taken into account……”

That reassessment proceedings have merely been initiated on the basis of audited financial statements duly filed during the course of the original assessment proceedings.

That initiation of reassessment proceedings in the absence of any tangible material merely on the basis of reappraisal of information / facts already available on record, is nothing but on the basis of mere change of opinion which is not permissible in law. Being so, the impugned, reassessment order is illegal and bad in law and the CIT(A) rightly quashed the same. Re(c): Non disposal of legal objections

That pursuant to the ‘receipt of reasons’ dated 17/02/2020 the assessee filed legal objections challenging the validity of reassessment proceedings vide letter dt. 16/12/2020. 37. That the AO without dealing with the aforesaid preliminary objections vide a separate speaking order, proceeded to conclude the assessment which vitiates the impugned reassessment proceedings.

That for aforesaid reason, too, the reassessment proceedings is invalid and bad in law and CIT(A) has rightly quashed the reassessment order. Re:- Ground of Appeal No. 3- On merits

No finding of CIT(A) in the impugned order on merits of disallowance made, the disallowance made by the AO is not sustainable for following reasons:- Re(i) Jalandhar City Transport Services Ltd. (‘JCTS’)- Bank Guarantee Invoked

Due to delay in delivering vehicles by the assessee to JCTS, they the JCTS invoked Bank Guarantee of Rs. 50,00,000/-. Since the income earned from sales made to JCTS has been offered to tax in the earlier years, thereby the bank guarantee invoked, being a part of the same transaction of sale of vehicles, was rightly claimed as deduction in the terms of Section 36(1)(vii) of the Act. Reliance on CIT Vs. Veerabhadra Rao : 155 ITR 152 (SC) and CIT Vs. DB,(India) Securities Ltd.; 318 ITR 26 (Del). The aforesaid of Rs. 50,00,000/- debited in the P&L Account of assessee company and corresponding reduction was made from ‘ Trade Receivable / advances’ in the balance sheet for the relevant period hence 36(1)(vii) complied with. Alternatively the payment towards invocation of Bank Guarantee being merely a ‘business settlement’ or compensation motivated purely by commercial purpose and there being sufficient commercial expediency on part of the assesse company to make the said payment, in order to safeguard its business interests, such expense was even otherwise allowable as deduction u/s 28/37 (1) of the Act. Re(ii) Viking Motors(P) Ltd. Trade receivable written off

The assessee had, in earlier years, entered into regular business transactions of supply of vehicles to Viking. The income resulting there from was duly offered to tax in the respective year(s). However an amount of Rs.

The personal hearing in the matter took place on 12/08/2024 when both the parties appeared and were heard at length on their respective submissions. The Ld. DR contended that the “impugned order” is bad in law and illegal. The Ld. DR stated that on balance sheet of the assessee perse the amount of Rs. 62,15,000/- is not written off in aggregate. Full and complete “Tax Audit” report not disclosed completely in a sense that amount of bad debts / written off are not reflected by way of words or highlighted. Mere furnishing of tax audit is not full disclosure unless and until its material contents are not disclosed truthfully during the assessment proceedings. It is not stated in the balance sheet in such a manner that it catches the eyes, that the amounts are bad debts or part thereof which is written off as irrecoverable in the accounts. The reopening of the assessment is done according to section 147/148 of the act. There is ‘Reasons to belief’ and for that ‘existing material is sufficient’. In the ‘original assessment’ no view was formed on issues herein and thereafter there are ‘reasons to belief’ that income has escaped in original assessment. CIT(A) ought to have disposed off the case on merits, which was not done so in the first appeal which was before him under the Act. The Ld. CIT(A) on the facts of the case and in law has erred in passing the ‘impugned order’ by holding that he proceedings initiated u/s 147/148 are based merely on the ‘change of opinion’

The assessee in rejoinder written argument has contended as below:

In rejoinder/ rebuttal to the above, and in addition to our arguments made vide synopsis dated 18.09.2023, it is submitted as under:

Audit Report in Form 3 CD on the e-filing portal but has included the same in the paper book filed before the Tribunal. In this regard, it is respectfully submitted that the claim made by the DR in his 4. submission that the tax audit report in Form 3CD was not e-filed by the assessee is factually incorrect inasmuch as Form 3CD was duly e-filed by the assessee on the income tax e-filing portal on 30.11.2015 vide e-filing acknowledgement number 895805611301115. A copy of the screenshot of the e-filing portal duly evidencing filing of Form 3CD on 30.011.2015 is reproduced hereunder for your Honour's ready reference:

On a perusal of the aforesaid, it will be appreciated that there was no delay in filing the tax audit report by the asscssee and the same was duly furnished online. Re (ii): Fresh Tangible material not required for initiating proceedings under section 148 of the Act The DR, in his submission, has submitted that there is no requirement for any 6. fresh tangible material to initiate proceedings under section 148 of the Act. In this regard, it is, at the outset, submitted that there is no dispute that no 7. fresh tangible material was available with the assessing officer post completion of original assessment. This is, in any case, fortified by the reasons recorded, which clearly states that the proceedings have been initiated based on perusal of note 26 and the profit and loss account forming part of the audited financial statements [refer paras 2 ad 3 on pg.61].

It is respectfully submitted that in order to initiate proceedings under section 147 of the Act, it is incumbent on the part of the assessing officer to first possess some fresh 'tangible material', on the basis of which prima facie case/ belief of any escapement of income on the part of the assessee is made out after completion of the original assessment proceedings.

In the present case, no new material/ tangible fact/ information has come to the notice of the assessing officer subsequent to completion of the original assessment as is evident from the fact that the reassessment proceedings have been initiated merely on the basis of disclosure made in the audited financial statements, which, as a matter of fact and admitted by the DR, were before the assessing officer during the course of original assessment proceedings.

In CIT vs. Kelvinator of India Ltd: [2002] 256 ITR 1 (Del) (FB), the reassessment proceedings were reopened within 4 years on the basis of the information contained in the tax audit report [refer para 21 pg. 9]. The issue before the Court was whether in the absence of any new / fresh material, reopening is permissible.

The Full Bench of the Hon'ble Court, reproduced with approval the following extracts of decision in Jindal Photo Films Ltd V. DCIT: [1998] 234 ITR 170 (Del) in absence of any new material, reopening is not permissible on mere fresh application of mind on the same set of facts:

In Jindal Photo Films Ltd. 's case (supra), R.C. Lahoti, J. (as His Lordship then was) observed:

Finally disagreeing with the Gujarat High Court and endorsing the aforesaid view is Jindal Photo (supra), the Full Bench observed as under:

We are, with respect, unable to subscribe to the aforementioned view. If the contention o f the revenue is accepted, the same, in our opinion, would confer an arbitrary power upon the Assessing Officer. The Assessing Officer who had passed the order o f assessment or even his successor officer only on slightest pretext or otherwise would be entitled to reopen the proceeding. Assessment proceedings may be furthermore reopened more than once. It is now trite that where two interpretations are possible, that which fulfils the purposes and object of the Act should be preferred.

We are unable to agree with the submission of Mr. Jolly to the effect that the impugned order of reassessment cannot be faulted as the same was based on information derived from the tax audit report. The tax audit report has already been submitted b y the assessee. It is one thins to say that the Assessing Officer had received information from an audit report which was not before the ITO, but it is another thins to say that such information can be derived b y the material which had been supplied b y the assessee himself.

We also cannot accept submission of Mr. Jolly to the effect that only because in the assessment order, detailed reasons have not been recorded on analysis o f the materials on the record b y itself m a y justify the Assessing Officer to initiate a proceeding, under section 147. The said submission is fallacious. An order o f assessment can be passed either in terms o f sub-section (1) o f section 143 or subsection (3) o f section 143. When a regular order o f assessment is passed in terms o f the said sub-section (3) o f section 143, a presumption can be raised that such an order has been passed on application o f mind. It is well-known that a presumption can also be raised to the effect that in terms o f clause (e) o f section 114 o f the Indian Evidence Act the judicial and official acts have been regularly performed. I f it be held that an order which has been passed purportedly without application o f mind would itself confer juri iction upon the Assessing Officer to reopen the proceeding without anything further, the same would amount to giving premium to an authority exercising quasi-judicial function to take benefit o f its own wrong.

The Supreme Court, while dismissing the appeal against the aforesaid judgment, reported as CIT vs. Kelvinator Of India Ltd: [2010] 320 ITR 561 (SC) held that the assessing officer has no power of review and can reopen assessment "provided there is "tangible material" to come to the conclusion". The pertinent observations are reproduced hereunder:

On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987 , re- opening could be done under above two conditions and fulfilment of the said conditions alone conferred juri iction on the Assessing Officer to make a back assessment, but in section 147 of the Act [with effect from 1-4-1989], they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers juri iction to re-open the assessment. Therefore, post 1-4-1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to reopen. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to reassess. But reassessment has to be based on fulfilment o f certain pre-condition and i f the concept o f "change o f opinion" is removed, as contended on behalf o f the Department, then, in the garb o f re-opening 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 , Assessing Officer has power to reopen, provided there is "tangible material" to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987 , Parliament not only deleted the words

Your Honour's kind attention in this regard is also invited to the decision of the Bombay High Court in the case of German Remedies Ltd vs. DOT: 285 ITR 26, wherein the assessee-firm filed the return of income for the assessment years 1999- 2000 and 2000-01. The assessment orders under section 143(3) of the Act were passed determining income after making various additions and disallowances. The Assessing Officer by impugned notice under section 148 sought to reopen the assessments on the grounds, inter alia, that (1) the assessee had not furnished any evidence to show that the tax was deducted at source before making remittances in foreign currency relating to payment of interest, royalty, consultancy and analytical fees; (2) that the gross dividend had been allowed against the allowable net dividend; and (3) the processing charges received by the assessee for the job work done for locals were not income derived from industrial activity and, therefore, the processing charges ought to have been excluded while computing deduction under section 80-IA/80-IB of the Act. The assessee filed a writ petition challenging the notice in which the High Court directed the assessee to file objection for reopening the assessment and further directed the Assessing Officer to dispose of the same in accordance with law. Thereafter, the assessee filed objections for reopening the assessment which were rejected by the Assessing Officer. On petition, the Hon'blc High Court quashed the re-assessment proceedings by observing as under: "It is a settled position of law that though the power conferred under section 147 for reopening the concluded assessment are very wide, the said power cannot be exercised mechanically or arbitrarily. The expression 'reason to believe that any income chargeable to tax has escaped assessment’ means entertaining a reasonable belief that particular income went unnoticed by the Assessing Officer and, hence, escaped assessment. Even after the introduction of the concept of the deemed escapement of income by Explanation 2 to section 147 with effect from 1-4-1989, the belief that the income has escaped assessment entertained by the Assessing Officer must be a prudent belief and not mere change o f opinion. :Thus, an assessment order passed after detailed discussion cannot be reopened within a period o f 4 years from the end o f the relevant assessment year, unless the Assessing Officer has reason to believe that due to some inherent defect in the assessment, the income chargeable to tax has been under assessed or assessed at too low rate or excessive relief is granted or excessive loss or depreciation allowance or any other allowance under the Act has been computed. [Para 5] In the instant case, after the service of the notice under section 148, the assessee had filed its objections for reopening the assessment to the effect that in the light of the binding decision of High Court and the decision of the Tribunal there was no scope for entertaining the belief that the income had escaped assessment. However, the said objection had been rejected without even considering the said binding decision. [Para 6]

Delhi High Court held that the proceedings initiated under Section 147 through issue of notice under section 148 of the Act without there being any tangible material coming to the knowledge of the assessing officer was beyond juri iction and was accordingly quashed. The relevant observations of this Hon'ble Court are as under: "Applying this line of decisions to the facts of the present case, the inescapable conclusion that would have to be reached is that while assessment proceedings remain inchoate, no "fresh evidence or material" could possibly be unearthed. I f any such material or evidence is available, there would be no restrictions or constraints on its being taken into consideration b y the Assessing Officer for framing the then current assessment. I f the assessment is not framed before the expiry o f the period o f limitation for a particular assessment year, it would have to be assumed that since proceedings had not been opened under section 143(2), the return had been accepted as correct. It may be argued that thereafter recourse could be taken to section 147, provided fresh material had been received b y the Assessing Officer after the expiry o f limitation fixed for framing the original assessment. So far as the present case is concerned we are o f the view that it is evident that, faced with severe paucity o f time, the Assessing Officer had attempted to travel the path o f section 147 in the vain attempt to enlarge the time available for framing the assessment. This is not permissible in law.'''1 (emphasis supplied).

The juri ictional Punjab & Haryana High Court in the case of CIT V. ITW India Ltd: [2015] 377 ITR 195 (P&H) following the decision of the Supreme Court in Kelvinator of India (supra), held that the assessing officer does not have power to reopen proceedings on mere change of opinion.

In CIT v. Feather Foam Enterprises (P) Ltd.: [2008] 296 ITR 342 (Del.) where case was reopened within 4 years, the Court held that reopening without new material is not permissible. The pertinent observations are reproduced hereunder:

20 Keeping in view the above facts, circumstances, legal position and Hon'ble Supreme Court Judgement in the favour of the appellant that the notice issued u/s 148 and reassessment made thereon u/s 147 of the I.T. Act is bad in law and the appellant's appeal is allowed on this ground.

We hold that the Revenue has no juri iction in law under section 147/148 to reopen the closed assessment proceedings which happened on 30.11.2017 under section 143(3) of the Act when Ld. AO passed the assessment order. A careful perusal by us of the said original assessment order dt. 30.11.2017 under section 143(3) of the Act shows that all accounts I;e copy of audited financial statements for the year ended March 31, 2015 relevant to the year under consideration A.Y. 2015-16 were on file of Ld. AO and so also copy of Tax Audit

We also notice in the original assessment order dated 30.11.2017 that even the notes to accounts were gone through. We gainfully refer to para 5.1 were in following is recorded: “ 5.1 After going through notes to accounts…………..” The above averment clearly means that Revenue besides accounts had also examined the notes to the account therefore issuing notice under section 147/148 just does not arises. We therefore hold that failure on part of the Department to examine something which is before them i.e books of accounts, Financial statements and Tax Audit Report minutely cannot lead to reassessment

The above reasons for reopening closed /original assessment is required to be examined under 147 which speaks of “ Reason to believe” “ Income chargeable to tax has escaped assessment” in view of above averment recorded in the original assessment order dt. 30/11/2017 (supra) we are of the considered view that there is “No reason to belief” in the first instance and secondly “there is no escapement of income too”. In return of income this income is disclosed along with books of account which was visible perse in books of account. Without there being any other information on record when such an exercise of nature referred to in 147/148 is done then; it amount to “ Changing opinion” which was ‘earlier determined’ in a quasi judicial exercise which was original assessment proceedings and that too under section 143(3). Such an exercise in our view is not permissible in law as Ld. AO has no power of review. Revenue has other options like 154 & 263 of the Act. We also notice that reasons were contested and no independent speaking order was given despite

We hold that no fresh tangible material was in possession of the Revenue when reassessment notice was issued to the Assessee company. This is more or less admitted position in the instant case [ Note 26 on page 22 of paper book and para 2 & 3 on page 61 of Paper book]. There was no fresh tangible material at all with Revenue for 147/148 proceedings; after original assessment proceedings dt. 30/11/2017 were over. Even DR has admitted this position factually. We therefore hold that exercise of power by Revenue U/s 147/148 is illegal and not proper. We gainfully refer to the judgment of Hon’ble Delhi High Court Full Bench in case of CIT Vs. Kelvinator India ltd. reported in [2002] 256 ITR 1 (Del)(FB) particularly the following: