TaxTMI 
TaxTMI 
TaxTMI 
2025 (8) TMI 1179
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....n taken up as the lead case wherein our observations, deliberations and adjudication shall apply mutatis mutandis to the other appeal i.e., ITA No. 3512/Mum/2025 for the A.Y. 2015-16. ITA No. 3511/Mum/2025 (A.Y. 2014-15) 4. At the outset, Shri Rajan Vora, Authorized Representative of the assessee (in short 'ld. AR') briefed the background of the case stating that the appellant-company is an Indian Multinational Automotive Manufacturing Company producing passenger cars, trucks, vans, coaches, buses, luxury cars, sports cars and construction equipment. For the year under consideration i.e., AY 2014-15, the appellant-company had filed its return of income on 28.11.2014 declaring loss of Rs. 5567.15 crores under the normal provisions of Income-tax Act and loss of Rs. 950.44 crores u/s 115JB of the Act. There after appellant revised its return on 30.03.2016 declaring loss of Rs. 5567.15 crores under the normal provisions of Income-tax Act and loss of Rs. 14.58 crores u/s 115JB of the Act. Subsequently, appellant's case was selected for scrutiny under CASS vide notice u/s 143(2) of the Act dated 28.08.2015. The scrutiny proceedings came to be completed vide order u/s 143(3) r.w.s. 144C....
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....O on assessment records and no new tangible material or fact brought on record. iii. The reopening was beyond a period of 4 years from the end of relevant assessment year without any failure on the part of assessee to disclose facts truly and fully as required for the assessment." 9. While raising the aforesaid contention, the ld. AR furnished before us a written synopsis along with jurisprudence relied upon to support that aforesaid contentions. The written submission furnished before us is culled out hereunder, for the sake of interpretation and to check the applicability of case laws relied upon in the facts of present matter: "Ground of Appeal Nos. 2 to 5: Invalidity of impugned proceedings under section 147 of the Act: 13. At the outset, the relevant extracts of the reasons for re-opening (enclosed at page nos. 304 to 306) are reproduced herewith for ready reference: "The assessee filed return of income on 28.11.2014 declaring current year loss of Rs. 5567,14,72,712/- under the normal provisions of the Act and loss of Rs. 9.50, 43,82, 744/- u/s 115JB of the Act. Subsequently, the assessee has filed revised e-return on 30.03 2016 declaring current year loss of Rs. 5567....
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....id and bad in law. 14. In this regard, the Appellant wishes to submit that deduction claimed by it under section 32AC has been properly disclosed in the computation of income (enclosed at page nos. 111 to 124 of the factual paperbook) as well as Tax Audit Report (enclosed at page nos. 178 to 183 of the factual paperbook). 15. Further, during the course of the assessment proceedings, the Appellant has submitted the working of investment in new plant & machinery eligible for deduction under section 32AC of the Act duly certified by the tax auditor vide its submission dated 21 November 2017 (enclosed at page nos. 194 to 198 of the factual paperbook). Vide submission dated 28 November 2017 (enclosed at page nos. 199 to 285 of the factual paperbook) and in response to point no. 7 of order sheet entry dated 20 October 2017, the appellant submitted details of additions made under the block Plant and Machinery along with sample copies of asset capitalization documents. 16. Subsequently, in response to point no. 3 of order sheet entry dated 28 November 2017, the Appellant vide its submission dated 12 December 2017 (enclosed at page nos. 286 to 293 of the factual paperbook) made detail....
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....pparent from the reasons there were no new tangible material in the hands of the Assessing Officer. Once the assessment is concluded, it is deemed to have been concluded with application of mind by the Assessing Officer from all perspectives legal and factual. In this regard it would be fruitful to rely upon the Full Bench decision of the Delhi High Court in the case of CIT v. Kelvinator of India Ltd [2002] 123 Taxman 433/256 ITR 1 of India Ltd 16 which held that: ................................................ The reopening of the assessment based on a different method of computation or application of the section is nothing else but a change of opinion which is impermissible in law. A similar situation was dealt with in the case of Jindal Photo Films Ltd. (supra) where the Court, in the background of section 147 of the Act, observed: ".................... all that the Income-tax Officer has said is that he was not right in allowing deduction under section 801 because he had allowed the deductions wrongly and. therefore, he was of the opinion that the income had escaped assessment. Though he has used the phrase "reason to believe" in his order, admittedly, between the date o....
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....11 December 2023 (enclosed at page nos. 407 to 408 of the legal paperbook). * Emkay Global Financial Services Ltd. [(2024) 465 ITR 763 dated 6 February 2024 (Bombay HC)] (enclosed at page nos. 409 to 413 of the legal paperbook) Department's SLP dismissed by SC in 482 ITR 286 dated 10 February 2025 (enclosed at page nos. 414 to 415 of the legal paperbook). * State Bank of India ((2019) 418 ITR 485 dated 17 January 2019 (Bombay HC)] (enclosed at page nos. 416 to 423 of the legal paperbook) Department's SLP dismissed by SC in 447 ITR 368 dated 4 August 2022 (enclosed at page nos. 424 to 425 of the legal paperbook) * Bharat Petroleum Corporation Ltd [(2025) 176 taxmann.com 103 dated 3 July 2025 (Bombay HC)] (enclosed at page nos. 426 to 443 of the legal paperbook) * Tata Sons Ltd. ((2022) 443 ITR 282 (Bombay HC) dated 03 February 2022] (enclosed at page nos. 444 to 449 of the legal paperbook): * Tata Sons Ltd. [(2022) 286 Taxman 587 dated 3 February 2022 (Bombay HC)] (enclosed at page nos. 450 to 453 of the legal paperbook) * Ananta Landmark (P.) Ltd. [(2021) 439 ITR 168 dated 14 September 2021 (Bombay HC)] (enclosed at page nos. 454 to 466 of the legal paperbook) ....
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....d before material, which means not all and every information can lead to reopening of assessment but it has to be a tangible material, which is so relevant that it leads to information by which the assessing officer can satisfy that there is income which has escaped assessment 25. Reliance in this regard is placed on the following decisions: * Coca-Cola Export Corporation [(1990) 231 ITR 200 (SC)] wherein it held that "there should be some fresh information and not mere reappraisal of evidence on record to justify jurisdiction for re-assessment * Kelvinator India Limited [(320 ITR 561) (SC)] (enclosed at page nos. 394 to 396 of the legal paperbook) * TechSpan India Pvt Ltd [Civil Appeal No. 2732/ 2007 dated 24 April 2018 (SC)) * New Delhi Television Ltd. [(2020) 424 ITR 607 dated 3 April 2020 (SC)] (enclosed at page nos. 549 to 564 of the legal paperbook): "33. In our view the assessee disclosed all the primary facts necessary for assessment of its case to the assessing officer. What the revenue urges is that the assessee did not make a full and true disclosure of certain other facts. We are of the view that the assessee had disclosed all primary facts before the assess....
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....-tax Officer. The Court held that the duty of the assessee is to disclose fully and truly all primary relevant facts and it does extend beyond that." * Department's SLP dismissed by Hon'ble SC in 482 ITR 286 dated 10 February 2025 (SC) (enclosed at page nos. 414 to 415 of the legal paperbook). * Imperial Consultants and Securities Ltd. [(2025) 303 Taxman 263 dated 20 December 2024 (Bombay HC)] (enclosed at page nos. 571 to 587 of the legal paperbook): "44. Adverting to the principles of law as the aforesaid decisions lay down to the facts of the present case, we may observe that the Assessing Officer in issuing the impugned notice under Section 148 of the IT At has clearly acted without jurisdiction. This firstly for the reason that the Assessing Officer was reopening an assessment beyond the period of four years and in such context the first proviso to Section 147 was strictly applicable inter alia to the effect that when the petitioner/assessee had not defaulted in fully and truly disclosing all material facts necessary for his assessment for the assessment year in question, the Assessing Officer would not have jurisdiction to reopen the concluded assessment. Second....
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....efore the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the preceding proviso. We may observe that this is certainly not a case where on the materials which are already produced before the Assessing Officer, the Assessing Officer has gathered or discovered further material evidence so as to construe that there was failure on the part of the assessee to make a disclosure of such materials. Moreover, there is no further tangible material which has been gathered on due diligence from the existing material and hence it is quite futile for the respondents to take recourse to this provision." * Tata Sons Ltd. ((2022) 443 ITR 282 (Bombay HC) dated 03 February 2022] (enclosed at page nos. 444 to 449 of the legal paperbook): * Tata Sons Ltd. [(2022) 286 Taxman 587 dated 3 February 2022 (Bombay HC)] (enclosed at page nos. 450 to 453 of the legal paperbook) * TMF Holdings Limited [ITA No. 2983/Mum/2025 dated 18 July 2025 (Mumbai ITAT)] (enclosed at page nos. 475 to 505 of the legal paperbook) 26. Further, it is humbl....
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.... escaping assessment (e. live linkage), entire re-assessment proceedings is bad in law 32. Reliance in this regard is placed on the following decisions * Lakhmani Mewal Das (103 ITR 437 (SC)] * Shodiman Investments Pvt Ltd [ITA No. 1297 of 2015 dated 16 April 2018 (Bombay HC)] Harish Gangji Dedhiya ((2022) 443 ITR 273 (Bombay HC) dated 29 March 2022 C. Reassessment proceedings without any failure on part of the Appellant to disclose facts fully and truly are bad in law and ought to be quashed. 33. The Appellant humbly submits that from the reasons recorded it cannot be established that what information/details were not submitted by the Appellant warranting initiation of the proceedings beyond a period of 4 years. 34. It is submitted that there is no live link of documents which the assessee has failed to disclose or has not been submitted by the Appellant and neither the same has been pointed out by the learned assessing officer as to which document the Appellant has failed to produce/disclose. 35. In this regard, the Appellant wishes to humbly highlight that the deduction claimed under section 32AC of the Act was disclosed in the computation of income as well as the ....
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....lete disclosure of all the primary material facts on the part of the petitioner and it cannot be said that there was any failure on the part of the petitioner to disclose fully and truly facts which were material and necessary for assessment." * Department's SLP has been dismissed by the Hon'ble SC in 296 Taxman 74 dated 9 October 2023 (enclosed at page nos. 592 to 593 of the legal paperbook). * L&T Ltd. [113 taxmann.com 47 (Bombay HC)] (enclosed at page nos. 594 to 595 of the legal paperbook) - Department's SLP has been dismissed by the Hon'ble SC in 113 taxmann.com 47 dated 22 November 2019 (enclosed at page no. 594 of the legal paperbook) * BPTP Ltd. [(2020) 421 ITR 59 dated 28 November 2019 (Delhi HC)] (enclosed at page nos. 596 to 605 of the legal paperbook): "24. It would also be profitable to refer to the decision of Central Warehousing Corpn. (supra) and CIT v. Kelvinator of India Ltd. [2002] 123 Taxman 433/256 ITR 1 (Delhi) and CIT v. Usha International Ltd. [2012] 25 taxmann.com 200/210 Taxman 188/348 ITR 485 (Delhi) and several other decisions wherein it has been repeatedly held that reopening initiated without any failure on the part of the Asses....
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....f opinion with regard to the interpretation of law differently on the facts that were well within his knowledge even at the time of assessment. Doing so would have the effect of giving the assessing officer the power of review and section 147 confers the power to reassess and not the power to review." * Department's SLP has been dismissed by the Hon'ble SC in 277 Taxman 198 dated 4 January 2021 (enclosed at page nos. 606 to 607 of the legal paperbook). * Gateway Leasing (P.) Ltd. ((2020) 426 ITR 228 dated 11 March 2020 (Bombay HC)] (enclosed at page nos. 608 to 616 of the legal paperbook) * GlaxoSmithKline Pharmaceuticals Ltd [(2025) 304 Taxman 350 dated 10 March 2025 (Bombay HC)] (enclosed at page nos. 617 to 624 of the legal paperbook) * Bharat Petroleum Corporation Ltd [(2025) 176 taxmann.com 103 dated 3 July 2025 (Bombay HC)] (enclosed at page nos. 426 to 443 of the legal paperbook) * Raheja Universal Private Limited [ITA No. 4847/Mum./2023 dated 26 August 2024 (Mumbai ITAT)] (enclosed at page nos. 625 to 638 of the legal paperbook) * Plaza Cable Industries Limited [ITA No. 1485/Del./2014 dated 2 June 2022 (Delhi ITAT)] (enclosed at page nos. 639 to 647 of the legal....
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....ted that, once a plausible view has been adopted by the AO and the assessee of claim u/s 32AC was allowed, based on material and facts on record, reopening of assessment of income escaping on the basis of same facts and material on record, is nothing but merely a 'change of opinion' which is not permissible under the provisions of section 147, and according to the settled principle of law by Hon'ble Courts in the judgments referred to (supra). 13. The ld. AR, further, placed his reliance on the decision of coordinate bench of ITAT Mumbai Bench "K" in the case of Larsen & Toubro Infotech Ltd. reported in (2023) 157 taxmann.com 812 (Mumbai - Trib.) wherein the Tribunal after discussing various judgments has held that, merely because a different view had been taken by assessing officer in the assessment on same set of facts, that did not lead to inference that there was failure on part of assessee to disclose relevant fact during the year. 14. The ld. AR also placed his reliance on the decision of ITAT Mumbai Bench "C" in the case of DCIT vs Red Chillies Entertainment (P) Ltd. reported in (2025) 172 taxmann.com 341 (Mumbai - Trib.) wherein it is held that if the assessing officer wa....
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....ssee failed to furnish necessary details but no specific description of such failure has been recorded in the reasons to believe. In view of such submissions, it was the prayer by ld. AR that the initiation of reopening assessment and the notices issued u/s 148 itself was bad in law, being not in conformity of the provisions of the Act and, therefore, the entire proceedings of reopening thereafter vitiate and does not have any legal standing in the eyes of law. Consequently, the notice issued u/s 148 which does not satisfy the conditions stipulated by the Act and also as per the settled principle of law under the jurisprudence accorded by Hon'ble courts (supra), the assessment framed u/s 147 r.w.s. 144B of the Act dated 30.03.2022, therefore, ought to have been quashed. 19. Per contra, the ld. CIT - DR, Shri Ritesh Misra representing the revenue vehemently supported and relied on the order of ld. CIT(A). The ld. CIT - DR drew our attention to para 5.3.10 to 5.3.19 of ld. CIT(A), wherein the ld. CIT(A) opined that the word reassessment is not confined to a fresh assessment being made on an income in the hands of same person but is wide enough to include a fresh assessment on an inc....
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....gs Limited [ITA No. 2983/Mum./2025 dated 18 July 2025 (Mumbai ITAT)] (enclosed at page. nos. 475 to 505 of the legal paperbook) * Project India [(2007) 110 TTJ 142 dated 31 August 2006 (Indore ITAT) 2 Praful Chunilal Patel (1999) 236 ITR 632 (Gujarat HC) 3 Navnidhi Dyeing and Printing Mills P. Ltd (2021) 434 ITR 334 (Gujarat HC) 4 Murrah Livestock Agency (2004) 91 ITD 198 (Patna ITAT 5 Raymond Woollen Mils Ltd. (1999) 236 ITR 34 (SC)] 6 Anant Kumar Saharia (1998) 232 ITR 533 (Gauhati HC) 7 Vasudev Fatandas Vaswani [Special Civil Application No. 15577/ 2018 dated 9 October 2018 (Gujarat HC)] 8 Phool Chand Bajrang Lal [(1993) 203 ITR 456 (SC)) The belief that certain income escapes assessment is that of the assessing officer, the sufficiency of reasons for forming the belief is that of the assessing officer the sufficiency of reason for forming the belief is not for the court to judge but it is open to an assessee to establish that, in fact, there existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. Distinguished by the Hon'ble Gujarat HC in case of Gujarat Natural Reso....
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....ly originating from the various information/ documents, which were submitted by the assessee in compliance to queries raised by the AO during the original assessment proceedings u/s 143(3) of the Act, the same were brought to our knowledge by the ld. AR by drawing our attention to the respective documents (referred to supra). 24. In backdrop of such facts, circumstances, provisions of law, interpretation and principles laid down by Hon'ble Courts, after giving a thoughtful consideration to the entire factum of the matter, we are of the considered opinion that the reopening in the present case was totally on account of 'the change of opinion', in contraventions to the pre-conditions of 1st proviso to section 147 and dehors any fresh material or fact on records, therefore, the same cannot be sustained. 25. Accordingly, the legal contentions raised by the ld. AR merits substance to concurred with and accordingly ground no. 2 to 5 of the ITA No. 3511/M/2025 are allowed in favour of the assessee. 26. Resultantly, the notice u/s 148 dated 30.03.2021, issued in the contravention to the mandate of law is held as bad in law, consequently, the subsequent proceedings of reopening assessmen....