Jubilant Organosys Ltd.,, v. ACIT, Range-I,,

ITA 4305/DEL/2003 | 1994-1995
Pronouncement Date: 18-02-2010 | Result: Allowed

Appeal Details

RSA Number 430520114 RSA 2003
Assessee PAN OFTHE1922A
Bench Delhi
Appeal Number ITA 4305/DEL/2003
Duration Of Justice 6 year(s) 5 month(s) 5 day(s)
Appellant Jubilant Organosys Ltd.,,
Respondent ACIT, Range-I,,
Appeal Type Income Tax Appeal
Pronouncement Date 18-02-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted H
Tribunal Order Date 18-02-2010
Date Of Final Hearing 11-02-2010
Next Hearing Date 11-02-2010
Assessment Year 1994-1995
Appeal Filed On 12-09-2003
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H DELHI BEFORE SHRI K.G. BANSAL AND SHRI GEORGE MATHAN ITA NO. 4305(DEL)/2003 ASSESSMENT YEAR: 1994-95 M/S JUBILANT ORGANOSYS LTD. ASS ISTANT COMMISSIONER OF BHARTIAGRAM J.P. NAGAR VS. INC OME-TAX RANGE-I MORADABAD. GAJRAULA-244233 (U.P). ITA NO. 4384(DEL)/2003 ASSESSMENT YEAR: 1994-95 ASSISTANT COMMISSIONER OF M/S JUBILANT ORGANOSYS LTD. INCOME-TAX RANGE-I MORADABAD. VS. BHARTIAGRAM J.P. NAGAR GAJRAULA. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI AJAY VOHRA & SHRI SACHIT JOLLY ADVOCATES DEPARTMENT BY : SHRI V.K. TIWARI CIT DR ORDER PER K.G. BANSAL : AM THESE CROSS APPEALS OF THE ASSESSEE AND THE REVENUE EMANATING FROM THE ORDER OF CIT(APPEALS) BAREILLY PASSED ON 27.6.2003 WERE ARGUED IN A CONSOLIDATED MANNER BY THE LD. COUN SEL FOR THE ASSESSEE AND THE LD. DR. THEREFORE A CONSOLIDATED ORDER IS PASSED. IT MAY BE MENTIONED HERE THAT THESE APPEALS WERE DECID ED BY THE H BENCH OF DELHI TRIBUNAL ON 7.11.2008. THIS ORDER W AS RECALLED ON AN ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 2 APPLICATION MADE BY THE ASSESSEE VIDE ORDER DAT ED 17.7.2009. THAT IS HOW THE APPEALS ARE PENDING BEFORE US. ITA NO. 4305(DEL)/2003- APPEAL OF THE ASSESSEE 2. THE ASSESSEE HAS TAKEN UP FOUR GROUNDS IN THE APPEAL INCLUDING THE JURISDICTIONAL GROUND THAT ON THE FACTS AN D IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(APPEALS) ERRED IN NOT HOLDING THAT THE RE- ASSESSMENT ORDER PASSED BY THE AO WAS BAD IN L AW BEYOND JURISDICTION AND VOID AB-INITIO. IN THIS CONNECTION THE LD. COUNSEL SUBMITTED THAT THE ORIGINAL ORDER WAS RECALLED BY THE TRIBUNAL ON THE GROUND THAT OLD SECTION 147 WAS CONSIDERED WHILE HOLDING THAT THE ASSESSMENT WAS NOT VALIDLY REOPENED WHILE THE NEW SECTION 147 CO NTAINS A TOTALLY DIFFERENT LAW. THEREFORE THE ORDER WAS RECALLED FOR H EARING THE APPEAL AFRESH. 2.1 THE LD. COUNSEL REFERRED TO THE REASONS R ECORDED BY THE AO FOR REOPENING THE ASSESSMENT PLACED IN THE PAPER BOOK ON PAGE 26. THE RELEVANT PORTION OF THE REASONS CONTAINED IN PAR AGRAPHS 2 AND 3 IS REPRODUCED AS UNDER:- 2. ON A PERUSAL OF THE BALANCE SHEET FOR THE PER IOD ENDING 31.3.1994 IT IS SEEN THAT THERE WERE SECURED LO ANS AS PER DETAILS GIVEN HERE AS UNDER:- A) NON-CONVERTIBLE DEBENTURES RS. 2 391.64 LAKHS B) TERM LOANS RS. 988.94 LAKHS ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 3 TOTAL: RS. 3 380.58 LAKHS THE ASSESSEE HAD ALSO INVESTED RS. 793.11 LAKH I N PURCHASES OF SHARES OF UTI HOUSEING DEVELOPMENT FINANCE CO RPN. LIMITED AND INDIA GLYCOLS LTD. AS ON 31.3.94. FROM THE BALANCE-SHEET IT IS APPARENT THAT THE ASSESSEE H AD MADE THE INVESTMENTS IN THESE SHARES OUT OF FUND AVAILABL E AFTER RAISING LOAN ON NON-CONVERTIBLE DEBENTURES AND TERM LO ANS ONLY. THERE WERE OTHER LOANS ALSO NAMELY CASH CREDI T ACCOUNTS AND UNSECURED LOANS. INVESTMENT IN SHARES COULD NOT BE MADE OUT OF THESE TWO LOANS AS ONE LOAN (CASH CREDIT) IS MEANT FOR BUSINESS ONLY AND UNSECURED LOAN COULD NOT BE INVESTED FOR A LONG PERIOD INVESTMENTS I.E. SHA RES. IT IS THUS APPARENT THAT THE ASSESSEE HAD MADE INVESTMENT I N PURCHASE OF SHARES OUT OF LOAN ON DEBENTURES AND TERM L OANS. 3. THE ASSESSEE HAD PAID THE INTEREST ON THES E TWO LOANS AS UNDER:- ON DEBENTURES - RS. 351.26 LAKH TERM LOANS - RS. 39.74 LAKH TOTAL: 3 90.00 LAKH THUS THE PART OF THIS INTEREST PERTAINS TO TH E INVESTMENT IN SHARES ON WHICH THE ASSESSEE EARNED THE DIVIDEND INCOME AND DISCLOSED IN THE RETURN OF INCOME AND ASSESSED. THE PROPORTIONATE AMOUNT OF INTEREST IS DEDUCTIBLE WHILE COMPUTING THE DIVIDEND INCOME AS LAID DOWN U/S 57(I) AND (III) OF THE IT ACT 1961 WHICH ARE REPRODUCED AS UNDER FOR THE SAKE OF CONVENIENCE:- S. 57SHALL BE COMPUTED AFTER MAKING THE FOLLOWING DEDUCTIONS NAMELY:- I) IN THE CASE OF DIVIDEND OR INTEREST ON SEC URITIES) ONLY REASONABLE SUM PAID BY WAY OF COMMISSION OR REMU NERATION TO A BANKER OR ANY OTHER PERSON FOR THE PURPOSE OF REALIZING SUCH DIVIDEND (OR INTEREST) ON BEHALF OF THE ASS ESSEE ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 4 (III) ANY OTHER EXPENDITURE (NOT BEING IN THE NATU RE OF CAPITAL EXPENDITURE) LAID OUT OR EXPENDED WHOLLY AND EX CLUSIVELY FOR THE PURPOSE OF MAKING AND EARNING SUCH INCOME THE PROPORTIONATE AMOUNT OF INTEREST DEDUCTIBLE F ROM DIVIDEND INCOME IS WORKED OUT AS UNDER:- 3.90 X 7.93 LAKH 33.81 = RS. 0.91 LAKH IN VIEW OF THE ABOVE FACTS THE DIVIDEND INCOME I S ASSESSABLE AT RS. 64 LAKH (1.56 0.91) AND DEDUCTION U/S 8 0M OF THE IT ACT 1961 WAS ALLOWABLE AT RS. 63 LAKH ( 1.54 0.91 CRORES) WHICH WAS ALLOWED AT RS. 1.54 CRORES. THE INCOM E UNDER THE HEAD PROFIT AND GAINS COMPUTED AT RS. 6 59 18 4 14/- AS PER ORDER DATED 28.1.98 IS TO BE INCREASED BY RS. 91 LAKH. AND DUE TO THIS THE ASSESSEE WILL BE ENTITLED FOR EXTRA DEDUCTION U/S 80HH AND 80I AND 80IA AT RS. 54 92 766/- AS PER WORKING GIVEN IN ANNEXURE A ENCLOSED HEREWITH. TH E DEDUCTION U/S 80M OF IT ACT 1961 HAS BEEN ALLOWE D IN EXCESS BY RS. 91 LAKH AND ASSESSEE IS ENTITLED FOR FURTHER DEDUCTION OF RS. 53 LAKH WHICH RESULTED UNDER A SSESSMENT BY RS. 36 LAKH (91-55). 2.2 THE LD. COUNSEL SUBMITTED THAT THE RETURN O F INCOME WAS FILED ON 29.11.1994 WHICH WAS PROCESSED U/S 143(1)(A) ON 31.3.1995. THEREAFTER NOTICE U/S 148 WAS ISSUED ON 10 .5.1996 PURSUANT TO WHICH ASSESSMENT U/S 143(3) READ WITH SECTION 148 WAS FRAMED ON 27.2.1997. THE SECOND NOTICE U/S 148 WAS IS SUED ON 12.6.1998. THE PROCEEDINGS PURSUANT TO THIS NOTICE WERE D ROPPED ON 17.11.1998. THE THIRD NOTICE U/S 148 BASED ON THE REASONS MENTIONED ABOVE WAS ISSUED ON 21.5.2005. ASSESSMENT ORDER PURSUAN T TO THIS NOTICE WAS ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 5 PASSED U/S 143(3) READ WITH SECTION 148 ON 3 1.3.2003. THUS THE NOTICE WAS ISSUED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE ASSESSMENT YEAR. PRIOR ASSESSMENT HAD ALSO BEEN MADE U /S 143(3) READ WITH SECTION 148. IN VIEW THEREOF PROVISO TO SEC TION 147 WAS APPLICABLE UNDER WHICH A NOTICE U/S 148 CAN BE ISSUED AFTER EXPIRY OF FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR O NLY IF ANY INCOME CHARGEABLE TO TAX ESCAPED ASSESSMENT BY REA SON OF FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT. IN A NUTSHELL TH E CASE OF THE LD. COUNSEL WAS THAT ALL MATERIAL FACTS RELEVANT FOR THE ASSESSMENT HAD BEEN DISCLOSED IN THE ORIGINAL RETURN OF INCOME AND THUS THERE WAS NO SUCH FAILURE ON THE PART OF THE ASSESSEE WHICH COULD LEAD TO THE ISSUANCE OF NOTICE U/S 148 ON THE FACTS OF THIS CASE. 2.3 IN ORDER TO SUPPORT THE AFORESAID ARGUMENT OUR ATTENTION WAS DRAWN TOWARDS THE COMPUTATION OF INCOME PLACED I N THE PAPER BOOK ON PAGE 68 WHICH INTER-ALIA SHOWS DIVIDEND INCOM E OF RS. 1 55 39 795/-. A CLAIM OF DEDUCTION OFRS. 1 54 24 230/- WAS MADE U/S 80M. PAGE 69 OF THE PAPER BOOK CONTAINS INTER-ALIA SCHEDULE-I O F THE BALANCE-SHEET REGARDING SOURCES OF FUNDS SHOWING RESERVES AN D SURPLUS AT RS. 7843.73 ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 6 LAKH AS ON 31.3.1994. PAGE 70 CONTAINS THE INCOME AND EXPENDITURE ACCOUNT SHOWING PROFIT FOR THE YEAR AT RS. 819.5 5 LAKH. PAGE 73 CONTAINS THE DETAILS OF SECURED AND UNSECURED LOANS THE F ORMER BEING RS. 8919.06 LAKH AND THE LATTER BEING RS. 2529.98 LAKH. PAGE 75 CONTAINS SCHEDULE- E OF INVESTMENTS IN WHICH INVESTMENT IN THE UT I IS SHOWN AT RS. 44.49 LAKH HDFC AT RS. 0.42 LAKH AND INDIA GLYCOLS LTD. AT RS. 748 LAKH. IT IS ALSO SEEN THAT THE INCREASE IN THE INVESTME NT IN UTI VIS--VIS LAST YEAR IS RS. 11.36 LAKH IN HDFC RS. .32 LAKH AND THERE IS NO CHANGE IN THE INVESTMENT IN INDIA GLYCOLS LTD.. ON THE BAS IS OF THESE FIGURES THE ARGUMENT OF THE LD. COUNSEL WAS TWO-FOLD NAME LY -(I) THE TOTAL INVESTMENTS AGGREGATING TO AN AMOUNT OF RS. 6614 LAKH IS LESSER THAN THE AMOUNT OF RESERVES AND SURPLUS AMOUNTING TO RS. 7843.73 LAKH AND THE INCREASE IN INVESTMENTS IN UTI AND HDFC AGGRE GATING TO RS. 11.68 LAKH IS LESSER THAN THE PROFIT OF THIS YEAR AT RS. 819.55 LAKH. THUS ALL THE INVESTMENTS ARE COVERED BY THE OWN FUNDS. THEREFORE THE ALLEGATION IN THE REASONS THAT CERTAIN AMOUNT PAID BY WAY OF INTEREST WAS REQUIRED TO BE DEDUCTED FROM DIVIDEND INCO ME IS NOT CORRECT AS NO INTEREST COULD BE ATTRIBUTED TO THE BORROWED FU NDS EITHER IN RESPECT OF INVESTMENTS WHICH CONTINUED FROM LAST YEAR OR FR ESH INVESTMENTS MADE IN THIS YEAR. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAD CLAIMED INTEREST ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 7 IN THE PROCEEDINGS OF LAST YEAR ALSO ON THE SAM E BASIS WHICH WAS ALLOWED BY THE REVENUE AUTHORITIES. THUS THE RE WAS NO CASE REGARDING ANY DISALLOWANCE OF INTEREST FOR ARRIVING AT N ET DIVIDEND INCOME. APART FROM THAT IT WAS ALSO ARGUED THAT THE ASS ESSEE HAD DISCLOSED ALL THE FACTS AND THEREFORE NO FAILURE COULD BE A TTRIBUTED TO IT IN DISCLOSING MATERIAL FACTS TRULY AND FULLY. IN THIS CONN ECTION RELIANCE WAS PLACED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF CIT VS. KELVINATOR OF INDIA LTD. IN WHICH IT WAS HELD TH AT THE AO HAD NO POWER TO REVIEW THE ORDER. HIS POWER TO RE-ASSESS THE I NCOME WAS BASED ON FULFILLMENT OF CERTAIN PRE-CONDITION AND IF TH E CONCEPT OF CHANGE OF OPINION IS REMOVED THEN IN THE GARB OF RE- OPENING THE ASSESSMENT REVIEW WOULD TAKE PLACE. THEREFORE THE CONCEPT OF CHANGE OF OPINION SHOULD BE TREATED AS AN IN-BUILT TEST TO CH ECK ABUSE OF POWER BY THE AO. FURTHER RELIANCE WAS PLACED ON THE DECIS ION OF HONBLE DELHI HIGH COURT IN THE CASE OF HARYANA ACRYLIC MANUFACT URING CO. VS. CIT (2008) 175 TAXMAN 262 IN WHICH IT WAS MENTIONED THAT THE ASSESSEE HAD SUPPLIED ALL RELEVANT DETAILS IN THE COURSE OF ORIGINAL ASSESSMENT WHICH WERE VERIFIED AND THERE WAS NO ALLEGATION TH AT THE ASSESSEE FAILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ASSESSMENT BECAUSE OF WHICH INCOME ESCAPED ASSESSMENT. IN THESE CIRCUMSTANCES ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 8 THE REOPENING OF THE ASSESSMENT AFTER EXPIRY O F FOUR YEARS FROM THE END OF THE RELEVANT ASSESSMENT YEAR WAS HE LD TO BE NOT JUSTIFIED. 3. IN REPLY THE LD. DR SUBMITTED THAT THE O NLY CONDITION NOW FOR REOPENING THE ASSESSMENT WAS REASON TO BELI EVE. HE RELIED ON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF KALYANJI MAVJI & CO. VS. CIT (1976) 102 ITR 287 TO SUPPORT THAT THE REOPENING OF THE ASSESSMENT WAS VALID IN LAW. IT WAS ALSO HIS CASE THAT THE DECISION OF HONBLE SUPREME COURT SHOULD BE SEEN IN THE LI GHT OF FACTS OF THAT CASE WHICH HAVE BEEN DISCUSSED IN DETAIL IN TH E DECISION OF THE HONBLE HIGH COURT OF DELHI. HE ALSO DREW OUR ATTENTIO N TO CLAUSE (C) OF EXPLANATION-2 OF SECTION 147 WHICH INTER-ALIA PROVIDES THAT WHERE INCOME CHARGEABLE TO TAX HAS BEEN UNDER-ASSESSE D IT SHALL BE DEEMED THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSE SSMENT. 4. WE HAVE CONSIDERED THE FACTS OF THE CASE AND RIVAL SUBMISSIONS. THE CASE OF KALYANJI MAVJI (SUPRA) WAS DECIDED U/S 34(1)(B) OF THE 1922 ACT WHICH CONTAINED ANALOGOUS LAW TO THE OLD SECTION 147(B). IT MAY BE FURTHER MENTIONED BY US HAT SECTION 1 47(B) WAS INTERPRETED BY HONBLE SUPREME COURT IN THE CASE OF INDIAN & EASTERN NEWSPAPER ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 9 SOCIETY VS. CIT (1979) 119 ITR 996. IN ORDE R TO APPRECIATE THE CONTROVERSY IT MAY BE APPROPRIATE HERE TO REPRO DUCE THE LANGUAGE OF THE RELEVANT LAW AS APPLICABLE IN THE CASE OF INDIAN & EASTERN NEWSPAPER SOCIETY; AND ALSO THE LANGUAGE OF THE LAW AS AP PLICABLE IN THE CASE OF THE ASSESSEE. SECTION 147 AS IT EXISTED EARLIER READS AS UNDER:- 147. IF- (A) THE INCOME-TAX OFFICER HAS REASON TO BEL IEVE THAT BY REASON OF THE OMISSION OR FAILURE ON THE PART OF AN ASSESSEE TO MAKE A RETURN UNDER SECTION 139 FOR ANY A SSESSMENT YEAR TO THE INCOME-TAX OFFICER OR TO DISCLOSE FUL LY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSE SSMENT FOR THAT YEAR INCOME CHARGEABLE TO TAX HAS ESCAPED AS SESSMENT FOR THAT YEAR OR (B) NOTWITHSTANDING THAT THERE HAS BEEN NO OMISSION OR FAILURE AS MENTIONED IN CLAUSE (A) ON THE PART OF THE ASSESSEE THE INCOME-TAX OFFICER HAS IN CONSE QUENCE OF INFORMATION IN HIS POSSESSION REASON TO BELIEVE THAT INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT FOR AN Y ASSESSMENT YEAR HE MAY SUBJECT TO THE PROVIS IONS OF SECTIONS 148 TO 153 ASSESS OR REASSESS SUCH INCOME OR RECOMPUTED THE LOSS OR THE DEPRECIATION ALLOW ANCE AS THE CASE MAY BE FOR THE ASSESSMENT YEAR CONCERNED. . THE LAW APPLICABLE IN THE CASE OF THE ASSESS EE READS AS UNDER:- IF THE ASSESSING OFFICER HAS REASON TO BELIEV E THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSES SMENT FOR ANY ASSESSMENT YEAR HE MAY SUBJECT TO THE P ROVISIONS OF SECTIONS 148 TO 153 ASSESS OR REASSESS SUCH INCOME AND ALSO ANY OTHER INCOME CHARGEABLE TO TAX WHICH H AS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSE QUENTLY IN THE COURSE OF THE PROCEEDINGS UNDER THIS SECTION OR RECOMPUTED THE LOSS OR THE DEPRECIATION ALLOWA NCE OR ANY ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 10 OTHER ALLOWANCE AS THE CASE MAY BE FOR THE ASSESSMENT YEAR CONCERNED (HEREINAFTER IN THIS SECTION AND IN SECTIONS 148 TO 153 REFERRED TO AS THE RELEVAN T ASSESSMENT YEAR): PROVIDED THAT WHERE AN ASSESSMENT UNDER SUB- SECTION (3) OF SECTION 143 OR THIS SECTION HAS BEEN MADE FOR THE RELEVANT ASSESSMENT YEAR NO ACTION SHALL BE TAKEN UNDE R THIS SECTION AFTER THE EXPIRY OF FOUR YEARS FROM THE END O F THE RELEVANT ASSESSMENT YEAR UNLESS ANY INCOME CHARGEABLE T O TAX HAS ESCAPED ASSESSMENT FOR SUCH ASSESSMENT YEAR BY REASON OF THE FAILURE ON THE PART OF THE ASSESSEE TO MAKE A RETURN UNDER SECTION 139 OR IN RESPONSE TO A NOTICE ISSUED UNDER SUB-SECTION (1) OF SECTION 142 OR SECTION 148 OR TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR HIS ASSESSMENT FOR THAT ASSESSMENT YEAR. 4.1 ON PLAIN READING OF THE STATUTORY PROVISION S IT WILL BE SEEN THAT THE LAW CONTAINED IN SECTION 147(A) EARLIER AND NOW CONTAINED IN THE MAIN SECTION READ WITH PROVISO THERETO ARE A PPLICABLE TO THE FACTS OF THE CASE. UNDER THE OLD LAW THE ASSESSMENT C OULD BE REOPENED U/S 147(A) IF THE ITO HAD REASON TO BELIEVE THAT BY REASON OF OMISSION OR FAILURE ON THE PART OF THE ASSESSEE TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR THE ASSESSMENT INCOME CHAR GEABLE TO TAX HAS ESCAPED ASSESSMENT. UNDER THE NEW LAW THERE ARE TWO PRE-CONDITIONS NAMELY THAT (I) HE HAS REASON TO BELIEVE THAT ANY INCOME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT; AND (II) SU CH ESCAPEMENT HAS TAKEN PLACE DUE TO FAILURE OF THE ASSESSEE TO DISCLO SE FULLY AND TRULY ALL MATERIAL FACTS FOR THE ASSESSMENT. THE DEC ISION IN THE CASE OF KALYANJI ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 11 MAVJI & CO. AND INDIAN & EASTERN NEWSPAPER SOCIET Y (SUPRA) WERE DECIDED UNDER THE OLD SECTION 147(B) THE PROVI SION OF WHICH IS NOT APPLICABLE ON THE FACTS OF THIS CASE WHEN SEEN IN THE LIGHT OF THE NEW STATUTORY PROVISIONS. ON THE OTHER HAND THE DECISION IN THE CASE OF KELVINATOR OF INDIA LTD. (SUPRA) WAS RENDERED UNDER THE NEW SECTION WHICH AS MENTIONED EARLIER IS SOMEWHAT SIMILA R TO THE PROVISION CONTAINED IN SECTION 147(A). WE MAY ADD HER E THAT WE NEED NOT GO INTO THE PROVISION OF OLD SECTION 147(A) BECAU SE NEW SECTION 147 IS APPLICABLE WHICH CONTAINS TWO PRE-CONDITIONS FO R REOPENING THE ASSESSMENT WHICH HAVE ALREADY BEEN MENTIONED BY US. THE MATERIAL QUESTION BEFORE US IS WHETHER THERE WAS ANY F AILURE ON THE PART OF THE ASSESSEE TO DISCLOSE TRULY AND FULLY ALL MAT ERIAL FACTS. THE LD. DR HAS NOT BEEN ABLE TO MENTION ANY MATERIAL FACT WHICH WAS REQUIRED TO BE FURNISHED BY THE ASSESSEE FOR COMPUTATION OF IN COME FOR THIS YEAR AND WHICH WAS NOT DISCLOSED IN THE RETURN OF INCOME. THEREFORE THE CASE OF THE REVENUE REGARDING REOPENING IS LIKELY TO FAIL ON THIS GROUND ITSELF. THE OTHER GROUND IS THAT SINCE NO OMISSION WAS ATTRIBUTED TO THE ASSESSEE IN THE RECORDED REASONS THE REVENUES CASE I S LIKELY TO FAIL IN THE LIGHT OF THE DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF HARYANA ACRYLIC MANUFACTURING CO. (SUPRA). THE CASE OF THE ASSESSEE ALSO FIND ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 12 SUPPORT FROM THE DECISION OF HONBLE SUPREME CO URT IN THE CASE OF KELVINATOR OF INDIA LTD. ON THE BASIS OF WHICH WE ARE OF THE VIEW THAT IF A CASE IS COVERED UNDER PROVISO TO SECTION 147 THEN THE ASSESSMENT CANNOT BE REOPENED MERELY ON CHANGE OF OPINION WITHOUT POINTING OUT ANY FAILURE ON THE PART OF THE ASSESSEE TO DISC LOSE FULLY AND TRULY ALL MATERIAL FACTS FOR THE ASSESSMENT. ACCORDINGLY IT IS HELD THAT THE LD. CIT(A) WAS NOT JUSTIFIED IN UPHOLDING THE ACTIO N OF THE AO IN RESPECT OF REOPENING OF THE ASSESSMENT. 4.2 IN VIEW OF OUR AFORESAID FINDING IT IS NOT NECESSARY FOR US TO GO INTO OTHER GROUNDS OF APPEAL TAKEN UP BY THE ASSESS EE. ITA NO. 4384(DEL)/2003- APPEAL OF THE REVENUE 5. IT HAS ALREADY BEEN HELD BY US THAT THE AO DID NOT PROPERLY ASSUME JURISDICTION U/S 147 AND THUS THE ORDER PASSE D ON THE BASIS OF NOTICE ISSUED U/S 148 IS BAD IN LAW. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS A LLOWED AND THAT OF THE REVENUE IS DISMISSED. THE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 18 FEBRUARY 2010. SD/- SD/- (GEORGE MATHAN) (K.G.BANSAL) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE OF ORDER: 18TH FEBRUARY 2010. SP SATIA ITA NO. 2061(DEL)/2007 & C.O. NO. 280(DEL)/2007 13 COPY OF THE ORDER FORWARDED TO:- 1. M/S JUBILANT ORGANOSYS LTD. GAJRAULA (U.P). 2. ACIT CIRCLE I MORADABAD. 3. CIT(A) 4. CIT 5. DR ITAT NEW DELHI. ASSISTANT REGISTRA R.