The Assessing Officer's jurisdiction under section 147 of the Act has to be tested on the basis of the reasons recorded, and the reassessment proceedings cannot be based on a mere change of opinion without new material.

JUDGMENT

Dhiraj Singh Thakur, J. - The petitioner questions the legality of a Notice dated 30th March 2021 issued under section 148 of the Income Tax Act, 1961 ('the Act') seeking to reopen the petitioner's assessment for the assessment year 2015-16. The petitioner also challenges the order dated 21st July 2022 passed by the respondent No.1, whereby the objections to the reopening of the assessment have been disposed of.

2. Briefy stated the material facts are as under :

2.1 The petitioner fled a return of income for the assessment year 2015-16. The case was subsequently selected by Computer Assisted Scrutiny Selection (CASS) for scrutiny assessment. Notices were issued under section 143(2) of the Act on 17th March 2016 and subsequently under section 142(1), dated 23rd January 2017. Necessary information and details were fled pursuant to such notices including the petitioner's claim for deduction under section 35(2AB) of the Act. Finally, an order of assessment dated 13th June 2017 was passed under section 143(3) of the Act assessing the total income at Rs.8,48,00,190/-, by disallowing Rs.32,70,724/- being excess deduction claimed under section 35(2AB) of the Act. The disallowance was subsequently reduced to Rs.16,35,262/- as per rectifcation order dated 23rd June 2017 passed under section 154 of the Act.

2.2 Notice dated 30th March 2021 was issued under section 148 seeking to reopen assessment for the assessment year 2015-16 on the ground that income chargeable to tax had escaped assessment. Pursuant to the said Notice and in compliance thereof, return of income was fled and reasons were sought, for such reopening, which were furnished and stated as under :

2. During the year under consideration, i.e. F.Y.2014-15 (Relevant A.Y. 2015-16), it is noticed that as per note No.23 to the accounts, the assessee company has transferred building on WDV of Rs.91,61,341/- as on 1.4.2014 from fixed assets to the R & D Centre and accordingly the capital expenditure of R & D Building of Rs.1,63,40,354/- which includes WDV of the building of Rs.91,61,344/- is debited to P & L Account. However, in the computation of income, the assessee company has reduced the entire amount of Rs.1,63,40,354/- as weighted deduction under section 35(2B) @ 100%, on capital expenditure. Whereas the amount debited of RS.91,61,341/- was firstly required to be added back to the net profit as per the P & L Account (in the computation), before allowing the deduction under section 35(2B) of Rs.1,63,40,354/-. This has resulted in excesses allowance of deduction under section 35(2B) of the tune of Rs.91,61,341/-.

3. Since 4 years from the end of the relevant year have expired in this case, the requirement to initiate proceedings under section 147 of the Act are reason to believe that income for the year under consideration has escaped assessment because of failure on the part of the assessee to disclose fully and truly all material facts necessary of his assessment for the assessment year under consideration.

4. It is true that the assessee has filed a copy of audited P & L account and balance sheet along with return of income where various information/material were disclosed. However, the requisite full and true disclosure of all material facts necessary for assessment has not been made. It is pertinent to mention here that even though the assessee has produced books of accounts, annual report, audited P & L Accounts and balance sheet or other evidence as mentioned above, the requisite material facts, as noted above, in the reasons for reopening were embedded in such a manner that material evidence could not be discovered by AO and would have been discovered with due diligence, accordingly attracting provisions of Explanation-I of section 147 of the Act.

5 It is pertinent to mention here that reason to believe that income has escaped assessment for the year under consideration have been recorded in the above referred paragraph. I have carefully considered the assessment record