Income Tax Appellate Tribunal - Pune
Brijesh Rameshkumar Nandwani,Nashik vs Deputy Commissioner Of Income Tax ... on 18 May, 2026
IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH "A", PUNE
BEFORE SHRI R. K. PANDA, VICE PRESIDENT
AND
Ms. ASTHA CHANDRA, JUDICIAL MEMBER
ITA No.2758/PUN/2025
Assessment year : 2017-18
DCIT, Circle-1, Brijesh Rameshkumar Nandwani,
Nashik Flat 1 2 Pride Home Jayabhai Colony Road,
Vs.
B H Mhasoba Mandir Nashik Road,
Nashik-422101
PAN: ACEPN9534E
(Appellant) (Respondent)
CO No.10/PUN/2026
Assessment year : 2017-18
Brijesh Rameshkumar Nandwani, DCIT, Circle-1,
Flat 1 2 Pride Home Jayabhai Colony Road, Nashik
Vs.
B H Mhasoba Mandir Nashik Road,
Nashik-422101
PAN: ACEPN9534E
(Appellant) (Respondent)
Assessee by : Shri S M Makhija & Mohit S Makhija
Department by : Shri R.Y. Balawade
Date of hearing : 04-05-2026
Date of pronouncement : 18-05-2026
ORDER
PER R.K. PANDA, VP:
This appeal filed by the Revenue is directed against the order dated 01.09.2025 of the Ld. CIT(A) / NFAC, Delhi relating to assessment year 2017-18.
The assessee has filed the CO against the appeal filed by the Revenue. For the sake of convenience, the appeal filed by the Revenue and the CO filed by the assessee were heard together and are being disposed of by this common order.
2 ITA No.2758/PUN/2025 & CO No. 10/PUN/20262. Facts of the case, in brief, are that the assessee is an individual and had filed his return of income on 15.10.2017 declaring total income of Rs.71,48,090/-. The case of the assessee was selected for scrutiny under CASS and assessment order u/s 143(3) of the Act was completed on 24.12.2019 determining the total income at Rs.71,48,090/-. In this case, specific information was flagged on the Insight Portal in accordance with the risk management strategy formulated by the Board under the category "High Risk CRIU/VRU Information" for the Financial Year 2016-17, relevant to the Assessment Year 2017-18. As per the specific information, the assessee had made following transaction.
3 ITA No.2758/PUN/2025 & CO No. 10/PUN/20263. Accordingly, the Assessing Officer issued a show cause notice u/s 148A(b) of the Act to the assessee on 16.01.2024. The assessee made an elaborate submission before the Assessing Officer stating that all the issues raised in the notice have already been considered in the regular return of income filed for AY 2017-18 and the same has been duly scrutinized by the authorities and no discrepancies or irregularities were found. Accordingly the assessee requested the Assessing Officer to drop the reassessment proceedings u/s 148A(b) of the Act.
However, the Assessing Officer was not convinced and rejected the reply of the assessee by passing an order u/s 148A(d) of the Act dated 27.02.2024.
Accordingly he issued notice u/s 148 on 27.02.2024. The assessee in response to the same filed his return of income on 27.03.2024 declaring total income of Rs.71,48,090/- which was the income returned earlier. Subsequently the Assessing Officer issued notice u/s 143(2) and 142(1) of the Act along with a questionnaire.
Rejecting the various explanations given by the assessee, the Assessing Officer determined the total income of the assessee at Rs.6,27,75,957/- by making the following additions to the returned income :
i) Sale of immovable property Rs. 1,02,63,591/-
ii) Turnover from services Rs. 89,97,348/-
iii) Unsecured loans in Shanti Constructions Rs.66,50,000/-
4 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026iv) Unsecured loans in Brijesh Nandwani Rs.1,36,00,000/-
v) Property sold Rs.1,75,82,042/-
4. Before the Ld. CIT(A) / NFAC the assessee apart from challenging the addition on merit challenged the validity of reassessment proceedings on the ground that the reassessment proceedings initiated were on incorrect facts that the assessee has not filed return of income. Further, the reassessment proceedings were initiated beyond the period of 4 years from the end of the relevant previous year on the very same issues on which the original assessment has been passed after considering the details and therefore, the same amounts to change of opinion and there is no failure on the part of the assessee to disclose truly and fully material facts.
4.1 Based on the arguments advanced by the assessee the Ld. CIT(A)/NFAC quashed the reassessment proceedings on the ground that such reassessment proceedings have been initiated on incorrect facts. Further, the reassessment proceedings initiated by the Assessing Officer amounts to change of opinion since all the issues on which the assessment has been reopened and addition has been made were duly verified in the original scrutiny proceedings. So far as the validity of the reassessment proceedings on incorrect facts are concerned the Ld. CIT(A)/NFAC quashed the reassessment proceedings by observing as under :
"6. In Ground No. 1, the appellant has challenged the re-assessment proceedings for the reason that the assessment was reopened on incorrect facts. AO issued notice under section 148A (b) on 16-01-2024 proposing to re open the assessment for the reason that in spite of having entered into the following transactions the appellant failed to file the ROI u/s 139 of the Act:5 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 6 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026
6.1 It apparently emerges that the only reason for assessing officer having initiated the re-assessment proceedings is the information received by him as flagged on insight portal under "High Risk CIRU/VRU information" for the AY 2017-18. As per AO the appellant failed to file the ROI u/s 139 of the Act in spite of entering into the transactions as per the CIRU/VRU information. From the notice u/s 148A(b) of the Act, dated 16/01/2024 and the submissions dated 21/01/2024 made by the appellant, copies of which are uploaded by the appellant and reproduced in the earlier part of this order, it is seen that as against the observations/information received by AO, that inspite of appellant having entered into huge transaction, had failed to file its ROI, though appellant has placed on record of assessing officer that not only the original return of income was filed U/s 139(1) of the Act, but even the assessment for the year was completed u/s 143(3) of the I.T Act. The AO has not at all dealt with this most important fact, as is evident from order u/s 148A(d) of the Act, dated 27/02/2024, copy of which is submitted by appellant at annexure "E" of his submissions dated 27/08/2025 and reproduced in earlier part of this order. The appellant 7 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 has challenged the initiation of re-assessment proceedings on the ground that same were initiated on incorrect facts.
6.1.1 In support of the contention that re-assessment proceedings having been initiated on the basis of incorrect facts is not tenable in law, the appellant has relied upon various judgements including that of Hon'ble jurisdictional Bombay High Court and the Hon'ble ITAT, Mumbai, as referred to by him at pg no's no's. 8 and 9 of written submissions dated 14/07/2025 reproduced supra.
6.1.2 It is seen that the issue of initiation of re-assessment proceedings on the basis of incorrect facts, particularly the fact that inspite of assesse having filed the ROI u/s 139 of the Act, the re-assessment proceedings were initiated holding that assesse had not filed the original return u/s 139 of the I.T Act, has been dealt upon by Hon'ble ITAT, Mumbai, "C" Bench, Mumbai, in the case of ITO V/s Champaklal M. Mehta in ITA No. 2253/Mum/2022. In the case before Hon'ble ITAT the said issue has been raised in ground no. having considered the basic fact having been recorded incorrectly and and the Hon'ble ITAT after relying upon the decisions of Hon'ble Bombay High Court, Hon'ble Delhi High Court and Hon'ble Gujrat High Court have decided the issue in favour of assessee holding as under:
2 "Whether on the facts and circumstances of the case and in law, the Ld. CIT (A) had erred in holding that the reason of reopening is based upon non filing return of income ignoring the fact mentioned in para 2 and 3 of the reason recorded."
Observations in regard to the above ground given by Hon'ble ITAT read as under:
3. We have heard rival submissions and perused the materials available on record. We find that assessee is an individual and had filed his return of income for the A.Y.2011-12 on 21/07/2011. The Id. AO obtained information from ITS / AIR/ CIB available with the Income Tax Department that during the year under consideration, the assessee had purchased immovable property to the tune of Rs.2,13,61,851/-. The Id. AO had a mistaken opinion that assessee had not filed his return for A.Y.2011-12. Accordingly, since there was financial transaction carried out by the assessee and no return has been filed by the assessee, the Id.
AO observed that income of the assessee had escaped assessment and sought to reopen the same by issuance of notice u/s.148 of the Act on 31/03/2017 after recording the reasons. The reasons recorded by the Id. AO are as under:-
Sir/Madam Subject-Re-assessment proceedings in your case for A.Y. 2011-12-reg. Ref: Your representative letter dated 24.11.2017 Please refer to the above. Vide this office letter dated 28.09.2017, the reasons for re-opening was intimated as under-
"As per the ITS/AIR/CIB information available with the income tax department, during the year under consideration, the assessee had purchased immovable property for Rs. 2,13,61,851/- on 19.01.2011 i.e. during the F.Y. 2010-11.on verification of the ITD system it is seen that the assessee has not filed the return of income for A.Y. 2011-12 .Income of Rs. 2,13,61,851/-chargeable to tax in the hands of the assessee has escaped assessment within the meaning of the provisions of section 147 (b) of the Act, for failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for A.Y. 2011-
12. Perhaps you failed to read the running dots after the first para and before the second para. For your better clarity, the para between these two paras is as under-8 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026
As the case was falling under the category of non- filers, NMS notice dated 25.07.2015 was sent to the assessee for filing the return of income and to explain the sources of the above financial transaction. In response to the notice, vide his AR's letter dated 03.08.2015, has stated that the assessee has filed his return on 21.07.2011. However, he has not given any explanation for the above financial transaction hence the source of the said investment in property remain unexplained.
Further your objection vide letter dated 25.10.2017 was reverted vide this office letter dated 27.10.2017 in which I never agreed to all the factual information submitted by the assessee. This office letter dated 27.10.2017 is self-explanatory in nature. There is no need to address the same again."
3.1. The re-assessment was framed by the Id. AO by making certain additions and ultimately the total income was determined at Rs.3,08,51,220/- as against the returned income of Rs.3,95,231/- vide order u/s.143(3)r.w.s. 147 of the Act dated 28/12/2017. The assessee challenged the validity of reopening u/s.147 of the Act before the Id. CIT(A) on the ground that the reopening was made based on incorrect assumption of fact as is evident from the reasons recorded. The Id. CIT(A) went through the reasons and quashed the re-assessment by observing as under:-
3. I have carefully considered the grounds of appeal, assessment order and submission of the appellant. This case was falling under the category of non filers. NMS letter dated 25.7.2015 was sent to the assessee in this regard. The appellant replied vide his letter dated 3.8.2015 filed on 4.8.2015 filed before ITO Wd 23(1)(3), Mumbai whereas he has informed that appellant has filed his income tax return for F.Y. 2010-11 onwards, The copy of acknowledgment of return is also to be stated to be filed before the A.O. It is observed that appellant has filed return of income in ITR-2 for AY. 2011-12 u/s 139(1) on 21.7.2011 in the office of ITO Ward 19(1)(3), Mumbai. However, Notice u/s 148 was issued by A.O on 31.3.2017. The AO has communicated following reasons for reopening to the appellant vide his letter dated 28.9.2017:-
3.1 As per the ITS/AIR/CIB information available with the Income tax department, during the year under consideration, the assessee had purchased immovable property for Rs. 2,13,61,851/- on 19.01.2011 le during the F.Y. 2010-
11. On verification of the ITD System it is seen that the assessee has not filed the return of income for A.Y. 2011-12 Income of Rs. 2,13,61,851/- chargeable to tax in the hands of the assessee has escaped assessment within the meaning of the provisions of section 147(b) of the Act, for failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment for A.Y. 2011-
12."
3.2 The appellant has objected to the reasons for reopening vide his letter dated 25.10.2017. He has submitted that there are no provision in ITR-2 to disclose relevant details in respect of purchase of property. He has also informed the AO that property has been purchased jointly with his wife Mrs. Sarojben C Mehta. No action has been taken in the case of wife of appellant after inquiry by the department. The AO disposed off the objections vide his letter dated 27.10.2017.
The objections were disposed of summarily without dealing with the main issues raised by the appellant. The appellant again objected to the reopening vide his letter dated 24.11.2017 pointing out that the reply of the A.O dated 27.10.2017 does not addressed to the appellant. The AO again vide his letter dated 28.11.2017 informed that appellant has not given any explanations for the 9 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 purchase of immovable property hence the investment in the said property remains unexplained. Ground of appeal no. 1 is relates to the appellant raised the issues that reopening by the AO is not valid. The arguments of the appellant in this regard are as under-
a. The AO has reopened the assessment under the belief that appellant has not filed ROI for A.Y. 2011-12 whereas the appellant vide his letter dated 03.08.2015 has informed the A.O that he has filed his ROI on 21.07.2011. b. The appellant vide his letter dated 30.10.2018 has pointed out various judicial pronouncements as per which the reopening of assessment in this case is invalid as the same has been made without application of mind on the basis of reason to suspect and not on the basis of reason to believe without being any tangible material on record.
c. Reopening in this case has been made beyond 4 years without showing any failure on the part of appellant to make full and true disclosure.
5. I have gone through the facts of the case. In this case, the appellant has clearly pointed out that he has filed return of income for A.Y. 2011-12 within due date. Ignoring this facts, the AO has issued notice u/s 148 without bringing any tangible material on record. The AO has also fail to show any failure on the part of appellant to make full and true disposal for reopening beyond 4 year. In these circumstance, it is held that notice u/s 148 148 issued by the AO is without jurisdiction and is liable to be quashed.
Ground of appeal no. 1 is partly allowed so far as it is decided in favour of appellant that reopening in this case is not valid. Other issues pointed out by the appellant are not decided as relief is allowed to him on the main issue.
6. Since, relief is allowed to the appellant on the issue of reopening the other grounds of appeal are not being decided on merit.
3.2. Aggrieved, the Revenue is in appeal before us. From the perusal of the reasons recorded reproduced supra, we find that the reopening was made on the mistaken assumption that assessee had not filed his return of income for A.Y.2011-12. Factually, the return of income was already filed by the assessee on 21/07/2011. Moreover, there was a letter dated 25/07/2015 issued by the Id. AO to the assessee for A.Y.2010-11 calling for reasons for not filing income tax return for A.Y.2010-11. This letter is enclosed in page 13 of the paper book. In response to the said letter, the assessee's representative had vide letter dated 03/08/2015 had addressed to the Id. AO stating that assessee is a senior citizen aged about 83 years old and had filed his income tax returns from A.Y.2011-12 onwards and had enclosed the copy of ITR acknowledgement thereon. This letter is enclosed in page 14 of the paper book. We find that the Id. AO had referred to the aforesaid two letters in the reasons recorded stating the same as the reason to conclude that assessee had not filed return of income for A.Y.2011-12. This fact is evident from the reasons recorded reproduced supra. Factually, the notice dated 25/07/2015 was issued by the Id. AO for A.Y.2010-11 calling for income tax return from the assessee. The reply letter dated 03/08/2015 from the assessee to the Id. AO clearly states that assessee is a senior citizen aged about 83 years and had filed his income tax returns from A.Y.2011-12 onwards. The Id. AO goes by the incorrect assumption of fact that assessee had not filed his income tax return for A.Y.2011-12 that subsequently in the same reasons, he acknowledges the fact that assessee had filed his return of income on 21/07/2011. From the perusal of the entire reasons recorded by the Id.AO for reopening the assessment, we have absolutely no hesitation to hold that the entire reopening had been triggered by the Id. AO based on complete incorrect assumption of fact that no return of 10 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 income was filed by the assessee for the A.Y. 2011-12, wherein a financial transaction of purchase of property was made. The letter to assessee by the Id. AO calling for income tax return based on report received in the non-filers list was never issued by the Id. AO for A.Y. 2011-12 i.e. the year under consideration before us. Factually it was issued only for A.Y.2010-11 as stated supra. Hence, we hold that the reasons recorded for reopening has been made without application of mind by the Id. AO. Now the moot question that arises for our consideration is as to whether the reopening which is made based on incorrect assumption of fact and non-application of mind by the Id. AO could be held to be valid. This issue has been addressed by the Hon'ble Jurisdictional High Court in the case of Dhiren Anantrai Modi vs. Income Tax Officer in Writ Petition No.3224 of 2019 dated 15/12/2021. For the sake of convenience, the entire order is reproduced hereunder:-
"1. Petitioner is impugning notice dated 26th March, 2019 issued under Section 148 of the Income Tax Act, 1961 (the Act) and the order dated 22nd October, 2019 disposing petitioner's objections to the re-opening.
2. Petitioner has challenged notice dated 26th March, 2019 on various grounds including non application of mind by the Assessing Officer while issuing notice.
3. We have considered the petition with documents annexed thereto, reply filed by respondent and also heard Mr. Gandhi and Mr. Pinto.
4. On bare perusal of the reasons it is quite evident that the reasons are based on totally erroneous and in correct facts and without non Purti Parab 2/4 420- WP3224-2019.doc application of mind. In the reasons it is stated "The assessee is an individual and the Return of Income for A.Y. 2012-13 was filed on 24 th September, 2012 declaring total loss of Rs.4,21,11,382/- and the same was processed by the C.P.C........It is pertinent to mention here that in this case the assessee had filed return of income for the year under consideration but no assessment as stipulated under Section 2(40) of the Act was made and the return of income was only processed under Section 143(1) of the Act. In view of the above, provisions of clause (b) of explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment".
5. The fact is the return of income for A.Y. 2012-13 filed by petitioner on 24th September, 2012 has been assessed under Section 143(3) of the Act and the Assessment Order dated 31st March, 2015 has been passed. Therefore, the Assessing Officer has proceeded on erroneous factual basis that the return of income was only processed under Section 143(1) of the Act. That displays total non application of mind. In fact, petitioner's allegations that Respondent No.1 has sought to re-open the assessment on incorrect factual position that the return of income was only processed under Section 143(1) of the Act has not even been denied in the affidavit in reply which is filed by the same Assessing Officer. In paragraph no.2 of the affidavit in reply which is in response to paragraph no.1 and 2 of the Purti Parab 3/4 420-WP-3224-2019.doc petition, Respondent No.1 simply says that these are factual in nature and the notice under Section 148 dated 26th March, 2019 and the order disposing the objections and the notice dated 22 nd October, 2019 are issued in pursuance of the objective of completing reassessment in accordance with the procedures laid down.
On this ground alone, the notice dated 26th March, 2019 has to be set aside.
6. Moreover, Mr. Gandhi submitted that despite repeated requests for copy of the sanction under Section 151 of the Act, the same has not been provided. The 11 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 averment to that effect in the petition has not even been denied in the affidavit in reply and respondent, in the affidavit in reply has not even bothered to annex the sanction obtained which gives us a feeling that the said Mr. Ramesh C. Meena who issued notice under Section 148 of the Act containing errors of facts and who has filed affidavit in reply does not wish to produce the same. We have to, therefore draw adverse inference against respondent that if it is disclosed it may be prejudicial to the interest of Revenue.
7. One wonders whether the sanctioning authority under Section 151 of the Act also would have even applied his mind because the reasons recorded as noted above itself displays non application of mind by the Assessing Officer. Therefore, either no sanction as contemplated under Purti Parab 4/4 420-WP-32242019.doc Section 151 of the Act has been obtained or the same was granted mechanically without application of mind to the facts because if only the Assessing Officer had placed the entire file before the sanctioning authority he would have pointed out the error in the reasons for re-opening.
8. In the circumstances, petition is allowed in terms of prayer clause (a) which read as under
(a) That this Hon'ble Court may be pleased to issue under Article 226 of the Constitution of India an appropriate direction, order or a writ, including a writ in the nature of 'Certiorari", calling for the records of the case and, after satisfying itself as to the legality thereof, quash and set aside the Notice u/s 148 dated 26.03.2019, Ex. "H" herein, the order disposing objections dated 22.10.2019, Ex.
"K" herein passed by the Respondent and also the Notice/summons dated 22.10.2019, Ex. "L" herein issued by the Respondent.
9. Petition disposed."
3.3. Similarly, the Hon'ble Delhi High Court in the case of Deepak Wadhwa vs. ACIT reported in 435 ITR 699 had also occasion to consider the similar issue wherein it was observed as under:-
5.2. As far as the other aspect is concerned, in our view, since the proof put in place by the petitioner-assessee with regard to the acknowledgment of return filed for the assessment year 2011-12 has not been disputed by the Revenue, as noticed above, the challenge to the impugned notice and the impugned order will have t will have to be sustained.
61 Therefore, for the foregoing reasons, we are inclined to quash the impugned notice dated March 27, 2018 as also the impugned order dated September 28, 2018. It is ordered accordingly.
3.4. Similar view was taken by the Hon'ble Gujarat High Court in the case of Mumtaz Haji Mohamad Menon vs ITO reported in 408 ITR 268 wherein it was held as under:-
"In this context, we have noted that the reasons proceeded on two fun-damental grounds. One, that the property in question was sold for a sum of Rs. 1,18,95,000; and two, that the assessee had not filed the return and that therefore his 1/3rd share out of the sale proceeds was not offered to tax. Both these factual grounds are totally incorrect as is now virtually admitted by the Revenue. It is undisputed that the assessee had actually filed the return of income for the said assessment year and also offered his share of income of the declared sale consideration to tax as capital gains. The Assessing Officer may have dispute with respect to computation of such capital gains, he cannot simply dispute the fact that the 12 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 assessee did file the return. Importantly, even the second factual assertion of the Assessing Officer in the reasons recorded is totally incorrect. He has referred to said sum of Rs. 1,18,95,000 as a sale price of the property. The assessee had produced before the Assessing Officer, the sale deed in which, the sale consideration disclosed was Rs. 50 lakhs.
The Assessing Officer may be correct in pointing out that when the sale consideration as per the sale deed is Rs. 50 lakhs but the registering authority has valued the property on the date of sale at Rs. 1,18,95,000 for stamp duty calculation, section 50C of the Act would apply, of course, sub-ject to the riders contained therein. However, this is not the cited reason for reopening the assessment. The reasons cited are that the assessee filed no return and that 1/3rd share of the assessee from the actual sale consideration of Rs. 1,18,95,000 therefore, was not brought to tax. These reasons are interconnected and interwoven. In fact, even if these reasons are seen as separate and severable grounds, both being factually incorrect, the Revenue simply cannot hope to salvage the impugned notice. Through the affidavit-in-reply a faint attempt has been made to entirely shift the centre of the reasons to a completely new theory, viz., the possible applicability of section 50C of the Act. The reasons recorded nowhere mentioned this possibility. Reasons recorded, in fact, ignored the fact that the sale consideration as per the sale deed was Rs. 50 lakhs and that the assessee had by filing the return offered his share of such proceeds by way of capital gains. In the result, the impugned notice is quashed. The petition is disposed of."
3.5. In view of the above, we do not find any infirmity in Id. CIT(A) quashing the re-assessment proceedings. Hence, the ground raised by the Revenue challenging the validity of quashing the re-assessment is dismissed. Since the entire re- assessment is quashed, there is no need to go into other grounds raised by the assessee on merits."
The issue under consideration being squarely covered by the decision of Jurisdictional Bench of Hon'ble ITAT. Respectfully following the binding decision of Ho'ble ITAT it is held that the notice u/s 148A(b) / 148 of the Act, and the consequential re-assessment order passed in pursuance to the said notice is void ab-initio and bad in law. Accordingly, the assessment is annulled. Ground no. 1 of the appeal is allowed."
5. So far as the merits of reassessment proceedings on account of change of opinion is concerned the Ld. CIT(A)/NFAC quashed the same by observing as under :
"6.2 In Ground no. 2 the appellant has challenged the validity of re-assessment proceedings on the ground that once the original assessment proceedings have been completed validly by passing an order u/s 143(3) of the Income tax Act, 1961, no re assessment proceedings could be initiated for the period beyond four years unless there was failure on the part of the assessee to disclose truly and fully material facts necessary for determining the income and the same if done, amounts to change of opinion.
6.2.1 After careful consideration of the facts of the case, the impugned assessment order, submissions uploaded by appellant in the course of faceless appellate proceedings, submissions filed by appellant in the course of re-assessment proceedings, copies of which are submitted at annexure M,N and O of submissions dated 14/07/2025 and 13 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 annexure D of submissions dated 27/08/2025, the notice u/s 142(1) issued by ACIT, Central Circle-2, Nashik and also the submissions filed by appellant in the course of original assessment proceedings, copies of which too are submitted at annexure C,D,D1,D2 and E of submissions dated 14/07/2025, it is seen that in the course of re- assessment proceedings appellant has repeatedly placed on record of the assessing officer the fact that the original assessment proceedings had been completed vide an order passed u/s 143(3) of the I.T Act, during the course of which all the 5 issues on which additions have been made by the assessing officer had already been considered and adjudicated upon the then assessing officer.
6.2.2 In the course of the faceless appellate proceedings, appellant has furnished a chart at pg no.'s 2 to 4 of its submission dated 27/08/2025, giving details of specific queries raised by ACIT, Central Circle-2, Nashik and the submissions filed by assessee in the course of original assessment proceedings completed u/s 143(3) of the Act. Infact, the AO has duly reproduced the reply of the appellant in the impugned assessment order from which it can seen that the appellant has given the details of the specific question on each issue (on which additions have been in the impugned assessment order) asked in the original scrutiny assessment proceedings u/s 143(3) of the Act and the details of his reply. The same is reproduced by the AO on page 24 onwards of the impugned assessment order.
6.2.3 In support of the contention that since the original assessment proceedings were completed u/s 143(3) of the I.T Act and 4 years from the end of the assessment year having lapsed, no re-assessment proceedings could have been initiated without having pointed out failure on part of assesse to disclose fully and truly the material facts appellant has relied upon judicial pronouncements of Hon'ble Madras High Court, Hon'ble Karnataka High Court and various decisions of Hon'ble Bombay High Court as referred to by him at pg no's 13 to 19 of its submissions dated 14/07/2025.
6.2.4 In addition to the appellant's contention that neither there was any failure on part of assesse to disclose fully and truly the material facts, nor the AO has pointed out any such failure on the part of assesse, the re-assessment proceedings could not have been initiated, has further vide his submissions dated 27/08/2025, submitted that inspite of the proviso to sec 147 of the I.T Act, having been omitted post amendment vide Finance Act, 2021, the same is still applicable, in support whereof has placed reliance upon the following decisions:
Mira Bhavin Mehta v.Income-tax Officer, [2024] 464 ITR 778 (Bombay), Siemens Financial Services (P.) Ltd. v. Deputy Commissioner of Income-tax, [2023] 457 ITR 647 (Bombay), Knight Riders Sports Pvt. Ltd. v. ACIT, Central Circle - 4(2), (Hon'ble Bombay High Court), (Writ Petition NO.2269 OF 2023) Springer Healthcare Limited V. ACIT & Anr. (Hon'ble High Court of Delhi), (W.P.(C) 336/2025 & CM APP Nos. 1665/2025, 1666/2025) Ratnagiri Gas and Power Private Limited v. ACIT, Circle 19(1), Delhi DCIT, Circle - 7, Pune V. Kolte Patil Integrated Townships Limited, (Hon'ble ITAT, Pune 'A' Bench, Pune), (ITA Nos. 2023 and 2011/PUN/2024) 6.2.5 In the case of Mira Bhavin Mehta v.Income-tax Officer, [2024] 464 ITR 778 (Bombay), the Hon'ble jurisdictional High Court have held as under:14 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026
2. Petitioner, an individual, filed return of income on 28th August 2018 for AY-
2018-19 declaring total income of Rs. 26,26,220/-. Petitioner, thereafter, received a notice dated 28th September 2019 issued under section 143(2) of the Income-tax Act 1961 (the Act) stating that return of income has been selected for limited scrutiny with regard to investments in immovable property, capital gains/income on sale of property. Petitioner was called upon to submit evidence with regard to the two issues raised. Thereafter, petitioner received a notice dated 12th December 2019 issued under section 142(1) of the Act calling upon petitioner to provide documents and details with regard to capital asset that was sold during the assessment year. Petitioner vide its Chartered Accountant's letter dated 11th December 2020, provided details of the property sold, consideration received, etc., the property being Flat No. 802, 8th floor of Boulevard-III, Ghatkopar (West), Mumbai 400086 (the said flat). Later, petitioner received one more notice dated 16th February 2021 issued under section 142(1) of the Act, seeking details with regard to same property. Once again, vide petitioner's Chartered Accountant's letter dated 17th February 2021, petitioner provided all details and documents.
3. An assessment order came to be passed on 28th April 2021, in which, it is stated that the case was selected for limited scrutiny assessment on the issues relating to investments in immovable property, capital gains/income on sale of property and in view of material available on record, no addition on the issues is made. The assessment order also states that the assessment is passed accepting the income computed as per order under section 143(1) of the Act.
4. Almost a year later, petitioner received a communication dated 11th March 2022 being an inquiry under section 148A(a) of the Act seeking details of the sale of the residential property, which was the subject matter of the scrutiny assessment. Petitioner replied vide its Chartered Accountant's letter dated 15th March 2022 and provided all details and documents called for. This was followed by a notice dated 22nd March 2022 issued under section 148A(b) of the Act, wherein paragraph 3 reads as under:
"3. On perusal of submission it is seen that you have purchased a residential property vide registered agreement dated 17-10-2017 and sold the said property vide registered agreement dated 27-10-2017 and thus the said immovable property is short term capital Asset and gain arising from the said sale of property is short terms capital Gain, however on perusal of computation of income it is seen that you have considered date of acquisition of property at 28-5- 2010 and computed net long term capital loss of Rs. 33,793/-. In view of the same, you are requested to explain as to why the capital gain on said sale of property should not be computed as under"
Sale consideration of flat (50% ownership) - Rs. 1,05,00,000/-
Less: Purchase consideration of flat (50% ownership) Rs. 71,95,625/-
Short terms Capital Gain = 33,04,375/- taxable @ 30%."
5. Petitioner replied to the said notice dated 22nd March 2022 objecting to the reopening vide petitioner's Chartered Accountant's letter dated 28th March 2022. Notwithstanding, petitioner's objections, the order dated 31st March 2022 under section 148A(d) of the Act has been passed and notice also dated 31st March 2022 issued under section 148 of the Act, holding that the asset sold was short term capital asset and gain arising on the transfer of such asset is short term 15 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 capital gain. It is this order and the notice both dated 31st March 2022 which are impugned in this petition.
6. Various grounds have been raised but one ground is that there has been change of opinion. Mr. Gopal submitted that this court has taken a view in Siemens Financial Services (P.) Ltd. v. Dy. CIT [2023] 154 taxmann.com 159/457 ITR 647 (Bom.) that assessment cannot be reopened on the basis of change of opinion. Paragraphs 36 to 39 of Siemens Financial Services (P.) Ltd. (supra) read as under:
36. We would agree with the submissions of Mr. Pardiwalla that if change of opinion concept is given a go by, that would result in giving arbitrary powers to the Assessing Officer to reopen the assessments. It would in effect be giving power to review which he does not possess. The Assessing Officer has only power to reassess not to review. If the concept of change of opinion is removed as contended on behalf of the Revenue, then in the garb of re-opening the assessment, review would take place. The concept of change of opinion is an in-
built test to check abuse of power by the Assessing Officer. As held in Dr. Mathew Cherian (supra), whether under old or new regime of reassessment, it is settled position that the issues decided categorically should not be revisited in the guise of reassessment. That would include issues where query have been raised during the assessment and query have been answered and accepted by the Assessing Officer while passing the assessment order. As held in Aroni Commercials (supra) even if assessment order has not specifically dealt with that issue, once the query is raised it is deemed to have been considered and the explanation accepted by the Assessing officer. It is not necessary that an assessment order should contain reference and/or discussion to disclose his satisfaction in respect of the query raised.
The Division Bench of this court in Aroni Commercials Ltd. (supra) held it is not necessary that the assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. Paragraph 14 of Aroni Commercials Ltd. (supra) Paragraph 14 of Aromi Co read as under:
"14. We are of the view that once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment. It is not necessary that an assessment order should contain reference and/or discussion to disclose its satisfaction in respect of the query raised. If an Assessing Officer has to record the consideration bestowed by him on all issues raised by him during the assessment proceeding even where he is satisfied then it would be impossible for the Assessing Officer to complete all the assessments which are required to be scrutinized by him under section 143(3) of the Act. Moreover, one must not forget that the manner in which an assessment order is to be drafted is the sole domain of the Assessing Officer and it is not open to an assessee to insist that the assessment order must record all the questions raised and the satisfaction in respect thereof of the Assessing Officer. The only requirement is that the Assessing Officer ought to have considered the objection now raised in the grounds for issuing notice under section 148 of the Act, during the original assessment proceedings. There can be no doubt in the present facts as evidenced by a letter dated 8 September 2012 the very issue of taxability of sale of shares under the head capital gain or the head profits and gains from business was subject a matter of consideration by the Assessing Officer during the original assessment proceedings leading to an order dated 12 October 2010. It would therefore, follow that the reopening of the assessment by impugned notice dated 28 March 2013 is merely on the basis of change of opinion of the Assessing 16 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 Officer from that held earlier during the course of assessment proceeding leading to the order dated 12 October 2010. This change of opinion does not constitute justification and/or reasons to believe that income chargeable to tax has escaped assessment."
37 The Assessing Officer does not have any power to review his own assessment when during the original assessment petitioner provided all the relevant information which was considered by him before passing the assessment order under section 143(3) of the Act dated 23rd December 2018. Petitioner had debited an amount of Rs. 6,41,87,931/- on account of software consumables in the profit and loss account and a detailed break-up of the said expenses were submitted before the Assessing Officer during the course of assessment proceedings vide a letter dated 6th December 2018. It is settled law that proceedings under section 148 cannot be initiated to review the earlier stand adopted by the Assessing Officer. The Assessing Officer cannot initiate reassessment proceedings to have a relook at the documents that were filed and considered by him in the original assessment proceedings as the power to reassess cannot be exercised to review an assessment. In petitioner's case the Assessing Officer having allowed the amount of software consumables as a revenue expenditure now seeks to treat the same as capital expenditure which is a clear change of opinion. Various judicial precedents have held that reassessment proceedings initiated on the basis of a mere change of opinion are invalid and without jurisdiction.
38 The Apex Court in Kelvinator of India Ltd. (supra) emphasised on the difference between a power to review and the power to reassess. The Apex Court held that the Assessing Officer has no power to review but has only the power to reassess. The concept of 'change of opinion' must be treated as an in-built test to check abuse of power by the Assessing Officer. The relevant extract of the judgement is reproduced as under:-
" ..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 beper sereason 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 of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of 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 "reason to believe" but also inserted the word "opinion" in section 147 of the Act. However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer.
39 The Delhi High Court in Seema Gupta v. ITO [(2022) 288 Taxman 519 (Del)] held that the order under section 148A(d) and notice under section 148 of the Act should be set aside when the reassessment was initiated on a change of opinion 17 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 where the same was discussed and verified by the Assessing Officer at the time of original assessment proceedings.
7. In the affidavit in reply filed through one Ratnesh Kumar Mishra affirmed on 20th June 2022, the stand has taken is that the entire scheme of reassessment is changed by insertion of new provisions through Finance Act 2021 and, therefore, the concept of change of opinion does not survive. Mr. Suresh Kumar in fairness agreed that since the court has specifically, in its judgment in Siemens Financial Services (P.) Ltd. (supra), held that the concept of change of opinion would still apply, if the court comes to conclusion that there was change of opinion, then certainly the impugned order passed under section 148A(d) of the Act and the impugned notice issued under section 148 of the Act, both dated 31st March 2022 have to be quashed.
8. In our view, it is clear case of change of opinion. We say this because the issue as to whether there was a short term capital gain with respect to the said flat, was the subject matter of consideration during the assessment proceedings. It is settled law that once a query is raised during the assessment proceedings and the assessee has replied to it, it follows that the query raised was a subject of consideration of the Assessing Officer while completing the assessment. In fact, the AO in the assessment order dated 28th April 2021 has noted that the issue of investment in immovable property and capital gain/income on sale of property was considered under limited scrutiny assessment and in view of the material on record no addition on the issue is made. The information relied upon while issuing notice under section 148A(b) of the Act also relates to the said flat and entirely contradictory view is taken in the impugned order that the asset sold was short term capital asset and gain arising on transfer of the said flat is short term capital gain. In our view, the reopening of the assessment is purely on the basis of change of opinion of the AO from that held earlier during the course of assessment proceedings. This change of opinion does not constitute justification for assuming that income chargeable to tax has escaped assessment.
9. Rule, therefore, made absolute. Petition allowed in terms of prayer clause (a) which reads as under:
"(a) That this Hon'ble Court may be pleased to issue under Article 226 of the Constitution of India, appropriate writ or order or direction including a writ in the nature of 'Certioraris' calling for the records for the case and after satisfying itself as to the legality thereof quash and set aside the order dated 31-3-2022 under section 148A(d) of the Act being Exhibit -'M' and notice issued by Respondent No. 1, dated 31-3-2022 under section 148 of the Act being Exhibit-
'N' being illegal and bad in law."
10. Petition disposed. JE TAX DEPARTMENT 6.2.6 In the case at hand, the impugned assessment order itself has reproduced the submissions of the appellant (pg 24 orwards) wherein the appellant has shown to the AO that all the issues on which the assessment has been reopened and additions have been made were duly verified in the original scrutiny assessment proceedings. Specific questions were asked by the then AO, replied by the appellant and no adverse view was taken. AO has not controverted this fact. Thus, the relied upon judgement of Hon'ble jurisdictional High Court in the case of Mira Bhavin Mehta (supra) is squarely applicable to the facts of the case. Therefore, respectfully following the same, the impugned reassessment proceedings and the Assessment Order is invalid and not sustainable in law. Accordingly, the impugned Assessment order is liable to be annulled and the same is annulled. Ground no. 2 of the appeal is allowed."
18 ITA No.2758/PUN/2025 & CO No. 10/PUN/20266. Since he quashed the reassessment proceedings the Ld. CIT(A)/NFAC did not adjudicate the grounds on merits.
7. Aggrieved with such order of the Ld. CIT(A) / NFAC the Revenue is in appeal before the Tribunal by raising the following grounds:
"01 Whether on the facts and circumstances of the case, the L.d. CIT(A) [NFAC] is justified in deleting the addition of Rs. 5,56,27,867/- made by the AO on various issues.
02. Whether on the facts and in the circumstances of the ease, the CIT(A) INFAC] has deleted the additions only the grounds that issues on which reassessment was initiated were earlier verified in original assessment proceedings. The reopening of assessment was made on tangible information received through the Insight Portal indicating possible escapement of income. The incidence of new information, even if certain issues were examined earlier, confers jurisdiction upon the Assessing Officer u/s 147 of the Act to re-examine the matter if there is reason to believe that income has escaped assessment.
03. Whether the Ld. CIT(A) [NFAC has annulled the order passed by the AO only reopening of assessment was merely a case of "change of opinion". The CIT(A) laid down by the Hon'ble jurisdictional Bombay High Court in the case of Mira Bhavin Mehta v. Income tax Officer, [2024] 464 ITR 778(Bombay), is squarely applied to the facts of the present case. The CIT(A) concluded that the reassessment proceedings were invalid and not sustainable in law and was accordingly annulled. But the decision on the judgment of Mira Bhavin Mehta is misplaced, as the said case applies only where reopening is based purely on a reappraisal of the same material that was before the AO earlier, without any fresh input or tangible material.
04. On facts and circumstances of the case, the Ld. CIT(A) [NFAC] has failed to appreciate that certain procedural minor defects occurred in the notice or order, such lapses are cured by Sec.292B and Sec.292BB of the Act. The reassessment order conforms to the intent and purpose of the Act i.e., determination of escaped income based on credible information. Therefore, the order cannot be annulled merely for procedural or technical reasons when substantive compliance exist.
05. The order of the Ld. CIT(A) [NFAC] may be vacated and that of the Assessing Officer may be restored.
06. The assessee craves leave to add, amend, alter or delete any ground of appeal."
8. The assessee has taken the following grounds in the CO:
"1) That on the facts and in the circumstances of the case and in law, the reassessment proceedings initiated by the Ld. Assessing Officer are wholly without jurisdiction and bad in law, as the reasons recorded for reopening are based on incorrect and non-existent facts, namely, the erroneous assumption that the appellant had not filed the return of income for the relevant assessment year, whereas the return of income had duly been filed. Reopening founded on patently 19 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 incorrect facts reflects complete non-application of mind and renders the initiation of reassessment proceedings void ab initio and bad in law.
2) That on the facts and in the circumstances of the case and in law, the reassessment proceedings are vitiated due to mechanical and non-speaking approval granted under section 151 of the Income-tax Act, 1961, by the approving authority, i.e., the then Hon'ble CCIT. Pune, without any independent application of mind or verification of basic jurisdictional facts. Had the approving authority conducted even a minimal enquiry, it would have been evident that the appellant had filed the return of income and that assessment proceedings for the year under consideration had already been completed by the ACIT/DCIT Central Circle - 2, Nashik. Such mechanical sanction renders the entire reassessment proceedings invalid in law The aforesaid defect of reopening on incorrect and non-cogent facts goes to the very root of the assumption of jurisdiction and is not a mere procedural irregularity. Accordingly, such a jurisdictional infirmity is not curable under the provisions of section 292B or section 292BB of the Income-tax Act, 1961, as the absence of valid sanction with independent application of mind under section 151 renders the initiation of reassessment proceedings void ab initio.
3) That on the facts and in the circumstances of the case and in law, the Ld. Assessing Officer has grossly erred in initiating reassessment proceedings ignoring the fact that the assessment for the relevant assessment year had already been completed by the ACIT/DCIT Central Circle- 2, Nashik, vide assessment order dated 24/12/2019, wherein, all the issues (additions/disallowances) under consideration had been considered and adjudicated upon. Once a completed assessment exists, the same cannot be reopened merely on change of opinion or erroneous assumptions, and the impugned reassessment proceedings are therefore liable to be quashed.
4) That on the facts and in the circumstances of the case and in law, the reassessment proceedings having been initiated beyond a period offour years from the end of the relevant assessment year, the same are invalid as the mandatory jurisdictional condition prescribed under the proviso to section 147, namely, failure on the part ofthe appellant to disclose fully and truly all material facts necessary for assessment, has neither been alleged nor established in the reasons recorded. In the absence of such allegation, assumption of jurisdiction is barred by law.
5) That on the facts and in the circumstances of the case and in law, the Ld. Assessing Officer has erred in initiating reassessment proceedings without pointing out any specific failure on the part of the appellant to disclose fully and truly all material facts necessary for determining the income. In the absence of such a finding, the reassessment proceedings are legally unsustainable and deserve to be quashed.
6) That on the facts and in the circumstances of the case and in law, the reassessment proceedings are vitiated due to gross violation of the principles ofnatural justice, as the Ld. Assessing Officer failed to appreciate and deal with the detailed reply filed by the appellant in response to the show cause notice issued under section 148A(b) dated 16/01/2024. wherein it was categorically brought on record that the return of income had been duly filed and assessment under section 143(3) had already been completed. The order passed under section 148A(d) is non-speaking and ignores vital jurisdictional facts, rendering the subsequent notice issued under section 148 invalid.20 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026
7) That on the facts and circumstances of the case the Ld. Assessing officer has grossly eared in initiating the reassessment proceedings without appreciating the fact that notice issued u/s 148 of the I.T Act, dated 26/03/2024, not being in accordance with amended provisions of law (i.c. in as much as the same could not have been issued by JAO post introduction of Faceless Assessment Scheme) the same and also the assessment order passed are ab-initio void & bad in law as has been held by Hon'ble Jurisdictional High Court in a judgment. dated 03/05/2024 i.e. Hon'ble Bombay High Court in the case of Hexaware Technologies Limited vs ACIT (162 Taxmann.com 225).
Without prejudice to the above, the appellant submits:
8) That on the facts and circumstances of the case the Ld. Assessing officer has grossly eared in treating an amount of Rs.1,02,63,591/-, as business income without appreciating the fact that the property sold during the year under consideration was held by the appellant as investment, which fact had already been appreciated by the assessing officer while completing the original assessment u/s 143(3) of the Income tax Act, 1961, in spite of the said fact having been placed on the record of the FAO.
9) That on the facts and circumstances of the case the Ld. Assessing officer has grossly eared in making addition of Rs.89,97,348/-not only disregarding the provisions of law, but even disregarding the fact placed on record that the very amount being the business receipts was already offered in earlier years turnover, in support whereof had even furnished the copy of the audited financial statements (i.e., profit and loss account) of the immediate earlier year (i.e., A.Y 2016-17) thereby having taxed the very amount again (i.e., Double Taxation) and disregarding the fact that the issue under consideration was already considered and adjudicated upon in the course of completion of original assessment proceedings by the Ld. ACIT/DCIT, Central Circle - 2, Nashik, which fact was also placed on record by the Ld. Assessing Officer in the course of reassessment proceedings.
10) That on the facts and circumstances of the case the Ld. Assessing officer has grossly cared in treating the loans amounting Rs.28,50,000/-, and Rs. 38,00,000/-
raised from Smt. Panidevi Jain and Smt. Sumitra Prakash Jain aggregating to Rs. 66,50,000/- as unexplained credits, without appreciating the fact that appellant had duly discharged the onus cast upon him and also disregarding the fact that the issue under consideration was already considered and adjudicated upon in the course of completion of original assessment proceedings by the Ld. ACIT/DCIT, Central Circle -2, Nashik, which fact was also placed on record by the Ld. Assessing Officer in the course of reassessment proceedings.
11) That on the facts and circumstances of the case the Ld. Assessing officer has grossly cared in treating the unsecured loans amounting to Rs.1,36,00,000/-. as unexplained credits without having raised any specific query in respect of the same and also disregarding the fact that the issue under consideration was already considered and adjudicated upon in the course of completion of original assessment proceedings by the Ld. ACIT/DCIT, Central Circle-2, Nashik, which fact was also placed on record by the Ld. Assessing Officer in the course of reassessment proceedings.
12) That on the facts and circumstances of the case the Ld. Assessing officer has grossly eared in making addition of Rs.1,36,00,000/- treating the same as unexplained credits without appreciating the fact that the loans of 21 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 Rs.1,36,00,000/-were brought forward from the earlier year/were not raised during the year under consideration and as such the same could not have been treated as unexplained/liable to tax for the year under consideration and also disregarding the fact that the issue under consideration was already considered and adjudicated upon in the course of completion of original assessment proceedings by the Ld. ACIT/DCIT, Central Circle -2, Nashik, which fact was also placed on record by the Ld. Assessing Officer in the course of reassessment proceedings.
13) That on the facts and circumstances of the case the Ld. Assessing officer has grossly eared in disallowing deduction amounting to Rs. 2, 05, 80,981/-claimed u/s 54F of the Income tax Act, 1961 merely on the basis of the date of registration of agreement, without appreciating the law that it is the date of investment made in purchase of the new property which was required to be considered for claiming deduction u/s 54F and not the date of registration of Agreement and also disregarding the fact that the issue under consideration was already considered and adjudicated upon in the course of completion of original assessment proceedings by the Ld. ACIT/DCIT, Central Circle-2, Nashik, which fact was also placed on record by the Ld. Assessing Officer in the course of reassessment proceedings.
14) That on the facts and in the circumstances of the case and in law, since the initiation of reassessment proceedings itself is void, illegal and without jurisdiction, the consequential reassessment order passed pursuant thereto deserves to be quashed.
15) The appellant craves leave to add, amend, alter and/or vary any of the grounds at the time or before the hearing of this appeal."
9. The Ld. DR submitted that the reopening of the assessment was made on tangible information received through the Insight Portal indicating possible escapement of income. He submitted that the incidence of new information, even if certain issues were examined earlier, confers jurisdiction upon the Assessing Officer u/s 147 of the Act to re-examine the matter if there is reason to believe that income has escaped assessment. So far as the decision of the Hon'ble jurisdictional Bombay High Court in the case of Mira Bhavin Mehta Vs. Income Tax Officer, [2024] 464 ITR 778 (Bombay), is concerned he submitted that the same is misplaced, as the said case applies only where reopening is based purely on a reappraisal of the same material that was before the AO earlier, without any fresh input or tangible material. He submitted that even if certain procedural minor 22 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 defects occurred in the notice or order, such lapses are cured by Sec.292B and Sec.292BB of the Act. In so far as the finding of the Ld. CIT(A)/NFAC that the Assessing Officer completed the assessment u/s 143(3) of the Act and all the issues raised in the 148A(b) notice were already considered in the original assessment is concerned he submitted that the assessment order is a cryptic one and therefore the order of the Ld. CIT(A)/NFAC should be reversed and that of the Assessing Officer be restored.
10. The Ld. Counsel for the assessee, on the other hand, supported the order of the Ld. CIT(A)/NFAC in quashing the reassessment proceedings on account of reopening of the assessment on incorrect facts and also on account of change of opinion. He submitted that during the course of original assessment proceedings the Assessing Officer has issued a questionnaire along with notice u/s 142(1) of the Act. Referring to pages 152 to 158 of the paper book he drew attention of the Bench to the notice u/s 142(1) dated 18.11.2019 along with questionnaire for AY 2017-18. Referring to pages 153 to 159 of the paper book he drew attention of the Bench to the questionnaire as per annexure to notice u/s 142(1) where the Assessing Officer had put 25 queries to the assessee which contained the very issues on which the Assessing Officer has reopened the assessment by issuing notice u/s 148 of the Act. Referring to pages 160 to 168 of the paper book he drew attention of the Bench to the same and submitted that the assessee vide submission dated 23.08.2019 filed on 04.12.2019 in response to the notice u/s 142(1) of the Act dated 07.08.2019 has filed the relevant details during the course of original assessment proceedings. He submitted that the Assessing Officer issued another notice dated 10.12.2019 u/s 142(1) of the Act during the course of the original 23 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 assessment proceedings to which the assessee filed its reply dated 13.12.2019 filed on 19.12.2019, the details of which are at pages 173 to 175 of the paper book.
Referring to the copy of notice dated 16.01.2024 issued u/s 148A(b) of the Act for initiation of reassessment proceedings, copy of which is placed at pages 16 to 19 of the paper book, he submitted that as per para 4 of the Annexure 1 to notice u/s 148A(b) of the Act, it is mentioned that the assessee has not filed his return of income. He drew the attention of the Bench to para 4 of the said annexure which reads as under :
"4. It is seen that in spite of entering into the above mentioned transaction/s, you have failed to file your return of income for A.Y.2017-18, as per the provisions of section 139 of the Income Tax Act, 1961. Therefore, as per amended provisions of the Income Tax Act, 1961, you are being provided an opportunity of being heard by issuance of show- cause notice u/s 148A(b) of the Income Tax Act, 1961 and are required to show cause as to why notice u/s 148 should not be issued on the basis of above information which suggests that income chargeable to tax has escaped assessment in your case for A.Y.2017-18."
10.1 Referring to the following decisions he submitted that reassessment proceedings initiated on the basis of incorrect facts are not tenable in the eyes of law.
i. Dhiren Anantrai Modi Vs. ITO in Writ Petition No. 3224 of 2019 (Bombay);
ii. ITO Vs. M/s. Champaklal Mathurbhai Mehta in ITA No. 2253/Mum/2022 (ITAT Mumbai);
iii. ITO Vs. Surendra Dalal in ITA Nos. 7714 & 7490/Del/2019 (ITAT Delhi) and iv. Keshav Saran Vs. ACIT in ITA No. 382/Del/2019 (ITAT Delhi).
11. He submitted that the original assessment proceedings were completed on 24.12.2019 and the assessment year involved is AY 2017-18. He submitted that 24 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 notice u/s 148 of the Act for AY 2017-18 was issued on 27.02.2024, copy of which is placed at page 37 of the paper book which is beyond the period of four years from the end of the relevant assessment year. Referring to the following decisions he submitted that the reassessment proceedings cannot be initiated after the lapse of four years where the original proceedings are completed u/s 143(3) of the Act unless there was failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of the assessment.
i. DCIT Vs. Kolte Patil Integrated Township Limited in ITA Nos. 2023 and 2011/PUN/2024 (ITAT Pune);
ii. Ananta Landmark (P) Ltd. Vs. DCIT, [2021] 439 ITR 168 (Bombay);
iii. Idea Cellular Ltd. Vs. DCIT [2008] (301 ITR 407 (Bombay));
iv. Lupin Ltd. Vs. ACIT, [2014] 46 taxmann.com 396 (Bombay);
v. First Source Solutions Ltd. Vs. ACIT, [438 ITR 139 (Bombay)];
vi. Saraswat Co-operative Bank Ltd. Vs. ACIT, [2024] 166 taxmann.com 360 (Bombay) and vii. CIT Vs. Kelvinator of India Ltd., (320 ITR 561 (SC)).
11.1 He submitted that the reassessment proceedings cannot be initiated where there is no failure on the part of the assessee to disclose fully and truly all material facts necessary for completion of assessment. He submitted that this principle is still valid and applicable in the light of the following decisions :
i. Mira Bhavin Mehta Vs. ITO, [2024] 464 ITR 778 (Bombay);
ii. Ratnagiri Gas and Power Private Limited Vs. ACIT in W.P (C) 221/2023) (Delhi High Court) and 25 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 iii. Springer Healthcare Limited Vs. ACIT & Anr. in W.P.(C) 336/2025 & CM APP Nos. 1666/2025 (Delhi High Court).
12. He accordingly submitted that the Ld. CIT(A)/NFAC has rightly quashed the reassessment proceedings initiated by the Assessing Officer on account of reopening of the assessment on the basis of incorrect facts and also on account of change of opinion since all the issues were duly considered in the original assessment proceedings. So far as the arguments of the Ld. DR that the order of the Assessing Officer is very cryptic one he submitted that the assessee has no control over the manner in which the Assessing Officer writes the order. He submitted that the Assessing Officer has raised various queries on this very issue to which the assessee has replied by submitting the documents and evidences. If the Assessing Officer does not pass any detailed order in the manner in which the Ld. DR wants the assessee cannot be held responsible. He accordingly submitted that the appeal filed by the Revenue should be dismissed.
13. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. CIT(A) / NFAC and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that the assessee has filed the original return of income u/s 139 of the Act on 15.10.2017 declaring total income of Rs.71,48,090/-.
The Assessing Officer completed the assessment u/s 143(3) on 24.12.2019 accepting the returned income. On perusal of the details filed by the Ld. AR we find the Assessing Officer had issued notice u/s 142(1) of the Act vide notice dated 18.11.2019 copy of which is placed at pages 152 to 159 of the paper book. We 26 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 find the assessee in response to the said notice issued u/s 142(1) of the Act filed detailed replies on the issues raised in the present reassessment proceedings, details of which are placed at page 154 to 158 and 161 to 163 of the paper book. From the various details furnished by the assessee, we find the assessee had filed detailed replies on the very same issues on which the Assessing Officer has initiated reassessment proceedings, the details of which are as under :
27 ITA No.2758/PUN/2025 & CO No. 10/PUN/202614. However, a perusal of the notice issued u/s 148A(b) of the Act shows that the very basis of reassessment proceedings initiated by the Assessing Officer is that the assessee has not filed return of income despite entering into various transactions. Under these circumstances we have to see as to whether the reassessment proceedings are valid having been initiated on the basis of incorrect fact. Further when the original assessment has been completed u/s 143(3) by calling for various details from the assessee to which the assessee had made submissions and the Assessing Officer, after considering the submissions, has completed the assessment u/s 143(3) of the Act then whether he can initiate reassessment proceedings on the very same issues beyond the period of four years 28 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 from the end of the relevant assessment year and as to whether such reassessment proceedings amount to change of opinion or not.
15. We find that the Hon'ble Bombay High Court in the case of Dhiren Anantrai Modi Vs. ITO vide Writ Petition No. 3224 of 2019, order dated 15.12.2021 has quashed the reassessment proceedings which are passed on totally erroneous and incorrect facts and without non application of mind, copy of which is placed at pages 1 to 4 of the paper book. The relevant observations of the Hon'ble High Court read as under :
"1. Petitioner is impugning notice dated 26th March, 2019 issued under Section 148 of the Income Tax Act, 1961 (the Act) and the order dated 22nd October, 2019 disposing petitioner's objections to the re-opening.
2. Petitioner has challenged notice dated 26th March, 2019 on various grounds including non application of mind by the Assessing Officer while issuing notice.
3. We have considered the petition with documents annexed thereto, reply filed by respondent and also heard Mr. Gandhi and Mr. Pinto.
4. On bare perusal of the reasons it is quite evident that the reasons are based on totally erroneous and in correct facts and without non Purti Parab 2/4 420-WP-3224-2019.doc application of mind. In the reasons it is stated "The assessee is an individual and the Return of Income for A.Y. 2012-13 was filed on 24 th September, 2012 declaring total loss of Rs.4,21,11,382/- and the same was processed by the C.P.C. .......It is pertinent to mention here that in this case the assessee had filed return of income for the year under consideration but no assessment as stipulated under Section 2(40) of the Act was made and the return of income was only processed under Section 143(1) of the Act. In view of the above, provisions of clause (b) of explanation 2 to section 147 are applicable to facts of this case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment".
5. The fact is the return of income for A.Y. 2012-13 filed by petitioner on 24th September, 2012 has been assessed under Section 143(3) of the Act and the Assessment Order dated 31st March, 2015 has been passed. Therefore, the Assessing Officer has proceeded on erroneous factual basis that the return of income was only processed under Section 143(1) of the Act. That displays total non application of mind. In fact, petitioner's allegations that Respondent No.1 has sought to re-open the assessment on incorrect factual position that the return of income was only processed under Section 143(1) of the Act has not even been denied in the affidavit in reply which is filed by the same Assessing Officer. In paragraph no.2 of the affidavit in reply which is in response to paragraph no.1 and 2 of the Purti Parab 3/4 420-WP-3224-2019.doc petition, Respondent No.1 simply says that these are factual in nature and the notice under Section 148 dated 26th March, 2019 and the order disposing the objections and the notice dated 22 nd October, 2019 are issued in pursuance of the objective of completing reassessment in accordance with the procedures laid down.
29 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026On this ground alone, the notice dated 26th March, 2019 has to be set aside."
16. Similar view has been taken by the Mumbai Bench of the Tribunal in the case of ITO Vs. M/s. Champaklal Mathurbhai Mehta in ITA No. 2253/Mum/2022 and Delhi Bench of the Tribunal in the case of ITO Vs. Surendra Dalal in ITA No. 7714 & 7490/Del/2019 and in the case of Keshav Saran Vs. ACIT in ITA No. 382/Del/2019. We, therefore, do not find any infirmity in the order of the Ld. CIT(A)/NFAC in quashing the reassessment proceedings initiated on the basis of incorrect facts.
17. Further, it is an admitted fact that the original assessment was completed u/s 143(3) of the Act on 24.12.2019. The Assessing Officer during the course of original assessment proceedings has raised various queries to which the assessee had made detailed submissions. It is also an admitted fact that the very issues on which the Assessing Officer has initiated reassessment proceedings were examined by the Assessing Officer during the course of original assessment proceedings.
Therefore initiating reassessment proceedings on the very same issues which were subject matter of original assessment proceedings amount to change of opinion.
18. We find that the Hon'ble Bombay High Court in the case of Bombay Stock Exchange Ltd. Vs. Deputy Director of Income Tax (Exemption) and Ors. reported in 365 ITR 181 (Bombay) held that where not only were there all details relating to relevant issues disclosed by assessee in original assessment but queries with reference to same were also replied by assessee, reopening of assessment was unsustainable. The relevant observation of the Hon'ble High Court reads as under:
"7. Section 147 of the Act empowers the Assessing Officer to re-open a concluded assessment subject to certain restrictions as set out therein. It provides that if the 30 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any Assessment Year, he may, subject to the provisions of sections 148 to 153 assess or reassess such income and also other income chargeable to tax which had escaped assessment and which comes to his notice subsequently in the course of the proceedings. The first proviso to section 147 reads as under:-
"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 under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to 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;"
(emphasis supplied) A perusal of the said proviso makes it clear that where an assessment under sections 143(3) or 147 has been carried out for the relevant assessment year, no action under section 147 can be taken after the expiry of four years from the end of the relevant assessment year unless income chargeable to tax had escaped assessment 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 section 142(1) or section 148, or to disclose fully and truly all material facts necessary for its assessment for that assessment year.
8. The present case relates to Assessment Year 2005-06. The return of income for Assessment Year 2005-06 was taken up for scrutiny which culminated in an Assessment Order dated 26th November, 2007 under section 143(3) of the Act. Thereafter, Respondent No.1 issued the impugned notice dated 28th February, 2011 under section 148 of the Act which was after the expiry of four years from the end of the relevant assessment year. In such a scenario, the first proviso to section 147 of the Act was attracted and no action for initiation of re-assessment proceedings could be initiated unless the income chargeable to tax had escaped assessment by reason of the failure on the part of the Petitioner to disclose fully and truly all material facts. Mr Dastoor, the learned senior counsel appearing on behalf of the Petitioner, submitted that apart from making a bald assertion that there was a failure on the part of the Petitioner to disclose fully and truly all material facts necessary for its assessment, no details whatsoever were given with reference to the same. He therefore submitted that the initiation of re-assessment proceedings for the Assessment Year 2005-06 were bad-in-law and accordingly prayed for quashing the impugned notice. On the other hand, Mr Gupta, the learned senior counsel appearing on behalf of the Respondents, submitted that the reasons for initiating re-assessment proceedings under section 147 of the Act clearly stated that there had been a failure on the part of the Petitioner to disclose fully and truly all material facts necessary for its assessment and therefore, Respondent No.1 was fully justified in initiating the re-assessment proceedings.
9. It is true that the reasons for initiating re-assessment proceedings do in fact state that there was a failure on the part of the Petitioner to disclose fully and truly all material facts necessary for its assessment. However, as correctly submitted by Mr Dastoor, merely making this bald assertion was not enough. In this regard, the reliance placed by Mr. Dastoor on a Division Bench judgment of this Court in the case of Hindustan Lever Ltd. v/s R.B. Wadkar, Assistant Commissioner of Income Tax and others, reported in [2004] 268 ITR 332 is well founded. The relevant portion of the said judgment reads as under:-
31 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026"The reasons recorded by the Assessing Officer nowhere state that there was failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. It is needless to mention that the reasons are required to be read as they were recorded by the Assessing Officer. No substitution or deletion is permissible. No additions can be made to those reasons. No inference can be allowed to be drawn based on reasons not recorded. It is for the Assessing Officer to disclose and open his mind through reasons recorded by him. He has to speak through his reasons. It is for the Assessing Officer to reach the conclusion as to whether there was failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment for the concerned assessment year. It is for the assessing Officer to form his opinion. It is for him to put his opinion on record in black and white. The reasons recorded should be clear and unambiguous and should not suffer from any vagueness. The reasons recorded must disclose his mind. The reasons are the manifestation of the mind of the Assessing Officer. The reasons recorded should be self- explanatory and should not keep the assessee guessing for the reasons. Reasons provide the link between conclusion and evidence. The reasons recorded must be based on evidence. The Assessing Officer, in the event of challenge to the reasons, must be able to justify the same based on material available on record. He must disclose in the reasons as to which fact or material was not disclosed by the assessee fully and truly necessary for assessment of that assessment year, so as to establish the vital link between the reasons and evidence. That vital link is the safeguard against arbitrary reopening of the concluded assessment. The reasons recorded by the Assessing Officer cannot be supplemented by filing an affidavit or making an oral submission, otherwise, the reasons which were lacking in the material particulars would get supplemented, by the time the matter reaches the court on the strength of the affidavit or oral submissions advanced."
(emphasis supplied)
10. In the present case, admittedly there are no details given by the Assessing Officer (Respondent No.1) as to which fact or material was not disclosed by the Petitioner that led to it's income escaping assessment. There is merely a bald assertion in the reasons that there was a failure on the part of the Petitioner to disclose fully and truly all material facts without giving any details thereof. This being the case, the impugned notice is bad in law and on this ground alone the Petitioner is entitled to succeed in this Writ Petition."
19. We find the Hon'ble Bombay High Court in the case of Hexaware Technologies Ltd. vs. ACIT (supra) while quashing the re-assessment proceedings has held that there cannot be reopening of assessment based on change of opinion.
It has been held that the Assessing Officer does not have any power to review his own assessment when the assessee had provided all the relevant details and which 32 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 were considered by him before passing the assessment order u/s 143(3) of the Act.
The relevant observations of the Hon'ble High Court read as under:
"42. As regards issue no.6, respondent no.1 has no power to review his own assessment when the same information was provided and considered by him during the original assessment proceedings. We agree with petitioner that there cannot be a reopening based on a change of opinion. The claim of deduction under Section 80JJAA of the Act was made by petitioner in the return of income and petitioner had filed Form 10DA being the report of the Chartered Accountant. In the said Form, a note has been filed alongwith Form 10DA and it has specifically been submitted by petitioner that software development activity constitutes 'manufacture/ production of article or thing'. The claim of deduction under Section 80JJAA of the Act was also disclosed in the Tax Audit Report filed by petitioner alongwith the return of income. Further, during the assessment proceedings, the Assessing Officer had issued a notice dated 5th October 2017 asking for details of deduction claimed under Chapter VI of the Act. Petitioner vide a letter dated 13th November 2017 gave the details of deduction claimed under Chapter VI of the Act alongwith supporting documents. The Assessing Officer has passed the assessment order dated 30th November, 2017 allowing the claim of deduction under Section 80JJAA of the Act. The claim for deduction under Section 80JJAA of the Act was allowed by the Assessing Officer in the previous years as well. Hence, the present case is clearly a case of change of opinion or review of the original assessment order which is not permissible even under the new provisions.
43 In Siemens Financial Services (P.) Ltd. (Supra) in paragraphs 35 to 39 the Court held as under:
35. During the course of assessment proceedings, notice had been issued to petitioner. In reply to the notice under Section 143(2), petitioner had by its letter dated 6 th December 2018 recorded, "......... based upon our discussion during the course of the hearing ..................". The transaction wise summary of the software consumable was made available. This was considered during the assessment proceedings and the assessment order accepting revised return came to be passed.
36. We would agree with the submissions of Mr. Pardiwalla that if change of opinion concept is given a go by, that would result in giving arbitrary powers to the Assessing Officer to reopen the assessments. It would in effect be giving power to review which he does not possess. The Assessing Officer has only power to reassess not to review. If the concept of change of opinion is removed as contended on behalf of the Revenue, then in the garb of re-opening the assessment, review would take place. The concept of change of opinion is an in-
built test to check abuse of power by the Assessing Officer. As held in Dr. Mathew Cherian (Supra), whether under old or new regime of reassessment, it is settled position that the issues decided categorically should not be revisited in the guise of reassessment. That would include issues where query have been raised during the assessment and query have been answered and accepted by the Assessing Officer while passing the assessment order. As held in Aroni Commercials (supra) even if assessment order has not specifically dealt with that issue, once the query is raised it is deemed to have been considered and the explanation accepted by the Assessing officer. It is not necessary that an assessment order should contain reference and/or discussion to disclose his satisfaction in respect of the query raised.
37. The Assessing Officer does not have any power to review his own assessment when during the original assessment petitioner provided all the relevant information which was considered by him before passing the assessment order 33 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 under section 143(3) of the Act dated 23rd December 2018. Petitioner had debited an amount of Rs.6,41,87,931/- on account of software consumables in the profit and loss account and a detailed break-up of the said expenses were submitted before the Assessing Officer during the course of assessment proceedings vide a letter dated 6th December 2018. It is settled law that proceedings under section 148 cannot be initiated to review the earlier stand adopted by the Assessing Officer. The Assessing Officer cannot initiate reassessment proceedings to have a relook at the documents that were filed and considered by him in the original assessment proceedings as the power to reassess cannot be exercised to review an assessment. In petitioner's case the Assessing Officer having allowed the amount of software consumables as a revenue expenditure now seeks to treat the same as capital expenditure which is a clear change of opinion. Various judicial precedents have held that reassessment proceedings initiated on the basis of a mere change of opinion are invalid and without jurisdiction.
38. The Apex Court in Kelvinator of India Ltd.(Supra) emphasised on the difference between a power to review and the power to reassess. The Apex Court held that the Assessing Officer has no power to review but has only the power to reassess. The concept of 'change of opinion' must be treated as an in-built test to check abuse of power by the Assessing Officer. The relevant extract of the judgment is reproduced as under :-
".......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 fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of 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 "reason to believe" but also inserted the word "opinion" in section 147 of the Act. However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament re-introduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer............."
39. The Delhi High Court in Seema Gupta v. ITO held that the order under section 148A(d) and notice under section 148 of the Act should be set aside when the reassessment was initiated on a change of opinion where the same was discussed and verified by the Assessing Officer at the time of original assessment proceedings.
43.1 Therefore, the concept of change of opinion being an in-built test to check abuse of power by the Assessing Officer and the Assessing Officer having allowed the claim of deduction under Section 80JJAA of the Act in the assessment order dated 13th November 2017, now to disallow the same is based on a clear change of opinion. Reassessment 34 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 proceedings initiated on the basis of a mere change of opinion is invalid and without jurisdiction. On this ground also the impugned notice issued under Section 148 of the Act has to be quashed and set aside."
20. We find Hon'ble Bombay High Court in the case of Shri Dilip Laximan Powar vs. ITO (supra) has held that where the Assessing Officer in the scrutiny assessment proceedings has considered the issue of deposit of specified bank notes by the assessee and after examination of the same has passed the order the objection would come within the fold of change of opinion. Thus, the re-
assessment notice was not valid.
21. We find Hon'ble Bombay High Court in the case of M/s. Siemens Financial Services Pvt Ltd vs. DCIT (supra) has held that where the assessee claimed expenses of software consumables and submitted a detailed break-up of said expenses during course of assessment proceedings and the Assessing Officer after considering said submissions passed assessment order, the Assessing Officer would not have any power to review his own assessment order and reopen assessment on ground that software consumables were capital expenditure.
22. Similar view has been taken by the Hon'ble Bombay High Court in the case of First Source Solutions Ltd. Vs. ACIT reported in 438 ITR 139 (Bombay) and in the case of Saraswat Co-operative Bank Ltd. Vs. ACIT reported in (2024) 166 taxmann.com 360 (Bombay). In this view of the matter and in view of the detailed reasoning given by the Ld. CIT(A)/NFAC while quashing the reassessment proceedings on account of change of opinion and reopening on the basis of incorrect fact, we do not find any infirmity in the order of the Ld. CIT(A)/NFAC.
35 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026Accordingly, the order of the Ld. CIT(A)/NFAC is upheld and the grounds raised by the Revenue are dismissed.
23. Since we have dismissed the appeal filed by the Revenue, the grounds raised in Cross Objection by the assessee become infructuous and accordingly the same are dismissed.
24. In the result, the appeal filed by the Revenue as well as CO filed by the assessee are dismissed.
Order pronounced in the open Court on 18th May, 2026.
,/-
Sd/- Sd/- (ASTHA CHANDRA) (R. K. PANDA) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; दिन ां क Dated : 18th May, 2026 RK Digitally signed by Ravi Kumar Ravi Kumar Date: 2026.05.20 10:54:03 +05'30'
आदे श की प्रतितिति अग्रे तिि/Copy of the Order is forwarded to:
1. अपील र्थी / The Appellant;
2. प्रत्यर्थी / The Respondent
3. The concerned Pr.CIT, Pune
4. DR, ITAT, 'B' Bench, Pune
5. ग र्ड फ ईल / Guard file.
//True Copy // आदे शानुसार/ BY ORDER, Assistant Registrar आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune 36 ITA No.2758/PUN/2025 & CO No. 10/PUN/2026 S.No. Details Date Initials Designation 1 Draft dictated on 14.05.2026 Sr. PS/PS 2 Draft placed before author 15.05.2026 Sr. PS/PS Draft proposed & placed before 3 JM/AM the Second Member Draft discussed/approved by 4 AM/AM Second Member Approved Draft comes to the 18.05.2026 5 Sr. PS/PS Sr. PS/PS 6 Kept for pronouncement on 18.05.2026 Sr. PS/PS 7 Date of uploading of Order 20.05.2026 Sr. PS/PS 8 File sent to Bench Clerk 20.05.2026 Sr. PS/PS Date on which the file goes to 9 the Office Superintendent Date on which file goes to the 10 A.R. 11 Date of Dispatch of order