M. R. Shah And S. H. Vora, JJ.

Mr J P Shah, Mr Manish J Shah, Mr BS Soparkar, Advs. For the Appellant Rep by:
Mr Sudhir M Mehta & Mr KM Parikh, Advs. For the Respondent :

JUDGMENT

The judgment of the court was delivered by

Mr. Justice M. R. Shah J-As common question of law and facts arise in this group of petitions, they are heard, decided and disposed of by this common.

[1.1] In all these petitions under Article 226 of the Constitution of India, the respective petitioner - Sugarcane Factory Societies have challenged the impugned notices under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as "Act") issued by the concerned Assessing Officer to reopen the completed assessment of respective assessment years.

[2.0] That for the sake of convenience all these petitions can be bifurcated into two groups. One group in which the reopening has taken place beyond the period of 4 years from the end of the concerned / relevant assessment year and another group in which the reopening has taken place within the period of 4 years from the end of the concerned/relevant assessment year. The statement of particulars with respect to each petitioner falling under the first group and second group in the tabular form are as under:

Reopening beyond the period of 4 years from the end of the relevant assessment year

Reopening within the period of 4 years from the end of the relevant assessment year

[3.0] For the sake of convenience Special Civil Application No.17870/2014 is considered and treated as a lead matter and therefore, the facts of Special Civil Application No.17870/2014 are narrated more particularly when the basic facts in each of the petitions are common / similar.

[3.1] Facts leading to the Special Civil Application No.17870/2014 in nut-shell are as under:

[3.2] That the petitioner - assessee is a co-operative society manufacturing sugar out of sugarcane supplied by its members and has been assessed to tax under the Act for last several years. That the assessee filed its return of income for AY 2007-08 on 23.10.2007 declaring NIL income after set off of brought forward business loss of Rs. 1,15,65,482/- and unabsorbed depreciation of Rs. 2,18,71,543/-. That the return income was accepted and NIL income assessed under Section 143(3) of the Act on 24.12.2009.

[3.3] That thereafter beyond the period of 4 years from the end of the relevant assessment year AY 2007-08, the Assessing Officer has issued the impugned notice dated 27.03.2014 under Section 148 of the Act to reopen the assessment for the AY 2007-08 alleging inter alia that there has been escapement of income atleast of Rs. 44,90,71,133/-on account of the original assessment.

[3.4] That immediately on receipt of the said notice under Section 148 of the Act, the petitioner - assessee vide communication / letter dated 31.03.2014 requested to treat the original return of income under Section 139(1) of the Act filed on 23.10.2007 as the return of income filed in response to the notice under Section 148 of the Act. Simultaneously, the petitioner - assessee also requested to supply the copy of the reasons recorded to reopen the assessment for AY 200708.

[3.5] That thereafter vide communication dated 01.05.2014 the petitioner - assessee has been served with the copy of the reasons recorded for reopening the assessment for AY 2007-08 [reasons recorded for reopening the assessment shall be considered hereinafter].

[3.6] That on receipt of the copy of the reasons recorded for reopening the assessment for AY 2007-08, the petitioner - assessee immediately filed the objections with the respondent by a letter dated 30.06.2014, raising objections against reopening of the assessment for AY 200708 stating inter alia that at the time of original assessment proceedings, all the relevant facts were disclosed to the Assessing Officer who passed a regular assessment order under Section 143(3) of the Act; that on identical facts, similar/identical assessments have been made for past decades; that apart from the farmers, the petitioner - assessee has other two types of members being General Members and Nominal Members and the profit is to be distributed on the basis of shareholding and not on the basis of cane supplied by the cane growers; that the method of accounting of the assessee is the same for all the years upto AY 200607 and years thereafter and the assessment for all these years have been completed in the identical manner as is done under Section 143(3) of the Act in AY 2007-08; that because of the adhoc payments to cane growers, there was an outstanding liability on the last day of the accounting year regarding which an entry came to be passed because the assessee is following mercantile system of accounting which tallies with the subsequent actual payment. It was also submitted that the Statutory Minimum Price (hereinafter referred to as "SMP") declared by the Government under Sugar (Control) Order, 1966 (hereinafter referred to as "Control Order") is only the minimum price payable by the sugar factory and therefore, any payment made in excess to the SMP by now stretch of imagination can be said to be distributing the profits. It was further submitted that the co-operative sugar factories save the individual cane growers from the exploitation of the private sugar barons. It was further submitted that in the matter of assessee's own case for the AYs 1980-81 to 1990-91, learned CIT(Appeals) sent the matter back to the Assessing Officer to find out whether by making the payment to the crane growers in excess to the SMP declared by the Government under the Control Order whether the society had really passed on the profits to its members in the form of payment of final price and thereafter the Assessing Officer had held that there was no such passing of a profit. It was submitted that therefore even Rule of Constituency would also demand that the department in a later year should not somersault. It was also further submitted on behalf of the assessee that as such there was no failure on the part of the petitioner - assessee in not disclosing truly and fully all the necessary materials relevant for assessment and therefore, reopening of the assessment beyond the period of 4 years is not permissible and justified.

[3.7] That vide letter dated 14.10.2014 the Assessing Officer has rejected the objections of the petitioner to notice under Section 148 of the Act. Hence, the petitioner - assessee has preferred the present Special Civil Application under Article 226 of the Constitution of India.

[4.0] Shri J.P. Shah, learned Advocate has appeared on behalf of the respective petitioners - assessees in Special Civil Application Nos.17870/2014, 17773/2014, 18784/2014, 18785/2014 18787/2014, 18795/2014, 2362/2015, 2364/2015, 2368/2015 to 2371/2015, 2373/2015, 2375/2015 and 2638/2015 to 2641/2015 and Shri B.S. Soparkar, learned Advocate has appeared on behalf of the petitioners - assessees in Special Civil Application Nos.3676/2015 to 3678/2015, 3682/2015 to 3684/2015 and 5009/2015 to 5011/2015.

[4.1] Shri Sudhir Mehta, learned Advocate and Shri K.M. Parikh, learned Advocate have appeared on behalf of the Revenue - concerned Assessing Officers in respective Special Civil Applications.

[4.2] At the outset it is required to be noted that as such in all these petitions in which the reopening of the assessment is within 4 years or beyond 4 years from the end of the relevant assessment year, the common ground/reason to reopen the assessment is the difference between actual price paid to the cane growers and the SMP declared by the Government and the Assessing Officer is of the opinion that the difference between the actual price paid to the cane growers and the statutory minimum price is not the price of sugarcane but is distribution of profits and that the amount paid to the cane growers in excess to the SMP declared by the Government is passing of the profit/distribution of profits and that there has been escapement of income to the extent of excess amount paid i.e. the amount paid in excess to the SMP declared by the Government. In 4 cases i.e. Special Civil Application Nos.17870/2014, 18785/2014, 18787/2014 and 2638/2015 and some other petitions the assessment is reopened on some other grounds/reasons also which shall be considered and dealt with hereinafter. However, the common reason/ground to reopen the assessment is with respect to the price paid to the cane growers in excess to the SMP declared by the Government and treating the said difference as distributing the profits/passing of the profits.

Submissions made by learned Advocates appearing on behalf of the respective petitioners - assessees in the cases where the reopening is beyond the period of 4 years.

[4.3] Shri J.P. Shah, learned Advocate appearing on behalf of some of the assessees has vehemently submitted that the impugned notices to reopen the concluded assessment beyond the period of 4 years is absolutely illegal, invalid and not justifiable.

It is further submitted that the condition precedent for assumption of jurisdiction to reopen the completed assessment beyond the period of 4 years as provided under Section 147 of the Act is not satisfied at all.

[4.4] It is submitted that as per proviso to Section 147 of the Act, only in a case where the Assessing Officer is of the opinion that there was any failure on the part of the assessee to disclose truly and fully all necessary material for assessment, the reopening of the assessment beyond 4 years is permissible. It is submitted that in none of the cases it is alleged in the notice that there was any failure on the part of the assessee to disclose fully or truly all necessary material for assessment. It is submitted that therefore the assumption of jurisdiction to reopen the assessment in the present case is wholly without jurisdiction. In support of his above submissions, Shri Shah, learned Advocate appearing on behalf of the assessees has relied upon the following decisions of this Court.

1. Austin Engineering Co. Ltd. v. Joint Commissioner of Income Tax [2009] 312 ITR 70 (Guj.)
2. Gujarat State Co-op. Agri. and Rural Development Bank Ltd. v. Deputy Commissioner of Income-tax 337 ITR 447 (Guj.)
3. Commissioner of Income-tax v. Bipin Vadilal [1999] 238 ITR 1022 (Guj.)
4. Gujarat Lease Financing Ltd. v. Deputy Commissioner of Incometax 360 ITR 496 (Guj.)

[5.0] Shri Soparkar, learned Advocate appearing on behalf of some of the petitioners - assessees in addition to the above has further submitted that in the present case the Assessing Officer has reopened the completed assessment on the basis of the subsequent judgment of the Hon'ble Supreme Court in the case of Deputy Commissioner of Income Tax v. Shri Satpuda Tapi Parishar SSK Ltd. reported in [2010] 326 ITR 42 (SC). It is vehemently submitted by Shri Soparkar, learned Advocate appearing on behalf of some of the assessees that there cannot be any reopening beyond the period of 4 years on the basis of the subsequent Supreme Court decision and that too without whisper of failure on the part of the assessee to truly and fully disclose all material facts. In support of his above submissions he has relied upon the following decisions of this Court.

1. Austin Engineering Co. Ltd. v. Joint Commissioner of Income Tax [2009]312 ITR 70 (Guj.)
2. Gujarat State Co-op. Agri. and Rural Development Bank Ltd. v. Deputy Commissioner of Income-tax 337 ITR 447 (Guj.)
3. Commissioner of Income-tax v. Bipin Vadilal [1999]238 ITR 1022 (Guj.)
4. Gujarat Lease Financing Ltd. v. Deputy Commissioner of Incometax 360 ITR 496 (Guj.)

[5.1] It is further submitted by Shri Soparkar, learned Advocate appearing on behalf of some of the assessees that even the reasons which have been recorded by the Assessing Officer by no stretch of logic lead a prudent person to form a reason to believe that the income has escaped assessment. It is further submitted that it is mandatory that "reason to believe" must necessarily show, indicate and communicate why and for what grounds/cause any income has escaped assessment. It is submitted that reasons recorded must be germane, prudent and disclose prima facie belief that the income has escaped assessment. It is submitted that when the reasons do not show any nexus or connection with the allegation of under assessment, they fall in the realm of suspicion, surmises and conjectures. It is submitted that reasons to believe must have a rational connection and should be relevant for the formation of a belief regarding escapement of income and should not be extraneous or irrelevant, otherwise they will be considered as invalid since they do not meet the statutory preconditions/prerequisites. In support of his above submissions he has relied upon the following decisions of the Delhi High Court.

1. Commissioner of Income-tax-V v. Orient Craft Ltd. (2013) 354 ITR 536 (Del)
2. G.S. Engineering & Construction Corporation v. Deputy Director of Income-tax (International Taxation) & Ors. 357 ITR 335 (Del)

[5.2] It is further submitted by Shri Soparkar, learned Advocate appearing on behalf of some of the petitioners that in the present case even the formation of opinion by the Assessing Officer that he has reason to believe that the income has escaped assessment is a borrowed satisfaction from another officer. It is submitted that a look at the provisions of Section 147 of the Act shows that prerequisite condition, which can be said to be sine qua non is that the Assessing Officer "has reason to believe" that the income chargeable to tax has escaped assessment. It is submitted that Assessing Officer does not have any jurisdiction to review its own order, and that, the opinion formed by the Assessing Officer, on the opinion of another Assessing Officer, could not be made basis to initiate the reassessment proceedings, as it can be described to be "borrowed satisfaction". In support of his above submissions, he has heavily relied upon the decision of the Rajasthan High Court in the case of Commissioner of Income-tax v. Shree Rajasthan Syntex Ltd. reported in [2009] 313 ITR 231 (Raj.).

[5.3] It is submitted that in the instant group of petitions, in every reason to believe it is stated that the learned CIT(Appeals) pursuant to the order of Hon'ble Supreme Court came to the conclusion that (in that particular case that was before the Hon'ble Supreme Court and which was remanded back to him) it was the case where profits were appropriated in the guise of purchase price. It is submitted that in the present case the Assessing Officer has solely and simply reiterated "that CIT(Appeals)'s findings" in order to held in the case of the assessee before this Court that the income has escaped assessment in the case of these / present assessees. It is submitted that therefore such borrowed satisfaction in the absence of any application of mind and any real finding in the case of the assessee do not constitute valid reason to believe that the income has escaped assessment. It is vehemently submitted that the reason to believe cannot be substituted by reason to suspect. In support of his above submissions he has relied upon the decision of the Delhi High Court in the case of Orient Craft Ltd. (Supra).

[5.4] Shri Soparkar, learned Advocate has further submitted that in the present cases prices paid to the cane growers is infact the business expenditure, hence no income has escaped assessment. In support of his above submissions, he has heavily relied upon the following decisions.

1. Commissioner of Income-tax v. Solapur District Co-op. Milk Producers & Process Union Ltd. 315 ITR 304 (Bombay)
2. Commissioner of Income-tax v. Mehsana District Co-op. Milk Producers Union Ltd. 282 ITR 24 (Guj.)
3. Commissioner of Income-tax v. Manjara Shetkari Sahakari Sakhar Karkhana Ltd. 301 ITR 191 (Bombay)

[5.5] It is further submitted by Shri J.P. Shah, learned Advocate appearing on behalf of some of the petitioners that infact there was no tangible material available with the Assessing Officer to form an opinion that the income chargeable to tax has escaped the assessment. It is submitted that infact solely on the basis that the concerned sugarcane growers are paid the prices in excess to the SMP fixed by the State Government under the Control Order, the amount paid in excess to the SMP is considered to be parting of the profits and/or distributing the profits and chargeable to tax. It is vehemently submitted that as such there was no material whatsoever before the Assessing Officer that what was the prevailing price paid to the cane growers by other co-operative societies at the relevant time and/or whether the price paid in excess to the SMP declared by the State under the Control Order was so exorbitant and/or too excessive which can be said to be passing of the profit and/or distributing the profits. It is submitted that any amount paid in excess to the SMP declared by the State under the Control Order ipso facto cannot be said to be passing of the profits and/or distributing the profits. It is submitted that therefore in absence of any tangible material available with the Assessing Officer, the formation of opinion by the Assessing Officer that the income has escaped assessment is vitiated. Shri Shah, learned Advocate appearing on behalf of some of the petitioners has taken us to relevant provisions of the Control Order and the mechanism while determining the SMP by the State. He has also vehemently submitted that as such the SMP declared by the State under the Control Order is the minimum price to be paid by the society to the concerned cane growers. It is submitted that therefore every payment or price paid to the cane growers in excess to the SMP cannot be said to be per se passing of the profits and/or distributing the profits and chargeable to tax as alleged by the Assessing Officer.

[5.6] It is submitted that in any case without any allegation by the Assessing Officer that there was any failure on the part of the assessee in truly and fully disclosing the relevant materials for assessment, the reopening of the assessment beyond the period of 4 years is wholly without jurisdiction, impermissible and invalid.

Submissions on behalf of the petitioners in cases where the reopening is within period of 4 years

[6.0] Shri Shah, learned Advocate and Shri Soparkar, learned Advocate appearing on behalf of the respective assessees have vehemently submitted that as such the reopening of the assessment within 4 years is also absolutely illegal, impermissible and wholly without jurisdiction, as the same is solely on the basis of change of opinion by the concerned Assessing Officer. It is vehemently submitted that the foundation of the reasons to believe escapement of income is on mere change of opinion without any tangible material. It is submitted that on mere change of opinion the reopening of the assessment is not permissible as held by the Hon'ble Supreme Court in the case of Commissioner of Income-tax v. Kelvinator of India Ltd. reported in 320 ITR 561

[6.1] It is further submitted by the learned Advocates appearing on behalf of the respective petitioners that at the time of original assessment the Assessing Officer considered all the issues in detail. It is submitted that on the issue having inquired at the time of original assessment, on mere change of opinion it is not permissible to reopen the concluded assessment. It is submitted that at the time of original assessment, inquiry was made and the issue was gone into detail and once having taken the facts and circumstances into consideration and formed an opinion and thereafter assessment was concluded, thereafter it is not open for the Assessing Officer to reopen the same due to change of opinion. It is submitted that when assessee's claim was processed at length and after calling for detail explanation same was accepted, merely because certain element or angle was not in the mind of Assessing Officer while accepting such a claim, could not be a ground for issuing notice under Section 148 of the Act for reassessment, where the Assessing Officer allowed the assessee's claim after making a detail inquiry, thereafter he cannot initiate reassessment proceedings on the basis of the same material, taking a view that the said claim was wrongly allowed. In support of above submissions, Shri Soparkar, learned Advocate appearing on behalf of some of the petitioners has relied upon the following decisions of this Court.

1. Cliantha Research Ltd. v. Deputy Commissioner of Incometax (2013) 35 taxmann.com 61 (Gujarat)
2. Sarla Rajkumar Verma v. Assistant Commissioner of Incometax (2014) 43 taxmann.com 372 (Gujarat)

3. Niko Resources Ltd. v. Assistant Director of Incometax (2015) 51 taxmann.com 568 (Gujarat)
[6.2] Shri Shah, learned Advocate appearing on behalf of some of the petitioners has further submitted that even in the case of most of the petitioners co-operative societies for number of decades, assessment came to be made accepting the higher price paid to the growers to be the purchase price and the same came to be done in Section 143(3) assessment. It is submitted that in other words, in original assessment what was accepted to be the price of sugarcane is alleged now as payment made in excess is on a change of opinion. It is submitted that in case of some of the sugar factories on identical facts, the earlier learned CIT(Appeals) had remanded the matter for AY 1980-81 to 1990-91 to ascertain whether any part of the price paid was not the price but was part of profit to the cane growers and the Assessing Officer in consequential orders for these years did not make any addition by disallowing part of the price, and therefore, for all the succeeding years also, the entire price paid came to be allowed in case of all sugar mills, the way it was allowed in all the years in past. It is submitted that therefore on the principle of Rule of Consistency the Assessing Officer is not justified in reopening the assessment on the aforesaid issue/ground/reasons.

[6.3] Shri J.P. Shah, learned Advocate appearing on behalf of the petitioners of Special Civil Application No.17870/2014 and 2638/2015 has submitted that in these cases the second reason for reopening the assessment for AY 2007-08 is with respect to unabsorbed depreciation permitted to be carried forward beyond a period of 8 years. It is submitted that in view of the decision of the Division Bench of this Court in the case of General Motors India Ltd. v. Deputy Commissioner of Income-tax reported in (2013) 354 ITR 244 (Guj.) and another decision in the case of Sahkari Khand Udyog Mandal Ltd. v. Assistant Commissioner of Income-tax reported in (2015) 370 ITR 107 on the aforesaid ground even within a period of 4 years, the reopening is not valid.

[6.3.1] It is submitted that in the presence case the reopening of the assessment is beyond the period of 4 years and therefore, there must be a failure on the part of the assessee to disclose truly and fully all the materials necessary for assessment. It is submitted that even in the present case the reasons itself concede that there was full and true disclosure regarding the material fact with respect to the unabsorbed depreciation carried forward. It is submitted that in Special Civil Application No.17870/2014 in the matter of Shree Chalthan Vibhag Khand Udyog Sahakari Mandli Ltd., the reasons itself record "Scrutiny of statement of unabsorbed business loss and depreciation allowance revealed that the brought forward unabsorbed depreciation of Rs. 12,32,03,579/-(before set off from current year's profit) includes unabsorbed depreciation of Rs. 7,80,40,419/- pertaining to the period prior to AY 1997-98. Since the unabsorbed depreciation for the period prior to AY 1997-98 was allowed to be carry forward & set off for eight assessment years only, as per provisions of Income Tax Act, set off of the unabsorbed depreciation pertaining to the period prior to 1997-98 against the income of AY 2007-08 was incorrect and is required to be withdrawn". It is further submitted that in Special Civil Application No.2638/2015 in the matter of Shree Maroli Vibhag Khand Udyog Sahakari Mandli Ltd. in the reasons recorded it is stated that on verification of record, it is observed that the assessee was allowed to carry forward business loss and unabsorbed depreciation pertaining to different preceding AYs (i.e. from AY 1978-79 to 1996-97 and AY 1997-98 to AY 2008-09)".It is submitted that therefore, on the second reason also the reopening of the assessment is not permissible so far as aforesaid two Special Civil Applications are concerned.

[6.4] Shri Shah, learned Advocate appearing on behalf of petitioners of Special Civil Application Nos.17875/2014 and 18787/2014 has submitted that the third reason for reopening of the assessment in the aforesaid two cases is with respect to wrong calculation under section 145A of the Act. It is submitted that in both the cases as such there was no failure on the part of the petitioner to disclose fully and truly any material facts necessary for assessment. It is submitted that even in the reasons recorded in Special Civil Application No.19785/2014, the Assessing Officer has stated that "on verification of computation of income for the year under consideration, it is seen that the assessee has claimed loss of Rs. 5,22,21,804/- after adjustment u/s. 145A of the Act. In this case, the assessee society has wrongly calculated adjustment u/s.145A. The correct working u/s.145A is as under..". It is submitted that therefore even the Assessing Officer concedes that all facts were on record but the Assessing Officer who passed under Section 143(3) assessment order committed an error in accepting the calculation of the petitioner. It is submitted that on the aforesaid the reopening of the assessment beyond 4 years is not permissible.

[6.5] It is submitted that similarly the reopening of the assessment in Special Civil Application No.18787/2014 on the aforesaid ground / reasons that there has been wrong adjustment under Section 145A is not permissible as there is no allegation whatsoever that there was any failure on the part of the assessee to disclose truly and fully all the materials necessary for assessment.

[6.6] Shri Shah, learned Advocate appearing on behalf of the petitioners of Special Civil Application Nos.2369/2015, 2364/2015 and 2373/2015 has also vehemently submitted that in the aforesaid cases the reopening of the assessment which is beyond the period of 4 years is not permissible as the reopening is solely on mere change of opinion of the Assessing Officer. It is submitted that the issues / reasons on which the assessment is sought to be opened were as such considered in detail by the Assessing Officer while passing 143(3) assessment order in detail. Making above submissions and relying upon the above decisions, learned Advocates appearing on behalf of respective petitioners have requested to allow the present Special Civil Applications and quash and set aside the impugned notices under Section 148 of the Act to reopen the completed assessment of respective assessment years.

[7.0] All these petitions are opposed by Shri Sudhir Mehta, learned Advocate and Shri K.M. Parikh, learned Advocate appearing on behalf of the Revenue in respective petitions. Learned Advocates appearing on behalf of the Revenue have vehemently submitted that in the facts and circumstances of the case and more particularly when the notices under Section 148 of the Act have been issued and the assessments have been reopened on recording the reasons and having satisfied that the income chargeable to tax has been escaped, it is requested not to entertain the present petitions at this stage.

[7.1] It is vehemently submitted that when the State Government declared the final purchase price under the Control Order after due procedure as required and after considering the element of profit, expenditure etc., it was not open for the sugarcane society to pay more than the SMP declared and therefore, any amount paid in excess to the SMP is nothing but sharing the profits and/or distributing the profits and therefore, the same is required to be included in the income of the assessee society.

[7.2] It is further submitted that the Assessing Officer noticed that the petitioner society has a practice of deciding the purchase price of sugarcane after finalizing its account profits in the financial year subsequent to procurement of sugarcane and till the time of finalization of purchase price, adhoc payments are distributed amongst the sugarcane farmers. It is submitted that the sugar purchase price is declared after arriving at a profit earned by the society during the year of procurement of sugarcane. It is submitted that thus the adhoc payments and final payments contained the element of profit of the society, which has been distributed amongst the sugarcane growers in the guise, "cane price" without payment of any income tax on the profit so earned and therefore, the impugned reopened reassessment proceedings are absolutely just and proper. It is submitted that as respective societies failed to fully and truly disclose all material facts during the relevant assessment proceedings, the cases have been rightly reopened under Section 147 of the Act after issuing notice under Section 148 of the Act.

[7.3] It is further submitted that as such the SMP is finalized by the Central Government on the recommendation of the expert panel which considers the cost of production of sugarcane + adequate profit margin of farmers and profit margin of the sugarcane companies. It is submitted that the SMP is a fair price determined to protect the interest of the farmers as well as the sugarcane factories and applies uniformly to the co-operative sugar factories and privately owned sugar factories across India. It is submitted that the resolutions passed by the assessee society only endorse the said price. It is submitted that in the present cases the Assessing Officer has proposed to disallow only the amount paid over and above the SMP as distribution of profit amongst the members. It is submitted that even the reopening of the assessment in case of some of the petitioners has been on the ground of unabsorbed business loss carried forward. It is submitted that the carried forward unabsorbed loss includes unabsorbed loss pertaining prior to AY 1997-98 and since the unabsorbed depreciation for the period prior to AY 1997-98 was allowed to be carried forward and set off for 8 assessment years only, as per the provisions of the Act, set off of the unabsorbed depreciation pertaining to period prior to 1997-98 is allowed and set off against the income of AY 1997-98, was incorrect and required to be withdrawn. It is submitted that failure to do so has resulted in incorrect carry forward of unabsorbed depreciation on which short levy of tax has been worked out and therefore, on the aforesaid reason/ground reopening the assessment is absolutely just and proper as the income chargeable to tax has escaped assessment.

Making above submissions, it is requested to dismiss the present Special Civil Applications.
[8.0] Heard learned Advocates appearing for respective parties at length.

In all these petitions under Article 226 of the Constitution of India, the respective petitioners - co-operative societies have challenged the impugned notices under Section 148 of the Act reopening the assessment for respective assessment years and the assumption of jurisdiction under Section 147 of the Act.

[8.1] As observed hereinabove as such this group of petitions can be bifurcated into two groups. One group in which the reopening of the assessment for respective AYs is beyond the period of 4 years and second group in which the reopening of the assessment is within the period of 4 years.

[8.2] Now, so far as the reopening of the assessment beyond the period of 4 years is concerned, at the outset it is required to be noted that the assessment can be reopened beyond the period of 4 years, if an only if the income chargeable to tax has escaped assessment by reason of failure on the part of assessee to disclose fully and truly all material facts necessary for its assessment for that assessment year, even if the Assessing Officer is authorized to make reassessment in the event of his having reasonable belief that any income chargeable to tax has escaped assessment for any assessment year. As per the first proviso to Section 147 of the Act, assessment can be reopened under Section 147 of the Act after expiry of 4 years only if the assessee had failed to make a return under Section 139 of the Act or in response to the notice issued under Section 142(1) or Section 148 of the Act, he failed to disclose truly and fully all material facts necessary for the assessment. Once all the primary facts were before the Assessing Authority, no further assistance is required by way of disclosure. Once the case of the assessee is covered by the first proviso to Section 147 of the Act, the reassessment proceedings beyond the period of 4 years from the end of the relevant year would be without any jurisdiction and bad in law, if all material facts were furnished and there remained no omission or failure on the part of the assessee to disclose truly and fully all material facts.

[8.3] In the present case, a perusal of the reasons recorded show that there is not even a whisper to the effect that income has escaped assessment on account of any failure on the part of the petitioner assessee to disclose fully and truly all material facts necessary for its assessment. The reasons recorded to reopen the assessment reads as under:

REASONS RECORDED TO REOPEN THE ASSESSMENT

"The assessee engaged in the manufacturing and selling of sugar and its bye products and Absolute alcohol filed its return of income for A.Y. 200708 on 23.10.2007 declaring NIL income after set off of brought forward Business Loss of Rs. 1,15,65,482/- and Unabsorbed depreciation of Rs. 2,18,71,543/- (Total Rs. 3,34,37,025/). The returned income was accepted and NIL income assessed u/s.143(3) of I.T. Act 1961 on 24.12.2009. The assessee claimed to carry forward of Unabsorbed depreciation of Rs. 10,13,32,036/.

It was noticed from the statement of computation of income and statement showing the carry forward and set off of Business losses and Unabsorbed depreciation attached with the Return of Income that the assessee had set off Business loss of Rs. 1,15,65,482/- and Unabsorbed depreciation of Rs. 2,18,71,543/- (Total Rs. 3,34,37,025/-) against the current year income of Rs. 3,34,37,025/-. Scrutiny of statement of unabsorbed business loss and depreciation allowance revealed that the brought forward unabsorbed depreciation of Rs. 12,32,03,579/-(before set off from current year's profit) includes unabsorbed depreciation of Rs. 7,80,40,419/pertaining to the period prior to A.Y. 1997-98. Since the unabsorbed depreciation for the period prior to A.Y. 1997-98 was allowed to be carry forward & set off for eight assessment years only, as per provisions of Income Tax Act, set off of the unabsorbed depreciation pertaining to the period prior to 1997-98 against the income of A.Y. 2007-08 was incorrect and is required to be withdrawn. Failure to do so has resulted in incorrect carry forward of unabsorbed depreciation to the tune of Rs. 7,80,40,419/- on which short levy of tax works out to Rs. 2,34,09,125/- (Potential) as per working provided hereunder:

 

Unabsorbed depreciation allowed to be carry forward

 

The correct carry forward of unabsorbed depreciation after set off from balance profit of A.Y. 2007-08 worked out to Rs. 2,32,91,617/-.

Further, it was noticed from the statement of computation of income filed along with Return of Income that the assessee had disallowed depreciation amounting to Rs. 1,82,00,000/- debited to Profit and Loss account of Sugar Unit, whereas the provisions for depreciation amounting to Rs. 41,22,091/- debited to Production and Trading Account of Distilery Plant was not disallowed and added back. This resulted in under assessment of income to the extent of Rs. 41,22,091/- on which short levy of tax worked out to Rs. 12,33,627/- (Potential).

The assessee is a co-operative society engaged in activity of manufacturing sugar from sugar cane purchased form its members, who are shareholders of the said co-operative society. It has come to notice during the course of assessment proceedings in the cases of sugarcane growers that the co-operative sugar factories of South Gujarat are following a practice of deciding the purchase price of sugarcane after finalization of its accounts and its profits in the financial year subsequent to procurement of sugarcane. Till the time of finalization of the purchase price, adhoc payments are distributed amongst the sugarcane farmers. The final purchase price is declared after arriving at the profits earned by the co-operative sugar factories during the year of procurement of sugar cane. Thus, the ad hoc payments and the final payments contain an element of profits of the co-operative sugar factories, which are distributed amongst the sugar cane growers in the guise of 'cane price', without payment of any income tax on the profits so earned.

Payment of sugarcane prices by sugarcane factories to sugarcane growers is governed by 'The Sugarcane (Control) Order (SCO), 1966' made by the Central Government, by virtue of the powers vested with it under 'The Essential Commodities Act, 1955'. By this order, fixation of a Statutory Minimum Price (SMP) by the Central Government every year, for every sugar factory, came into place. This price is fixed as per the recommendations of the Commission for Agricultural Costs and Prices, after consulting the State Governments, associations of sugar industries and sugarcane growers and after considering all factors like cost of production of sugarcane, returns to growers from alternate crops, availability of sugar to consumers at fair price, sale price of sugarcane produced by the sugar factory, recovery of sugar from sugarcane and realization made by the sugar factory from byproducts. Thus, the exercise of determining the SMP/FRP is undertaken in a scientific way using all accepted economic, technological and statistical tools by specialists and experts of each of such fields.

The activity of manufacturing of sugar by a co-operative society is not eligible for any kind of deduction u/s.80P of the Act and the entire profits earned from such activity is liable to be taxed. During the course of assessment proceedings, made in the cases of M/s. Shree Chalthan Vibhag Khand Udyog Sahakari Mandli Ltd. and M/s. Shree Khedut Sahakari Khand Udyog Mandli Ltd., it was seen that those sugar factories had purchased sugarcane over and above the Minimum Support Price (MSP)/Fair and Remunerative Price (FRP) declared by the Central Government. It was also seen therein that, during a crushing season, the co-operative sugar factories of South Gujarat are in the practice of making payment to sugarcane suppliers from time to time on adhoc basis and the final amount to be paid for sugarcane (Rupees per metric ton) are fixed after the end of the crushing season, i.e. after about 5 to 6 months from the end of financial year, at the time of finalization of its accounts. The cane price so decided is not based on any formula or working. Generally, it is a trade practice that the purchase price is decided before the actual purchase of the commodity. In this case, the amount to be paid to sugarcane suppliers is neither before the crushing season nor during the crushing season. This practice of deciding the cane price after the end of crushing season at the time of finalization of their accounts, was being followed by them so that these sugar factories comes to know of the profits earned by it in that crushing season by that time and so that the cane purchase price can be so adjusted that there would be no incidence of tax in the hands of the co-operative society or in the hands of their members. This was seen to have been done with the motive to substantially suppress the profits of the co-operative sugar societies by the distribution of profit as purchases from its members. The entire profits of the sugar factories, which otherwise would have been taxed in their hands, are distributed amongst its members, in the guise of 'cane price'. It is also noted that a sugar unit cannot pay purchase price for sugar cane below the SMP/FRP decided by the Central Government. Thus, it is reasonable to consider that in absence of any purchase price fixed by the co-operative sugar factories for sugar cane, it would be reasonable to adopt the SMP/FRP as the purchase price.

The case of the assessee for the year under consideration was also perused from this angle. It was seen that the assessee has purchased 1049359.71 Metric tons of sugarcane during the year. The average sugarcane purchase price of the assessee for the year is Rs. 1332.15 per M.T., as against the MSP/FRP of Rs. 982.5/- per M.T. declared by the Central Government. All the sugarcane is purchased by the assessee from its members.

All the members of the co-operative society are shareholders of the society and are interested in the co-operative society. In order to avoid incidence of tax, the assessee co-operative society has made excess payment of Rs. 349.65/- (1332.15982.5) per Metric tons. Since the total purchases of the assessee for the year is 1049359.71 M.T., the excess payment made during the year to its members works out to Rs. 36,69,08,623/- (349.65 x 1049359.71). The provisions of section 37(1) strengthened by several judicial pronouncements, like that in the cases of M/s. Rambahadur Thakur Ltd. vs. CIT (Kerala High Court), Travancore Titanium Products Ltd. vs. CIT (1966) 60 ITR 277 (SC) and CIT vs. Navsari Cotton and Silk Mills Ltd. (1982) 135 ITR 546 (Guj.), in respect of that section finds its applicability upon the assessee in respect of the said issue of payment of excess purchase price, which actually is distribution of profits amongst its members. Thus the purchases of the assessee are inflated to the extent of Rs. 36,69,08,623/-, upon which, the assessee ought to have paid taxes and thereafter distributed it to its members as dividend. The 'Real Income' theory states that income that is taxable under the Income Tax Act is the income computed on ordinary commercial principles but subject to provisions of the Act. On these considerations, what is taxable in the case of the assessee is its commercial profits prior to its distribution to the members in the guise of 'Final Cane Price' and the same cannot be allowed as expenditure either under ordinary commercial principles or under the Income Tax Act and the excess payment of Rs. 36,69,08,623/- so made by the assessee during the year represents the 'Real Income' of the assessee, which is taxable. The said excess payments in the form of inflated purchases of Rs. 36,69,08,623/- is liable to be disallowed and added to the total income of the assessee.

Thus, on the facts of the case, the undersigned is also reasonably satisfied and has the relevant reasons to believe that there has been escapement of income at least of Rs. 44,90,71,133/- on account of original assessment. Therefore, on the facts of the case, the case of your concern for A.Y. 2007-08 has been reopened for reassessment of such income to tax, which has escaped assessment."

[8.4] In the case of Aayojan Developers v. Income-Tax Officer reported in (2011) 335 ITR 234, where no foundation was laid in the reasons for reopening assessment that there was failure on the part of the assessee to disclose fully and truly all material facts and nothing was brought on record and by filing of affidavit in reply for the first time such escapement was indicated, the Division Bench of this Court has held that notice of reopening beyond 4 years must fail.

"5.06. Identical question came to be considered by the Division Bench of this Court in the case of Niko Resources Ltd. (supra) and while considering the scope and ambit of powers to be exercised under section 147 of the Income Tax Act by the Assessing Officer, while reopening the assessment beyond the period of 4 years, the Division Bench of this Court while considering its decisions in the case of Gujarat Lease Financing Limited (supra), has observed and held in paragraph Nos.16, 17 and 27 as under :-

16. The Assessing Officer is authorized to make reassessment in the event of his having reasonable belief that any income chargeable to tax has escaped assessment for any assessment year. As per the 1st proviso to section 147 of the Act, assessment can be reopened under section I47 of the Act after expiry of 4 years only if (1) the assessee failed to make a return under section I39 of the Act or in response to notice issued under section 142(1) or under section 148 of the Act, he failed to disclose truly and fully all material facts necessary for the assessment. Once all primary facts are before the assessing authority, no further assistance is required by way of disclosure. All inferences of facts and legal inference need to be drawn by the Assessing Officer. It is not for any one to guide the Assessing Officer in respect of inference "factual or legal", which requires to be drawn by him alone.

17. Once the case of the assessee is covered by the 1st proviso to section 147 of the Act, the reassessment proceedings beyond the period of 4 years from the end of the relevant assessment year would be without any jurisdiction and bad in law, if all material facts are furnished and there remained no omission or failure on the part of the assessee to disclose truly and fully all material facts. This Court, after extensively discussing law on the issue in case of Gujarat Lease Financing Ltd. (supra), has held thus:

"10. It can be clearly noted from the reasons recorded that there is no mention at all of the assessee having not disclosed fully or truly material facts which were necessary for the purpose of computing the income of the assessee. Assuming that in the notice for reopening. such wordings are not specifically mentioned and they can be supplemented either while rejecting the objections or by way of affidavit of the Assessing Officer, then also, the revenue has failed to point out as to in what manner there has been non-disclosure on the part of the assessee."

27. From the ratio that can be culled out from all these decisions, it is amply clear that the Assessing Officer, who is authorized to issue notice under section 148 of the Act for reassessment. on his having a reason to believe that income chargeable to tax had escaped assessment for any assessment year, can assess or reassess such income and also any such other income chargeable to tax, which has escaped the assessment. However, no such action is permissible after lapse of 4 years from the end of the relevant assessment year unless income chargeable to tax has escaped assessment on account of failure on the part of the assessee to disclose fully and truly all material facts necessary for the purpose of such assessment. The onus is on the assessee to reveal the primary facts and to draw the inferential facts would be the responsibility of the Assessing Officer. Once having revealed from the record that the assessee disclosed full and complete facts and on scrutiny, at the time of original assessment all these details are examined, no change of opinion is permissible merely because there was some error earlier on the part of the Assessing Officer himself or because he choose not to opine on the issue or even when he changes his mind and interprets the material or law otherwise than what was done by him.

5.07. Applying the decision of the Division Bench of this Court in the case of Niko Resources Ltd. (supra) as well as Gujarat Lease Financing Limited (supra), to the facts of the case on hand and as observed hereinabove, there does not appear to be failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment with respect to the additional depreciation claimed, the initiation of the impugned reassessment proceedings which are initiated beyond the period of four years, are not permissible and the same cannot sustain and on that ground alone, the impugned reassessment proceedings deserve to be quashed and set aside."

[8.5] Under the circumstances and in absence of any allegation in the notice under Section 148 of the Act that there was any failure on the part of the assessee to disclose truly and fully all material facts necessary for assessment, considering first proviso to Section 147 of the Act, the assumption of jurisdiction is absolutely wholly without jurisdiction and illegal. Under the circumstances, impugned notices under Section 148 of the Act beyond the period of 4 years cannot be sustained on the aforesaid ground alone and the same deserve to be quashed and set aside.

[9.0] Now, so far as the initiation of impugned reassessment proceedings and the impugned notices under Section 148 of the Act within 4 years is concerned, it appears that the reopening has taken place only on one ground that the assessee has paid price of sugarcane more than the SMP. It is required to be noted that in all these cases the assessments were completed under Section 143(3) of the Act after holding necessary inquiry by the Assessing Officer. It also appears that the inquiry was made and the issue was gone into detail. It is also required to be noted that in some of the cases the practice of paying more prices to the cane growers than the SMP declared by the Government has been consistently followed since many years and the same has been accepted and no objection has been raised at any point of time earlier. It appears that the reason to believe and/or formation of the opinion by the Assessing Officer that the income chargeable to tax has escaped assessment is on the ground that the assessee has paid more price than the price determined / declared by the Government and therefore, the same is nothing but distribution of profits and/or passing of profits on the basis of the decision of the Hon'ble Supreme Court in the case of Shri Satpuda Tapi Parishar SSK Ltd. (Supra). However it is required to be noted that once at the time of original assessment under Section 143(3) of the Act the Assessing Officer after applying the mind accepted the return, thereafter reopening of the assessment can be said to be on mere change of opinion of the Assessing Officer and as per the catena of decisions of the Hon'ble Supreme Court as well as this Court mere on change of opinion of the Assessing Officer, reassessment proceedings are not permissible.

[9.1] If any decisions are required to be referred to on the point, they are the decision of the Hon'ble Supreme Court in the case of Kelvinator of India Ltd. (Supra), decisions of this Court in the case of Cliantha Research Ltd. (Supra), Sarla Raj Verma (Supra) and Niko Resources Ltd. (Supra). In the case of Kelvinator of India Ltd. (Supra), the Hon'ble Supreme Court in para 6 has held as under:

"6. On going through the changes, quoted above, made to section 147 of the Act, we find that, prior to the Direct Tax Laws (Amendment) Act, 1987, reopening could be done under the above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act (with effect from 1st April , 1989), they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen the assessment. Therefore, post-1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to reopen 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 reassess. But reassessment has to be based on fulfillment of certain preconditions and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of reopening 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 1st April, 1989, the 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 reintroduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer. We quote hereinbelow the relevant portion of Circular No.549 dated October 31, 1989 [(1990) 182 ITR (St.) 1, 29), which reads as follows:

"7.2 Amendment made by the Amending Act, 1989, to reintroduce the expression 'reason to believe' in section 147. A number of representations were received against the omission of the words 'reason to believe' from section 147 and their substitution by the 'opinion' of the Assessing Officer. It was pointed out the meaning of the expression, 'reason to believe' had been explained in a number of court rulings in the past and was well settled and its omission from section 147 would give arbitrary powers to the Assessing Officer to reopen past assessments on mere change of opinion. To allay these fears, the Amending Act, 1989, has again amended section 147 to reintroduce the expression 'has reason to believe' in place of the words 'for reasons to be recorded by him in writing, is of the opinion'. Other provisions of the new section 147, however remain the same."

[9.2] Even otherwise it is required to be noted that the reasons to believe must necessarily show, indicate and communicate why and on what grounds / cause any income has escaped assessment. Reasons recorded must be germane, prudent and disclose prima facie belief that income has escaped assessment. Even for formation of the opinion and/or reason to believe that any income has escaped assessment, there must be some tangible new material available with the Assessing Officer on the basis of which the reassessment proceedings are permissible. In the present case as such except the allegation that cane price / price has been paid to the cane growers more than the purchase price determined / declared by the Government under the Control Order and therefore, the difference between the same is distributing the profits and therefore, the income liable to tax has escaped assessment. However, mere payment of cane price paid in excess to the SMP cannot by ipso facto and/or per se can be said to be distributing the profits. There must be tangible material available with the Assessing Officer, such as the amount or cane price paid to the cane growers in excess to the SMP either is exorbitant or too excessive and is not justifiable at all and on the basis of the material available with the Assessing Officer with respect to the cane price paid by other societies it is found that amount of cane price paid by a particular assessee/co-operative society is not justifiable at all, as either it is exorbitant and/or unreasonable, then and then only it can be said that such excess payment of cane price is nothing but distributing the profits and/or passing of the profits. However, for that and for reopening of the assessment on the aforesaid ground, there must be some tangible material available with the Assessing Officer to have a reasonable belief and/or form such an opinion and in that case only the reassessment is permissible.

At this stage it is required to be noted that as such the SMP declared by the Government, declared under the Control Order is as such in the larger interest of the cane growers and so as to see that the cane growers are not exploited and therefore, it is mandated that the sugar co-operative societies to pay the purchase price of the cane not less than the SMP declared by the Government. Under the Control Order as such there is no restriction and/or ban not to pay more amount than the SMP declared. Even in the case of Shri Satpuda Tapi Parishar SSK Ltd. (Supra), the Hon'ble Supreme Court has observed that in deciding the questions whether the differential payment made by the assessee to the cane growers after the close of the financial year or after the balancesheet date would constitute an expenditure under Section 37 of the Act and whether such differential payment would, applying the real income theory, constitute an expenditure or distribution of profits, the Assessing Officer is required to take into account the manner in which the business works, resolutions of the State Government, the modalities and the manner in which SAP and SMP are decided, the timing difference which will arise on account of the difference in the accounting years etc. Therefore, while considering the aforesaid question, number of questions are required to be examined by the Assessing Officer, before even forming an opinion and/or a reason to believe that the income chargeable to tax has escaped assessment. Mere payment of any amount of cane price / purchase price in excess to SAP / SMP per se cannot be said to be distribution of profits. For which a detailed inquiry is required to be conducted by the Assessing Officer. In the present case no such inquiry has been done and/or conducted by the Assessing Officer before having a reasonable belief and/or forming an opinion that the income chargeable to tax has escaped assessment on the aforesaid ground.

[9.3] At this stage it is required to be noted that in some of the cases the Assessing Officer has formed an opinion on the basis of the order passed by the learned CIT (Appeals) which were pursuant to the order of Hon'ble Supreme Court in the case of Shri Satpuda Tapi Parishar SSK Ltd. (Supra). However, it is required to be noted that on the basis of the order passed by the learned CIT(Appeals) in the case of some other assessee the satisfaction of the Assessing Officer and formation of opinion in the case of present assessee cannot be sustained and the same can be said to be a borrowed satisfaction from another officer. Such borrowed satisfaction in absence of any application of mind and any real finding in the case of the assessee do not constitute valid reason to believe that the income has escaped assessment. Under the circumstances on the aforesaid ground also the impugned reassessment proceedings within 4 years and beyond 4 years deserves to be quashed and set aside.

[9.4] At this stage even the provisions of Sugarcane Control Order, 1966 are also required to be referred to. Clause 3 provides for minimum price of sugarcane payable by the producer of the sugar and it provides that the Central Government may, after consultation with such authorities, bodies or associations as it may deem fit, by notification in the Official Gazette, from time to time, fix the minimum price of sugarcane to be paid by producers of sugar or their agents for the sugarcane purchased by them, having regard to (a) the cost of production of sugarcane; (b) the return to the grower from alternative crops and the general trend of prices of agricultural commodities; (c) the availability of sugar to the consumer at a fair price; (d) the price at which sugar produced from sugarcane is sold by producers of sugar; and (e) the recovery of sugar from sugarcane. It is also required to be noted that even the Control Order provides for additional price for sugarcane purchased and it also further provides that no additional price determined under sub-clause (2) or sub-clause (3) of Section 5A shall become payable by a producer of sugar who pays a price higher than the minimum sugarcane price fixed under Clause (3) to the sugarcane growers, provided that the price so paid shall in no case be less than the total price comprising the minimum sugarcane price fixed under clause (3) and the additional price determined under sub-clause (2) or subclause (3) as the case may be of Clause 5A. Therefore, even in the Control Order itself there is a reference to the additional purchase price which can be more than the purchase price fixed under clause (3). However, as observed hereinabove, in a given case after holding inquiry if it is found that the purchase price paid in excess to the SMP is so exorbitant and/or unreasonable it can be said to be distributing the profits and/or passing of the profits. However, for that purpose there must be some further inquiry and/or tangible material with the Assessing Officer.

[9.5] Under the circumstances, the impugned notices under Section 148 of the Act to reopen the proceedings beyond 4 years and within 4 years on the aforesaid ground i.e. on the ground that the payment of purchase price in excess to the SMP has escaped the assessment cannot be sustained and the same deserves to be quashed and set aside.

[10.0] Now, so far as the reopening of the assessment on other grounds viz. 1) unabsorbed depreciation permitted to be carried forward beyond a period of 8 years raised in Special Civil Application Nos.17870/2014 and 2638/2015; 2) wrong adjustment u/s.145A of the Act raised in Special Civil Application Nos.17875/2014, 18787/2014 and 2369/2015 and 3) with regard to section 43B of the Act raised in Special Civil Application Nos.2364/2015 and 2373/2015 are concerned, considering the respective assessment orders it appears that at the relevant time after due inquiry the same was allowed by the Assessing Officer and therefore, the reopening on the aforesaid reasons/grounds can be said to be change of opinion which is not permissible.

[11.0] In view of the above and for the reasons stated above, on the aforesaid ground alone and without expressing any opinion on merits / on the issue whether any amount of purchase price paid in excess to the SMP declared by the Government can be said to be distributing the profits and/or passing of the profits or not, impugned notices under Section 148 of the Act to reopen the completed assessment for the respective assessment years are hereby quashed and set aside. Rule is made absolute to the aforesaid extent in each of the petitions. In the facts and circumstances of the case, there shall be no order as to costs.