1 9 D.B. CIVIL SPECIAL APPEAL NO.574/2006. [ M/S S.K.MARBLES PVT. LTD. VS. U.O.I. ANR.] DATED : 27.02.2007 HON'BLE MR. RAJESH BALIA, J. HON'BLE MR. CHATRA RAM JAT, J. Mr.Anjay Kothari the appellant. Mr.Sangeet Lodha} for the respondent. Mr.Viveek Shrimali} ***** This appeal is directed against the order for vacating interim stay of further proceedings in pursuance of the notice issued under Section 148 read with Section 147 of the Income Tax Act, 1961 for the following Assessment Years. ASSESSMENT YEAR NOTICE DATED 1] 1999-2000 29.08.2005 2] 2000-2001 29.08.2005 3] 2001-2002 31.03.2005 4] 2002-2003 31.03.2005 5] 2003-2004 29.08.2005 The petitioner appellant assessee has challenged the assumption of jurisdiction inter alia on the ground that reasons for issuing notice had not been disclosed within reasonable time and the reasons disclosed show that jurisdiction has been 2 assumed merely on change of opinion about the activity of the assessee on the basis of the Supreme Court Judgment in Lucky Minerals Pvt. Ltd. Vs. CIT reported in 245 ITR 830. Proceedings under Section 147/148 cannot be initiated merely on change of opinion. It was pointed out by the learned counsel for the appellant that the Supreme Court judgment was already existing when assessments were completed and, therefore, the judgment of the Hon'ble Supreme Court which has not been noticed by it cannot be a ground for reopening. The reasons which were recorded before issuing notices to assessee have been transmitted to the assessee vide letter dated 2nd February, 2006 which reads as under:- “Perusal of income tax return revealed that you have claimed deduction U/s 80I/A 80I/B amounting to Rs.4,24,878/- which was wrongly allowed while processing the return U/s 143 (1). It is noticed that the Hon'ble Supreme Court in its decision in the case of M/s Lucky Minerals Pvt. Ltd. Vs. CIT [245 ITA 830] and Lucky Minerals [P] Ltd. [226 ITR 245] has held that mining 3 and cutting of marble slabs tiles etc. from marble blocks is not manufacturing process or production. Thus, in view of above decision you have wrongly claimed deduction. U/s 80IA/ 80IB for Rs.4,24,878/-.” From perusal of the aforesaid reasons and reading of judgment in M/s Lucky Minerals Ltd. Vs. CIT does prima facie show that the activity for merely cutting the stones removed from citu and it selling in the market has not been held to manufacture for the purposes of claiming deduction under Section 80 HH of the Income Tax Act, 1961. Therefore, it cannot be said firstly that the formation of belief that allowance of deduction under Section 80 1A and 80 1 B has wrongly been allowed resulting in under assessment of income and consequently escapement of tax was on non-existing material or non germane ground. Undoubtedly, mere change of opinion cannot be considered to be a ground for assumption of jurisdiction under Section 147/148. However, whether the case falls within the ambit of change of opinion or holding of a belief otherwise than the change of 4 opinion will remain always a question of fact depending on facts and circumstances of each case. In the present case the Assessment Order shows that assessee's claim that he is engaged in the activity of manufacturing by cutting the marbles blocks into marble slabs was assumed to be so without joining any issue. Therefore, if on discovery of correct law after the assessment the Assessing Officer holds a belief that income has escaped assessment to tax it cannot be said merely a change of opinion. The Assessing Officer was not seeking to come to a different conclusion on the very same material which has gone into consideration at the time of framing of assessment. Moreover, when issue about the activity of the assessee was not enquired into at the time of assessment the statement of fact stated by Assessee in the Assessment Order cannot be said to be by application of mind which could give to rise to change of opinion subsequently on the basis of material which had already gone into consideration. We are therefore not impressed by the suggestion of the learned counsel for the appellant that it was a case of mere change of opinion consequently assumption of jurisdiction in respect of Assessment 5 Year 2000-2001 to 2003-04 cannot be held to be beyond the scope of Section 147/148. However, so far as Assessment Year 1999- 2000 is concerned, undoubtedly the jurisdiction has been assumed after expiry of four years from the end of the relevant Assessment Year. There is no allegation nor record reasons showed that any belief was held by the Assessing Officer that under assessment of income has been due to any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. Therefore, in respect of Assessment Year 1999-2000 jurisdiction could not have been assumed under proviso to Section 147 after the expiry of four years from the end of the relevant Assessment Year. That being the position an assumption of jurisdiction in respect of 1999-2000 lacks inherent authority. Accordingly, the assessee's appeal deserves to be partly allowed in respect of the Assessment Year 1999-2000 and the notice under Section 148 in respect of the said assessment year is quashed. However, the notices in respect of subsequent years 6 are held to be valid. This is without prejudice to assessee's contention about the merit of his case that notwithstanding judgment of Supreme Court in M/s Lucky Minerals case his case falls within the ambit of Section 80 1A and 80 1B for claiming deduction thereunder. We have not expressed any opinion on merit of the issue that remains to be decided by the Assessing Officer in light of the submissions made before it. Before parting with the case we may notice that Assessing Officer has also resorted to proceedings under Section 154 in respect of Assessment Year 2001-2002 for the rectification on the very same reasons. Obviously two proceedings for the same reason which have been initiated within limitation cannot be continued together. It will be open for the Assessing Officer to elect to continue with anyone of the proceedings. [CHATRA RAM JAT]J. [RAJESH BALIA], J. mamta