1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY O. O. C. J. WRIT PETITION NO.43 OF 2010 Shree Bal Constructions Pvt. Ltd. ...Petitioner. Vs. The Asstt. Commissioner of Income Tax & Ors. ...Respondents. .... Ms.Aarti Sathe with Mr.Kalpesh Turalkar for the Petitioner. Mr.Vimal Gupta for the Respondents. ..... CORAM : DR.D.Y.CHANDRACHUD AND J.P.DEVADHAR, JJ. March 18, 2010. P.C. : The Challenge in these proceedings is to a notice dated 20th March 2009, issued under Section 148 of the Income Tax Act, 1961, by which an assessment for Assessment Year 2004-05 has been sought to be reopened. The Petitioner filed a return of income on 1st November 2004 for the Assessment Year in question, in which a deduction was claimed under Section 80-IB(10). The return was processed under Section 143(1) on 16th February 2006. A notice for reopening the assessment has been issued within a period of four years of the end of the relevant Assessment Year on 20th March 2009. On 26th November 2009, the Petitioner in 2 response to the notice for reopening the assessment submitted that the return filed on 20th April 2009 should be treated as a return in response to the reopening of the assessment. The reasons which have been disclosed to the Petitioner for reopening the assessment are as follows: “On perusal of return of income in the case of the assessee for A.Y.2004-05, it is seen that the assessee has claimed deduction u/s.80-IB at Rs.23,52,230/- whereas, it has claimed unabsorbed losses of Rs.11,97,020/- and unabsorbed depreciation of Rs.2,29,802/- as carried forward as shown in its computation of income annexed to the return of income. However, the same was supposed to be set-off against the taxable income first and then the balance income could have been claimed as deduction u/s.80-IB of the I.T. Act, if at all. Hence, the unabsorbed losses and unabsorbed depreciation totaling to Rs.14,26,822/-, when set-off against taxable income of Rs.23,50,230/- leaves only Rs.9,23,408 to be claimed as deduction. Further, it is also seen that the deduction u/s. 80-IB, claimed by the assessee for A.Y.2005-06 has also been disallowed. I am satisfied that an income of Rs.14,26,822/- have escaped the assessment within the meaning of Section 147 of I.T. Act and, therefore, have reasons to believe that the aforesaid amount needs to be brought to tax. Hence, notice u/s.148 of the I.T. Act issued to the assessee.” 2. The contention of the Learned Counsel appearing on 3 behalf of the Petitioner is that there was no fresh or new material that would warrant the exercise of the power to reopen the assessment and that the Petitioner had duly furnished full details with the original return. 3. The condition precedent to the exercise of the power to reopen an assessment under Section 147 is a reason to believe on the part of the Assessing Officer that income chargeable to tax has escaped the assessment. Now it is well settled that the Assessing Officer cannot reopen an assessment even within the period of four years, merely on the basis of a change of opinion and there must be some tangible material for the Assessing Officer to do so. (CIT vs. Kelvinator of India Ltd., [2010] 320 ITR 561 (SC)). In the present case, the reasons which have been indicated by the Assessing Officer do furnish a tangible basis for reopening the assessment. The reasons which have been set forth are that unabsorbed losses and unabsorbed depreciation amounting to Rs. 14.26 lakhs should have been first set off against the taxable income of Rs.23.50 lakhs, leaving only Rs.9.23 lakhs to be claimed as deduction. Moreover, a deduction under Section 80IB for A.Y. 4 2005-06 has been denied. At this stage, we are not concerned with the question as to whether the reasons are on merits, justified or otherwise. All that needs to be observed is that there was tangible material before the Assessing Officer to come to the conclusion that the income chargeable to tax has escaped assessment. In that view of the matter, we do find this to be a fit and proper case to exercise the writ jurisdiction under Article 226 of the Constitution. We however, clarify that having regard to the fact that the challenge in the present case is to the notice for reopening an assessment, we have not expressed any opinion on the merits of the claim to a deduction under Section 80-IB(10). The Petition is dismissed. ( Dr.D.Y.Chandrachud, J.) ( J.P.Devadhar, J.)