Mr.Chhotaroy learned counsel for the revenue mentioned that the profit and loss account of the assessee as furnished by the petitioners would clearly indicate that the Assessing Officer had not applied his mind to the same. This non-application of mind by the Assessing Officer at the stage of passing the assessment order is the view of Mr.Chhotaroy. There is no basis for coming to this conclusion. Once a query had been raised with regard to a particular issue, it must follow that the Assessing Officer had duly applied his mind to the queries raised and taken a view on the matter. Therefore, we do not accept the submissions of Mr.Chhotaroy that this is not a case of change of opinion on the part of the Assessing Officer in issuing the impugned notice. Mr.Chhotaroy placed strong reliance on the decision of this Court in the matter of Electronics Corporation of India Ltd vs. Additional C.I.T. reported in 350 ITR 651. In the aforesaid decision, this Court has held that when the assessment is re-opened for less than 4 years, it is permissible for the Assessing officer to rely upon the material which were a part of the original proceedings for assessment before the Assessing Officer However, for the Assessing Officer to rely upon the material which was available during the section 143 (3) proceedings, it must be clearly be established that the Assessing Officer had not applied his mind to the tangible material available on record. In this case, the controversy is whether the profit would be chargeable to tax as “business income” or not as “capital gains.” This was the issue which was raised by the Assessing Officer during the assessment proceedings and the petitioner submitted its reply dated 29.7.2009 to the above query. It must follow that the Assessing Officer was satisfied with the explanation as furnished by the petitioner. Therefore, the decision of our Court in the matter of Electronics Corporation of India Ltd (supra) would have no application to the facts of the present case.
Accordingly, we hold that there is no reason for the Assessing Officer to have a reasonable belief that the income is chargeable to tax has escaped assessment.
In this Case Honourable High Court has also held that Writ Petition challenging lack of jurisdiction to issue Notice Under Section 148 of the Income tax Act,1961 on the ground that it is based on ‘change of opinion’ & preconditions of Section 147 of the Income tax Act,1961 are not satisfied is maintainable .
