IN THE HIGH COURT OF DELHI AT NEW DELHI 
 . 
  21.03.2011 
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 Present:       Ms. Rashmi Chopra, Advocate for the Revenue. 
 Mr. V.P. Gupta, Advocate with Mr. Basant Kumar, Advocate for the 
 respondent. 
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 + ITA 532/2011 
.
 The assessee had filed return pertaining to assessment year 2001-02 which 
 was processed by the AO under Section 143 (3) of the Income-Tax Act (hereinafter 
 referred to as ?the Act?) and assessment orders were passed on 28th March, 2003 
 accepting the return as it is declaring  the loss of ` 25,29,290/-.  However, 
 after a lapse of more than four years, notice under Section 148/147 of the Act 
 was issued to the respondent/assessee seeking to reassess  the return, inasmuch 
 as,  as per the AO, on following two aspects the income had escaped assessment, 
 as pointed out above by the audit report:- 
 ?(2)       The revenue Audit pointed out that a sum of ` 22.33 lacs on account 
 of advance written off has been debited to P and L Account.  This being an 
 expenditure of capital nature and treating it as a revenue loss was not in order 
 which resulted in under assessment of income by ` 22.33 lacs. 
.
 (3)       The Revenue Audit pointed out that a sum of ` 576.97 lacs was debited 
 in P and L account as exceptional expenditure out of which a sum of ` 399.09 
 lacs was treated as revenue expenditure which resulted, in under assessment of 
 income by ` 399.09 lacs.? 
.
 It resulted in passing the reassessment order vide which  the AO 
 disallowed  both the aforesaid expenditure.  The assessee preferred appeal 
 thereagainst before the CIT in which it was successful, inasmuch as, vide orders 
.
.
 dated 27th February, 2009 the appeal was allowed quashing  the proceedings 
 initiated under Section 147  of the Act as without jurisdiction holding that  it 
 was based on mere change of opinion.  The CIT (A), inter alia, held that action 
 was initiated only on the basis of Audit objection which was impermissible. 
 Even on merits, the CIT (A) took the view that entire claim of expenditure was 
 duly examined and considered in the original assessment proceedings and   order 
 under Section 147 of the Act was based on mere change of opinion.  The appeal of 
 the Department against the order of the CIT (A) has been dismissed by the 
 Tribunal vide impugned order dated 14th May, 2010 thereby affirming the order of 
 the CIT (A). 
 The admitted facts are that the action of reassessment was taken after 
 the expiry of four years from the end of the relevant assessment year.  However, 
 it was not even stated in the notice or Reasons to Believe that the assessee had 
 either concealed certain facts or had not given full disclosure.  On the 
 contrary, the complete facts were before the AO who applied his mind and took a 
 particular view thereby allowing the expenditure under both the heads mentioned 
 above. 
 In these circumstances, we are agree with the authorities below that it 
 was merely a case of change of opinion which could not be the basis of 
 initiating reassessment proceedings, that too,  after the expiry  of four years 
 from  the end of the relevant assessment year. 
.
 Because of this reason, it is not necessary to examine as to whether the 
 notice for reassessment could be issued on the basis of audit report or not. We 
 do not find any error in the impugned order.  No question of law arises and this 
 appeal is accordingly dismissed. 
.
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 A.K. SIKRI, J. 
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 M.L.MEHTA, J. 
 MARCH 21, 2011 
 skb 
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 37#