This is appeal filed by assessee against order of learned CIT(A), dt. 24th March, 2005 relating to asst. yr. 1996-97. Ground Nos. 1 to 3: Through these grounds assessee has challenged validity of initiation of reassessment proceedings. These grounds are as under: "1. That having regard to facts and circumstances of case, learned CIT(A) has erred in law and on facts in confirming action of learned AO in upholding validity of reassessment proceedings initiated under s. 147 vide notice dt. 31st March, 2003. That having regard to facts and circumstances of case, learned CIT(A) h s erred in law and on facts in upholding validity of reassessment proceedings and reassessment order even though statutory conditions prescribed under ss. 147 to 151 were not complied with, moreso when reopening was done on basis of mere change of opinion on same set of facts. In any view of matter and in any case, learned CIT(A) has erred in law and on facts in confirming action of learned AO in reopening assessment and in any case, impugned reassessment was void ab initio." facts concerning this matter are as under: assessee was deriving income from export of readymade garments and trading of fabrics as also interest from partnership firm. assessee filed return of income on 2nd Dec., 1996 declaring total income at nil. return was processed under s. 143(1)(a) on 4th Dec., 1996. Subsequently, case was selected for scrutiny and notice under s. 143(2) was issued. assessee had claimed deduction under s. 80HHC to tune of Rs. 9,84,062. AO completed assessment under s. 143(3) on 18th March, 1999. Thereafter, notice under s. 148 was issued by AO on 28th March, 2001. copy of this notice has been filed on p. 6 of paper book. assessee submitted reply to this notice vide letter dt. 10th May, 2001. From record made available to us it is not known as to whether notice issued under s. 148 on 28th March, 2001 was dropped or withdrawn or not. In absence of any s u c h material brought on record, it is to be presumed that reassessment proceedings initiated on basis of this notice continued. Another notice under s. 148 of IT Act has been issued on 31st March, 2003. copy of this notice has been filed on p. 8 of paper book. On perusal of notice it is found that even details of income escaping assessment have not been given in notice. assessee has submitted reply against that notice, copy of which is available at pp. 10 and 11 of paper book. assessment was completed under s. 143(3). date of order has not been mentioned in assessment order. assessee filed appeal before CIT(A) against assessment order and took ground No. 2 to challenge validity of initiation of reassessment proceedings. This ground is as under: "That having regard to facts and circumstances of case learned AO has erred in law and on facts in framing assessment under s. 147 that too without recording valid reasons and has further erred in framing assessment without serving notice under s. 148 and notice under s. 143(2) within prescribed time." learned CIT(A) has rejected this ground merely by observing that assessee is not taking (sic). observations of learned CIT(A) are as under: "4. In ground No. 2, assessee has contended that AO had erred in law as well as facts in framing assessment under s. 147 that too without recording valid reasons and has further erred in framing assessment without serving notice under s. 148 and notice under s. 143(2) within prescribed time. Perusal of assessment order shows that notice under s. 148 was issued t o assessee on 31st March, 2003 in response to which assessee filed return declaring nil income. In paper book filed in appeal proceedings, appellant has filed copy of acknowledgement receipt of return dt. 9th July, 2003 filed in response to notice under s. 148 per index of paper book. AO has mentioned that notice under s. 143(2) was served upon assessee within stipulated period. From assessment order it appears no such contention was raised before AO in assessment proceedings. Therefore, in view of above facts there appears no merit in contention of t h e appellant and same is rejected. In submission filed in appeal proceedings (apparently dt. 2nd June, 2004) assessee has contended that notice under s. 148 dt. 31st March, 2003 is void as proceedings already initiated vide notice under s. 148 dt. 28th March, 2001 were pending on date of fresh intimation. If such was case appellant would have pointed out before AO. However, no such plea was raised before AO. In order under appeal assessment was completed on basis of action taken under s.148 on 31st March, 2003. original assessment under s. 143(3) in case was completed on 18th March, 1999. Therefore, notice issued under s. 148 was within four years from end of year, in which original assessment was completed and was within time specified in main provision of s. 147 and as such was valid. Therefore, this contention of appellant is also rejected." Before us, learned counsel for assessee submitted that since earlier notice issued under s. 148 on 28th March, 2001 was not withdrawn or proceedings were not dropped, proceedings continued on basis of said notice and therefore reopening of assessment during time when proceedings were already pending, cannot be treated as valid reopening of assessment. In support of this submission reliance has been placed on ratio of decisions in cases of Parimisetti Seetharamamma vs. CIT (1965) 57 ITR 532 (SC); K. Adinarayana Murty vs. CIT (1967) 65 ITR 607 (SC); CIT vs. Jaideo Jain & Co. (1997) 227 ITR 302 (Raj); Ghanshyamdas vs. Regional Asstt. CST (1964) 51 ITR 557 (SC); and S.P. Kochhar vs. ITO (1983) 37 CTR (All) 49: (1984) 145 ITR 255 (All). learned Departmental Representative, on other hand, supported order of learned CIT(A). facts as submitted by learned counsel for assessee have remained uncontroverted. In case of CIT vs. Ram Kishan Leela (2007) 207 CTR (Raj) 463, Hon ble Rajasthan High Court has considered similar issue and has held that second notice issued during pendency of proceedings cannot be treated to be legally justified. observations of Hon ble High Court are as under: "Asst. yrs. 1985-86 & 1986-87 Reassessment Notice under s. 148 Second notice during pendency of proceedings First reassessment proceedings which were initiated after search at premises of assessee had not attained finality and were pending with AO as result of orders of appellate forum Two parallel assessment proceedings cannot continue together Once reassessment proceedings are pending, entire assessment is open and is not confined to scope of reasons recorded by AO before assuming jurisdiction There cannot be second reassessment proceedings while first reassessment proceedings are pending." In view of above decision and on facts and circumstances of this case argument of learned counsel for assessee deserves to be accepted. Hence, on this basis itself reopening of assessment by second notice cannot be justified and assessment completed on basis of such illegal notice does not have legal legs to stand. assessment is, therefore, liable to be quashed on this ground. learned counsel for assessee further contended that second notice issued under s. 148 on 31st March, 2003 was beyond period of four years from end of relevant assessment year and therefore reassessment can be justified only if it is shown that income chargeable to tax has escaped assessment due to failure on part of assessee to disclose fully and truly all material facts necessary for completion of assessment. It was submitted by learned counsel that in this case assessee has disclosed all material facts and therefore reopening after four years was not legally justified. In support of his contention learned counsel has placed reliance on various authorities including decisions in cases of CIT vs. Kalvinator of India Ltd. (2002) 174 CTR (Del)(FB) 617: (2002) 256 ITR 1 (Del)(FB); Asstt. CIT vs. Vindhya Telelinks Ltd. (2007) 107 TTJ (Jab)(TM) 149; Jindal Photo Films Ltd. vs. Dy. CIT & Anr. (1999) 154 CTR (Del) 355: (1998) 234 ITR 170 (Del); and CIT vs. Foramer France (2003) 185 CTR (SC) 512: (2003) 264 ITR 566 (SC). He also placed reliance on order of Tribunal, Pune Bench "A", dt. 9th June, 2006 rendered in ITA Nos. 503 to 505/Pn/2003 in case of Ahmednagar Forgings Ltd. vs. Asstt. CIT; and order of Tribunal, Delhi Bench F , dt. 11th Aug., 2006 rendered in ITA Nos. 1211 & 1212/Del/2004 in case of C.P. Kukreja & Associates (P) Ltd. vs. Dy. CIT. In latter decision Tribunal has considered decision of Hon ble Delhi High Court in case of Kalvinator of India Ltd. (supra) and has held that reassessment proceedings were resorted after period of four years after end of relevant assessment year then requirement of law in terms of s. 147 is that income chargeable to tax should have escaped assessment by reason of failure on part of assessee to disclose fully and truly all material facts, necessary for his assessment and since there was no failure on part of assessee, resort to reassessment proceedings being beyond time laid down in s. 147, order of reassessment is liable to be annulled. We have carefully considered entire material on record and rival submissions. Following facts are undisputed. Subsequent notice under s. 148 was issued on 31st March, 2003. assessment pertains to asst. yr. 1996- 97. Notice issued on 31st March, 2003 was therefore, after expiry of four years from end of assessment year as fourth year expired on 31st March, 2001. Proviso to s. 147 runs as under: "Provided that where assessment under sub-s. (3) of s. 143 or this section has been made for relevant assessment year, no action shall be taken under this section after expiry of four years from end of relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on part of assessee to make return under s. 139 or in response to notice issued under sub-s. (1) of s. 142 or s. 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year." In view of above proviso to s. 147 of IT Act, no action can be taken for reassessment after expiry of four years from end of relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on part of assessee to make return under s. 139 or in response to notice issued under sub-s. (1) of s. 142 or s. 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. In instant case as pointed out by learned counsel for assessee, assessee has disclosed all facts relating to deduction under s. 80HHC during original assessment. In case of Sita World Travels (India) Ltd. vs. CIT & Anr. (2005) 193 CTR (Del) 84: (2005) 274 ITR 186 (Del), Hon ble Delhi High Court has observed as under: "Held, allowing petition, that from original assessment orders as well as order made by appellate authority, it was clear that AO was well aware of primary facts, namely, claim made by assessee, circumstances under which claim was made and provisions of law which could be applied while granting benefits. decision may be right or wrong but that was none of concern of subsequent officer. If primary facts were not available or there was concealment or there was no application of mind at all, then case of reopening assessment could be made out. But, when all facts were placed before AO and AO consciously considered facts and arrived at decision, then it could not be reopened merely because subsequently he changes his mind or some other officer takes different view. Hence, this was case of wrongful assumption of jurisdiction and as such notices, speaking orders and assessment orders made in pursuance of notices were quashed." ratio of decision is fully applicable to facts of present case and therefore, on facts and circumstances of this case, it cannot be said that there was any failure on part of assessee in disclosing material facts. On other hand, as pointed out above, assessee had disclosed all material facts relating to deduction under s. 80HHC claimed in original return and AO in original assessment proceedings preferred to accept claim of assessee. Hon ble Supreme Court of India in very recent decision in case of Asstt. CIT vs. Rajesh Jhaveri Stock Brokers (P) Ltd. (2007) 210 CTR (SC) 30: (2007) 291 ITR 500 (SC) has considered about scope and effect of s. 147 as substituted w.e.f. 1st April, 1989. Hon ble Court has observed as under: "The scope and effect of s. 147(a) substituted w.e.f. 1st April, 1989, as also ss. 148 to 152 are substantially different from provisions as they stood prior to such substitution. Under old provisions of s. 147, seperate cls. (a) and (b) laid down circumstances under which income escaping assessment for past assessment years could be assessed or reassessed. To confer jurisdiction under s. 147(a) two conditions were required to be satisfied: firstly, AO must have reason to believe that income, profits or gains chargeable to income-tax have escaped assessment, and secondly, he must also have reason to believe that such escapement has occurred by reason of either omission or failure on part of assessee to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before AO could have jurisdiction to issue notice under s. 148 r/w s. 147(a). But, under substituted s. 147 existence of only first condition suffices. In other words, if AO for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen assessment. It is, however, to be noted that both conditions must be fulfilled if case falls within ambit of proviso to s. 147. case at hand is covered by main proviso and not proviso." It may be pointed out that since instant case is covered by proviso both conditions are required to be satisfied. As assessee had disclosed material facts in instant case, second condition is not satisfied. On controversy relating to failure on part of assessee to make disclosure of facts, application of mind by AO and non-expression of opinion on relevant point by AO as well as on issue relating to change of opinion, we may make reference to latest decision of Hon ble Delhi High Court rendered in case of CIT vs. Eicher Ltd., ITA No. 309/Del/2006, dt. 22nd May, 2007. In that case assessment was completed under s. 143(3) on 7th Dec., 1995 and subsequently, AO reopened assessment by issuing notice dt. 30th March, 2000 under s. 148. reason for reopening assessment was to tax waiver of interest allegedly not offered to tax by assessee. On receipt of notice, it was contended by assessee that reopening was based on change of opinion and not because that assessee had not fully and truly disclosed material facts. In support of this contention, reference and truly disclosed material facts. In support of this contention, reference was made to letter dt. 8th Nov., 1995, wherein it was pointed out that assessee had approached banks and financial institutions for finance to pay interest arrears and principals upon which banks agreed to same and principal and interest thereupon was re-scheduled and interest arrears were treated as fresh interest bearing loans. It was submitted that as such entire arrear of interest upto relevant year was treated as having been paid to bank and financial institutions. According to assessee all these facts were before AO who chose not to give finding on them but accepted contention of assessee and did not treat interest amount that has been waived as income of assessee. AO rejected contention but on appeal, CIT(A) held that reassessment was based on change of opinion. This view was upheld by Tribunal who dismissed appeal of Revenue. Hon ble Delhi High Court dismissed appeal of Revenue and upheld order of Tribunal by observing as under: "17. Insofar as present appeal is concerned, we find that assessee had placed all material before AO and where there was doubt, even that was clarified by assessee in its letter dt. 8th Nov., 1995. If AO, while passing original assessment order, chose not to give any finding in this regard, that cannot give him or his successor in office reason to reopen assessment of assessee or to contend that because facts were not considered in assessment order, full and true disclosure was not made. Since facts were before AO at time of framing original assessment, and later different view was taken by him or his successor on same facts, it clearly amounts to change of opinion. This cannot form basis for permitting AO or his successor to reopen assessment of assessee." It may be pointed out that in abovementioned case, Hon ble Delhi High Court, besides others, has considered decision in case of KLM Royal Dutch Airlines vs. Asstt. Director of IT (2007) 208 CTR (Del) 33 and also decision in case of Hari Iron Trading Co. vs. CIT (2003) 183 CTR (P&H) 228: (2003) 263 ITR 437 (P&H). relevant observation of Hon ble Court in this regard is as under: "16. Applying principles laid down by Full Bench of this Court as well as observations of Punjab and Haryana High Court, we find that if entire material had been placed by assessee before AO at time when original assessment was made and AO applied his mind to that material and accepted view canvassed by assessee, then merely because he did not express this in assessment order, that by itself would not give him ground to conclude that income has escaped assessment and, therefore, assessment needed to be reopened. On other hand, if AO did not apply his mind and committed lapse, there is no reason why assessee should be made to suffer consequences of that lapse." In view of above latest authority issue stands fully covered in favour of assessee and following said decision, we hold that in this case also assessment has been made only on basis of change of opinion. In view of above legal position reassessment made in this case after expiry of four years from end of relevant assessment year cannot be justified in law because Department has not been able to bring out any material to show that there was any failure on part of assessee to disclose material facts truly and fully to AO during assessment proceedings. Thus, in view of proviso to s. 147, reopening of assessment cannot be justified and consequently notice issued under s. 148 is held to be invalid. entire reassessment proceedings are therefore, found to be null and void and on this basis assessment order is liable to be quashed. We, therefore, set aside order of learned CIT(A) and quash reassessment. Accordingly, grounds raised by assessee in this appeal stand allowed. In view of our findings on above legal grounds, we are not required to dispose of other grounds raised by assessee on merits. Assessee s appeal stands allowed accordingly. *** MRS. SARLA SHREEDHARAN v. INCOME TAX OFFICER