JUDGMENT judgment of court was delivered by M. S. Sanklecha J.-This petition under article 226 of Constitution of India challenges notice dated March 14, 2007, issued under section 148 of Income-tax Act, 1961 ("the Act"), by Assessing Officer seeking to reopen assessment for assessment year 2002-03. petition was admitted on December 18, 2007. At time of admission, impugned notice dated March 14, 2007, was stayed. brief undisputed facts leading to this petition are as under: (a) petitioner has three manufacturing units-one located at Pimpri and two at Ahmednagar. At all times relevant to this petition, two manufacturing units of petitioner were located at Ahmednagar were entitled to benefit of tax under section 80-IA/80-IB of Act as they were situated in backward region; (b) On October 30, 2002, petitioner filed its return of income for assessment year 2002-03 declaring total income of Rs. 6.89 crores. In its return of income, petitioner claimed deduction under section 80-IA/ 80-IB of Act in respect of two manufacturing units situated at Ahmednagar aggregating to Rs. 2.86 crores; (c) Along with its return of income, petitioner had filed two auditor certificates both dated October 26, 2002, in respect of its two manufacturing units situated at Ahmednagar claiming benefit of section 80-IA/ 80-IB of Act. auditor's certificate was given in terms of section 80-IA(8) of Act as then existing for claiming deduction. Along with auditor's report, petitioner had also filed note indicating manner in which it had worked out its claim for deduction under section 80-IA of Act. note indicated that expenses were allocated between three manufacturing units on its turnover, actual basis and time spent depending upon nature of expenses; (d) During regular assessment proceedings, Assessing Officer by communication dated December 27, 2004, inter alia, sought following information/clarification in respect of working of its claim for deduction under section 80-IA/80-IB of Act: "13. From working of deduction under section 80-IA in respect of Ahmednagar unit, it is seen profit of this unit includes interest of Rs. 17.14 lakhs. As interest not derived from such business of undertaking, please explain why same should not be excluded for profit of industrial undertaking. 14. File profit and loss account of each unit giving details of expenditure actually incurred and also common expenditure allocated against and also give basis for allocating expenditure. 15. Details of power and fuel unit-wise. 16. Please submit depreciation chart as per unit-wise. 17. Details of inventories unit-wise. 18. Details of stores consume unit-wise. 19. Details of consumption of tools/materials, etc., unit-wise." (e) petitioner by its letter dated January 25, 2005, responded to queries raised by communication dated December 27, 2004. In its response dated January 25, 2005, petitioner in particular gave details of manner in which expenses had been allocated amongst three manufacturing units, i.e., two in backward region and one at Pimpri; (f) On March 9, 2005, Assessing Officer passed order for assessment year 2002-03 in regular assessment proceedings under section 143(3) of Act. income was determined at Rs. 7.13 crores while accepting petitioner's claim for deduction under section 80-IA/80-IB of Act of Rs. 2.08 crores in order dated March 9, 2005; (g) On March 14, 2007, impugned notice under section 148 of Act was issued by Assessing Officer, seeking to reopen assessment for assessment year 2002-03. relevant portion of letter dated August 6, 2007, containing reasons recorded in support of impugned notice dated March 14, 2007, reads as under: "2 Assessment in your case for assessment year 2002-03 was originally completed under section 143(3) on March 9, 2005, at income of Rs. 7,13,08,960. In said assessment, Assessing Officer had asked you to furnish details in support of your claim of exemption under section 80-IA. You had furnished expenses as per which it has been observed that there is disappropriate allocation of expenses between various units eligible and those not eligible for deduction under section 80-IA. In view of above, Assessing Officer has reopened your proceedings under section 148, reasons for which are being provided to you as under: 'The assessee in this case filed return of income on October 30, 2002, declaring income of Rs. 6,89,93,550. assessment was completed under section 143(3) on March 9, 2005, assessing income at Rs. 7,13,08,960. assessee-company is engaged in business of manufacturing and sale of sintered automotive parts, sintered bearings and parts, fittings and mental powders. assessee is claiming deduction under section 80-IA for its unit located at Ahmednagar for manufacturing (i) bearing and parts (year of commencement 1994-95); and (ii) metal powder (year of commencement 1992- 93). comparative figures for turnover and profit in respect of assessee's section 80-IA units and non-section 80-IA units is as per annexure enclosed herewith. Prima facie it appears that while preparing accounts, assessee has claimed most of its expenditure in units which are not eligible for section 80- IA deduction, thereby inflating profits of units which are eligible for deduction. To highlight this fact, following expenses are compared: Allotted Allotted % Sl. Expenses Total % to bearing % to powder allotted to No. head amount unit unit other units Miscellaneous 2.57 1. 24.50% 5.22% 70.28% 1. 24.50% 5.22% 70.28% expenses crores Employee 12.36 2. 15.25% 3.68% 81.07% cost crores Stores 2.75 3. 49.78% 7.01% 43.21% consumed crores If above expenses are reallotted correctly in ratio of respective turnover, then assessee's claim of deduction under section 80-IA will decrease and, correspondingly, profits of non-section 80-IA units would be increased as under: Ratio of turnover of non-section 1. = 49.83% 80-IA unit to total turnover 70.28% of Miscellaneous expenses allotted to 2. = Rs. 2,57,16,581 non-section 80-IA unit Rs. 1,80,73,613 49.83% Miscellaneous expenses allocable in 3. = Rs. 2,57,16,581 ratio of turnover Rs. 1,28,14,572 Excess miscellaneous expenses Rs. 4. = allotted to non-section 80-IA unit (2 3) 52,59,040 profits of section 80-IA unit needs to be reduced by Rs. 52,59,040 and, accordingly, corresponding section 80-IA deduction at 30 per cent., i.e., Rs. 15,77,712 needs to be reduced. In view of above facts, I have reason to believe that assessee's income has been escaped assessment and, accordingly, request for permission under section 151(1) to issue notice under section 148 in this case.'" (h) On September 3, 2007, petitioner filed its objections to reasons recorded by Assessing Officer in support of impugned notice dated March 14, 2007. In its objections, petitioner contested impugned notice essentially on ground that same is issued on change of opinion. It was pointed out that during regular assessment proceedings under section 143(3) of Act, Assessing Officer had formed opinion that allocation of expenses between three units was proper. This on basis of not only complete disclosure of allocation of expenses but also in view of specific enquiry into same by Assessing Officer during regular assessment proceedings before accepting same. Thus, it was submitted that there is no reason to believe on part of Assessing Officer to acquire jurisdiction to issue impugned notice dated November 14, 2007; and (i) Assessing Officer, by order dated November 14, 2007, rejected petitioner's objections to reasons recorded. This, inter alia, on ground that income had escaped assessment and post amendment to section 147 of Act with effect from April 1, 1989, power of Assessing Officer to issue notice under section 148 of Act is much wider than that existing under earlier provisions. Submissions Mr. Irani, learned counsel in support of petition, submits as under: (a) sine qua non for issue of notice to reopen assessment even within period of four years from end of relevant assessment year would be reason to believe on part of Assessing Officer that income chargeable to tax has escaped assessment. However, in present case, as Assessing Officer had occasion to form opinion on very issue of allocation of expenditure during regular assessment proceedings, issue of impugned notice on same facts being change of opinion would not satisfy test of reasons to believe on part of Assessing Officer; (b) impugned order dated November 14, 2007, not dealing with petitioner's objection that notice has been issued on account of mere change of opinion, is implicit acceptance of petitioner's objection; (c) In any event, letter dated August 6, 2007, by which reasons recorded were furnished to petitioner itself indicates that during regular assessment proceedings, specific questions were raised by Assessing Officer with regard to petitioner's claim for deduction under section 80- IA/80-IB of Act and consequent to explanation of petitioner, same was accepted in regular assessment proceedings. It is on observations of those very facts that now opinion is formed that allocation of expenditure among three manufacturing units is disproportionate. Thus, impugned notice is clearly based on change of opinion; and (d) In any view of matter, there is no universal method of allocation of expenditure between distinct manufacturing units run by any assessee like petitioner. This allocation of expenditure could be done by adopting various methods and petitioner itself had adopted different methods of allocation depending upon nature of expenditure incurred amongst three manufacturing units. This basis was found acceptable in regular assessment proceedings under section 143(3) of Act. In view of above, it is submitted that impugned notice is without jurisdiction. Opposing petition, Mr. Chhotrary, learned counsel appearing for Revenue, submits as under: (a) petitioner in its objections to reasons recorded in support of impugned notice dated March 14, 2007, have not disputed disproportionate allocation of expenses to its Pimpri unit (non-section 80-IA/ 80- IB unit) resulting in escapement of income. Thus, escapement of income having been accepted by petitioner, reopening notice cannot be found fault with; (b) In present case, issue of impugned notice is not on basis of any change of opinion but on basis of tangible material namely, communication dated January 15, 2007, received by Assessing Officer from Additional Commissioner of Income-tax, who assessed petitioner to tax for assessment year 2004-05, indicating that allocation of expenditure amongst three manufacturing units was disproportionate having regard to its turn over, resulting in excessive allocation of expenditure to non-section 80IA/80-IB unit. It is settled position of law that material obtained during subsequent assessment proceedings would be tangible material for purpose of invoking provisions of section 147/148 of Act for reopening assessment; (c) Without prejudice to above, it is submitted that in any view Assessing Officer had formed no opinion in respect of allocation of expenditure amongst three manufacturing units while passing assessment order on March 9, 2005, under section 143(3) of Act. This is evident from fact that no reference to same is found in assessment order dated March 9, 2005. Moreover, queries raised by letter dated December 27, 2004, by Assessing Officer were of general nature and response being voluminous, it did not indicate any application of mind by Assessing Officer for forming opinion in regular assessment proceedings; and (d) At this stage, when, only notice for reopening has been issued, this court should not interfere. At this stage, it is only prima facie view and petitioner would during regular assessment proceedings have sufficient opportunity to satisfy authorities about appropriates/corrections of allocation of expenditure amongst its three manufacturing units. In view of above, it is submitted that no interference with impugned notice is warranted. law on reopening of assessment under Act is fairly settled. assessment once made is final. Assessing Officer can reopen assessment only in accordance with express provisions provided in section 147/148 of Act. This is for reason that there is finality/sanctity attached to assessment order. It is only on Assessing Officer strictly satisfying provisions of section 147 of Act, that it acquires jurisdiction to reopen assessment. Section 147 of Act clothes Assessing Officer with jurisdiction to reopen assessment on satisfaction of following: (a) Assessing Officer must have reason to believe that; (b) Income chargeable to tax has escaped assessment; and (c) In cases where assessment sought to be reopened is beyond period of four years from end of relevant assessment year, then additional condition is to be satisfied, viz., there must be failure on part of assessee to fully and truly disclose all material facts necessary for assessment. Admittedly in this case, impugned notice has been issued within period of four years from end of relevant assessment year, i.e., assessment year 2002-03. In such cases, Assessing Officer would be clothed with jurisdiction to issue notice for reopening of assessment if he has reason to believe that income chargeable to tax has escaped assessment. requirement of failure to make true and full disclosure as provided in proviso to section 147 of Act is not to be satisfied for issuing of reopening notice within period of four years from end of relevant assessment year. Thus, in absence of cumulative satisfaction of reason to believe and in absence of any income chargeable to tax escaping assessment, Assessing Officer is not empowered with jurisdiction to reopen assessment. So far as true and correct meaning of words "reason to believe" is concerned, Supreme Court in CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC) has after analysing section 147 of Act explained meaning of words "reason to believe" as (page 564): "However, one needs to give schematic interpretation to words'reason to believe' failing which, we are afraid, section 147 would give arbitrary powers to Assessing Officer to reopen assessments on basis of'mere change of opinion', which cannot be per se reason to reopen. We must also keep in mind conceptual difference between power to review and power to reassess. But reassessment has to be based on fulfilment of certain preconditions and if concept of'change of opinion' is removed, as contended on behalf of Department, then, in garb of reopening assessment, review would take place. One must treat concept of 'change of opinion' as in-built test to check abuse of power by Assessing Officer. Hence, after April 1, 1989, Assessing Officer has power to reopen, provided there is'tangible material' to come to conclusion that there is escapement of income from assessment. Reasons must have live link with formation of belief." From aforesaid observations of Supreme Court, it is clear that powers to reopen assessment is not power to review order of assessment. Further, change of opinion on part of Assessing Officer in issuing reopening notice, from opinion formed on very issue during regular assessment proceedings would result in same ceasing to be reason to believe. Besides, this court in catena of decisions beginning with Hindustan Lever Ltd. v. R. B. Wadkar, Asst. CIT (No. 1) [2004] 268 ITR 332 (Bom) has taken view that notice for reopening of assessment would stand or fall on basis of reasons recorded at time of issuing notice for reopening of assessment. This court had observed that reasons are required to be read as recorded by Assessing Officer and same cannot be improved upon either by substitution, addition or deletion. In fact, in above case, court observed as (page 338): "The reasons recorded by Assessing Officer cannot be supplemented by filing affidavit or making oral submission, otherwise, reasons which were lacking in material particulars would get supplemented, by time matter reaches court, on strength of affidavit or oral submissions." Thus, validity of notice for reopening of assessment is to be examined on basis of reasons recorded at time of issuing notice for reopening assessment. impugned notice cannot be supported any additional material which does not find place in reasons recorded at time while issuing notice. Keeping above settled principles in mind, we shall now examine rival contentions. In this case, impugned notice has been issued within period of four years from end of relevant assessment year. In such case, Assessing Officer acquires jurisdiction to issue impugned notice, if he has reason to believe that income chargeable to tax has escaped assessment. Mr. Irani submits that objections taken by petitioner that impugned notice has been issued on mere change of opinion, has not been dealt with in order dated November 14, 2007, which results in petitioner's submission of change of opinion, being accepted. It must follow that there is no reason to believe on part of Assessing Officer that income chargeable to tax has escaped assessment. This submission is not factually correct. order dated November 14, 2007, has in fact, held that there is no change of opinion in issuing impugned notice although not supported by reasons. Therefore, contention of petitioner that petition be allowed only on above basis cannot be accepted. Similarly, contention of Revenue that merely because petitioner had not contested fact of escapement of income in its objections to reasons recorded, it must conclusively follow that impugned notice is valid in law and this court should not interfere is not acceptable. petitioner had in its objections questioned jurisdiction of Assessing Officer to issue impugned notice on ground that there was no reason to believe on part of Assessing Officer this on basis of impugned notice is change of opinion. This is evident from fact that opinion on issue of allocation of expenses for claiming deduction under section 80-IA/80-IB of Act was formed during regular assessment proceedings. As observed above, jurisdiction to issue notice is acquired on satisfaction of twin conditions, i.e., reason to believe and escapement of income-tax in case of assessment being sought be opened within period of less than four years from end of assessment year. Besides, issue of escapement of income chargeable to tax is also issue on merits and may not in particular facts establish ex facie absence of jurisdiction. In present facts, petitioner had along with its return of income filed its computation of income wherein claim for deduction under section 80-IA/80- IB of Act was made. Besides auditor's certificate, as required under section 80-IA(8) of Act, to claim deduction was also filed along with note indicating basis of allocation of expenditure amongst its three manufacturing units was also filed. These were all primary documents which would not normally escape examination during scrutiny proceedings. This is also evident from fact that during assessment proceedings, Assessing Officer had by letter dated December 27, 2004, called upon petitioner to furnish details with regard to its claim for deduction under section 80-IA/80-IB of Act including method/manner of allocation of expenditure amongst its three manufacturing units. petitioner by its letter dated January 25, 2005, submitted various details of allocation of expenses supporting its note filed along with return of income that expenditure had been allocated actual basis, turnover basis and time-spent basis amongst three manufacturing units. aforesaid allocation of expenses on different basis was on basis of nature of expenditure. Assessing Officer was satisfied with petitioner's response and, consequently, in assessment order dated March 9, 2005, under section 143(3) of Act accepted petitioner's claim for deduction under section 80- IA/80-IB of Rs. 2.08 crores. This establishes that opinion was formed in respect of allocation of expenses amongst three manufacturing units for deduction under section 80-IA/ 80-IB of Act while passing order of assessment on March 9, 2005. However, Mr. Chhotrary, learned counsel appearing for Revenue, submits that there has been no formation of opinion on allocation of expenditure amongst three manufacturing units by Assessing Officer as assessment order dated March 9, 2005, passed under section 143(3) of Act contains no discussion on same. According to Revenue, it could only be when assessment order contains discussion with regard to particular claim can it be said that Assessing Officer had formed opinion with regard to claim made by assessee. This court in Idea Cellular Ltd. v. Deputy CIT [2008] 301 ITR 407 (Bom) has expressly negatived on identical contention on behalf of Revenue. court held that once all material was placed before Assessing Officer and he chose not to refer to deduction/claim which was being allowed in assessment order, it could not be contended that Assessing Officer had not applied his mind while passing assessment order. Moreover, in this case, it is evident from letter dated August 6, 2007, addressed by Assessing Officer to petitioner containing reasons recorded for issuing impugned notice also record fact that during regular assessment proceedings, petitioner has been asked to furnish details in support of claim for exemption under section 80-IA/80-IB of Act. letter further records that details sought for were furnished and it is now observed that there has been disproportionate distribution of expenses between various units belonging to petitioner for claiming deduction under section 80-IA/80-IB of Act. This is further indication of fact that Assessing Officer had during regular assessment proceedings for assessment year 2002-03 sought information in respect of allocation of expenses and explanation offered by petitioner was found to be satisfactory. This is evident from query dated December 27, 2004, and petitioner's response to same on January 25, 2005, explaining manner of distribution of common expenses for delaying process of claiming deduction under section 80-IA/80-IB of Act. All this would indicate that Assessing Officer had formed opinion while passing order dated March 9, 2005. This court in Aroni Commercials Ltd. v. Asst. CIT [2014] 367 ITR 405 (Bom) had occasion to consider somewhat similar submission made by Revenue and negatived same by holding that when query has been raised with regard to particular issue during regular assessment proceedings, it must follow that Assessing Officer had applied his mind and taken view in matter as is reflected in assessment order. Besides, manner in which Assessing Officer would draft/frame his order is not within control of assessee. Moreover, if every contention raised by assessee which even if accepted is to be reflected in assessment order, then as observed by Gujarat High Court in CIT v. Nirma Chemicals Ltd. [2008] 305 ITR 607 (Guj), order would result into epic tome. Besides, it would be impossible for Assessing Officer to complete all assessments which have to undergone scrutiny at its hand. In above view, it is clear that once query has been raised during assessment proceedings and petitioner has responded to query to satisfaction of Assessing Officer as is evident from fact that assessment order dated March 9, 2005, accepts petitioner's claim for deduction under section 80-IA/80-IB of Act. It must follow that there is due application of mind by Assessing Officer to issue raised. Therefore, as there is change of opinion in issuing impugned notice having regard to opinion formed while passing assessment order under section 143(3) of Act, Assessing Officer would cease to have any reason to believe as held by Supreme Court in Kelvinator of India Ltd. (supra). Moreover, power to reassess under section 147/148 of Act is not power to review order of assessment passed under section 143(3) of Act. It is further submitted on behalf of Revenue that so far as letter dated December 27, 2004, issued by Assessing Officer is concerned, same was of general nature and particulars furnished by petitioner in response to same are voluminous and, therefore, not indicative of any application of mind on this issue by Assessing Officer. Reliance was placed upon decision of this court in Export Credit Guarantee Corporation of India Ltd. v. Addl. CIT [2013] 350 ITR 651 (Bom) by Revenue in support of its stand that as issue of allocation of expenses was ignored/overlooked while passing assessment order, then in such case, it is open to Assessing Officer to exercise its jurisdiction under section 147/148 of Act and reopen assessment. In above decision, during regular assessment proceedings, no query was made with regard to issue on which assessment was sought to be reopened, and, therefore, ex facie indicative of non-application of mind. In present case, Assessing Officer had raised queries with regard to allocation for expenditure between three manufacturing units of petitioner which could only be raised on consideration of claim and, consequently, accepted on consideration of reply. Thus, it is not case where Assessing Officer overlooked/ignored material and/or issue which now forms basis of issuing impugned notice for reopening of assessment order for assessment year 2002-03. Further, reliance is also placed by Revenue upon decision of Bombay High Court in Sociedade De Formento Industrial P. Ltd. v. Asst. CIT [2011] 339 ITR 595 (Bom) to relegate petitioner to remedies available under Act. In above case, this court refused to exercise its extraordinary jurisdiction under article 226 of Constitution of India and dismissed petition, challenging notice under section 148 of Act at stage of admission. This on ground that whether or not there was full and true disclosure, is debatable issue and, consequently, same could be appropriately be examined by statutory authorities. In present case, as pointed above, there has been formation of opinion by Assessing Officer, as is evident from queries raised with regard to allocation of expenses between three manufacturing units by petitioner during regular assessment proceedings. No debatable issue requiring examination into jurisdictional fact arises in this case. Therefore, above decision also does not assist Revenue in present facts. Further, reliance was also placed by Revenue upon by Gujarat High Court's decision in Praful Chunilal Patel v. M. J. Makwana, Asst. CIT [1999] 236 ITR 832 (Guj) to contend that where Assessing Officer had overlooked something in order passed in regular assessment proceedings, there can be no question of any change of opinion. aforesaid decision is not applicable to present facts as in this case, queries were raised in respect of allocation of expenditure during regular assessment proceedings. There was admittedly application of mind to facts involved and opinion formed by Assessing Officer to allow claim for deduction under section 80-IA/80-IB of Act. In Gujarat High Court's decision in Praful Chunilal Patel (supra), observations were made in context of Assessing Officer admittedly not having formed opinion on issue on which reopening notice for reassessment was issued. aforesaid decision is also of no avail to Revenue. It was next contended by Mr. Chhotrary, learned counsel appearing for Revenue, that, in present case, impugned notice does not emanate from any change of opinion but on account of communication dated January 15, 2007, received by Assessing Officer from Additional Commissioner of Income-tax who had assessed petitioner to tax for assessment year 2004-05. aforesaid communication dated January 15, 2007, has been annexed to affidavit-in-reply dated January 11, 2008, filed by Assistant Commissioner of Income-tax. aforesaid communication dated January 15, 2007, is not even referred to in reasons recorded while issuing impugned notice dated March 14, 2007. On contrary, communication dated August 6, 2007, which contains reasons recorded at time of issuing impugned notice refers to details furnished by petitioner during regular assessment proceedings and it is now observed therefrom that allocation of common expenses between three manufacturing units belonging to petitioner is disproportionate. As pointed out hereinabove, this court in series of decisions beginning with Hindustan Lever (supra) has taken view that reopening notice has to stand or fall on basis of reasons recorded at time of issuing notice for reopening. It is not open to Assessing Officer to improve upon reasons recorded at time of issuing notice either by adding and/or substituting reasons by affidavit or otherwise. tangible material, i.e., letter dated January 15, 2007, on which Revenue relies upon for issuing of notice, could have undoubtedly been basis for issuing impugned notice even if same has been obtained in assessment proceedings for subsequent assessment year provided same was basis of impugned notice and so recorded in reasons in support of impugned notice. In these circumstances, reliance by Revenue upon letter dated January 15, 2007, from Additional Commissioner of Income-tax cannot be read into reasons recorded while issuing impugned notice. It was, lastly, contended by Mr. Chhotrary, learned counsel appearing for Revenue, that impugned notice is only for reassessment for assessment year 2002-03. At this stage, Revenue is not required to establish case to hilt but only required to make out prima facie case in support of its stand. In support of above submission, reliance was also placed upon decision of Supreme Court in Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500 (SC). There can be no dispute to above proposition. It is submitted that during course of reassessment proceedings, petitioner would have opportunities to satisfy authorities that there has been no escapement of income and allocation of common expenses between three manufacturing units for purposes of claiming deduction under section 80-IA/80-IB of Act is in accordance with law. However, issue being examined is whether Assessing Officer has jurisdiction to issue reopening notice. Once assessment order is being passed, it has some sanctity. If assessment order is to be disturbed, then Assessing Officer must strictly satisfy condition precedent as provided under section 147/148 of Act before he can issue notice, seeking to reopen assessment. In this case, as we have pointed out hereinabove, there has been change of opinion on part of Assessing Officer in issuing notice and, therefore, he has no reason to believe that income chargeable to tax has escaped assessment. In these circumstances, jurisdictional requirement for issuing notice is not satisfied and, therefore, impugned notice and consequent order dated November 14, 2007, disposing of objections, are not sustainable. For reasons indicated hereinabove, we set aside impugned notice dated March 14, 2007, issued under section 148 of Act. petition allowed. No order as to costs. *** GKN Sinter Metals Ltd. v. Assistant Commissioner of Income-Tax (Ramapriya Raghavan)