JUDGMENT judgment of court was delivered by R. K. Gauba J.-This appeal by assessee seeks to assail order dated May 27, 2013, passed by Income-tax Appellate Tribunal ("the ITAT") in appeal registered as I. T. A. No. 2141/Del/2012 and for quashing of reassessment order passed by respondent (the assessing authority) under section 147 of Income-tax Act, 1961. By impugned order, Income-tax Appellate Tribunal set aside order passed by Commissioner Income-tax (Appeals) ("the CIT(A)") on February 15, 2012, whereby assessment order made on December 2, 2010, by Assistant Commissioner, Income-tax Circle 10(1), New Delhi, for assessment year (AY) 2003-04 assessing income at Rs. 1,63,90,330 having effect of tax liability in sum of Rs. 23,83,380 under section 147 read with section 143(3) of Income-tax Act was set aside. assessment order dated December 21, 2010, passed by Assistant Commissioner, Income-tax Circle 10(1), New Delhi, shows that assessee had filed return of income for assessment year 2003-04 on December 2, 2003, declaring income of Rs. 1,17,24,580. return was processed under section 143(1) of Income-tax Act, 1961. case was selected for scrutiny and notice under section 143(2) of Income-tax Act, 1961, was issued and later assessment was completed at Rs. 1,32,03,670 after making certain additions in returned income of assessee-company. Subsequently, income was revised at Rs. 1,17,24,580 by order under section 250/143(3) of Income-tax Act dated September 21, 2007. case was reopened under section 147 of Income-tax Act leading to notice under section 148 of Income-tax Act being issued on March 22, 2010, which action was resisted by assessee through response. In course of reassessment proceedings, assessee was called upon to furnish details of income-tax return/bank account/profit and loss account/tax audit report, etc., vide letter dated October 14, 2010. assessing authority found in reassessment proceedings that assessee, while calculating deduction under section 80HHE, had adopted incorrect turnover which had resulted in excess claim under said provision of law to tune of Rs. 46,65,749. Assessing Officer proceeded to recalculate deduction and restricted it to 50 per cent., that is to say, Rs. 6,41,070. On that basis, revised taxable income was calculated at Rs. 1,63,90,329 on which interest under sections 234B and 234D was also applied, simultaneously withdrawing proportionately interest allowed under section 244A. Assessing Officer directed penalty proceedings to be initiated separately under section 271(1)(c) of Income-tax Act. Commissioner of Income-tax (Appeals) in appeal by assessee, however, found reassessment order to have been actuated by "change of opinion" of Assessing Officer which is not permissible in law, also for reason case had been reopened after expiry of four years prescribed in proviso to section 147 of Income-tax Act. In reaching such conclusions, first appellate authority, inter alia, referred to dictum in CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC). Income-tax Appellate Tribunal, in appeal by Revenue, however, found that first appellate authority had failed to give opportunity to Assessing Officer for responding to objections of assessee in first appeal and had also not given any specific finding after investigating fact as to whether there had been failure on part of assessee to make return under section 139 or in response to notice under section 142(1) or section 148 or for that matter as to whether there had been failure on part of assessee to disclose fully and truly material facts necessary for assessment of this case. Income-tax Appellate Tribunal, thus, set aside order of Commissioner of Income-tax (Appeals) and restored matter to said forum for re-adjudication after giving appropriate and reasonable opportunity to both parties. pleadings and submissions made in course of hearing indicate that appellant-assessee on November 8, 2013, has moved application before Income-tax Appellate Tribunal invoking section 254(2) of Income- tax Act seeking rectification of order dated May 27, 2013, reiterating its position about there being no material showing failure on its part to make full and true disclosure and questioning grounds on which assessing authority had reopened case. said application is pending consideration before Income-tax Appellate Tribunal. Commissioner of Income-tax (Appeals) exercises jurisdiction of first appellate authority following procedure prescribed under section 250 of Income-tax Act. It is clear from section 250(2) that at hearing of such appeal both sides, i.e., assessee and also Assessing Officer, have right to be heard, either in person or by representative. perusal of order of Commissioner of Income-tax (Appeals) in this case clearly shows that Assessing Officer was never called upon by said authority to assist at hearing before appeal of assessee was allowed. Technically speaking, ground on which matter has been remanded by Income-tax Appellate Tribunal to Commissioner of Income-tax (Appeals) cannot be questioned. Ordinarily, in such fact situation, this court would not interfere. But, having heard both sides, we find merit in view taken by Commissioner of Income-tax (Appeals) on validity of satisfaction on basis of which case of assessment for assessment year in question was reopened in matter at hand. Since it is jurisdictional error, we proceed to set out hereinafter reasons why remand order passed by Income-tax Appellate Tribunal should be set aside and matter of reassessment for assessment year 2003-04 in respect of appellant-assessee be closed. In facts and circumstances, following question of law arises: "Whether reopening of assessment under section 147 of Income-tax Act, after completion of assessment proceedings on March 21, 2006, under section 143(3), leading to notice under section 148 of Income-tax Act issued on March 22, 2010, was for reason of'change of opinion' and, therefore, impermissible in law?" procedure for assessment is prescribed in section 143 of Income- tax Act. Every person liable to pay income-tax is required by law (section 139) to submit return of income. There is provision for inquiry before assessment (section 142), for which purposes assessing authority is required to issue notice for submission of return or production of specified account or document or furnishing of information, as may be deemed necessary. assessment is made under section 143(1) on return submitted under section 139, or material furnished in response to notice under section 142. assessing authority is vested with power to subject case to be taken for scrutiny under section 143(2) and (3) of Income-tax Act. Generally, if he considers it necessary or expedient to do so, to ensure that assessee has not understated income or has underpaid tax in any manner and, particularly, in cases where he has reasons to believe that any claim of loss, exemption, deduction, allowance or relief made in return is inadmissible. For cases taken up under "scrutiny" clause, Assessing Officer is required to issue notice calling for such information and documents as are considered necessary. In cases of failure to make return under section 139, or in compliance with notice under section 142, or notice under section 143(2) on part of assessee, Assessing Officer is vested with jurisdiction to make best judgment assessment (section 144) of total income or loss accruing to, or incurred by, assessee and for determining sum payable as income-tax thereupon, after taking into account relevant material "gathered" by such authority subject, however, to requirement of giving to assessee opportunity of being heard. Ordinarily, assessment procedure stands concluded upon assessment order being passed either under section 143 or section 144 of Income-tax Act. But legislation provides for dealing with cases of income escaping assessment and for such purposes procedure is stipulated in section 147 of Income-tax Act which, as amended by Direct Tax Laws (Amendment) Act, 1989, brought in force with effect from April 1, 1989 (as is relevant for purposes), reads as under: "147. Income escaping assessment.-If Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in course of proceedings under this section, or recompute loss or depreciation allowance or any other allowance, as case may be, for assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as relevant assessment year): Provided that where assessment under sub-section (3) of section 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 section 139 or in response to notice issued under subsection (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year: Provided further that Assessing Officer may assess or reassess such income, other than income involving matters which are subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment. Explanation 1.-Production before Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by Assessing Officer will not necessarily amount to disclosure within meaning of foregoing proviso. Explanation 2.-For purposes of this section, following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:- (a) where no return of income has been furnished by assessee although his total income or total income of any other person in respect of which he is assessable under this Act during previous year exceeded maximum amount which is not chargeable to income-tax; (b) where return of income has been furnished by assessee but no assessment has been made and it is noticed by Assessing Officer that assessee has understated income or has claimed excessive loss, deduction, allowance or relief in return; (ba) where assessee has failed to furnish report in respect of any international transaction which he was so required under section 92E; (c) where assessment has been made, but- (i) income chargeable to tax has been underassessed; or (ii) such income has been assessed at too low rate; or (iii) such income has been made subject of excessive relief under this Act; or (iv) excessive loss or depreciation allowance or any other allowance under this Act has been computed. (d) where person is found to have any asset (including financial interest in any entity) located outside India. Explanation 3.-For purpose of assessment or reassessment under this section, Assessing Officer may assess or reassess income in respect of any issue, which has escaped assessment, and such issue comes to his notice subsequently in course of proceedings under this section, notwithstanding that reasons for such issue have not been included in reasons recorded under sub-section (2) of section 148. Explanation 4.-For removal of doubts, it is hereby clarified that provisions of this section, as amended by Finance Act, 2012, shall also be applicable for any assessment year beginning on or before 1st day of April, 2012." (emphasis supplied) Supreme Court in Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500 (SC) explained law in following words (page 511): "The scope and effect of section 147 as substituted with effect from April 1, 1989, as also sections 148 to 152 are substantially different from provisions as they stood prior to such substitution. Under old provisions of section 147, separate clauses (a) and (b) laid down circumstances under which income escaping assessment for past assessment years could be assessed or reassessed. To confer jurisdiction under section 147(a) two conditions were required to be satisfied: firstly, Assessing Officer must have been 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 Assessing Officer could have jurisdiction to issue notice under section 148 read with section 147(a). But under substituted section 147 existence of only first condition suffices. In other words if Assessing Officer 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 section 147. case at hand is covered by main provision and not proviso. (emphasis supplied)" expression "reasons to believe" appearing in section 147 of Income-tax Act has been subject matter of interpretation in number of cases decided by this court including in Haryana Acrylic Manufacturing Co. v. CIT [2009] 308 ITR 38 (Delhi), Jindal Photo Films Ltd. v. Dy. CIT [1998] 234 ITR 170 (Delhi) and CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1 (Delhi) [FB]. In Jindal Photo Films Ltd. v. Dy. CIT (supra), this court observed as under (page 179 of 234 ITR): "It is also equally well-settled that if notice under section 148 has been issued without jurisdictional foundation under section 147 being available to Assessing Officer, notice and subsequent proceedings will be without jurisdiction, liable to be struck down in exercise of writ jurisdiction of this court. If'reason to believe' be available, writ court will not, exercise its power of judicial review to go into sufficiency or adequacy of material available. However, present one is not case of testing sufficiency of material available. It is case of absence of material and hence absence of jurisdiction in Assessing Officer to initiate proceedings under section 147/148 of Act." view taken by Full Bench of this court in CIT v. Kelvinator of India Ltd. was affirmed by Supreme Court of India in civil appeal, vide judgment reported in [2010] 320 ITR 561; [2010] 2 SCC 723. observations of Supreme Court in said case (after noting legislative changes) appearing in paragraph 6 of report, to following effect are germane to issue raised here (page 564): "On going through changes, quoted above, made to section 147 of Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1989, reopening could be done under above two conditions and fulfilment of said conditions alone conferred jurisdiction on Assessing Officer to make back assessment, but in section 147 of Act (with effect from 1st April, 1989) they are given go-by and only one condition has remained, viz., that where Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to reopen assessment. Therefore, post-1st April, 1989, power to reopen is much wider. 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. Assessing Officer has no power to review; he has power to reassess. But reassessment has to be based on fulfilment of certain pre-condition 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." (emphasis supplied) first proviso to section 147 quoted earlier makes it abundantly clear that no action thereunder is ordinarily permissible in cases where assessment for relevant assessment year has already been made under section 143(3), after expiry of four years from end of relevant assessment year. But it is clear that this limitation would apply only if there has been scrutiny assessment and not otherwise. There is, however, exception available even to four year rule wherein such reopening of assessment proceedings is permitted if any income chargeable to tax has escaped assessment on account of failure on part of assessee "to disclose fully and truly all material facts necessary" for assessment for assessment year in question. Noticeably, reopening of assessment after expiry of four years is permitted only if there has been default on part of assessee to disclose. To put it conversely, law does not provide for reopening of assessment, through route of section 147 of Income-tax Act, if any income has escaped assessment on account of failure on part of assessing authority to gather necessary information within prescribed period or to make proper inquiry or subject available material to proper scrutiny. Thus, it emerges that generally assessing authority is vested by amended law in section 147 to reassess (recompute, etc.) if he has reasons to believe that income has escaped assessment but this he can do only within four year period. On elapse of such period, matter must attain finality. Yet, if Assessing Officer also finds material giving rise to reasons to believe that escapement was due to default of assessee to truly disclose, bar of limitation would get lifted. Undoubtedly, Explanation 1 to section 147 indicates that mere production of account books or other evidence before Assessing Officer would not necessarily amount to disclosure of material information by assessee. But then Explanation clarifies said general refrain by words "not necessarily". Therefore, burden is equally placed on Assessing Officer to exercise due diligence in examining record (account books or evidence) produced before him in light of declarations made in return or responses (to notices, questionnaire, etc.) As has been noted above, sine qua non for action under section 147 (to deal with escapement of income) is gathering or availability of some "tangible material" requiring matter to be reopened. impugned order passed by Income-tax Appellate Tribunal quotes reasons recorded by assessing authority for reopening assessment under section 147/148 of Income-tax Act as under: "The assessment was completed and order under section 143(3) of Act was passed on November 30, 2005. After going through records, it is revealed that calculation of deduction admissible under section 80HHE of Income-tax Act, assessee adopted total turnover of business as Rs. 1,63,58,001 whereas profit and loss account shows that total turnover as Rs. 14,54,12,662 (sales gross + services). Adoption of incorrect total turnover resulted in excess allowance of deduction under section 80HHE to tune of Rs. 42,17,556 entailing short levy of tax of Rs. 21,27,313. Therefore, I have reason to believe that income of assessee has escaped assessment as per section 147 of Income-tax Act. Issued notice under section 148. approval of Commissioner of Income-tax, Delhi-IV, has been obtained on February 19, 2010." It is clear from bare reading of aforementioned satisfaction note recorded by assessing authority for reopening assessment five years after assessment had been completed under section 143(3) (on November 30, 2005) that only indication set out as to grounds which had triggered such action is through words "after going through records". assessing authority would not elaborate as to which records had been adverted to and what was event which had occurred that had impelled such perusal of records for fresh view to be taken. Noticeably, Assessing Officer while recording his satisfaction by note dated March 19, 2010, that case had been made out for income to be reassessed would not attribute any act of commission or omission on part of assessee so as to constitute failure to discuss fully and truly of material facts. Indeed, assessing authority expressed that reasons to believe existed that part of income had escaped assessment. But, it would not clarify even remotely as to how said failure had occurred. relevant part of reassessment order that came to be eventually passed by assessing authority on December 21, 2010, needs to be extracted. It reads as under: "The reply filed by assessee-company has been considered, however, no found to tenable. In absence of any substantiating submissions filed by assessee-company it is presumed that it has nothing to say in matter. On going through profit and loss account submitted by assessee it appears that net sales was of Rs. 10,89,05,293 and after adding back services and others total turnover comes to Rs. 13,16,12,262 whereas on perusal of annexure 2 regarding deduction under Chapter VI-A assessee in computation of deduction under section 80HHE total turnover claimed was Rs. 1,63,58,001. Thus, details relating to claim by exporter computer software for deduction under section 80HHE of Income-tax Act shows that as per Form No. 10CCAF total turnover of assessee-company for year under consideration has been taken at Rs. 1,63,58,001 instead of Rs. 13,54,12,662 (sales gross + services). In view of above, it is quite evident that assessee-company, while computing deduction under section 80HHE has adopted incorrect turnover which has resulted excess claim of deduction under section 80HHE to tune of Rs. 46,65,749..." Revenue has placed reliance on Honda Siel Power Products Ltd. v. Deputy CIT [2012] 340 ITR 53 (Delhi) to argue that mere production of books of account or other evidence was not sufficient in view of Explanation 1 to section 147 noted earlier. In our considered view, factual matrix of Honda Siel Power Products Ltd. (supra) is distinguishable. court had found on that occasion omission or failure on part of assessee which attracted initiation of action under section 147(1) on account of first proviso thereto coming into play. order passed by assessing authority extracted above unmistakably shows that even at that stage it had no fresh material available to it so as to exercise jurisdiction available under sections 147/148 of Income-tax Act. It was, thus, taking fresh call on subject of assessment of income (i.e., reassessment), drawing conclusions and inferences from same very material that had been scrutinised in original assessment proceedings. case at hand is concededly not covered by other exceptions as indicated by second and third proviso or Explanation to section 147 quoted earlier. reopening of assessment in case at hand through notice under section 148 of Income-tax Act issued on March 22, 2010, fails to pass muster on both tests. satisfaction note does not disclose foundation of "reasons to believe" as it vaguely refers to perusal of "the records" without specifying fresh "tangible material" that had come to light giving rise to need for such action. Since assessment had earlier been concluded under section 143(3) by order dated September 21, 2007, restrictions on exercise of power of reassessment as contained in first proviso to section 147 would inhibit further action in absence of material showing default by assessee to fully or truly disclose. In above facts and circumstances, we concur with view taken by Commissioner of Income-tax (Appeals) that it is case of impermissible change of opinion. order whereby proceedings have been reopened for assessment under section 147/148 of Income-tax Act, thus, is found to suffer from jurisdictional error. Consequently, proceedings taken out in its wake cannot sustain. We, thus, answer question of law formulated as above in affirmative against Revenue. Consequently, order of Income-tax Appellate Tribunal is set aside and order passed by Commissioner of Income-tax (Appeals) on December 15, 2012, is restored. *** Donaldson India Filters Systems P. Ltd. v. Deputy Commissioner of Income-tax