IN HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.3171 of 2019 Ravindra Kumar (HUF) @ Rabindra Kumar (HUF) son of Late Bhagirath Prasad Kumar @ Bhagirath Kumar Hindu Undivided Family resident of Jhandapur, District Bhagalpur through its Karta Rabindra Kumar, resident of Radha Rani Sinha Road, P.O. Adampur, P.S. Joskar, Jagdishpur, District- Bhagalpur. Petitioner/s Versus 1. Commissioner of income Tax, Bhagalpur. 2. Income Tax Officer, Ward1(2), Bhagalpur. Respondent/s Appearance : For Petitioner/s : Mr. D.V. Pathy, Adv. Ms. Manju Jha, Adv. Mr. Sadashiv Tiwari, Adv. For Respondent/s : Mr. Rishi Raj Sinha, Sr. S.C Ms. Shilpi Keshri, J.S.C. CORAM: HONOURABLE MR. JUSTICE JYOTI SARAN and HONOURABLE MR. JUSTICE PARTHA SARTHY ORAL JUDGMENT (Per: HONOURABLE MR. JUSTICE JYOTI SARAN) Date : 06-08-2019 petitioner by filing this writ petition under Article 226 of Constitution of India questions notice dated 22.03.2018 issued by respondent No.2, Income Tax Officer, Ward 1(2), Bhagalpur in purported exercise of power vested in him under Section 148 of Income Tax Act, 1961 (hereinafter referred to as Act ). Alongside petitioner also questions final order dated 26.12.2018 together with demand notice issued by same authority. Copies of Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 2/27 notice and assessment order are impugned at Annexures-3 and 10 series respectively to writ petition. Mr. D.V. Pathy, learned counsel for petitioner has appeared for petitioner. respondents are represented by Mr. Rishi Raj Sinha, learned Senior Standing Counsel who appears with Ms. Shilpi Keshri, Junior Standing counsel. preliminary objection was raised by learned counsel for respondents when this matter came up for consideration on 21.02.2019 on plea of alternative remedy of appeal available to petitioner to question assessment order but since according to Mr. Pathy, assessment order so passed was de hors statutory provisions under which it was exercised and also lacked foundation that we allowed parties to address issue on merits and when matter has been heard with view to final disposal at stage of admission. Facts of case as advanced by Mr. Pathy briefly stated is that petitioner submitted his returns for assessment year in question i.e. 2011-12 together with audit report on 30.03.2012, copy of which is on record at Annexure- 1 series to writ petition. It is case of petitioner that since after filing of return under Section 139 of Act no Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 3/27 objection was raised by department and it is after lapse of almost 6 years that notice was issued on 22.03.2018 by respondent No.2, Income Tax Officer, Ward 1 (2), Bhagalpur in purported exercise of powers vested under Section 133 (6) of Act requiring petitioner to furnish information detailed in notice. plain look of directions present in notice would confirm that documents so directed to be produced related to agricultural income disclosed by petitioner in his return which is to tune of Rs.4,85,905/- for assessment year 2011-12, copy of which is at Annexure-2. petitioner did not respond to this notice which was followed by notice under Section 148 of Act charging petitioner of escaped assessment for reasons to believe in possession of said officer and thereby proposing to reassess income/loss for assessment year 2011-12. copy of such notice is at Annexure-3 to writ petition and it is in compliance of direction that return was again submitted by petitioner before Income Tax Officer vide Annexure- 4 to writ petition which is identical to one originally filed and placed at Annexure-1 series to writ petition. petitioner along side requested for supply of reason which Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 4/27 led Income Tax Officer to believe that some part of income had escaped assessment within meaning of Section 148 of Act which was supplied by Income tax Officer and copy of which is enclosed at Annexure-5 to writ petition. petitioner filed his objection to initiation of proceedings, copy of which is at Annexure-6 to writ petition which was followed by two notices dated 7.12.2018 and 15.12.2018 requiring petitioner to furnish information sought through vide Annexure-2 to writ petition. Copies of such notice is at Annexure 7 and 8 respectively to writ petition and which was followed by third notice dated 16.12.2018 to same effect at Annexure-9. petitioner did not comply with directions to produce documents so directed through notices under reference and which led to passing of order impugned dated 22.06.2018 by respondent No.2, Income Tax Officer in purported exercise of power vested in him under Section 147 of Act whereby, Income Tax Officer while holding audit report submitted by petitioner along with his original return at Annexure-1 series,a fabrication, has proceeded to disallow claim towards agricultural income as well claim on expenses under head income from business and profession, to be added to his Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 5/27 total income. It is on computation of total income that tax liability has been determined at Rs. 10,73,780/- vide assessment order at Annexure 10 series and which is followed by demand notice issued under Section 156 of Act which accompanies Annexure-10 which is put to question in this writ petition. Mr. Pathy, learned counsel for petitioner has straightway taken this Court to reasons so supplied to petitioner by respondent No.2 to reopen proceedings under Section 147 of Act , copy of which is impugned at Annexure-5 to writ petition. It is submitted that petitioner has disclosed income of Rs. 4,85,905/- as his agricultural income in his return which was accompanied with audit report as well as balance sheet, profit and loss account etc. It is submitted that return of petitioner was not subjected to scrutiny nor assessment proceeding was held, which would allow Income Tax Officer to verify position on agricultural income but having not done so, law does not permit Assessing officer to hold enquiry which should have been done at stage of filing of returns. According to Mr. Pathy, in case Assessing authority is in possession of materials which leads to reasonable belief that Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 6/27 any part of income had escaped assessment that proceeding of such kind under Section 147 can be carried out but such power cannot be abused for holding roving enquiry where petitioner was being directed to produce evidence against himself. It is submitted by Mr. Pathy, that although petitioner questioned authority of Income Tax Officer to reopen proceedings but same has been ignored to result in order impugned at Annexure-10 series. Learned counsel has next turned to satisfaction recorded by Commissioner on such reopening and copy of which has been placed on record by department in its counter affidavit at Annexure- B. According to Mr. Pathy, while Section 151 of Act casts obligation on Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner to record satisfaction on reasons recorded by Assessing Officer that it is fit for issuance of notice, plain look at remarks recorded by Joint Commissioner and Principal Commissioner of Income tax accompanying Annexure -B would confirm that while Joint Commissioner of Income Tax has recorded mechanical satisfaction on reasons recorded by Assessing Officer for issuance of notice under Section 148 of Act , Principal Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 7/27 Commissioner of Income Tax has simply certified it as fit case for issuing notice. Learned counsel in support of submission that entire exercise of reopening of assessment is de hors statutory provisions and Assessing authority while exercising such jurisdiction cannot force petitioner to produce documents/records against himself, has relied upon following judgments (1) [1961] 41 ITR 191 (SC)]( Culcutta Discount Co.Ltd. versus Income Tax Officer) In reference to opinion expressed by Supreme Court at paragraph 11 of judgment, he submits that Supreme Court has held that no duty remains on assessee to produce any record or documents after making full and truthful disclosure of all primary facts. According to Mr. Pathy, entire disclosure is present in returns filed which was accompanied with audit report as well as balance sheet and profit and loss statement of petitioner allowing him to hold whatsoever enquiry that Assessing Officer wanted to do at that stage, but not having exercised such jurisdiction to hold assessment proceedings, when assessee was lawfully obliged to supply particulars, this jurisdiction Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 8/27 cannot be carried forward to proceeding under Section 147/148 of Act (2) [1976]103 ITR 437 (SC)] (Income Tax Officer versus Lakhmani Mewal Das) placing reliance on opinion expressed at paragraph 7 of judgment, it is submitted that legal position as to exercise of jurisdiction under Section 147/148 of Act has been discussed. He submits that Supreme Court while accepting that duty is cast upon assessee to make true and full disclosure of preliminary fact at time of assessment further goes on to hold that duty of assessee does not extent beyond such true and full disclosure and once he has done his part then his duty ends for it is no responsibility of assessee to advise Income Tax Officer as to inference that he should draw from fact so disclosed. (3) W.P. No. 1000 of 2017 and W.P. No.1001 of 2017 (Zuari Foods and Farms Pvt. Ltd. versus Assistant Commissioner of Income Tax and Ors.). In reference to opinion expressed by Bombay High Court at paragraph 6 of judgment, he submits that grounds for reopening assessment has to be recorded before notice is issued and which reason must disclose live Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 9/27 link between tangible material in possession of assessing Officer as well as reason to believe that income chargeable to tax has escaped assessment. It is submitted that in so far as present case is concerned, there is no material in possession of Assessing Officer to reopen proceeding rather it is to gather material that documents etc. are being directed to be produced as manifest from notice issued under section 133 of Act impugned at Annexure-2. (4) (2016) 91 VST 1(SC) (State of Uttar Pradesh versus Aryaverth Chawal Udyog and Ors.) In reference to position settled by Supreme Court at paragraphs 19 to 27 it is submitted by Mr. Pathy that legal position on reopening of assessment has been settled to hold that unless there is tangible material in possession of Assessing Officer for formation of reason to believe that any income chargeable to tax has escaped assessment, such exercise cannot be carried out by holding roving enquiry as in case of original assessment. (5) 235 ITR 219 (Rina Sen versus CIT) Mr. Pathy in reference to opinion at para 2 to 7 submits that Assessing Officer while exercising such jurisdiction cannot force assessee to produce particular information in Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 10/27 his possession. Summarizing his argument, it is contended by Mr. Pathy that reopening of assessment under Section 147/148 of Act is not mechanical discharge rather Assessing officer having accepted return filed by assessee which became deemed assessed, there had to be some tangible material in possession of Assessing Officer for formation of reasons to believe that any part of income of petitioner has escaped assessment and when any Assessing officer would be well within his jurisdiction to reopen assessment to carry out reassessment proceeding but in case of present nature where every disclosure as regarding Agricultural income was made by petitioner at stage of filing of original return and no steps were taken by Assessing Officer to doubt return on its veracity as well as on disclosure of agricultural income, this failure on part of Assessing Officer to carry out exercise of verification as well as for demand of records in support of disclosure so made, cannot be extended and stretched to proceeding under Section 147 of Act . According to Mr. Pathy illegality is perpetuated by Assessing Officer in going beyond reasons supplied by disallowing expenses claimed by petitioner under Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 11/27 various heads to tune of Rs. 12, 39,000/- to add it to total income of assessee, which is beyond reasons supplied by Assessing Officer. writ petition is resisted by Mr. Rishi Raj Sinha, learned Senior standing Counsel for Income Tax Department. Defending exercise and orders passed thereunder, he submits that exercise is within parameters of statutory provisions and there is neither any default in jurisdiction nor order is in excess of such jurisdiction. According to Mr. Sinha, entire argument of Mr. Pathy is resting on preamended provisions of Section 147 of Act and even judgments relied upon is in reference to such provision. According to Mr. Sinha, there has been sea change in provisions of Section 147 of Act vide Direct Tax Law (Amendment) Act, 1987 which came into force with effect from 01.04.1989. According to Mr. Sinha, enunciation of law as found in judgments relied upon by Mr. Pathy is in consideration of unamended provisions of Section 147 of Act but since after its amendment with effect from 01.04.1989, Assessing officer has been given wider play field. According to Mr. Sinha, learned Senior Standing Counsel for Department, disclosure towards agricultural income Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 12/27 was made by petitioner in his returns which was not supported with material. He submits that it is in light of order passed by this Court on pubic interest litigation that advisory was issued to all Assessing Officers to carefully examine claim on agricultural income and in cases where assessment was completed or pending, to verify, whether such income has been rightfully claimed by assessee. It is submitted by Mr. Sinha, that it is in course of such exercise that case of petitioner also was taken into consideration and since claim was not supported with material that notice under Section 148 was issued enclosing reasons. In reference to letter issued on behalf of Principal Commissioner, Income Tax dated 20.03.2018 at Annexure B, he submits that approval was granted for such reopening of assessment in case of 3 assessees including petitioner in respect of agricultural income so declared. It is submitted that since in course of such examination, it also transpired that disclosure on agricultural income was not supported with material and certain expenses had been wrongfully claimed by petitioner that same, were rejected for being added to his total income. To differentiate case laws relied upon by Mr. Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 13/27 Pathy, learned counsel has placed strong reliance on judgment of Supreme Court reported in (2007) 291 ITR 500 (Asst. CIT versus Rajesh Jhaveri Stock Brokers). In reference to opinion expressed at paragraphs 9, 16 and 17 he submits that transition in Section 147 has been dealt and even if preamended provisions of Section 147, gave openings for assessee to question proceedings, no such plea is entertainable since after amendment was brought in Section 147 effective from 01.04.1989. Defending disallowance of expenses, learned counsel refers to Explanation 3 attached to Section 147 to submit that no infirmity exists in exercise. According to Mr. Sinha, Assessing Officer was well within his jurisdiction to direct assessee to produce records supporting agricultural income so claimed by petitioner. Learned counsel has referred to Section 151 of Act to submit that plain look at letter of Principal Commissioner enclosed at Annexure- B to counter affidavit which also encloses sanction accorded, would confirm that there is absolutely no infirmity in exercise of reopening of assessment. Reverting back to provisions of Section 147 it is Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 14/27 submitted that once Assessing Officer on materials on record has reasons to believe that any income chargeable to tax has escaped assessment, it is after issuing notice and hearing assessee that Assessing Officer can assess or reassess. According to Mr. Sinha, even if reasons supplied by Assessing Officer made reference to disclosure of agricultural income by assessee but once assessment is reopened, it allows Assessing Officer to examine other claims as well and since material on record showed that certain expenses had been wrongly claimed by assessee petitioner that it is within powers so vested under Section 147 to assess or reassess, Assessing officer has proceeded to pass order in respect of expenses claimed as well and which would suffer no infirmity. In sum and substance, it is argument of Mr. Sinha that there is absolutely no infirmity in exercise complained of which warrants any interference. Briefly responding to arguments of Mr. Sinha, Mr. Pathy has made reference to statutory provisions of Section 143 of Act to submit that when return is filed under Section 139 of Act it is processed in manner prescribed in Section 142, 143(2) and 143(3) which inter alia Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 15/27 allows Assessing Officer to satisfy himself on claim of loss, deduction, allowance or relief etc. and whether it is inadmissible and if he has reasons to believe that claim is inadmissible then he is at liberty to direct assessee to produce or cause to be produced any evidence or particulars which may be required in support of such claim. In reference to Sub section (3) of Section 143 he submits that in case on date fixed, assessee fails to comply with such notice then Assessing Officer has all jurisdiction under Act to put such assessee to notice and make computation of income/loss to best of his judgment and also to determine sum payable by assessee. According to Mr. Pathy, even if law vests such jurisdiction in Assessing Officer at stage of original assessment, this power cannot be stretched once period of 6 months has lapsed from end of financial year for which return is furnished because even this power has been withdrawn by legislature under Section 143 of Act on expiry of such period. According to Mr. Pathy, if law does not allow Assessing Officer to put assessee on notice on his disclosure at time of original assessment on expiry of 6 months of end of financial year to which returns relates, it cannot be done by resorting to power for Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 16/27 reopening of such reassessment. We have heard learned counsel for parties and we have perused records. Although exhaustive arguments have been advanced by either side but it is following issues which fall for consideration in present case; (a) Whether exercise under Section 147 of Act is barred by limitation so prescribed under Section 149 of Act ; (b) Whether Assessing officer in exercise of jurisdiction vested under Section 147 of Act can compel assessee for production of records /documents/particulars in respect of any disclosure made in returns; (c) Whether there was any tangible material available with Assessing Officer to reopen proceedings which was live link in between reasonable belief and order passed under Section 147 of Act ; and (d) Whether Assessing Officer could have travelled beyond reasons to disallow expenses claimed by petitioner in his return to add to his total income, by relying on Explanation 3 attached to Section 147. In so far as issue of limitation as raised by Mr. Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 17/27 Pathy is concerned, considering import of Section 149 of Act that return were originally filed on 30.3.2012, notice issued under Section 148 on 22.3.2018 is found to be well within limitation period and to that extent there is no infirmity in initiation of proceedings. issue of contest is that disclosure towards agricultural income made by petitioner in his return at Annexure-1 of writ petition has been disbelieved and it is to satisfy himself on this account that enquiry is initiated by Assessing officer under Section 133(6) of Act . No less than 14 documents/records/registers have been demanded by Income Tax Officer respondent No.2. It is rather fairly informed by Mr Sinha that such exercise was initiated in view of advisory issued which had approval of Principal D.G.I.T. (S) New Delhi. Such advisory contained in letter dated 10.3.2016 was issued in light of order passed by this Court on public interest litigation and required verification of agricultural income for periods, which also included assessment year in question. advisory directs Assessing Officer to verify whether there is any data entry error in returns filed; to provide feedback where assessment is complete and in cases where Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 18/27 assessment is pending, to thoroughly verify claims on agricultural income. We are persuaded to take notice of advisory issued, copy of which was handed over during course of proceedings, because, in case it is said advisory which lies at foundation of reopening then entire exercise is fit to be struck down on this score because this does not constitute information or live link in between materials available and reasons to believe formed by Assessing Officer for reopening of assessment. In fact, two letters have been handed over by Mr. Sinha during course of argument, each having approval of Principal D.G.I.T(S), New Delhi and they have been circulated in reference to judgment of this Court in respect of claims towards agricultural income. Paragraph 2 of letter dated 10.03.2016 takes notice of assessees who have declared income of more than 1 Crore as agricultural income in their returns filed for assessment year 2011-12 to 2013-14. writ petitioner does not come within this category because his claim towards agriculture income is Rs. 4,85,905/- which is less than 1 crore. Paragraph 4 of letter dated 10.3.2016 accepts that disclosure towards agricultural income is only for rate purposes. Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 19/27 Paragraph 5 of letter issues directions to Assessing Officer to verify any error in data entry, to provide feedback based on such score where assessment is completed and to verify claims where assessment proceeding is pending. Paragraph 6 again mentions about list of cases in which agricultural income exceeding Rs. 1 crore has been claimed. We completely fail to appreciate as to how this advisory can lay foundation for such exercise especially where there is no direction in advisory to reopen any proceeding. Perhaps, Assessing Officer in his exuberance has got misled by such advisory to issue notice for such proceeding and unfortunately even Principal Commissioner has defaulted in not appreciating whether at all case was fit case for reopening especially where Assessing Officer had failed to satisfy himself on reasons for belief that any part of income chargeable to tax had escaped assessment. Much reliance has been placed by Mr. Sinha to contest proposition advanced by Mr. Pathy in reference to parameters drawn for exercise of power vested in Assessing Officer under Section 147 of Act by submitting Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 20/27 that proposition canvassed may be good under preamended provision of Section 147 of Act but since after its amendment with effect from 01.04.1989, this argument would not hold good for extensive powers has been vested in Assessing Officer to reopen assessments where he has reasons to believe that any income chargeable to tax has escaped assessment and in such exercise, Assessing Officer can also direct for production of documents/records needed for purpose. It is also his argument that in this course, Assessing Officer can also go beyond reasons supplied, to comment upon any other matter that my arise during such exercise under Explanation 3 attached to Section 147. In our opinion argument advanced on behalf of department is fallacious. transitory provision of Section 147 came up for consideration in case of Commissioner of Income Tax versus Kelvinator of India reported in (2010)2 SCC723. Supreme Court after taking note of preamended provision of Section 147, its amendment vide Amendment Act, 1987 as well as Amendment Act, 1989 has observed thus in paragraphs 5,6 and 7: 5.On going through changes, quoted above, made to Section 147 of Act, we find that, prior to Direct Tax Laws (Amendment) Act, 1987, reopening could be Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 21/27 done under above two conditions and fulfillment of said conditions alone conferred jurisdiction on Assessing Officer to make back assessment, but in Section 147 of Act (with effect from 1-4- 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-1-4-1989,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. 6. 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 fulfillment of certain precondition 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. 7. One must treat concept of change of opinion as in-built test to check abuse of power by Assessing Officer. Hence, after 1-4-1989, 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. Our view gets support from changes made to Section 147 of Act, as quoted hereinabove. Under Direct Tax Laws(Amendment) Act, 1987, Parliament not only deleted words reason to believe but also inserted word opinion in Section 147 of Act. However, on receipt of representations from companies against omission of words reason to believe , Parliament reintroduced said Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 22/27 expression and deleted word opinion on ground that it would vest arbitrary powers in Assessing Officer. Supreme Court taking note of transitory change in Section 147 has in paragraph 7 concluded that power to reopen would vest in Assessing Officer only if, there is tangible material in his possession for coming to conclusion that there was escapement of income chargeable to tax, from assessment and reasons with Assessing Officer must have live link with formation of belief. Testing case in hand in backdrop of position so settled in judgments relied upon by Mr. Pathy as well as on transitory change as clarified in judgment of Kelvinator of India (supra), it is to be seen whether case in hand would pass test. reasons in possession of Assessing Officer finds mention in enclosure to Annexure -B to counter affidavit and runs under. assessee has not produced concrete evidence like land adanga register, nature of crop cultivated expenses incurred to whom agricultural produce was sold, who cultivated land and how income was derived. In absence of any material produced to substantiate receipt agricultural income therefore, I have reason to believe that quantum of agriculture income as claimed in ITR for A.Y.2011-12 is not his agricultural Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 23/27 income. Accordingly, same is treated as income from undisclosed source which escaped for assessment. Hence income chargeable to tax to extent of Rs. 4,85,905/- has escaped assessment within meaning of Sec. 147 of Act, 1961. Proposal for issuing notice u/s 148 of Act may be approved accordingly. plain look at reasons so assigned would confirm that no tangible material was in possession of Assessing Officer which could constitute any reasons which led to belief that any part of income chargeable to tax had escaped assessment rather it is in search of such tangible material that proceedings had been reopened. Income Tax Officer fairly mentions in reasons so supplied that assessee had not produced certain evidences in support of agricultural income and in absence of which claim towards agricultural income could not be substantiated. We completely fail to appreciate as to how such admission by Assessing Officer regarding absence of material, could lead to formation of belief that disclosure was incorrect and chargeable to tax under Section 147 of Act . reason is two fold. Firstly such opportunity was much available to Assessing Officer at stage of filing of returns when in exercise of powers under Section 142/143, such directions could have been issued for production of records and Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 24/27 failure of petitioner to satisfy Assessing Officer on such count could have led to best judgment assessment under Section 144 at stage of original assessment but having not done so, such recourse cannot be adopted by relying upon statutory provisions of Section 147 of Act . Secondly such enabling powers is only to be exercised only where there is tangible material available at hands of Assessing Officer and not in absence thereof. judgments relied upon by Mr. Pathy has been contested by Mr. Sinha on grounds that they relate to preamended provisions of Section 147 but in our considered opinion, in view of position settled by Supreme Court in case of Kelvinator of India (supra) after taking note of transitory change in Section 147, legal position as to prerequisites for such exercise, has not undergone change and which is that, there had to be tangible material at disposal of Assessing Officer for reopening of such proceedings and which power cannot be exercised for initiating roving enquiry. Even if judgments rendered by Supreme Court in case of Calcutta Discount Co. Ltd. and Lakhmani Mewal Das is relatable to preamended provisions of Section 147, in view of legal position settled by Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 25/27 Supreme Court in judgment rendered in case of Kelvinator of India(supra), whatsoever doubts that may be present are in mind of department is set at rest. In this contest we are persuaded to reproduce opinion of Division Bench of this Court recorded in case of Rina Sen (supra) relied upon by Mr. Pathy, which not only relates to period after amendment to Section 147 but also discusses extent of power exercised by Assessing Officer under Section 147 when it records at page 226 as under: . ..It is well settled that object of Section 147 of Act is not to make roving or fishing enquiry. While it is open to authority in appropriate case to make enquiry confidentially or otherwise -in order to obtain information or verify facts disclosed to him by assessee or coming to his notice, before reaching stage of reasonable believe, he cannot compel assessee to associate himself in such roving or fact finding enquiry. assessee can be required to appear only after Assessing Officer has come to conclusion as to reasonable believe within meaning of Section 147 of Act .. ... discussions above would answer issues relating to power in Assessing officer to compel production of records in negative. corollary to such conclusion is that there was no tangible material in possession of Assessing officer for formation of belief of escaped Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 26/27 income chargeable to tax For reasons and discussions that we have made above and in view of clear fact situation available on record where such reopening is simply founded on advisory dated 10.03.2016 issued by department and where reasons so present for formation of belief is not resting on any tangible material, in possession of Assessing officer as confirmed from discussions above, in our opinion, entire exercise is illegal and dehors provisions of Section 147/148 of Act . Since entire exercise is held de hors statutory prescriptions, we do not consider it necessary to express our opinion on expanded scope of Explanation 3 attached to Section 147 and leave it open for discussion in appropriate case. issues so taken note of above are answered accordingly. In result, we quash entire proceedings including notice dated 22.03.2018 impugned at Annexure-3 together with final order dated 26.12.2018 and demand notice issued thereunder impugned at Annexure 10 series passed by respondent No.2 Income Tax Officer which are accordingly set Patna High Court CWJC No.3171 of 2019 dt.06-08-2019 27/27 aside. writ petition is allowed but with no order as to costs. (Jyoti Saran, J) ( Partha Sarthy, J) Bibhash/- AFR/NAFR AFR CAV DATE NA Uploading Date 16.08.2019 Transmission Date NA Ravindra Kumar (HUF) @ Rabindra Kumar (HUF) v. Commissioner of Income-tax, Bhagalpur / Income-tax Officer, Ward1(2), Bhagalpur