Rajesh Balia, J.:— The petitioner challenges in this petition reassessment notice dated March 31, 1995, issued by the Assessing Officer under section 148 read with section 147 of the Income-tax Act, 1961, for the assessment year 1990-91.
2. The reasons recorded by the Assessing Officer for issuing notice read as under:
“The assessee-company filed its return of income on December 28, 1990, declaring a total income of Rs. 1,80,72,380 which was revised to Rs. 1,89,22,173 by way of a revised return filed on December 30, 1991. Income was assessed at Rs. 1,89,22,173 by way of an order under section 143(3) dated March 30, 1993, which was the income computed as per the special provisions under section 115J of the Act. The assessment order was disputed in appeal and after giving effect to the Commissioner of Income-tax (Appeals) order the income was determined at Rs. 1,89,22,173 as per the provisions of section 115J. While working out the book profit under section 115J certain items were excluded. However, as per the provisions of section 115J these items were required to be included in the book profit. These are income-tax refund of Rs. 28.20 lakhs credited to the profit and loss appropriation account which has been excluded, amount Rs. 1.77 lakhs being depreciation revaluation reserve which has been deducted in computing the book profit. Also incorrect set-off of investment allowance has been given.
I, therefore, have reasons to believe that income has escaped assessment to the extent mentioned above, accordingly notice under section 148 is issued.”
3. Learned counsel for the parties state that for identical reasons, notice under section 148 read with section 147 had been issued to the petitioner for the assessment year 1989-90 also on March 18, 1994, which was challenged by way of Special Civil Application No. 6291 of 1994. The said petition has been decided on April 26, 1995 (Vxl India Ltd. v. Assistant Commissioners Income-Tax., [1995] 215 ITR 295 (Guj)), in favour of the petitioner by which the notices for reassessing the income for the assessment year 1989-90 had been quashed by holding that the essential requirement for initiating proceedings under section 148 of the Act is that the Assessing Officer must have reason to believe that any income chargeable to tax has escaped assessment for any assessment year. Explanation 2 to section 147 of the Act, as appended to the newly substituted section 147 makes certain provisions where, in certain circumstances, income is deemed to have escaped assessment giving jurisdiction to the Assessing Officer to act under the said provision. Another requirement which is necessary for assuming jurisdiction is that the Assessing Officer shall record his reasons for issuing notice. This requirement necessarily postulates that before the Assessing Officer is satisfied to act under the aforesaid provisions, he must put in writing as to why in his opinion or why he holds the belief that income has escaped assessment. “Why” for holding such belief must be reflected from the record of reasons made by the Assessing Officer.
4. In a case where the Assessing Officer holds the opinion that because of excessive loss or depreciation allowance income has escaped assessment, the reasons recorded by the Assessing Officer must disclose by what process of reasoning he holds such a belief that excessive loss or depreciation allowance has been computed in the original assessment. Merely saying that excessive loss or depreciation allowance has been computed without disclosing the reasons which led the assessing authority to hold such a belief, in our opinion, does not confer jurisdiction on the Assessing Officer to take action under sections 147 and 148 of the Act. We are also of the opinion that, howsoever wide the scope for taking action under section 148 of the Act be, it does not confer jurisdiction on a change of opinion on the interpretation of a particular provision from that earlier adopted by the assessing authority. For coming to the conclusion whether there has been excessive loss or depreciation allowance or there has been underassessment at a lower rate or for applying the other provisions of Explanation 2, there must be material that has nexus to hold an opinion contrary to what has been expressed earlier. The scope of section 147 of the Act is not for reviewing its earlier order suo motu irrespective of there being any material to come to a different conclusion apart from just having second thoughts about the inferences drawn earlier. According to learned counsel for the parties, this decision governs this petition as well.
5. In the aforesaid circumstances, following the decision in Special Civil Application No. 6291 of 1994, decided on April 26, 1995 (Vxl India Ltd. v. Assistant Commissioners Income-Tax., [1995] 215 ITR 295 (Guj)), this petition is allowed by holding that necessary conditions for issuing notice under section 148 read with section 147 of the Act have not been satisfied. Hence, the notice dated March 31, 1995 (annexure-B), is not sustainable and is hereby quashed. Rule is made absolute. There shall be no order as to costs.