ORDER : Harsha Devani, J. The appellant revenue in these appeals under section 260A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) has challenged the common order dated 5.9.2014 made by the Income Tax Appellate Tribunal, ‘C’ Bench, Ahmedabad (hereinafter referred to as “the Tribunal”) by proposing the following question, stated to be a substantial question of law:- “Whether the Appellate Tribunal has erred in law and on facts by not upholding that the issuance of notice under section 148 which was issued as per provisions available as per explanation 2(c)(iii) and 2(c)(iv) given below section 147 of the Income Tax Act, by Assessing Officer and thereby allowing deduction claimed by the assessee under section 80IB of the Income Tax Act without appreciating the fact that deduction under section 80IB is eligible for SSI unit only where the investment in fixed assets on Plant & Machinery does not exceed Rs. 3 crore whereas the total value of Plant & Machinery as per the Balance Sheet for all the three assessment years under consideration was above 3 crore ?” 2. In the tax appeals arising out of the cross objections, the following question of law has been proposed: “Whether the Appellate Tribunal has erred in law and on facts in holding that the issuance of notice under section 148 which was issued as per provisions available as per explanation 2(c)(iii) and 2 (c)(iv) given below section 147 of the Income Tax Act ?” 3. The assessment years are 2004-05 and 2005-06 and the relevant accounting periods are the financial years 2003-04 and 2004-05. The respondent assessee filed return of income claiming deduction under section 80IB (10) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) of Rs. 37,13,631/- for assessment year 2004-05 and Rs. 44,22,737/- for assessment year 2005-06. The original assessment was completed under section 143(3) of the Act for assessment year 2004-05 on 18.12.2006 and for assessment year 2005-06 on 28.3.2007, whereby the claim for deduction under section 80IB(10) of the Act was allowed to the assessee. 37,13,631/- for assessment year 2004-05 and Rs. 44,22,737/- for assessment year 2005-06. The original assessment was completed under section 143(3) of the Act for assessment year 2004-05 on 18.12.2006 and for assessment year 2005-06 on 28.3.2007, whereby the claim for deduction under section 80IB(10) of the Act was allowed to the assessee. Subsequently, the Assessing Officer issued notice under section 148 of the Act for assessment year 2003-04 on 12.06.2009, for assessment year 2004-05 on 17.3.2009 and for assessment year 2005-06 also on 17.3.2009 by recording the following reasons :- “An industrial undertaking commencing operation on or after 01.04.1995 can claim deduction under section 80IB only if it is a small scale industrial undertaking. The assessee company commenced operation after 15.09.1997 i.e. after 31.03.1995. As defined by section 11 of Industrial (Development & Regulation) Act, 1951 and amended vide SO 857(E) dated 10.12.1999, Small Scale & Industrial Undertaking is an industrial undertaking in which the investment in the fixed assets in Plant & Machinery does not exceed Rs. 1 crore. As per schedule 5 to the Balance Sheet, the total value of Plant & Machinery was certified at Rs. 4,73,81,571/- as on 01.04.2002 i.e. at the beginning of the Financial Year 2002-03 relevant to AY 2003-04, Rs. 4,80,33,282/- as on 01.04.2003 i.e. at the beginning of the Financial Year 2003-04 relevant to AY 2004-05, and Rs. 4,97,88,775/- as on 01.04.2004 i.e. at the beginning of the Financial Year 2004-05 relevant to AY 2005-06 which exceeded the limit fixed for investment in Plant and Machinery and thereby the assessee ceased to be an SSI unit and thus not eligible for deduction under section 80IB of the Act. However, the assessee claimed and was allowed deduction under section 80IB of the Act of Rs. 35,40,963/-, Rs. 37,13,631/- and Rs. 44,22,737/- for Assessment Years 2003-04, 2004- 05 and 2005-06 respectively. Thus, the income chargeable to tax has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961.” 4. The assessment for all the three assessment years was completed on 29.10.2009 whereby the deduction under section 80IB(10) which was allowed to the assessee in the original assessment came to be withdrawn. Thus, the income chargeable to tax has escaped assessment within the meaning of section 147 of the Income Tax Act, 1961.” 4. The assessment for all the three assessment years was completed on 29.10.2009 whereby the deduction under section 80IB(10) which was allowed to the assessee in the original assessment came to be withdrawn. Being aggrieved, the assessee went in appeal before the Commissioner of Income Tax (Appeals) mainly on two grounds; firstly on the ground that the Assessing Officer had reopened the assessment and thereby withdrawn the deduction as granted under section 80IB of the Act on the ground that the assessee was not a small scale industrial undertaking, whereas the assessee, in fact, was a small scale industrial undertaking and, therefore, the deduction under section 80IB was rightly allowed, and secondly, on the ground that the reopening was bad in law as the same was merely based upon a change of opinion. The Commissioner (Appeals) partly allowed the appeal by holding that the assessee being a Small Scale Industrial (SSI) unit had rightly been allowed the deduction under section 80IB(10) of the Act. He, however, upheld the reopening of assessment under section 147 of the Act. The revenue carried the matter in appeal before the Tribunal. The assessee filed its cross objections qua the issue which was decided against it by the Commissioner (Appeals). The Tribunal by the impugned order allowed the cross objections filed by the assessee by holding that the reopening of assessment by the Assessing Officer was without authority of law. In view of the decision taken on the jurisdictional ground, the Tribunal dismissed the appeals filed by the revenue for all the three years. 5. Insofar as assessment year 2003-04 is concerned, against the impugned order, the revenue had preferred appeal which came to be dismissed as the same related to reopening of assessment beyond a period of four years without there being any failure on the part of the assessee to disclose fully and truly all material facts. These appeals, therefore, relate to reopening of assessment within a period of four years from the end of the relevant assessment years. 6. Tax Appeals No. 137 and 139 of 2015 arise out of the appeals filed by the revenue before the Tribunal, whereas Tax Appeals No. 138 and 140 of 2015 arise out of the cross objections filed by the assessee before the Tribunal. 6. Tax Appeals No. 137 and 139 of 2015 arise out of the appeals filed by the revenue before the Tribunal, whereas Tax Appeals No. 138 and 140 of 2015 arise out of the cross objections filed by the assessee before the Tribunal. 7. Mr. M.R. Bhatt, Senior Advocate, learned counsel for the appellant submitted that in relation to the assessment years in question, the only embargo is that reopening of assessment cannot be based upon change of opinion. Referring to the impugned order, it was pointed out that the sole reason assigned by the Tribunal for setting aside the reopening of assessment is that the Assessing Officer had failed to bring on record any new tangible material which had come to his notice subsequent to the completion of the assessment made in the assessment years under consideration. It was submitted that it is settled legal position that the tangible material does not have to be from an external source and can be within the record itself. In support of such submission, the learned counsel placed reliance upon the decision of this court in the case of Gujarat Power Corporation Ltd. v. Assistant Commissioner of Income Tax, (2013) 350 ITR 266 (Guj) wherein the court had expressed the opinion that as long as there is some tangible material on the basis of which the Assessing Officer can form a belief that income chargeable to tax has escaped assessment, it would be permissible to reopen the assessment in exercise of the powers under section 147 of the Act, particularly after the amendments made with effect from April 1, 1989. Such tangible material need not be alien to the record. Mr. Bhatt submitted that, therefore, the Tribunal is not alive to the legal position and hence, the matter is required to be remanded to the Tribunal for considering the same afresh. It was further submitted that the Tribunal also needs to undertake the exercise of going into the factual aspect, inasmuch as, the Tribunal has dismissed the appeals of the revenue merely on the ground that the reopening of assessment was bad in law and has not decided the same on merits. 8. Opposing the appeals, Mr. J.P. Shah, learned counsel for the respondent assessee invited the attention of the court to the reasons recorded by the Assessing Officer for reopening the assessment. 8. Opposing the appeals, Mr. J.P. Shah, learned counsel for the respondent assessee invited the attention of the court to the reasons recorded by the Assessing Officer for reopening the assessment. It was submitted that the sole reason for reopening the assessment is that the respondent assessee did not satisfy the requirements for availing of the benefit of a small scale industrial unit. It was submitted that the record of the case before the Assessing Officer clearly shows that being a pharmaceutical industry, the limit of expenditure incurred on plant and machinery was Rs. 5 crores. It was submitted that the Assessing Officer in the reasons recorded has not reduced the exempted items as permitted under the exemption notification. Under the circumstances, the reasons recorded by the Assessing Officer are invalid for the reason that it goes by the gross block plus the upper limit of one crore without considering the deduction which the assessee was entitled. It was submitted that on the material available on record, the Assessing Officer could not have formed the requisite belief that income chargeable to tax has escaped assessment. It was pointed out that allowability of deduction under section 80IB of the Act had been gone into at the time of the original assessment to submit that the reopening is, therefore, based on a mere change of opinion. It was submitted that in these circumstances, the Tribunal rightly held that the reopening of assessment itself was bad in law. It was, accordingly, urged that the impugned order being just, legal and proper does not suffer from any infirmity so as to give rise to any substantial question of law and that the appeals being devoid of merits, deserve to be dismissed. 9. In these appeals, the assessment for assessment years 2004-05 and 2005-06 have been reopened by the Assessing Officer within a period of four years from the end of the relevant assessment year. The reasons recorded for reopening the assessments have already been reproduced hereinabove. The Tribunal has held the reopening to be bad in law on the ground that the same was not based upon any material external to the record and that in the absence of any new tangible material coming to his notice, the Assessing Officer was not justified in reopening the assessment. The Tribunal has held the reopening to be bad in law on the ground that the same was not based upon any material external to the record and that in the absence of any new tangible material coming to his notice, the Assessing Officer was not justified in reopening the assessment. Insofar as the reasoning given by the Tribunal that the Assessing Officer was not justified in reopening the assessment as there was no new tangible material on record which had come to his notice subsequent to the completion of assessment is concerned, the same is clearly contrary to the settled legal position. This court in the case of Gujarat Power Corporation Ltd. v. Assistant Commissioner of Income Tax (supra) has clearly held that as long as there is some tangible material on the basis of which the Assessing Officer can form a belief that income chargeable to tax has escaped assessment, it would be permissible to reopen the assessment in exercise of the powers under section 147 of the Act and that such tangible material need not be alien to the record. Under the circumstances, the reasoning assigned by the Tribunal for setting aside the reopening of assessment is clearly not in consonance with the principles propounded in the above decision rendered by this court. 10. In the aforesaid premises, this court would be required to independently examine as to whether on the reasons recorded, the Assessing Officer was justified in reopening the assessment for the assessment years under consideration. 11. In this regard, a perusal of the reasons recorded for reopening the assessment for the assessment years under consideration reveals that the Assessing Officer was of the opinion that the total value of plant and machinery was certified at Rs. 4,80,33,282/- as on 1.4.2003, that is, at the beginning of the financial year 2003-04 relevant to assessment year 2004-05, and Rs. 4,97,88,775/- as on 1.4.2004, that is, at the beginning of financial year 2004-05 relevant to assessment year 2005-06 which exceeded the limit fixed for investment in plant and machinery and thereby the assessee ceased to be an SSI Unit and was thus not eligible for deduction under section 80IB of the Act. However, the assessee had claimed deduction under section 80IB of the Act of Rs. 37,13,631/- and Rs. However, the assessee had claimed deduction under section 80IB of the Act of Rs. 37,13,631/- and Rs. 44,22,737/- for assessment year 2004-05 and 2005-06 respectively and thus income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. 12. While it is true that the satisfaction of the Assessing Officer for the purpose of reopening is subjective in character and the scope of judicial review is limited. When the reasons recorded show a nexus between the formation of the belief and the escapement of income, a further inquiry about the adequacy or sufficiency of the material to reach such belief is not open to scrutiny. It is settled legal position that after a foundation based on information is set up, there must still be some reasons which warrant the holding of a belief so as to necessitate the issuance of a notice under section 148 of the Act. 13. In Assistant Commissioner of Income Tax v. Rajesh Jhaveri Stock Brokers (P.) Ltd., (2007) 291 ITR 500 , the relevant tests for examination as to whether the reasons recorded indicate whether the authority was in possession of any material which would permit him to hold a belief so as to form an opinion or have reason to believe that any income has escaped assessment have been stated thus :- “The word ‘reason’ in the phrase ‘reason to believe’ would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion..... In other words, at the initiation stage, what is required is reason to believe, but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the material would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction (see ITO v. Selected Dalurband Coal Co. Whether the material would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction (see ITO v. Selected Dalurband Coal Co. Pvt. Ltd. [ 1996 (217) ITR 597 (SC)] and Raymond Woollen Mills Ltd. v. ITO [1999 (236) ITR 34 (SC)]”. 14. Looked in the light of the above principles, it is necessary to appreciate the information available with the Assessing Officer in the present case. Indubitably, the Assessing Officer, in the present case, seeks to reopen the assessment on the basis of the very same material which was available at the time of framing the original assessment under section 143(3) of the Act and not on any material obtained after the assessment came to be framed under section 143(3) of the Act. That, however, does not preclude him from reopening the assessment, if such material is sufficient for him to hold the requisite belief that income chargeable to tax has escaped assessment. It is however always open to the assessee to question the existence of such belief. If the assessee can demonstrate that in fact the Assessing Officer did not have any reason to believe, the exercise of authority conferred on him would be ultra vires the provisions of law and would be an abuse of such authority. It is true that while recording the reasons for reopening the assessment, it is not necessary for the Assessing Officer to establish fact of escapement of income but what is necessary is whether there is relevant material on which a reasonable person could have formed the requisite belief. The court, therefore, can certainly examine the material on record to ascertain as to whether on the basis of such material the Assessing Officer could have formed the requisite belief that income chargeable to tax has escaped assessment. 15. As is manifest on a perusal of the reasons recorded, the formation of belief by the Assessing Officer that income chargeable to tax has escaped assessment is based on the material on record. The ground for reopening is that the assessee though not an SSI unit had claimed benefit under section 80IB of the Act. 15. As is manifest on a perusal of the reasons recorded, the formation of belief by the Assessing Officer that income chargeable to tax has escaped assessment is based on the material on record. The ground for reopening is that the assessee though not an SSI unit had claimed benefit under section 80IB of the Act. It would, therefore, be necessary to examine as to whether on the material available on record, the Assessing Officer could have formed the belief that the assessee was not a small scale industrial limit. 16. In this regard, the findings recorded by the Commissioner (Appeals) on the merits of the order passed by the Assessing Officer show that various notifications were issued by the Ministry of Industry (Department of Industrial Policy and Promotion) from time to time increasing the limit of investment in plant and machinery for treating the undertaking as a small scale industrial unit. The Commissioner (Appeals) has recorded a finding to the effect that the investment made by the assessee at all times was within the limit for plant and machinery for the assessment years under consideration. A perusal of the table showing the calculation of plant and machinery as on the 31st March of each year which has been reproduced in the order of the Commissioner (Appeals) as well as the impugned order passed by the Tribunal, clearly shows that the investment made in plant and machinery was within the limit prescribed for an SSI unit. As pointed out by the learned counsel for the respondent assessee, certain assets are exempted from the computation of the exemption limit under the relevant notification. The Assessing Officer, however, had taken into consideration even the exempted assets and come to the conclusion that the assessee had crossed the limit. Moreover, the Assessing Officer has failed to take into consideration that as per notification No. 857(E) the limit for investment in plant and machinery for SSI units manufacturing drugs and pharmaceutical products was Rs. 3.00 crore and as per notification No. 655(E) with effect from 5th June, 2003 such limit has been increased to Rs. 5.00 crore. Therefore, the assessee remained an SSI Unit for the years under consideration. 3.00 crore and as per notification No. 655(E) with effect from 5th June, 2003 such limit has been increased to Rs. 5.00 crore. Therefore, the assessee remained an SSI Unit for the years under consideration. In the aforesaid premises, it is evident that the Assessing Officer has proceeded on an erroneous assumption that the respondent assessee does not meet with the requirement of an SSI unit when the record clearly points out to the contrary. Under the circumstances, it is manifest that based upon the material on record on the basis of which the Assessing Officer sought to reopen the assessment, he could not have formed the belief that the assessee did not meet with the requirements of an SSI unit and consequently could not have formed the requisite belief that income chargeable to tax has escaped assessment. In the absence of having any reason to believe that income chargeable to tax has escaped assessment for the assessment years under consideration, the assumption of jurisdiction on the part of the Assessing Officer under section 147 of the Act by issuing notice under section 148 of the Act is clearly without any authority of law. 17. In the light of the above discussion, while disagreeing with the reasons recorded by the Tribunal for holding that the reopening of assessment was bad in law, for the reasons recorded hereinabove, the court is in agreement with the final conclusion arrived at by the Tribunal. Under the circumstances, it is not possible to state that the impugned order suffers from any legal infirmity so as to give rise to any question of law, much less, a substantial question of law, warranting interference. The appeals, therefore, fail and are, accordingly, dismissed.