Judgment :- 1. This Petition under Article 226 of the Constitution of India challenges the notice dated 30th March, 2007 issued under Section 148 of the Income Tax Act, 1961 (the Act) passed by the Assessing Officer. The impugned notice dated 30th March, 2007 seeks to re-open the assessment for Assessment Year 2002-03. 2. This Petition was admitted on 23rd January, 2008. At that time, the impugned notice was stayed pending the disposal of the Petition. 3. On 30th October, 2002, the Petitioner filed its return of income for Assessment Year 2002-03. In its return of income, the Petitioner had inter alia claimed deduction on interest paid as revenue expenditure of an amount of Rs.35.62 lakhs under Section 36 (i)(iii) of the Act. This being interest paid on borrowed capital for the purpose of expanding its existing business which had been capitalized in its books of Account. The Petitioner had also claimed depreciation on its intangible assets i.e. Good will and Non-compete fees as a part of its block of intangible assets claiming depreciation at 25%. 4. During the course of assessment proceedings, the Assessing Office called upon the Petitioner to give detailed break up of interest expenditure, interest capitalized and also detailed working of the claim for depreciation. The Petitioner responded to the same by its letter dated 27th January, 2005 furnishing the details as sought. The Assessing Officer satisfied with the Petitioner's response, inter alia, passed an order on 28th January, 2005, accepting the Petitioner's claim on account of interest expenditure as well as on account of depreciation, save and except reducing depreciation claimed on building from the 10% as claimed to 5% which was the prescribed rate. However, as the tax payable under the normal provisions was nil, the Petitioner was brought to tax under Section 115JB of the Act. 5. On 30th March, 2007, the impugned notice was issued by the Assessing Officer, seeking to re-open the assessment for the Assessment Year 2002-03. The reasons as furnished to the Petitioner for re-opening of the assessment reads as under:— " On verification of the records it is seen that while computing the income of the year assessee company deducted an amount of Rs.35,62,404/- on account of interest capitalized in accounts. The reasons as furnished to the Petitioner for re-opening of the assessment reads as under:— " On verification of the records it is seen that while computing the income of the year assessee company deducted an amount of Rs.35,62,404/- on account of interest capitalized in accounts. Detailed examination of records shows that the assessee had borrowed funds from State Bank of India towards financing the capital projects and capitalized the interest portion before the assets were put to use. However, in computing the income of the year the assessee decided not to claim depreciation on the interest capitalized but claimed it as revenue expenditure in computing the income. Under the existing provision of the section 43(1) of the I. T. Act, 1961 actual cost means the actual cost of the assets to the assessee. As per explanation-8 to section 43(1), where an amount is paid or payable as interest in connection with the acquisition of an asset so much amount that is relatable to the period after such asset is first put to use shall not be included and shall be deemed never to have been included in the actual cost of the assessee. Conversely, the interest paid in acquisition of an asset before it is put to use to be included in the cost of the assets to the assessee. It is also seen from the records that assessee had claimed depreciation on Good will and Non-compete fees at 25% treating them as intangible assets. Both these items did not find a place in the list of intangible assets as per I. T. Rules 1961. Hence depreciation claimed on Goodwill of Rs.7,89,915/- and on Non-compete fees of Rs.7,03,125/- needs to be disallowed. In view of the above, I have reason to believe that income chargeable to tax for A. Y. 2002-03 has escaped assessment for failure on the part of the assessee company to disclose fully and truly all the material facts requiring for assessment for A. Y. 2002-03." 6. In view of the above, I have reason to believe that income chargeable to tax for A. Y. 2002-03 has escaped assessment for failure on the part of the assessee company to disclose fully and truly all the material facts requiring for assessment for A. Y. 2002-03." 6. From the above, it is clear that the reasons in support of impugned notice are two fold as under:- (a) The interest paid on borrowed capital has to be capitalized and cannot be allowed as Revenue expenditure ; and (b) The depreciation claimed on Goodwill and Non-compete fees at 25% cannot be allowed as they are not listed amongst the intangible assets set out in Appendix to the Income Tax Rules, 1961 (Rules). 7. The Petitioner by its letter dated 21st September, 2007 filed objections to the reasons for re-opening of the notice on both issues viz. allowing of interest expenditure and depreciation on Goodwill and Non-compete fees. It was inter alia pointed out that the Assessing Officer had duly applied his mind to both the issues during the regular assessment proceedings under Section 143(3) of the Act. Thus, it was submitted that the impugned notice only arises on account of change of opinion and, therefore, not valid. However, by an order dated 27th July, 2007, the Assessing Officer rejected the Petitioner's objections to the reasons recorded in support of the notice. 8. It is agreed by Counsel that under Section 36(1)(iii) of the Act, interest paid in respect of amounts borrowed for capital expenses is allowable in view of the decision of the Supreme Court in Dy. CIT v. Core Health Care Ltd. [2008] 298 ITR 194/167 Taxman 206. Therefore, it is an accepted position that the first ground in the reasons recorded in support of the impugned notice is not sustainable. 9. Similarly, the Counsel are agreed that depreciation on Goodwill stands covered by the decision of the Supreme Court in CIT v. Smifs Securities Ltd. [2012] 348 ITR 302/210 Taxman 428/24 taxmann.com 222 in favour of the Petitioner. Therefore, the second ground in the reason recorded in support of the impugned notice, as agreed, is not sustainable to the extent of Goodwill. 10. Therefore, the only controversy that is to be resolved between the parties is with regard to depreciation claimed on Non-compete fees as part of the second ground in the reasons in support of the impugned notice. 10. Therefore, the only controversy that is to be resolved between the parties is with regard to depreciation claimed on Non-compete fees as part of the second ground in the reasons in support of the impugned notice. 11. Mr. Jain, learned Counsel in support of the Petition submits as under:— (a) The impugned notice with regard to depreciation claimed on Non-compete fees is without jurisdiction. This is so as it has been issued only on account of change of opinion as the Assessing Officer had duly considered the same while passing an order under Section 143(3) of the Act in regular assessment proceedings; (b) This is further evident from the fact that depreciation in respect of Non- compete fees was allowed not only in the earlier assessment years but in the subsequent Assessment Years 2003-04, 2004-05 and 2005-06 as upheld by the Income Tax Appellate Tribunal (the Tribunal). The Revenue accepted the allowing of the claim of depreciation in respect of Non-compete fees as no appeal on the above account was filed from the orders of the Tribunal; (c) The claim for depreciation on Non-compete fees has been made by the Petitioner for earlier Assessment Years and was an integral part of its block of assets claiming depreciation at 25%. The depreciation on Non-compete fees has been allowed in the earlier years. In the reasons in support of the impugned notice, no averment is made that the opening balance of the intangible assets forming a part of block assets claiming depreciation at 25% is not correct. Thus, it is not open to the Assessing Officer to disallow the claim for depreciation by taking individual items out of the block assets; and (d) It is submitted that the decision of the Supreme Court in Smifs Securities Ltd. (supra) would apply even in case of Non-compete fees on application of rule of ejusdem generis to the intangible assets set out in the Appendix to the Rules which are identical to Explanation 3(b) to Section 32(1) of the Act and which by application of the above rule of interpretation was interpreted by the Apex Court to apply to Goodwill. 12. On the other hand, Mr. 12. On the other hand, Mr. Pinto learned Counsel appearing for the Revenue in support of the impugned notice submit as under:— (a) The re-opening notice is within the period of four years from the end of the relevant Assessment Year and, therefore, the scope of re-opening is much wider. Therefore, the Court should not interfere; (b) No fault can be found with the impugned notice as the same is covered by Explanation 2(c)(iv) to Section 147 of the Act so far depreciation is allowed on Non-compete fees; (c) The decision of the Supreme Court in Smifs Securities Ltd. (supra) deals only with depreciation on Goodwill and not with Non-compete fees. In that view of the matter, Smifs Securities Ltd. (supra) is not applicable to the claim for depreciation on Non-compete fees; and (d) So far as orders passed by the Tribunal for the Assessment Years 2003-04, 2004-05 and 2005-06 allowing benefit of depreciation on Non-compete fees is concerned, the same even if accepted by the Revenue, is in applicable for Assessment Year 2002-03. This on the ground that the principle of res judicta is inapplicable in the tax matters. 13. We have considered the submissions. In this case, the assessment sought to be re-opened is less than four years from the end of the relevant Assessment Year. In such a case also, the primary conditions for invoking jurisdiction under Section 147/148 of the Act has to be satisfied. However, the additional condition viz. failure to disclose fully and truly all material facts necessary for assessments as provided in the proviso to Section 147 of the Act which applies in cases of re-opening of assessments for extended period i.e. of four years and beyond from the end of the relevant Assessment Years, need not be satisfied. The primary conditions to be satisfied for seeking to re-open an assessment within a period of four years is two fold i.e. one - there must be reason to believe and two, income chargeable to tax must have escaped assessment. Therefore, even if the re-opening of assessment is within a period of less than four years from the end of the relevant assessment year, the aforesaid twin pre-conditions must be satisfied. Therefore, even if the re-opening of assessment is within a period of less than four years from the end of the relevant assessment year, the aforesaid twin pre-conditions must be satisfied. Thus, even if the scope of re-opening an assessment for less than four years from the end of Assessment Years is wider, yet even in such cases, jurisdiction is acquired only on the cumulative satisfaction of the twin conditions required by the main part of Section 147 of the Act. 14. The Petitioner did contend that in view of decision of the Supreme Court in Smifs Securities Ltd. (supra) dealing with 'Goodwill' would also cover the present case of depreciation on 'Non-compete fees'. This is on the basis of interpretation of the Judgment and extending its reach. Un-disputedly the Apex Court in Smifs Securities Ltd. (supra) did not consider 'Non-compete fees'. Thus at the time of examining whether the impugned notices are without jurisdiction, it is not for us to finally rule on disputed interpretational issues which would appropriately be a matter for consideration during the reassessment proceedings. Our examination is limited to whether the Assessing Officer has prima facie reason to believe that income chargeable to tax has escaped assessment. The Petitioner should be able to ex facie establish absence of jurisdiction. In absence of the Petitioner doing so, we would not interdict the re-opening proceedings under Section 147/148 of the Act. 15. We have noted that in the return of income filed for the Assessment Year 2002-03, the Petitioner had in the computation of income, disclosed the claim for depreciation made on intangible assets including the Non-compete fees. During the course of assessment proceedings, various queries were raised by the Assessing Officer including seeking a detailed working of the depreciation claimed. By letter dated 11th January, 2004, the Petitioner had supplied the necessary details and the Assessing Officer by an order dated 28th January, 2005 passed under Section 143(3) of the Act in regular assessment proceedings allowed the claim for depreciation on Non-compete fees. In fact, the order dated 28th January, 2005 passed in regular assessment proceedings specifically discusses the Petitioner's claim for depreciation and disallows the excess depreciation claimed on buildings at 10% to the extent it is in excess of the prescribed 5%. In fact, the order dated 28th January, 2005 passed in regular assessment proceedings specifically discusses the Petitioner's claim for depreciation and disallows the excess depreciation claimed on buildings at 10% to the extent it is in excess of the prescribed 5%. This would be further evidence of the Assessing Officer having applied his mind to the depreciation claimed by the Petitioner in respect of its block of assets. Hence, it is clear that the reason recorded in support of the impugned notice seeking to deny depreciation on Non-compete fees has been issued on account of change of opinion. Thus, it lacks reasonable belief. Consequently, the impugned notice is not sustainable. 16. One more fact which establishes that there has been a change of opinion, is evident from the fact that for earlier assessment years as well as for subsequent assessment years, the depreciation has been allowed in respect of Non-compete fees as a part of block of assets, claiming depreciation at 25%. It is not the case of the Revenue that Non-compete fees on which depreciation is being claimed is not a part of the block of assets. Nor is it the case of the Revenue in the reasons recorded that the written down value of the block of assets has to be adjusted under Section 32(l) of the Act. Thus, depreciation is to be allowed on the written down value of block of assets. In fact on the above basis, the Tribunal has upheld the claim for depreciation on Non-compete fees for Assessment Years 2003-04, 204-05 and 2005-06. It is pertinent to note that Revenue had not filed any appeal from the order of the Tribunal for Assessment Years 2003-04, 2004-05 and 2005-06 to this Court with regard to allowing of depreciation on Non-compete fees. The applicability of the above decision to the present year is contested by the Revenue on the ground that, the principle of res judicta is inapplicable to tax matters. Therefore, it is submitted that no reliance can be placed upon the orders of the Tribunal passed for earlier years. Where facts and law are identical over different years, then the principle of consistency sets in and the Revenue is not permitted to change its stand from year to year when there is no change in the facts and the law. Where facts and law are identical over different years, then the principle of consistency sets in and the Revenue is not permitted to change its stand from year to year when there is no change in the facts and the law. In these circumstances, we find that the Assessing Officer had no reason to believe that income chargeable to tax has escaped assessment on account of depreciation being claimed on Non-compete fees. 17. Mr. Pinto, learned Counsel appearing for the Revenue contends that in view of Explanation 2 to Section 147 of the Act, if there has been excessive depreciation claimed as in this case on account of Non-compete fees, then it has to be deemed that income chargeable to tax has escaped assessments. Even if one accepts the submission, the other condition precedent of the twin preconditions to invoke jurisdiction under Section 147 of the Act viz. reason to believe still remains to be satisfied. We have herein above held that the impugned notice has been issued on account of change of opinion. Therefore, the conditions precedent of reasonable belief are not satisfied. Thus, the impugned notice is without jurisdiction. 18. For the above reasons, the impugned notice dated 30th March, 2007 is quashed and set aside. Accordingly, Petition is allowed. No order as to costs.