JUDGMENT : K. Vinod Chandran, J. The four appeals arise from the very same period spanning 27 months, due to the peculiar facts and circumstances of two companies having been amalgamated. 2. We would first notice the background facts arising in the above cases and would deal with the documents as produced in ITA No.108/2002. There were two Companies incorporated under the English Companies Act; M/s. Harrisons & Crossfield (I) Ltd. (HCL) and M/s. Malayalam Plantations (I) Ltd. (MPL). HCL was amalgamated with MPL w.e.f. 01.01.1983. The scheme of amalgamation, which had the approval of this Court, is produced as Annexure-D. While HCL was following the calendar year for the purpose of income tax assessment, MPL was following the financial year. Hence, when the two Companies got amalgamated, MPL applied for change of previous year relevant to the assessment year by Annexure-E and the change was permitted by Annexure-F. The application is seen filed by HCL itself. The 18 months comprised between 01.01.1983 and 30.06.1984 was, by Annexure-F, permitted to be the previous year of the assessment year 1985-86, since, 30.06.1984 was the date on which MPL closed its accounts. When the assessment was made for the assessment year 1985-86, the previous year had a total of 27 months from 01.01.1983 to 31.03.1985. The assessment is seen at Annexure-G. 3. A claim was made under Section 80HHC of the Income Tax Act, 1961 (‘Act’, for brevity), which was allowed. Later, a rectification was made under Section 154 by the Assessing Officer (AO), which is the subject of challenge in ITA No.102/2002. The rectification was on the premise that M/s. Harrisons Malayalam Limited, the new company formed, cannot be said to have a previous year to the previous year relevant for the assessment year 1985-86. In such circumstances, there could be no claim made under sub-Clause (b) of Section 80HHC(1) of the Act, since there is no previous year to the relevant previous year. The rectification went on the premise that M/s. Harrisons Malayalam Limited is a new Company which does not have a previous year to claim benefit under sub-Clause (b) of Section 80HHC(1) of the Act. Section 154 order dated 12.02.1992, which went up in appeal and second appeal, eventually has reached this Court in ITA No.102/2002. 4. Subsequently, a re-assessment under Section 147 was attempted by the AO by issuance of a notice under Section 148. Section 154 order dated 12.02.1992, which went up in appeal and second appeal, eventually has reached this Court in ITA No.102/2002. 4. Subsequently, a re-assessment under Section 147 was attempted by the AO by issuance of a notice under Section 148. Section 148 notice was issued on 30.03.1993, after the rectification under Section 154. The notice under Section 148 was issued on the premise that HCL did not have any assessment for the assessment years 1983-84 and 1984-85 and the AO had allowed the change of previous year and permitted closure of the books on 30.06.1983 without being aware of any amalgamation. The AO found that the income of HCL in the three years has to be assessed at the hands of M/s. Harrisons Malayalam Limited and hence, computed the income for the three separate assessment years of 1983-84, 1984-85 and 1985-86. The first year comprising of a previous year of three months and two other years comprising of a previous year of 12 months each. The assessee filed appeals from the orders under Section 147, which was overturned by the Commissioner of Income Tax. The first appellate authority found that there can be no re-assessment under Section 147, since the entire facts were within the knowledge of the AO, who also completed the assessment resorting to scrutiny under Section 143(3) of the Act. The first appellate authority also found that the assessment completed for the year 1985-86 was comprised of a relevant previous year of 27 months. The first appellate authority was of the opinion that the re-assessment attempted to be made, would not come within the scope of Section 147. The Tribunal upheld the order of the Commissioner (Appeals) against which the Revenue has filed the three other Income Tax Appeals under Section 260A of the Act. 5. We have heard Sri. Jose Joseph, learned Standing Counsel, Government of India (Taxes) and Sri. Raja Kannan, learned counsel appearing for the respondent-assessee. 6. Sri. Jose Joseph would argue relying on the decision of the Honourable Supreme Court in (1990) 186 ITR 278 [Saraswati Industrial Syndicate Ltd. v. Commissioner of Income-Tax, Haryana, Himachal Pradesh and Delhi III]. On facts, it is pointed out that the two Companies, HCL and MPL amalgamated and a new Company was formed by Name M/s. Harrisons Malayalam Limited. 6. Sri. Jose Joseph would argue relying on the decision of the Honourable Supreme Court in (1990) 186 ITR 278 [Saraswati Industrial Syndicate Ltd. v. Commissioner of Income-Tax, Haryana, Himachal Pradesh and Delhi III]. On facts, it is pointed out that the two Companies, HCL and MPL amalgamated and a new Company was formed by Name M/s. Harrisons Malayalam Limited. M/s. Harrisons Malayalam Limited being a new Company could not have claimed any benefit under sub-Clause (b) of Section 80HHC(1) of the Act, since the new Company did not have a previous year. Assessment year 1985-86 was the first year of inception of the new Company M/s. Harrisons Malayalam Limited. In such circumstances, there could be only claim of 1% of the deduction of the export turnover of the new Company for the relevant previous year of the assessment year 1985-86 and no claim could be made of 5% differential turnover of the previous year and the previous year to the previous year as there being no previous year to the previous year. This is in support of the rectification under Section 154 of the Act. The learned Standing Counsel would also contend that, if at all, the rectification is not upheld, then the assessments under Section 147 could be upheld, since otherwise, the benefit claimed by the new Company would be excessive in nature. 7. Sri. Raja Kannan, learned counsel for the respondent-assessee would, however, point out that the rectification and the re-assessment proceedings are both taken on a wrong premise and on the misconception that on amalgamation a new Company was formed called M/s. Harrisons Malayalam Limited. The learned Counsel alertly points out the scheme of amalgamation which indicates that HCL got amalgamated into MPL. HCL is shown as the transferor Company and MPL as the transferee Company. Even going by the decision of the Honourable Supreme Court cited by the learned Standing Counsel for the Revenue, it is submitted that MPL exists even after the amalgamation and it also has a previous year to the previous year relevant to the assessment year 1985-86. The learned counsel would first contend that the re-assessments under Section 147 cannot be sustained, since the entire facts were in the knowledge of the AO at the time when Annexure-G order was passed for the assessment year 1985-86 comprising of the previous year of 27 months between 01.01.1983 to 30.03.1985. The learned counsel would first contend that the re-assessments under Section 147 cannot be sustained, since the entire facts were in the knowledge of the AO at the time when Annexure-G order was passed for the assessment year 1985-86 comprising of the previous year of 27 months between 01.01.1983 to 30.03.1985. The Commissioner’s order finding no re-assessment possible under Section 147, has to be upheld, is the contention, since it is on a mere change of opinion. 8. On the rectification, the learned Counsel would take us through the figures at Annexure-G and point out that what has been claimed under Section 80HHC is only the export turnover of MPL for the assessment year 1985-86 relevant to the previous year of 27 months. In computing the 1% deduction available under sub-Clause (a) of Section 80HHC(1) of the Act, the export turnover of MPL after amalgamation was claimed, wherein the business of HCL was treated as the trading division of MPL. Similarly, when claiming 5% deduction, the total export turnover of MPL for the 27 months was taken and the export turnover of MPL for its previous year to the previous year of 27 months was deducted and the balance claimed at 5% under sub-Clause (b) of Section 80HHC(1) of the Act. 9. We frame the following questions of law as arising in the appeals for the three years. In ITA Nos.87, 108 and 201/2002, the following question is framed:- Whether re-assessment could have been carried out under Section 147, when the entire facts and circumstances, including that of the amalgamation, were within the knowledge of the AO and the change in assessment year prayed for and permitted, was anticipating the amalgamation itself and is not the reassessment attempted hence based on a mere change of opinion? In ITA No.102/2002, the question arising is re-framed as follows:- Whether the rectification under Section 154 was permissible and whether it is sustainable on the grounds stated for such rectification, which are not true and correct? 10. Section 147 as it existed in the relevant year is extracted herein below:- “147. In ITA No.102/2002, the question arising is re-framed as follows:- Whether the rectification under Section 154 was permissible and whether it is sustainable on the grounds stated for such rectification, which are not true and correct? 10. Section 147 as it existed in the relevant year is extracted herein below:- “147. Income escaping assessment:- If (a) The Income-tax Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under Section 139 for any assessment year to the Income-Tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or (b) Notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the income-tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of section 148 to 153, assess or re-assess such income or recompute the loss or the depreciation allowance, as the case may be, for the assessment year concerned (hereafter in sections 148 to 153 referred to as the relevant assessment year). Explanation 1.- For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely:- (a) Where income chargeable to tax has been under-assessed; or (b) Where such income has been assessed at too low a rate; or (c) Where such income has been made the subject of excessive relief under this Act or under the Indian Income-tax Act, 1922 (11 of 1922); or (d) Where excessive loss or depreciation allowance has been computed. Explanation 2.- Production before the Income-tax Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Income-tax Officer will not necessarily amount to disclosure within the meaning of this section.” 11. When we look at the documents produced by the Department itself in ITA No.108/2002, it is very clear that the AO was in the know-how of the amalgamation proceedings. Annexure-F permission was granted for change of assessment year to HCL only by way of a request made at Annexure-E, which is specifically read in Annexure-F as letter dated 28.08.1984. When we look at the documents produced by the Department itself in ITA No.108/2002, it is very clear that the AO was in the know-how of the amalgamation proceedings. Annexure-F permission was granted for change of assessment year to HCL only by way of a request made at Annexure-E, which is specifically read in Annexure-F as letter dated 28.08.1984. The request for change of previous year specifically indicated that the amalgamation process was on and that they expect the order of the High Court of Kerala approving the scheme of arrangement and amalgamation, shortly. In such circumstances, there is no warrant to assume that the assessment order at Annexure-G was passed without knowledge of the amalgamation. We also see that the order at Annexure-G specifically noticed the amalgamation as ordered by Annexure-D. It is also stated in the assessment order that HCL was amalgamated with the assessee Company w.e.f. 01.01.1983. In such circumstances, we do not think that there could be any re-assessment made under Section 147, since then it would merely be a change of opinion as held in (1997) 225 ITR 226 [Andhra Bank Ltd. v. Commissioner of Income-Tax] and in (2010) 2 SCC 723 [Commissioner of Income Tax, Delhi v. Kelvinator of India Limited]. 12. On the above reasoning, the first question is answered against the Revenue and in favour of the assessee and ITA Nos. 87, 108 and 201/2002 are rejected. 13. On the second question, we have to first notice the submission of the learned counsel appearing for the respondent-assessee that the entire proceedings was on a misconception of a new Company having been formed in the name of M/s. Harrisons Malayalam Limited. The learned counsel for the assessee produced across the Bar a certificate of incorporation, consequent on change of name, dated 29.10.1984 which we extract hereunder:- “image” 14. Hence, as we noticed, the two Companies, HCL and MPL, when amalgamated; the former was amalgamated into the latter. What remained and existed after the amalgamation was MPL. Subsequent to the amendment, MPL requested for and obtained change of name as M/s. Harrisons Malayalam Limited, which is evidenced by the above extract. Hence, it cannot be said that M/s. Harrisons Malayalam Limited was a new Company incorporated on amalgamation. 15. What remained and existed after the amalgamation was MPL. Subsequent to the amendment, MPL requested for and obtained change of name as M/s. Harrisons Malayalam Limited, which is evidenced by the above extract. Hence, it cannot be said that M/s. Harrisons Malayalam Limited was a new Company incorporated on amalgamation. 15. We now look at the judgment of the Honourable Supreme Court in Saraswati Industrial Syndicate Ltd., wherein on identical facts one Company called Indian Sugar and General Engineering Corporation was amalgamated with Saraswati Industrial Syndicate Ltd. Indian Sugar and General Engineering Corporation, prior to its incorporation, had claimed a trading liability of Rs.58,735/-. After amalgamation, in the next assessment year, the Revenue required Saraswati Industrial Syndicate Ltd. to bring to income, the said trading liability of the Company amalgamated. The Honourable Supreme Court found that it could not be done, since Indian Sugar and General Engineering Corporation ceased to exist after the amalgamation. We extract hereunder the reasoning on amalgamation, as found by the Honourable Supreme Court with reference to Halsbury’s Laws of England:- “5. Generally, where only one company is involved in change and the rights of the shareholders and creditors are varied, it amounts to reconstruction or reorganization of scheme of arrangement. In amalgamation two or more companies are fused into one by merger or by taking over by another. Reconstruction or ‘amalgamation’ has no precise legal meaning. The amalgamation is a blending of two or more existing undertakings into one undertaking, the shareholders of each blending company become substantially the shareholders in the company which is to carry on the blended undertakings. There may be amalgamation either by the transfer of two or more undertakings to a new company, or by the transfer of one or more undertakings to an existing company. Strictly ‘amalgamation’ does not cover the mere acquisition by a company of the share capital of other company which remains in existence and continues its undertaking but the context in which the term is used may show that it is intended to include such an acquisition. See: Halsbury’s Laws of England (4th edition volume 7 para 1539). Two companies may join to form a new company, but there may be absorption or blending of one by the other, both amount to amalgamation. See: Halsbury’s Laws of England (4th edition volume 7 para 1539). Two companies may join to form a new company, but there may be absorption or blending of one by the other, both amount to amalgamation. When two companies are merged and are so joined, as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its entity.” Hence, when one Company is amalgamated into the other Company, the former ceased to exist and the latter continues as such. We notice here that HCL would cease to exist and MPL would continue to exist. 16. In looking at the sustainability of the order under Section 154, we have to necessarily first look at the assessment order at Annexure-G, which was sought to be rectified, and the figures coming out therein. The claim under Section 80HHC has been computed in the following manner:- “Less : Deduction under Chapter VIA Deduction u/s 80 HHC FOB value of Export turnover of Trading division Rs.35,31,66,651/- Add : 40% of FOB value of Rs.92,91,647/- being export turnover of tea manufactures in its own estates as per discussion in the body of order. Rs.37,16,659/- Rs.35,68,83,310/- Less: FOB value of Export turnover of the Company for the year ending on 31.3.1984 Rs.87,34,764/- Rs.34,81,48,546/- 1% on Rs.35,68,83,310/- Rs.35,68,833/- 5% on incremental turnover of Rs.34,81,48,546/- Rs.1,74,07,427/- Rs.2,09,76,260/-” 17. As pointed out by the learned counsel for the respondent-assessee, the business of HCL when amalgamated with MPL, continued as the trading division of MPL. For the 27 months comprised in the previous year to the relevant assessment year, the trading division had an export turnover of Rs.35,31,66,651/- to which was added the export turnover of the business of MPL, which was also continuing, coming to Rs.37,16,659/-. The total of Rs.35,68,83,310/- was taken for deduction under Section 80HHC(1)(a) at 1%. Then, the total export turnover of MPL for the previous year relevant to the assessment year 1985-86 was taken from which was deducted the export turnover of MPL for the previous year to the previous year which was only Rs.87,34,764/-. The balance of Rs.34,81,48,546/- was taken for deduction under Section 80HHC(1)(b) @ 5%. We cannot find any infirmity in the same. The balance of Rs.34,81,48,546/- was taken for deduction under Section 80HHC(1)(b) @ 5%. We cannot find any infirmity in the same. We, however, notice that but for the decision in Saraswati Industrial Syndicate Ltd., MPL would have had to deduct the export turnover of HCL for the period from 01.01.1983 to 31.12.1983 being the previous year to the previous year comprising of 27 months, between 01.01.1983 to 31.03.1985. Correctly, the AO had also not at the time of passing Annexure-G order sought to deduct such turnover presumably being aware of the Supreme Court judgment. In such circumstances, we do not see any reason to interfere with the order passed at Annexure-G and the interference caused under Section 154 on rectification is found to be bad in law. In fact, we had been toying with this problem for quite some time after finishing the hearing and we appreciate the efforts taken by Sri. Raja Kannan to put us in the right stream, especially by referring to the figures as seen from Annexure-G order. The question is, hence, answered against the Revenue and in favour of the assessee. ITA No.102/2002 also would stand rejected. No costs.