JUDGMENT : N.V.ANJARIA, J. Heard learned senior advocate Mr. Tushar Hemani assisted by learned advocate Mr. Vaibhavi Parikh for the petitioner and learned senior advocate Mr. M.R. Bhatt for M.R. Bhatt & Company with learned advocate Mr. Karan Sanghani for the respondents. 1.1 Rule returnable forthwith. Learned advocate Mr. Karan Sanghani waives service of Rule for respondents. 2. The challenge in this petition is directed against notice dated 29.03.2016 issued under Section 148 of the Income Tax Act, 1961 to the petitioner assessee in respect of assessment year 2012-13 seeking to reopen the assessment for the year under consideration. 2. The assessing officer stated in the impugned notice that he had reasons to believe that the income chargeable to tax for the assessment year 2012-13 has escaped assessment within the meaning of Section 147 of the Income Tax Act, therefore, propose to re-open the assessment. 3. Noticing the facts, the assessee was a Company known as Arihant Tradecom Pvt. Ltd, which came to be amalgamated with the petitioner Company named as AIM Fincon Pvt. Ltd. with effect from 01.04.2013, that is, from assessment year 2014-15. Prior to the amalgamation, the assessee Arihant Tradecom Pvt. Ltd. was an independent entity and was assessed by the competent income tax officer. 3.1 The said assessee company had been holding 10,000 shares of one Highlight Agencies Pvt. Ltd. worth Rs. 50,00,000/-. It also held 8,000 shares of Imperial Barter Pvt. Ltd. having value of Rs. 40,00,000/- at the beginning of the financial year 2011-12, relevant to the assessment year 2012-13, which was the year under consideration. 3.2 The assessee Arihant Tradecom sold the shares during the year under consideration which included 5,000 shares of Highlight Agencies Pvt. Ltd. for an aggregate consideration of Rs. 25,00,000/- (4,000 + 1,000 shares were sold, Rs.20,00,000/- + Rs.5,00,000/-). Similarly, 3,000 shares of Imperial Barter Pvt. Ltd. came to be sold for a consideration of Rs.15,00,000/-. The shares of both the companies above came to be sold to one Shubhdristi Complex Pvt. Ltd., aggregate consideration was thus Rs. 40,00,000/-. 3.3 The assessee Company filed its return of income for the assessment year 2012-13 on 07.09.2012 declaring loss at Rs.5,43,881/-. The case of the assessee was selected for scrutiny assessment. The shares of both the companies above came to be sold to one Shubhdristi Complex Pvt. Ltd., aggregate consideration was thus Rs. 40,00,000/-. 3.3 The assessee Company filed its return of income for the assessment year 2012-13 on 07.09.2012 declaring loss at Rs.5,43,881/-. The case of the assessee was selected for scrutiny assessment. The predecessor assessing officer issued notice on 02.06.2014 under section 142(1) of the Income Tax Act, 1961 (hereinafter mentioned as "Act") calling upon the assessee to furnish the details including the purchase and sales. The assessee by letter dated 08.10.2014 furnished such details pertaining to shares sold during the year under consideration. The statement of details produced on record of the petition [page 22-24 (23)] reflected such details of sale of shares of both the Highlight Agencies Pvt. Ltd. and Imperial Barter Pvt. Ltd. to Shubhdristi Complex Pvt. Ltd. 3.4 When the assessment was framed under Section 143(3) of the Act by order dated 23.03.2015, the then assessing officer did not make any addition in respect transaction of sale of shares. The only disallowance made while framing assessment was under section 14A of the Act. 3.5 The assessee company challenged the assessment order before the Commissioner of Income Tax(Appeals). Before the appellate authority, calculation of revised disallowance under section 14A read with Rule 8D(2)(ii) was furnished. It was stated that the said working contained the details of opening and closing balance of shares held by assessee and the details of the aforesaid shares sold were also mentioned. The appellate authority by order dated 10.01.2018 held that only those investments, which yielded exempt income were liable to be considered for disallowance under Section 14A of the Act. 3.6 Now pursuant to the impugned notice under Section 148 of the Act, the case of the petitioner is sought to be reopened on the ground that the petitioner was a beneficiary of accommodation entries to the tune of Rs.40,00,000/-, which was the sum received from Shubhdristi Complex Pvt. Ltd. 3.6.1 The reasons for reopening of the assessment for the year under consideration recorded by the assessing officer addressed to the petitioner Company by communication dated may be extracted, 2. Information was received from Dy. Commissioner of Income Tax, Central Circle — 3(1), Kolkata. The information included ledger account of Arihant Tradecom Pvt. Ltd. in the books of Subhdristi Complex Pvt. Ltd and other details. Information was received from Dy. Commissioner of Income Tax, Central Circle — 3(1), Kolkata. The information included ledger account of Arihant Tradecom Pvt. Ltd. in the books of Subhdristi Complex Pvt. Ltd and other details. As per the information, a search and seizure operation u/s 132 of the Income-tax Act, 1961 was conducted at the business and residential premises of Sri Pavan Agarwal and his group companies at Kolkata on 13.09.2012, Sri Praveen Agarwal is one of the know entry operators of Kolkata. In his statement recorded on oath in course of search, Sri Praveen Agarwal accepted that he had registered a large number of paper companies with bogus share capital/premium, which have subsequently been sold for a commission. In his statement recorded in course of search, Sri Agarwal had also accepted that he had given entries of bogus expenses like commission, contractual expenses, professional charges etc. The sources of share capital/ share premium of sold companies were unexplained and shareholders had changed after the sale. 3.6.2 The assessing officer further stated, "The assets shown prior to sale in the balance sheet of these sold companies in the form of investment in unquoted shares, debtors, loans etc. had subsequently been liquidated and realization was credited in the bank account of sold companies. Sources of such realization were not explained. The actual source was the cash provided by new purchaser of the company which was laundered through the companies if Sri Agarwal only and showed and realization from liquidation of assets. Although the companies were sold to buyers all over the country, they continued to be assessed in Kolkata as their registered office was in Kolkata. The realization from liquidation of assets which in most cases was sale consideration of unquoted shares, have ultimately been invested in other regular business ventures of the actual purchaser. In some cases property was purchased using the realization." 3.6.3 It was stated that the aforesaid information was analysed and statement of Sri Praveen Agarval came to be recorded under section 132 of the Act on 22.12.2012. In some cases property was purchased using the realization." 3.6.3 It was stated that the aforesaid information was analysed and statement of Sri Praveen Agarval came to be recorded under section 132 of the Act on 22.12.2012. The details of the statement were reproduced in the reasons supplied to the petitioner to further state that on perusal of ledger account of Arihant Tradecom Pvt. Ltd. assessee company, in the books of Shubhdristi Complex Pvt. Ltd., it was noticed that Arihant Tradecom Pvt. Ltd. had received Rs.40,00,000/- from said Shubhdristi Complex Pvt. Ltd., which was a company associated with Sri Praveen Agarwal during financial year 2011-12. It was stated that the said Praveen Agarwal had admitted that no real business activities were carried out by his associated companies and that he was in the business of providing accommodation entries only. 3.6.4 The assessing officer therefore stated that transaction amounting to Rs.40,00,000/- was nothing but accommodation entry done by assessee company with Praveen Agarwal. It was concluded that as a result of the accommodation transaction, the assessee Arihant Tradecom Pvt. Ltd. was benefited to the tune of Rs. 40,00,000/- during the financial year 2011- 2012 and tax was evaded and that the said amount had escaped from taxation. 3.7 The petitioner filed its objections on 18.06.2019 to state inter alia that the petitioner and the assessee company were independent entities, that the assessee Arihant Tradecom Pvt. Ltd.(ATPL) merged with the petitioner Company with effect from 01.04.2013, that the case of ATPL was selected for scrutiny and details including investments made by the assessee company in equity shares were also considered in the course of regular assessment. It was further stated that certain additions in respect of section 14A were made in assessment under section 143(3) of the Act, which was appealed before the Commissioner of Income Tax (Appeals)-III Kolkata and assessee was granted relief in that proceedings. It was stated that the issue of addition of expenses related to dividend income and investments was already examined. It was further stated that certain additions in respect of section 14A were made in assessment under section 143(3) of the Act, which was appealed before the Commissioner of Income Tax (Appeals)-III Kolkata and assessee was granted relief in that proceedings. It was stated that the issue of addition of expenses related to dividend income and investments was already examined. 3.7.1 It was further contended that inferences drawn from the statement of said Praveen Agarwal was only to serve the modus operandi of the said person doing billing by providing accommodation entry and nowhere in the statement of the said Praveen Agarwal, it was reflected that the transactions were entered into by him with the assessee company nor there was anything to suggest that such transactions were facilitated between ATPL or its group entities. It was contended that the ledger account of ATPL duly reflected transactions and there was no evasion of tax. It was contended that the conclusion was wrongly drawn by the assessing officer that there was escapement of income. 4. Learned senior advocate for the petitioner submitted that the department had already information about the shares of Rs.40 lakhs sold to Shubhdristi Complex Pvt. Ltd. in the course of framing of assessment under section 143(3) of the Act. Therefore, any new material could not have been said to be detected by the assessing officer to justify the reopening. It was next submitted that the solitary ground for reopening of the case of the petitioner was statement of said Praveen Agarwal recorded under section 132 of the Act on 22.12.2012. 4.1 It was highlighted that the search action was carried in case of Shri Praveen Agarwal on 13.09.2012, statement was recorded on 12.12.2012 and assessment was framed on 23.03.2015. It implied that, it was submitted, the information was already with the assessing officer which is now sought to be applied for reopening. 4.1.1 Learned senior advocate submitted that reopening was acted upon after a gap of 4 years and that there was no failure on the part of the assessee to disclose the material fully and truly. It was submitted that the action of reopening was based only on the change of opinion which is not permissible in law. 4.1.1 Learned senior advocate submitted that reopening was acted upon after a gap of 4 years and that there was no failure on the part of the assessee to disclose the material fully and truly. It was submitted that the action of reopening was based only on the change of opinion which is not permissible in law. 4.1.2 Learned senior advocate for the petitioner also pressed into service the doctrine of merger by submitting that the assessment order was carried in appeal before the Commissioner of Income Tax(Appeals) and revised working of disallowance under section 14A read with Rule 8D(2)(ii) was furnished before the appellate authority containing details of opening and closing balance of shares held by assessee. 4.1.3 Learned senior advocate relied on the decision of the Supreme Court in Assistant Commissioner of Income Tax vs. Radhaswami Salt Works in SLP (Civil) 42502/2017 decided on 16.03.2018, which confirmed the decision of the Division Bench of this Court in Radhaswami Salt Works v. Assistant Commissioner of Income Tax [(2018) 400 ITR 249 (Guj)] to submit that on the principle of merger also, reopening was not justified. 4.2 On the other hand, learned senior advocate on behalf of the revenue relied on the affidavit-in-reply and contentions raised therein. It was submitted that the assessee was beneficiary of accommodation entry made with one Shubhdristi Complex Pvt. Ltd., which was managed by the persons whose statement was recorded, namely Mr.Praveen Agarwal. It was submitted that he was an entry provider. According to the learned senior counsel for the revenue, there was prima facie case for proceeding under sections 147 and 148 of the Act. He submitted that reopening was resorted to upon receipt of letter dated 11.03.2019 from the Deputy Commissioner of Income Tax, Kolkata for the assessment years 2012-13. 4.2.1 It was further submitted on behalf of the department that as per the provisions of the Act, if the income that skipped assessment was Rs.1 lakh or more, it may be permissible to issue notice under section 148 within 6 years from the end of the relevant assessment year. It was submitted that on such criteria, the impugned notice could not be said to be barred by limitation as it was issued within 6 years. 4.2.2 He submitted that there was failure on the part of the assessee to fully and truly disclose the material facts. It was submitted that on such criteria, the impugned notice could not be said to be barred by limitation as it was issued within 6 years. 4.2.2 He submitted that there was failure on the part of the assessee to fully and truly disclose the material facts. For the above proposition, the decision of Aspas Multimedia Limited Vs. Deputy Commissioner of Income Tax, Circle [2018(405) ITR 512 (Guj)]. By relying on decision of the Supreme Court in Commissioner of Income Tax vs. Rajesh Jhaveri Stock Brokers (P) Ltd. [ (2007) 161 Taxman 316 (SC)], it was submitted that the expression and reason to believe could not be read to mean that the assessing officer should have finally ascertained the facts by legal evidence, but would mean the cause or justification for proceeding further to reopen the case. 4.2.3 Learned advocate for the respondent relied on the decision of the Supreme Court in Phool Chand Bajrang Lal and Ors. vs Income-Tax Officer and anr. [ (1993) 203 ITR 456 ] to submit on that basis that merely because the same details were called for during the assessment proceedings, it would not absolve the assessee from being subjected to reopening proceedings when untruth of submissions of assessee comes to fore pursuant to availability of credible information subsequently. He relied on observations of Supreme Court in paras 20 and 21 of the said decision. It was submitted that the ratio in Phool Chand Bajrang Lal (supra) was reiterated by the decision of this Court in (i) Yogendrakumar Gupta vs. ITO - 366 ITR 186 (Guj)], (ii) Backbone Projects vs. ACIT - 437 ITR 144 (Guj) (iii) Kottex Industries (P) Ltd. vs. ACIT - 437 ITR 211 (Guj). 4.2.4 As regards the contention of the petitioner that the issue on which the reopening was sought to be effected had merged with the subject matter of appeal before the Commissioner of Income Tax (Appeals), learned senior advocate submitted that the concept of merger in light of the Third Proviso to section 147 of the Act came to be considered by this Court in Krishna Developers & Company v. DCIT [400 ITR 260], it was observed that for applicability of this proviso and principle of merger flowing from such provision, what is necessary is that there has to be income involving matter, which is subject matter of appeal, reference or revision. 4.2.5 It was submitted that in the case on hand, the assessee had raised two contentions before the appellate authority. The first was in respect of validity of assessment framed by the assessing officer without service of notice and second was in relation to the merits of additions made by him in order of assessment. The Commissioner (Appeals) confined his comments only to the first of the contention and declared that the assessment was invalid. In other words, it was submitted that the appellate authority had not gone into nor had commented on the assessee's contention on merits of the additions. 4.2.6 It was therefore submitted to persuade the Court that the merger doctrine was made applicable as the order of the Commissioner in appeal did not touch the merits of the additions made and when the reopening was based on the belief of the assessing officer that the sale proceeds should be taxed as business income and not capital gains, it could not be said that the said subject matter was part of the order of the Commissioner (Appeals). 5. Having considered the facts, the contents in the reopening proceeding, the objections raised by the assessee and having appreciated the rival submissions, there is no gainsaying that the action of reopening was rested upon and was sought to be justified on the ground of statement of one Praveen Agarwal recorded under section 132 of the Acton 22.12.2012. It was the solitary ground for reopening the assessment of the petitioner. Now it could not be denied that the said fact was very much available with the department while framing the assessment under section 143(3) of the Act, which was done by order dated 23.03.2015. It could not be said that any new tangible material was found by the department subsequent to the framing of assessment under section 143(3) of the Act. 5.1 The assessee had addressed letter dated 08.10.2014 to the officer in course of assessment proceeding pointing out in clear terms that certain shares were sold for consideration of Rs. 40 lakhs to Shubhdrishti Complex Pvt. Ltd. In other words, the department had already with it the information on that count. If the officer was not satisfied with the explanation furnished by the asessee, at that stage, he could have exercised powers to make addition but did not choose to do anything on such count. 40 lakhs to Shubhdrishti Complex Pvt. Ltd. In other words, the department had already with it the information on that count. If the officer was not satisfied with the explanation furnished by the asessee, at that stage, he could have exercised powers to make addition but did not choose to do anything on such count. 5.2 Even subsequent to framing of assessment, any material or information was not available. The situation unfolded before the assessing officer was that though he had no new material, much less tangible material other than those considered during the assessment which included the aspect of sale of shares to Shubhdrishti Complex Pvt. Ltd., he put his hand on the very factual aspect and issued notice under section 148 of the Act seeking to reopen the assessment. 5.3 The action therefore of the assessing officer was in the nature of change of opinion only. He by proceeding for reopening of assessment acted to seek a roving inquiry in relation to the very facts and information considered by him earlier. It could not be said that there was any new tangible material available with the assessing officer. The material, which was noticed, was part of the material and facts already considered in the assessment proceedings and which could have been probed further by the assessing officer if the assessing officer was of such opinion, to ascertain and fix the tax liability on the assessee in that respect could not be classified as tangible material. 5.4 When the assessment proceedings were earlier undertaken and relevant material and information was called by the assessing officer from the assessee, the assessing officer had been carrying the onus to consider the said information from all angles to deal with it including to seek further information and conclude about the tax liability of the assessee on that score. The assessing officer having not done so, cannot claim that the material was not available. Such consideration by the assessing officer for the reassessment would tantamount to change of opinion. 5.5 The assessing officer is not permitted to reverify the facts. It is well settled that mere change of opinion could not be a ground for the Assessing Officer to reopen the concluded assessment. Such consideration by the assessing officer for the reassessment would tantamount to change of opinion. 5.5 The assessing officer is not permitted to reverify the facts. It is well settled that mere change of opinion could not be a ground for the Assessing Officer to reopen the concluded assessment. In Commissioner of Income Tax vs. Kelvinator of India Ltd. [ (2010) 320 ITR 561 O(SC)], the supreme court observed that concept of change of opinion was an inbuilt test and it did not stand obliterated after substitution of section 147 in the Act by the Direct Tax Laws (Amendment) Act, 1987 and 1989. The Apex Court stated, “... prior to Direct Tax Laws (Amendment) Act, 1987, re-opening could be done under above two conditions and fulfillment of the said conditions alone conferred jurisdiction on the Assessing Officer to make a back assessment, but in section 147 of the Act with effect from 1st April, 1989, they are given a go-by and only one condition has remained, viz., that where the Assessing Officer has reason to believe that income has escaped assessment, confers jurisdiction to re-open the assessment. Therefore, post-1st April, 1989, power to reopen is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. The Assessing Officer has no power to review; he has the power to reassess. But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer" 5.6 When the case turns out to be change of opinion on the part of the assessing officer, the decision relied on by learned advocate for the respondent department in Phulchand (supra) and other decision relied on by learned senior advocate for the respondent would have no application. On facts, the case on hand is not the case where the assessee willfully made any false or untrue statement at the time of original assessment or that falsity has come to the notice, which may justify the assessing officer to exercise the powers. 5.7 The case is not only of reopening the completed assessment on the same facts without availability of fresh and tangible material, it was reopening acted upon beyond period of four years from the end of the relevant assessment year. The law requires, in such cases, that the reopening is permitted only if the assessee had not disclosed fully and truly all the material facts. There was no failure on the part of the petitioner (i) to make return under section 139 or in respect to notice under section 142(2) or under section 148 or that (ii) he had not disclosed fully and truly all material facts necessary for the assessment concerned. 5.8 The assessee in the present case furnished complete details in his letter dated 08.10.2014 during the assessment with respect to the transaction occurred with Shubh Dristi Complex Pvt. Ltd. There was no omission on the part of the petitioner as to full and true disclosure for the year under consideration which were necessary for the assessment concerned. 6. In light of the above discussion, it has to be held that the action of reopening by the Assessing Officer was bad in law, mainly for the reason that it was passed on a mere change of opinion on the same set of facts, which was disclosed and considered by the assessing officer during the assessment year 2012-2013. 6.1 In the above view, the aspect of merger completed by the petitioner need not be dealt with for its merits, and hence, not gone into. 7. For the aforesaid reasons and discussions, the petition succeeds. The impugned notice dated 29.03.2019 issued under section 148 of the Income Tax Act, 1961, by the Assessing Officer in respect of Assessment Year 2012-13 seeking to reopen the assessment of the petitioner-assessee for the year under consideration, is hereby quashed and set aside. All consequential actions and decisions are also set aside. Rule is made absolute accordingly.