JUDGMENT : BHARGAV D. KARIA, J. 1. Heard learned Senior Advocate Mr. Tushar Hemani with learned advocate Ms. Vaibhavi Parikh for the petitioner and learned Senior Standing Counsel Mr. Nikunt Raval with Mrs. Kalpana Raval for the respondents. 2. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for quashing and setting aside the notice dated 30th March 2021 for the Assessment Year 2014-15 issued under Section 148 of the Income Tax Act, 1961 (for the short “the Act”). 3. The petitioner, who is an individual, was engaged in the business of providing financial services and was also acting as a commission agent. 4. The petitioner filed return of income for the Assessment Year 2014-15 on 28th November 2014 declaring total income at Rs. 20,76,35,110/-. 5. The case of the petitioner was selected for scrutiny. The Assessing Officer issued notice dated 18th August 2016 and the petitioner was called upon to furnish various details including working of disallowance under Section 14A of the Act read with Rule 8D of the Income Tax Rules, 1962. 6. The petitioner, vide reply dated 15th September 2016, submitted that he had invested in unlisted shares of companies and has not earned any dividend income under Section 10(34) of the Act on such investments and no disallowance under Section 14A of the Act is made in the return of income. 7. The petitioner received another notice dated 3rd October 2016 requiring him to show cause as to why the provisions of Section 14A of the Act read with Rule 8D of the I.T. Rules should not be invoked for making necessary disallowance. The petitioner again replied by letter dated 24th October 2016 reiterating that no new investment was made during the year consideration and therefore, no disallowance is required to be made. 8. The Assessing Officer, by framing the assessment, passed order dated 26th December 2016 under Section 143(3) of the Act and did not make any disallowance under Section 14A of the Act read with Rule 8D of the I.T. Rules. 9. The petitioner received impugned notice dated 30th March 2021 under section 148 of the Act and received copy of reasons recorded for reopening on 11th November 2021. 9. The petitioner received impugned notice dated 30th March 2021 under section 148 of the Act and received copy of reasons recorded for reopening on 11th November 2021. On perusal of reasons for reopening, it reveals that the case was reopened broadly for the disallowance under Section 14A of the Act on the basis of the verification of the case record. The reasons recorded by the Assessing Officer are as under: “2. On verification of case record, It is found that the assessee had claimed exempt Income of Rs. 3,93,472 on account of on dividend. Further as per schedule 13 of Profit & Loss a/c, the assessee company had claimed interest expenses of Rs. 30,26,19,331. It was further noticed that the assessee had investment of sum of Rs. 26,71,00,000 in unquoted shares of Spring Valley Organizers Pvt. Ltd. and Satyaprbhu infrastructures Pvt. Ltd. as on 31/03/2013 and as on 31/03/2014. Moreover, assesses had also claimed various administrative expenses. Managing of investment requires time and energy. Therefore, some of these expenses must be attributable to the Investment in managing of unquoted equity shares. Provisions of section 144 are found to be applicable… *** *** *** 3. In view of the above, even if no exempt income was earned by the assessee from the investment in unquoted shares of Spring Valley Organizers Pvt. Ltd. provisions of section 14A are applicable and disallowance according to Rule 8D was required to be made. It is however noticed that the assessee had not made any disallowance u/s 14A r.w.r. 8D in the computation of income/return of income. Expenditure disallowance in view of sec. 14A r.w.r. 8D is calculated as under: S. No. Particulars Amount 1 Interest expenses debited to the P&L Account Rs. 39,26,19,131 2 Value of Investment as on 31.03.2014 Rs. 26,71,00,000 3 Value of Investment as on 31.03.2013 Rs. 26,71,00,000 4 Average Value of investment Rs. 26,71,00,000 5 Value of Total assets as on 31.03.2014 Rs. 4,64,46,67,882 6 Value of Total assets as on 31.03.2013 Rs. 9,16,90,00,028 7 Average value of total assets Rs. 6,90,68,33,955 8 Disallowance u/s 14A read with rule 8D (a) (Interest expenditure x Average value of investments)/(Average value of total assets)-Rule 8D(ii) Rs. 1,51,83,313 (b) 0.5% of average investment - Rule 8D(ii) 13,35,500 Total disallowance u/s 14A read with rule 8D Rs. 1,65,18,813 While computing total income disallowance u/s 14A read with rule 8D was not made. 6,90,68,33,955 8 Disallowance u/s 14A read with rule 8D (a) (Interest expenditure x Average value of investments)/(Average value of total assets)-Rule 8D(ii) Rs. 1,51,83,313 (b) 0.5% of average investment - Rule 8D(ii) 13,35,500 Total disallowance u/s 14A read with rule 8D Rs. 1,65,18,813 While computing total income disallowance u/s 14A read with rule 8D was not made. While as per section 14A read with Rule 8D the disallowance of Rs. 1,65,18,813 is required to be made as shown in table above: 1. In view of the facts above, I have reason to believe that income chargeable to tax to the tune of Rs. 1,65,18,813 has escaped assessment in the hands of the assessee within the meaning of section 147 of the IT Act and hence I am satisfied that it is a fit case for reopening the assessment under section 147 of the IT Act.” 10. Learned Senior Advocate Mr. Tushar Hemani for the petitioner submitted that the impugned notice dated 30th March 2021 is without jurisdiction as the reopening is based on change of opinion by the Assessing Officer. It was submitted that the Assessing Officer has failed to record any independent belief, but, while verification of the record, he has a different opinion for disallowance to be made under Section 14A of the Act as the issue of disallowance was already considered by the Assessing Officer while framing the assessment under Section 143(3) of the Act. 10.1 Learned Senior Advocate Mr. Hemani has referred to and relied upon the documents placed on record namely (1) notice dated 18th August 2016 (point No. 12), (2) reply of the petitioner dated 15th September 2016 (point No. 2), (3) notice dated 3rd October 2016 (point No. 2), (4) reply of the petitioner dated 24th October 2016 (point No. 2), to submit that the issue raised for reopening was examined threadbare at the original assessment stage by the then Assessing Officer. 10.2 It was submitted that no new tangible material has come in possession of the respondent after framing the regular assessment. A reference was made to the reasons recorded wherein it is stated: “(1) On verification of case records, it was found that the petitioner had claimed. (2) Further, as per Schedule 13 of the profit and loss account, the petitioner had claimed interest expenses. A reference was made to the reasons recorded wherein it is stated: “(1) On verification of case records, it was found that the petitioner had claimed. (2) Further, as per Schedule 13 of the profit and loss account, the petitioner had claimed interest expenses. (3) It was further noticed that the petitioner had investment of.....” It was, therefore, submitted that on perusal of the reasons recorded, no new tangible material has been found on record resulting into change of opinion by the Assessing Officer for reopening, which is not tenable in law for reopening after four years from the assessment year under consideration. 10.3 Learned Senior Advocate Mr. Hemani reiterated that when the issue has already been scrutinized at the original assessment stage, the Assessing Officer cannot resort to reopening to examine another facet of the very same claim as the petitioner has disclosed truly and fully all material facts during the regular assessment proceedings. It was also submitted that reopening is based on audit objection which is not permissible in the eye of law. 10.4 It was also pointed out that for issue of notice under Section 148 of the Act, sanction from the competent officer was not obtained under Section 151 of the Act. It was, therefore, submitted that when the impugned notice under Section 148 of the Act is beyond the period of four years, the respondent has no jurisdiction to issue such notice and in spite of raising the objections by the petitioner, the same were discarded relying upon the record only by order dated 23rd February 2022. 10.5 In support of his submissions, learned Senior Advocate Mr. Hemani has referred to and relied upon the decision of the Hon’ble Supreme Court in the case of CIT, Delhi vs. Kelvinator of India, 2010 (2) SCC 723 . 11. On the other hand, learned Senior Standing Counsel Mr. Nikunt Raval for the respondents submitted that the petitioner has an alternative efficacious remedy in case of reassessment order is passed making addition on the basis of impugned notice. It was submitted that the respondent has reopened the assessment as the petitioner has claimed exempt income of Rs. 3,93,472/- on account of dividend as per Schedule 13 of the profit and loss account. The petitioner has claimed interest expenses of Rs. 39,26,19,331/- and the petitioner had investments of Rs. It was submitted that the respondent has reopened the assessment as the petitioner has claimed exempt income of Rs. 3,93,472/- on account of dividend as per Schedule 13 of the profit and loss account. The petitioner has claimed interest expenses of Rs. 39,26,19,331/- and the petitioner had investments of Rs. 26,71,00,000/- in unquoted shares of Spring Valley Organizers Pvt. Ltd. and Satyaprabhu Infrastructures Pvt. Ltd. coupled with the fact that the petitioner had claimed various administrative expenses. The Assessing Officer had reasoned to believe that some expenses must be attributable to the investment in management of the unquoted shares and therefore, disallowance under Section 14A of the Act was required to be made. 11.1 It was submitted that on the basis of the record available with the Assessing Officer, the impugned notice is issued while recording the reasons in accordance with law, and therefore, no interference may be made while exercising extraordinary jurisdiction under Article 226 of the Constitution of India. 11.2 It was submitted that the impugned notice is issued after following due process of law and after the approval taken from the competent authority as per the provisions under Section 151 of the Act. 11.3 Reliance was placed on the decision of this Court in the case of Lalita Ashwin Jain vs. Income Tax Officer, (2014) 45 Taxmann.com 404, wherein it was held that the Assessing Officer while placing reasons recorded for approval of the Commissioner prior to issuance of notice under Section 148, recorded in Form No. ITNS-10 that income which escaped assessment was more than Rupees One Lakh, statutory bar imposed against reopening of assessment under Section 149(1)(b) would not operate in such a case. It was, therefore, submitted that reopening of the assessment is justified and therefore, the respondent has jurisdiction to issue such notice. 12. Having heard the learned advocates for the respective parties and on perusal of the documents placed on record, it is not in dispute that the issue of disallowance under Section 14A of the Act read with Rule 8D of the I.T. Rules was thoroughly scrutinized during the original assessment proceedings. It is evident from the notice dated 18th August 2016, wherein the details of disallowance under Section 14A of the Act read Rule 8D of the I.T. Rules were called for. The petitioner has also replied to such notice on 15th September 2016. It is evident from the notice dated 18th August 2016, wherein the details of disallowance under Section 14A of the Act read Rule 8D of the I.T. Rules were called for. The petitioner has also replied to such notice on 15th September 2016. Again, the Assessing Officer has issued notice on 3rd October 2016, wherein the petitioner was called upon to show cause as to why the provisions under Section 14A of the Act read with Rule 8D of the I.T. Rules should not be invoked. After verification of the balance sheet, it was seen that the petitioner had made investment in shares, income from dividend which is exempt from tax. The petitioner again replied vide letter dated 24th October 2016 giving detailed explanation as to why no disallowance is required to be made under Section 14A of the Act read with Rule 8D of the I.T. Rules as there was no exempt income earned during the relevant assessment year and the assessee had made investment in long term, non trade (unquoted investment) in private limited companies being carried forward from earlier years. 13. In view of the above facts and on perusal of the reasons recorded by the respondents, it is apparent that the respondent has failed to assume jurisdiction to issue such notice on the basis of the material which was available on record even during the course of original assessment proceedings and in absence of any fresh tangible material for reopening, the respondents could not have formed any reason to believe that the income has escaped assessment, more particularly, when the impugned notice is issued after four years from the end of the assessment year and after framing assessment under Section 143(3) of the Act, wherein the issue for which the reopening sought to be made is already considered by the Assessing Officer. Therefore, as per proviso to section 147 of the Act, as the petitioner has disclosed truly and fully all material facts during the regular assessment, no notice could have neem issued under section 148 of the Act. Moreover, in view of scrutiny of the issue of disallowance under section 14A of the Act read with Rule 8D of the Rules during the regular assessment proceedings, reopening on the same issue would amount to mere change of opinion of the assessing officer. 14. Moreover, in view of scrutiny of the issue of disallowance under section 14A of the Act read with Rule 8D of the Rules during the regular assessment proceedings, reopening on the same issue would amount to mere change of opinion of the assessing officer. 14. The Hon’ble Supreme Court in the case of Kelvinator of India (supra), in such circumstances, has held as under: “6. On going through the changes, quoted above, made to Section 147 of the Act, we find that, 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 re-open 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 re-assess. 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. Hence, after 1st April, 1989, Assessing Officer has power to re-open, provided there is “tangible material” to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words “reason to believe” but also inserted the word “opinion” in Section 147 of the Act. Reasons must have a live link with the formation of the belief. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words “reason to believe” but also inserted the word “opinion” in Section 147 of the Act. However, on receipt of representations from the Companies against omission of the words “reason to believe” Parliament re-introduced the said expression and deleted the word “opinion” on the ground that it would vest arbitrary powers in the Assessing Officer........” 15. In view of the settled legal position and in view of the foregoing reasons, this petition succeeds and is accordingly, allowed. The impugned notice dated 30th March 2021 issued by the Assessing Officer for reopening of the Assessment Year 2014-15 is hereby quashed and set aside and consequently, the order of rejecting the objections of the petitioner is also quashed and set aside. Rule is made absolute to the aforesaid extent. No order as to cost.