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 for learned advocate Ms. Kalpana Raval for the respondents. 2. Rule returnable forthwith. Learned advocate Mr. Nikunt Raval waives service of notice of Rule on behalf of the respondents. 3. Since the issue involved is in narrow compass, with consent of learned advocates appearing for the respective parties, the matter is taken up for final hearing. 4. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 28.3.2021 issued under Section 148 of the Income-Tax Act, 1961 (for short ‘the Act’) for Assessment Year 2016-17. 5. The reasons recorded for issuance of the notice read as under : “1. Brief Details of the Assessee : The assessee filed his return of income for A.Y.2016-17 declaring total income of Rs.3.08.58.620. The return of income was processed u/s 143(1) of the I.T.Act. Subsequently, this case was selected for scrutiny and assessment u/s 143(3) of the I.T.Act finalized on 28.11.2018 at assessed income of Rs.3,08,58,620/- as returned. 2. Brief Details of Information collected/received by the AO: On verification of case records (Computation of income, purchase deed and sale deed) revealed that assessee has purchased 10421 sq.mts. old tenure agricultural land at Block No.191, R.S.No.162 Village Puna, Taluka-Choryasi, Dist. Surat at consideration of 4,95,000 along with two other co-partners vide sale deed number 9562/23.04.2008. As per his share the cost of land purchased was 2,48,900. The said land was converted in to non-agricultural use for residential and commercial purposes vide Collectors Surat order dated 21/12/2013. The assessee has also availed development permission for the said land from the competent officers vide order No.TDO/DP/No.385 dated 19.2.2015 and after converting the agricultural land into residential and commercial purpose the assessee has sold the said land to Kantilal Jethabhai Patel and two others for consideration of 4,50,14,40. Further it is revealed that Shri Nanubhai Vashrambhai Ramolia (PAN:ABAPR5115L) is one of the co-owners of above sale deed has treated the said transactions of sale and purchase as a trade and business and disallowed the exemption claimed under section 54B. Further it is revealed that Shri Nanubhai Vashrambhai Ramolia (PAN:ABAPR5115L) is one of the co-owners of above sale deed has treated the said transactions of sale and purchase as a trade and business and disallowed the exemption claimed under section 54B. It was also mentioned in the assessment order that the land sold was not a capital asset rather stock in trade for which the Long Term Capital Gain is disallowed and the sale proceed would be treated as business income. 3. Analysis of information collected /received: As per data available in ITD/ITBA, the profile of the assessee is as under: Status of the assessee is Individual and filed in form ITR-3/4 and his source of income was Business, Long term capital gains and no agricultural income. For the last 3 years the assessee has shown his nature of business and source of income as tabulated below: Sr. No. Nature of business AY LTCG Business / Salary 1. Trading 2014-15 Nil Nil/360000 2. Trading 2015-16 13966772 Nil/360000 3. Trading 2016-17 30485096 Nil/360000 In the present case it is observed that the assessee has shown its nature of business as Trading and Property Developer and is involved in the practice of sale purchase of land. Hence, the present transaction is in the nature of trade and should have been treated as business income instead of long term / short term capital gains. 4. Enquiries made by the AO as sequel to information collected/received: The main source of income of the assessee is not sale of land. Assessee has converted the land into non-agriculture land and then he sold and ofiered the income under the head LTCG. However, the assessee's main intention is to trade and he is a developer and practice of sale and purchase of lands. Thus transaction are in nature of business and trade. 5. Findings of the AO: From the information available with the ofiice, analysis of the same and enquiries conducted in consequence, it is evident that the assessee has deliberately shown income from long term capital gains instead of business income. The assessee has tried to take advantage of LTCG instead of business income. Assessee's failure to disclose fully and truly all their material facts of the case has to believe that the income chargeable to tax amounting to Rs.3,04,85,097/- has escaped assessment/lower rate in the hand of assessee for the year under consideration. The assessee has tried to take advantage of LTCG instead of business income. Assessee's failure to disclose fully and truly all their material facts of the case has to believe that the income chargeable to tax amounting to Rs.3,04,85,097/- has escaped assessment/lower rate in the hand of assessee for the year under consideration. As per section 2(13) of the Act, Business includes any trade, commerce or manufactures or any adventures or concern in nature of trade, commerce or manufacture. As per section 63AA of Bombay Land Revenue Code when agriculture land is sold or purchased for bona fide industrial purpose the status of land will consider as N.A land. The assessee involves in purchasing lands and selling them to various persons as series of transactions, it would be chargeable to tax under the head profit and gain from business/profession.” 6. Learned Senior Advocate Mr. Tushar Hemani for the petitioner submitted that the impugned notice under Section 148 of the Act is without jurisdiction, as the same is issued beyond the period of four years from the date of the assessment scrutiny for the year under consideration under Section 143(3) of the Act. It was submitted that during the regular course of the scrutiny assessment, the inquiry was made with regard to Long Term Capital Gain (for short ‘LTCG’) claimed by the petitioner in the return of income. It was further submitted that the petitioner has never treated the LTCG as a business income as alleged in the reasons recorded, more particularly when the petitioner has filed the return of income in Form ITR-5 and not in Form ITR-3 and Form ITR-4, as stated in the reasons recorded. It was submitted that after considering the details submitted by the petitioner with regard to the property sold during the year under consideration along with the working of LTCG and the copy of the registered sale deeds and the purchase deed of the property, the assessment order dated 28.11.2018 under Section 143(3) of the Act was passed. It was, therefore, submitted that the impugned notice is nothing but a change of opinion on the part of the respondent to issue the impugned notice for reopening. 7. On the other hand, learned Senior Standing Counsel Mr. It was, therefore, submitted that the impugned notice is nothing but a change of opinion on the part of the respondent to issue the impugned notice for reopening. 7. On the other hand, learned Senior Standing Counsel Mr. Nikunt Raval for the respondents submitted that the impugned notice is issued after taking into consideration that the petitioner is involved in purchasing the lands and selling them to various persons as series of transactions, which would be chargeable to tax under the head profit and gain from business / profession and not as LTCG. It was submitted that during the year under consideration, the petitioner sold the land by sale deed on 23.4.2008 as he has purchased the land by sale deed dated 23.4.2008 for total consideration of Rs.4,50,14,400/- and out of the sale transaction, the petitioner was having the share of Rs.3,09,47,400/-. It was submitted that the Assessing Officer was of the opinion that such transactions were in nature of trade and ought to have been treated as business income instead of LTCG. It was submitted that such error was pointed out by the audit party and it is permissible for the Assessing Officer to reopen the assessment on the basis of such error pointed out by the audit objection. In support of his submissions, reliance was placed on the decision in the case of CIT v. P.V.S. Beedies Pvt. Ltd., reported in (1999) 237 ITR 53, wherein the Hon’ble Apex Court has observed as under : “2. We have considered the matter. It appears that the reopening was done because in the original assessment donations made to a body known as P.V.S. Memorial Charitable Trust was held by the Income Tax Ofiicer to be eligible for deduction under Section 80G. But subsequently it was pointed out by the internal audit party that the recognition which had been granted to the P.V.S. Memorial Charitable Trust had expired on 22-9-1972. That means it had expired before 1-4-1973. Therefore, in the relevant years of account this Trust was not a recognised charitable trust. In that view of the matter the donation to P.V.S. Memorial Charitable Trust did not qualify for deduction under Section 80G as a donation made to a recognised charity.” 8. That means it had expired before 1-4-1973. Therefore, in the relevant years of account this Trust was not a recognised charitable trust. In that view of the matter the donation to P.V.S. Memorial Charitable Trust did not qualify for deduction under Section 80G as a donation made to a recognised charity.” 8. Referring to the above observations, it was submitted that no interference be made while exercising extraordinary jurisdiction as the Assessing Officer was having the adequate jurisdiction to reopen the assessment under Section 148 of the Act. 9. Having heard the learned advocates for the respective parties and considering the submissions made by both the sides as well as the material placed on record, it is apparent that the reasons recorded pertain to sale of the land during the year under consideration which was subjected to scrutiny in the regular assessment. Therefore, as per the second proviso to Section 147 of the Act, the Assessing Officer would not have any jurisdiction to reopen the assessment when there is no failure on part of the assessee to disclose fully and truly all the material facts relevant for the assessment. Moreover, the reasons recorded by the respondent - Assessing Officer are also not correct as the assessee has never filed the return in Form ITR-3 or Form ITR-4, as stated in the reasons recorded by treating the income so as to treat the sale consideration received as a business income. The petitioner – assessee has filed the return of income in Form ITR-5 which is for the purpose of salary income and the other income from the capital gain and as such, the information recorded in the reasons is not correct and the entire reasons are based on the assumption and presumption that the assessee ought to have disclosed the LTCG as business income, without there being any basis. The respondent – Assessing Officer has, therefore, not arrived at an independent reasoning for reopening of the assessment. It appears that the impugned notice is issued on the basis of the audit objection which is not permissible in law, in absence of any fresh tangible information available with the Assessing Officer to reopen the assessment, which is already completed under Section 143(3) of the Act after more than four years in absence of any failure on part of petitioner to disclose fully and truly all material facts relevant for the assessment. 10. 10. In view of the foregoing reasons, the petition succeeds and accordingly allowed. The impugned notice dated 28.3.2021 issued under Section 148 of the Act is hereby quashed and set aside. Rule is made absolute to the aforesaid extent, with no order as to costs.