ORDER : Niral R. Mehta, J. 1. Heard learned advocate Mr. Manish J. Shah for the petitioner and learned advocate Mr. Karan Sanghani for learned advocate Ms. Kalpana K. Raval for the respondent. 2. Rule returnable forthwith. Learned advocate Mr. Sanghani waives service of notice of Rule for the respondent. 3. 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 2019 issued by the respondent – Assessing Officer under Section 148 of the Income Tax Act, 1961 (for short, “the Act”) for the Assessment Year 2012-13. 4. The brief facts of the case are that the petitioner – company filed its return of income on 27th November 2012 for the Assessment Year 2012-13 declaring total income at Rs.10,86,70,260/- under the normal provisions of the Act and book profit of Rs.10,79,13,516/- under Section 115JB of the Act. 4.1 Along with the return of income, the petitioner also filed balance-sheet and profit and loss account. The case of the petitioner was taken up for scrutiny assessment and notices under Section 142(1) / 143(2) of the Act were issued which were complied with by the petitioner giving reply in detail. 4.2 During the course of regular assessment, the petitioner filed reply dated 15th February 2016 wherein justification of various expenses amounting to Rs.30,75,80,968/- framed in the computation of income with documentary evidence was submitted. It was contended that such expenses were claimed as stated in the Audit Report in Form No.3CD and it comprises of depreciation under Section 32 of the Act of Rs.21,44,61,679/-, claim under Section 43B of the Act of Rs.27,99,737/- and claim admissible under Section 40a of the Act of Rs.39,05,807/- as TDS has been paid for the year under consideration and claim admissible under Section 35(2AB) of the Act of Rs.2,03,40,140/- along with remarks. 4.3 Considering such explanation, the assessment order under Section 143(3) of the Act was passed on 26th February 2016 by the then Assessing Officer by making disallowance of Rs.4,52,97,160/- to the return income by assessing total income of Rs.15,39,67,420/-. 4.4 Thereafter, notice under Section 148 of the Act was issued on 30th March 2019. The petitioner filed return of income pursuant to the notice and requested for supply of reasons recorded vide letter dated 27th June 2019, which was provided by the respondent – Assessing Officer. 4.4 Thereafter, notice under Section 148 of the Act was issued on 30th March 2019. The petitioner filed return of income pursuant to the notice and requested for supply of reasons recorded vide letter dated 27th June 2019, which was provided by the respondent – Assessing Officer. The reasons recorded read as under : “The scrutiny of records revealed that the assessee company had claimed deduction of foreign exchange loss of Rs.1,20,50,206/- pertaining to indigenous assets and the same was allowed. These losses claimed as deduction in respect of foreign currency loans for acquisition of assets. The assets acquired utilizing these loans were indigenous assets. Since the assets acquired were the indigenous assets under section 43A is not applicable. For application of Section 43A, the assets acquired should be from outside India in foreign currency. In the present case the asset is acquired from within India and therefore Section 43A is not applicable. As the foreign currency loan is utilized for acquisition of indigenous assets, the change in liability due to forex fluctuation would not be allowable as revenue expenditure. The unrealized/realized exchange loss pertaining to indigenous assets is capital in nature. This is sustained by Hon'ble Supreme Court Decision in the case Sutlej Cotton Mills Ltd Vs. Commissioner of Income Tax, West Bengal, 116 ITR 1 wherein the Apex Court held as under. Whether the loss suffered by the assessee was a trading loss or not would depend on the answer to the question, whether the loss was in respect of a trading asset or a capital asset. In the former case, it would be a trading loss but not so in the latter. The test may also be formulated in another way by asking the question whether the loss was in respect of circulating or in respect of fixed capital. Further observation made in above case that, if the amount in foreign currency is utilized or intended to be utilized in the course of business or for a trading purpose or for effecting a transaction on revenue account, loss arising from depreciation in its value on account of alteration in the rate of exchange would be a trading loss, but if the amount is held as a capital asset, loss arising from depreciation would be a capital loss. In other case of CIT Vs. In other case of CIT Vs. Dempo & Co Pvt. Ltd (206 ITR 291) which has specifically laid down principles in order m decide whether loss/gain arising out of foreign exchange fluctuations is in nature of revenue or capital of which at para 5 of said principles which says as follows: Loss resulting from depreciation of the foreign currency which utilized or intended to be utilized in business and is part of the circulating capital, would be trading loss but depreciation of fixed capital on account of alteration in exchange rate would be capital loss. As the loans were utilized for acquisition of indigenous assets, such expenses are capital in nature and in view of the above decision of Hon'ble Supreme Court would not be allowable as revenue expenses, Basis of forming reasons to believe and details of escapement of income:- In view of the above facts, I have reasons to believe that the income to the extent of Rs.1,20,50,206/- and any other income are chargeable to tax and has escaped assessment within the meaning of section 147 of the Income-tax Act and this is a fit case for assessment proceeding u/s 147 of the Income-tax Act. The above income is prime facie more than the limit for re-opening the case u/s 147 of the Income-tax Act. Therefore, I am satisfied that this is a fit case for taking action u/s. 147 of the Income-tax Act, 1961.” 4.5 The petitioner filed objections on 8th August 2019 explaining in detail that the impugned notice has been issued beyond a period of four years from the date of assessment year without any tangible material / information for forming reasons to believe that income has escaped assessment and it is a case of mere “change of opinion”. It was, therefore, contended that as per proviso to Section 147 of the Act, the petitioner – assessee has disclosed fully and truly all material facts relevant for the assessment year and the same could not have been reopened after a period of four years to examine the same issue which has already been verified by the Assessing Officer. It was, therefore, contended that the impugned notice issued was without jurisdiction. 4.6 However, the respondent – Assessing Officer, vide order dated 21st November 2019, disposed of the objections rejecting the same. 5. Being aggrieved, the petitioner has preferred this petition. 6. Learned advocate Mr. It was, therefore, contended that the impugned notice issued was without jurisdiction. 4.6 However, the respondent – Assessing Officer, vide order dated 21st November 2019, disposed of the objections rejecting the same. 5. Being aggrieved, the petitioner has preferred this petition. 6. Learned advocate Mr. Manish Shah for the petitioner, while assailing the impugned notice, has made the following submissions: 6.1 Learned advocate Mr. Shah for the petitioner submitted that the petitioner company had disclosed all necessary facts pertaining to the foreign exchange loss. He therefore submitted that notice under Section 148 of the Act does not fulfill the conditions in proviso to Section 147 of the Act and therefore, even if it is assumed that the notice is given within four years, the same would have been the case of change of opinion. Under the circumstances, this Court may allow this petition by quashing and setting aside the impugned notice and all consequential proceedings. 6.2 Learned advocate Mr. Shah submitted that a bare perusal of reasons recorded would suggest that the reassessment proceedings were sought to be initiated on the basis of material already available on record and thereby, no tangible and / or new material was found, thus, the same is nothing, but a change of opinion and thereby, according to learned advocate Mr. Shah, the impugned notice deserves to be quashed and set aside. 6.3 Learned advocate Mr. Shah further submitted that the foundation of notice by considering Section 43A of the Act itself is erroneous and thereby, the impugned notice deserves to be quashed and set aside. 6.4 By making above submissions, learned advocate Mr. Shah prayed before this Court to allow the present petition by quashing and setting aside the impugned notice and all consequential proceedings. 7. Per contra, learned advocate Mr. Karan Sanghani for the respondent, while supporting the impugned notice, made the following submissions: 7.1 Learned advocate Mr. Sanghani for the respondent submitted that notice under Section 148 of the Act issued by the revenue authority is perfectly justified and being issued after following the due procedure of law and thereby, no illegality can be said to have been committed by the respondent which requires interference by this Court and thereby, he prayed this Court to dismiss the present petition. 7.2 Learned advocate Mr. 7.2 Learned advocate Mr. Sanghani submitted that deduction of foreign exchange loss of Rs.1,20,50,206/- pertaining to indigenous assets was claimed by the petitioner and the same was allowed. According to learned advocate Mr. Sanghani, since the assets acquired were indigenous, Section 43A of the Act is not applicable. He submitted that for application of Section 43A of the Act, the assets acquired should be from outside India in foreign currency, thus, application of Section 43A of the Act could not be applied while allowing deduction in respect of foreign currency loans for acquisition of assets. Learned advocate Mr. Sanghani therefore requested this Court to dismiss the present petition. 7.3 Learned advocate Mr. Sanghani submitted that while framing assessment order under Section 143(3) of the Act, the issue is with regard to foreign exchange loss and its application was not dealt with and thereby, the impugned notice under Section 148 of the Act is perfectly justified and therefore, he requested this Court to dismiss the present petition. 7.4 According to learned advocate Mr. Sanghani, the petitioner had utilized the foreign currency loans for acquisition of assets, thus, as result of devaluation of foreign currency, the assessee incurred foreign currency loss. Therefore, the issue to be decided is whether such loss is business loss or capital loss. Learned advocate Mr. Sanghani further submitted that the assessee did not establish that the indigenous assets were trading asset or stock in trade and therefore, the foreign exchange loss on acquisition of indigenous asset was capital in nature and the same was to be set off and carried forward in accordance with the provisions of Sections 70 to 72 of the Act. Under the circumstances, learned advocate Mr. Sanghani submitted that the impugned notice under Section 148 of the Act is rightly issued as the Assessing Officer has reason to believe that the income chargeable to tax has escaped the assessment and thereby, no fault can be found with the Assessing Authority and therefore, he requested this Court to dismiss this petition. 7.5 Learned advocate Mr. Sanghani submitted that the impugned notice under Section 148 of the Act is rightly issued as the Assessing Officer has reason to believe that the income chargeable to tax has escaped the assessment and thereby, no fault can be found with the Assessing Authority and therefore, he requested this Court to dismiss this petition. 7.5 Learned advocate Mr. Sanghani further submitted that the assessee failed to disclose truly and fully all the material facts for its assessment and the assessee did not disclose as to how its claim was revenue in nature and not capital in nature and whereas the Assessing Officer in the reasons recorded for reopening of assessment established that the claim of the assessee was capital in nature and not revenue in nature. Learned advocate Mr. Sanghani emphatically submitted that the issue of deduction of foreign exchange loss on acquisition of indigenous asset was neither part and parcel of issues involved in order under Section 143(3) of the Act nor in the office note appended to order under Section 143(3) of the Act. Under the circumstances, reopening of assessment can be said to be perfectly justified and therefore, present petition deserves to be dismissed. 7.6 Learned advocate Mr. Sanghani lastly submitted that notice under Section 148 of the Act has been issued after taking necessary approval from the Principal Commissioner of Income Tax, Vadodara – 3, Vadodara and sanction was granted after due application of mind and therefore, it cannot be said that notice under Section 148 of the Act was issued in absence of any valid sanction. 7.7 By making above submissions, learned advocate Mr. Sanghani requested this Court to dismiss this petition. 8. Having considered the submissions of the learned advocates appearing for the respective parties and considering the reasons recorded as well as the facts on record, it emerges from the facts of the case that during the regular assessment, the Assessing Officer has called for the details with regard to claim of deduction made by the petitioner of Rs.30,75,80,968/-, which was provided by the petitioner. The Assessing Officer also called for the details for deduction of foreign exchange loss. The Assessing Officer also called for the details for deduction of foreign exchange loss. The respondent – Assessing Officer has, therefore, on the same facts and scrutiny on record has formed “reason to believe” that the foreign exchange loss of Rs.1,20,50,206/- pertaining to indigenous assets could not have been allowed as per the provisions of Section 43A of the Act. However, the petitioner has provided justification before the Assessing Officer in regular course of assessment for the said deduction. Therefore, there was no new tangible material available with the Assessing Officer with regard to the said deduction and in absence of such new information, the Assessing Officer could not have assumed the jurisdiction to reopen the assessment merely on “change of opinion”. 9. In the facts of the case, the Assessing Officer, while framing the original scrutiny assessment, has examined the claim of deduction made by the petitioner and as such, after considering the explanation tendered by the petitioner, the regular assessment order was passed and in the process, if he had made any legal error, then the succeeding Assessing Officer cannot correct such error. Therefore, process of reopening of assessment from the reasons recorded clearly reflects that as the respondent – Assessing Officer seeks to correct the error in his opinion, such foreign exchange loss could not have been allowed. We are therefore of the opinion that such reasons cannot be the basis for reopening of the assessment previously framed after scrutiny. 10. This Court in the case of P.C. Snehal Engineers (P) Ltd. vs. Assistant Commissioner of Income-tax reported in [2023] 146 taxmann.com 54 (Gujarat), in similar facts, held as under : “11. We are of the opinion that to confer jurisdiction to the Assessing Officer to reopen the assessment under section 147 of the Act beyond four years from the end of relevant assessment year, the two conditions must be satisfied namely, that the Assessing Officer must have reason to believe that the income chargeable to tax has escaped assessment and that the same was occasioned on account of either failure on part of the assessee to make a return of his income for that assessment year or to disclose fully and truly all material facts necessary for that assessment year. In the present case, the entire material was available with the Assessing Officer during the original assessment and therefore, there was no failure on part of the assessee to disclose truly and fully all material facts necessary for assessment and based upon such material supplied by the petitioner, the Assessing Officer passed the original assessment order. Further, it appears that the notice for reopening is based upon the audit objection and there is nothing on record to suggest that such reopening is made on account of new tangible material available on record. It is therefore, apparent that there is change of opinion by the Assessing Officer to reopen the assessment for the Assessment Year 2011-2012, more particularly, when the issue raised in the reopening assessment is already considered during the original assessment proceedings. The Assessing Officer cannot have any jurisdiction to issue the notice under section 148 of the Act, 1961 for reopening the assessment for the year under consideration more particularly, when the assessment is sought to be reopened beyond a period of four years as held by the Supreme Court in case of Commissioner of Income tax v. Kelvinator of India Ltd. reported in (2010) 320 ITR 561 (SC) as under: "2. A short question which arises for determination in this batch of civil appeals is, whether the concept of "change of opinion" stands obliterated with effect from 1st April, 1989, i.e., after substitution of Section 147 of the Income Tax Act, 1961 by Direct Tax Laws (Amendment) Act, 1987? xxxx 6. ............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 reopen assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. 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 reopen 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..…" 12. The Assessing Officer issued notice under section 148 of the Act only to make a roving inquiry into the facts which were already considered by the Assessing Officer at the time of framing the original assessment under section 143(3) of the Act. It appears that the Assessing Officer now wants to reverify the facts which is not permissible to be an acceptable ground for exercising powers to reopen the assessment.” 11. For the foregoing reasons, this petition succeeds and is hereby allowed. The impugned notice dated 30th March 2019 issued under Section 148 of the Act by the respondent exercising powers to reopen the assessment for the Assessment Year 2012-13 would not survive and is accordingly quashed and set aside. As a consequence, the order dated 21st November 2019 passed by the Assessing Officer disposing of the objections of the petitioner against the impugned notice is also set aside. The consequential actions and orders would also not survive. Rule is made absolute accordingly with no order as to cost.