JUDGMENT : Bhargav D. Karia, J. 1. Rule returnable forthwith. 2. Ms.Maithili Mehta, learned Senior Standing Counsel waives service of notice of Rule on behalf of respondent. 3. Having regard to the controversy in narrow compass, with the consent of learned advocates for the parties, the matter is taken up for hearing. 4. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice issued under Section 148 of the Income-Tax Act, 1961 (for short ‘the Act’) dated 21.3.2021 for reopening of the Assessment Year 2017- 18. 5. The petitioner, who is an importer and refiners of edible oil in India, filed original return of income for Assessment Year 2017-18 on 22.11.2017 which was revised on 26.11.2018, declaring total income of Rs.54,94,84,050/- under the normal provisions and book profit of Rs.345,20,74,045/- under MAT provisions of the Act. 5.1 The case of the petitioner was selected for scrutiny and detailed notice under Section 142(1) of the Act dated 5.7.2019 was issued, requiring the petitioner to furnish various details with respect to break-up of ‘any other amount allowable as deduction’ claimed in Schedule BP of return, wherein notional guarantee commission of Rs.99,72,603/- was claimed by the petitioner. 5.2 The petitioner by reply dated 14.11.2019 submitted the requisite details. Thereafter, the assessment order under Section 143(3) of the Act was passed on 2.12.2019 assessing total income of Rs.55,42,43,719/- under the normal provisions and book profit of Rs.345,68,33,714/-. 5.3 The respondent thereafter issued the notice under Section 148 of the Act on 21.3.2021 for Assessment Year 2017-18. The petitioner, in response to the notice, filed return of income and requested for the copy of the reasons recorded for reopening the assessment. 5.4 The respondent – Assessing Officer provided the reasons for reopening on 12.5.2021, which read as under : “2. Brief details of Information collected/received by the AO: On perusal of the Assessment records for the year under consideration, it is found that in Profit and Loss account, at Note No.29 "Other Income" of Annual Report for F.Y. 2016-17 relevant to the Assessment Year 2017-18, the assessee has received guarantee commission of Rs.9.97 Mn. The assessee company has reduced an amount of Rs.99,72,603/- from its total income on account of corporate guarantee fees which is in respect of two of its subsidiaries companies claiming it to be a notional income. The assessee company has reduced an amount of Rs.99,72,603/- from its total income on account of corporate guarantee fees which is in respect of two of its subsidiaries companies claiming it to be a notional income. However, it is seen that while computing the book profit the assessee has disallowed the same and increased the book profit. On the one hand the guarantee fees to the extent of 99.73 lakhs after deductions of Rs. 27,000/- which could not be ascertained from the records and on the other hand it is noticed that at note no. 5 of the balance sheet the investments in share capital of the two subsidiary companies namely KOG Food Products (India) Pvt. Ltd. and KTV Health Food Pvt. Ltd. has correspondingly been increased by Rs. 1 cr. The assessee has credited this guarantee commission in its income from other sources which is at the rate of 1% as mentioned in note 5 to its balance sheet. From the above treatment of the guarantee that commission when the same is credited in the profit and loss account and correspondingly share capital has been Increased in these two subsidiary companies it cannot be said to be notional income as claimed by the assessee and as reduced from its total income. As per para 6 of ICDS-IV, revenue from service transactions was to be recognized in same manner as in para 20 of Ind. As. Further the investment is increased in a notional manner but by actually recognizing investment on consideration of actual service provided. The reduction of guarantee fees of Rs.99,72,603/- is not allowable from the computation of total income under normal provisions. The claim of wrong deduction has resulted in escaped assessment by an amount of Rs.99,72,603/-. 3. Analysis of information collected/received: it is found that in Profit and Loss account, at Note No.29 "Other Income" of Annual Report for F.Y. 2016-17 relevant to the Assessment Year 2017-18, the assessee has received guarantee commission of Rs.9.97 Mn. The assessee company has reduced an amount of Rs.99,72,603/- from its total income on account of corporate guarantee fees which is in respect of two of its subsidiaries companies claiming it to be a notional Income. However, it is seen that while computing the book profit the assessee has disallowed the same and increased the book profit. The assessee company has reduced an amount of Rs.99,72,603/- from its total income on account of corporate guarantee fees which is in respect of two of its subsidiaries companies claiming it to be a notional Income. However, it is seen that while computing the book profit the assessee has disallowed the same and increased the book profit. On the one hand the guarantee fees to the extent of 99.73 lakhs after deductions of Rs. 27,000/- which could not be ascertained from the records and on the other hand it is noticed that at note no. 5 of the balance sheet the investments in share capital of the two subsidiary companies namely KOG Food Products (India) Pvt. Ltd. and KTV Health Food Pvt. Ltd. has correspondingly been increased by Rs. 1 cr. The assessee has credited this guarantee commission in its income from other sources which is at the rate of 1% as mentioned in note 5 to its balance sheet. From the above treatment of the guarantee that commission when the same is credited in the profit and loss account and correspondingly share capital has been increased in these two subsidiary companies it cannot be said to be notional income as claimed by the assessee and as reduced from its total income. As per para 6 of ICDS-IV, revenue from service transactions was to be recognized in same manner as in para 20 of Ind. As. Further the investment is increased in a notional manner but by actually recognizing investment on consideration of actual service provided. The reduction of guarantee fees of Rs.99,72,603/- is not allowable from the computation of total income under normal provisions. The claim of wrong deduction has resulted in escaped assessment by an amount of Rs.99,72,603/-. 5. Enquiries made by the AO as sequel to information collected/received : The facts enumerated above have been found out on examination on the case records of the assessee and are self explanatory. Therefore, no further enquiry is required in this case. On the basis of the same there are reasons to believe that the income chargeable to tax has escaped assessment. 5. Therefore, no further enquiry is required in this case. On the basis of the same there are reasons to believe that the income chargeable to tax has escaped assessment. 5. Findings of the AO: During the examination of the assessment records, it is noticed that the assessee has claimed wrong reduction of Rs.99,72,603/-, Hence, it is found that an amount of Rs.99,72,603/- for the year under consideration has escaped assessment within the meaning of section 147 of the I.T. Act.” 5.5 On receipt of the above reasons, the petitioner filed the objections with a request to drop the reassessment proceedings on 3.7.2021 which were disposed of by the respondent vide order dated 10.11.2021 along with the notice under Section 142(1) of the Act. 5.6 Being aggrieved, the petitioner has approached this Court. 6. Mr. B.S. Soparkar learned advocate for the petitioner submitted that the main reason for reopening the assessment is not on basis of any fresh tangible material which is placed on the perusal of the assessment record, wherein it is found that as per Note No.29 showing ‘other income’ of Annual Report for Financial Year 2016-17 that the assessee has received guarantee commission of Rs.9.97 Million and the assessee has reduced the amount of Rs.99,72,603/- from the total income on account of corporate guarantee fees which is in respect of two of its subsidiary companies claiming to be a notional income. It was submitted that such opinion framed by the Assessing Officer is to reopen the assessment, is already considered during the course of the regular assessment as per the Notice under section 142(1) of the Act dated 5.7.2019, asking the same details with respect to break-up of ‘any other amount allowable as deduction’ claimed in Schedule BP of the income-tax return, wherein the notional guarantee commission was claimed. Reliance was placed on the decision in the case of Gujarat State Board of School Textbooks v. Asst. CIT, reported in (2016) 75 taxman.com 281 and a decision in the case of Premium Finance (P.) Ltd. v. Asst. CIT, reported in (2016) 73 taxman.com 369 to submit that there is change of opinion by the respondent – Assessing Officer having the reason to believe that the income has escaped the assessment and, therefore, the impugned notice is without jurisdiction. CIT, reported in (2016) 73 taxman.com 369 to submit that there is change of opinion by the respondent – Assessing Officer having the reason to believe that the income has escaped the assessment and, therefore, the impugned notice is without jurisdiction. 6.1 It was further submitted that the impugned notice is issued on the basis of the audit party objection which is not valid and the entire exercise of assumption of jurisdiction to issue the notice for reassessment would be without jurisdiction as reliance was placed on the decision in the case of Reckit Benckiser Healthcare India (P) Ltd. v. Dy. CIT, reported in (2017) 392 ITR 336 as well as on the decision in the case of Adani Power Maharashtra Limited v. Asst. Commissioner of Income-Tax, rendered in Special Civil Application No.347 of 2022, decided on 20.2.2023. 6.2 In support of his submission that no new material and/or information was in possession of the respondent – Assessing Officer, reliance was placed on the decision in the case of Shanti Enterprise v. ITO, reported in 2016 (76) taxmann.com 184. It was submitted that the very basis of issuance of notice for reopening that income has escaped the assessment is not met with in view of the fact that the assessee company has paid the tax on book profit computed under MAT provisions and it was found that even after proposed addition to income under normal provisions, the assessee would still be governed under the provision of Section 115JB of the Act and assessed on same book profit. It was, therefore, submitted that there was no escapement of income and as such, the reason to believe that the income has escaped the assessment by the respondent – Assessing Officer would be without any basis as there would not be excess tax liability under MAT provisions and there is no income that has escaped assessment and reassessment, therefore, could not have been initiated. Reliance was placed on the decision in the case of National Dairy Development Board - (2016) 76 taxmann.com 38. 7. On the other hand, Ms.Maithili Mehta, learned Senior Standing Counsel for the respondent – Assessing Officer submitted that the petitioner would have an alternative efficacious remedy to challenge the assessment order by preferring an Appeal before the CIT (Appeals) and, therefore, no interference be made as issuance of notice is under Section 148 of the Act. 7. On the other hand, Ms.Maithili Mehta, learned Senior Standing Counsel for the respondent – Assessing Officer submitted that the petitioner would have an alternative efficacious remedy to challenge the assessment order by preferring an Appeal before the CIT (Appeals) and, therefore, no interference be made as issuance of notice is under Section 148 of the Act. Ms.Maithili Mehta referred to and relied upon the following averments made in the affidavit filed on behalf of the respondent : “4. The petition challenges the notice issued under Section 148 of the Act for Assessment Year 2017-18. The notice has been issued within a period of four years from the end of the relevant assessment year. As can be seen from the reasons recorded, relevant at page 137, the petitioner received guarantee commission of Rs.99.72 Lacs and reduced the said amount from its total income on account of Corporate Guarantee Fees which is in respect of two of its subsidiary Companies claiming it to be a notional income. On the other hand, while computing the book profit, the petitioner disallowed the same and increased the book profit. After elaborating on other aspects, a specific reason has been formed that the reduction of guarantee fees of Rs.99.72 Lacs was not allowable from the computation of total income under normal provisions which has led to escapement of income. The petitioner lodged objections and at page 146, has stated that there was no new material and that the issue was gone into at the time of original assessment and that since the income of the petitioner was assessed under MAT provisions, escapement under normal computation would pale into insignificance. The objections of the petitioner have been disposed of by an order and at page 168, it has been recorded that during the course of original proceedings, no conscious decision has been taken. It has also been recorded that the petitioner's assertion that this was only notional income is not correct. It has also been recorded that though while computing book profits under Section 115JJB, the guarantee fees were taken into consideration but without any basis were reduced in the normal computation. 5. I humbly submit that the petitioner's main assertion that since the assessment was undertaken under the MAT provisions, escapement of income under the normal provisions cannot be invoked, is thoroughly misconceived. 5. I humbly submit that the petitioner's main assertion that since the assessment was undertaken under the MAT provisions, escapement of income under the normal provisions cannot be invoked, is thoroughly misconceived. I crave leave to refer to and rely upon the provisions of Section 147 and the provisos thereto so as to submit that once the assessment has been reopened, the entire income escaping is required to be brought to tax. It would be open for the Assessing Officer to assess the entire escaped income and, therefore, at the stage of issuance of notice, it is not open for the petitioner to contend that even if escaped income is added to the normal computation, there would not be impact on the MAT computation.” 7.1 Referring to the above averments, it was submitted that the escapement of income under the normal provisions of the Act can be considered for invoking jurisdiction under Section 147 of the Act and the provisio thereto as the assessment has been reopened, the entire income escaping income is required to be brought back and the Assessing Officer can look into all other relevant aspects as to frame the assessment once the reopening is done. It was, therefore, submitted that the contentions raised on behalf of the petitioner are not tenable and the petition being without any merits, may be dismissed. 8. Considering the above submissions, it appears that the notice under Section 142(1) of the Act dated 5.7.2019 clearly indicates the break-up of any other amount allowable as deduction, in which in reply the petitioner has submitted that the claim of Rs.99,72,603/- made towards the notional guarantee commission and the same is deemed to have been considered by the Assessing Officer while framing the assessment. Moreover, it is settled legal position that the reopening on the basis of the audit party objections is invalid and on bare perusal of the reasons recorded, it is apparent that there was no material available with the respondent - Assessing Officer to form a reason to believe that the income has escaped assessment. In such circumstances, the impugned notice issued under Section 148 of the Act is held to be without jurisdiction and accordingly, the same is quashed and set aside. Rule is made absolute to the aforesaid extent.