JUDGMENT : BHARGAV D. KARIA, J. 1. Heard learned advocate Mr. B.S.Soparkar for the petitioner and learned Senior Standing Counsel Ms. Maithili Mehta for the respondents. 2. Rule returnable forthwith. Learned Senior Standing Counsel Ms. Mehta waives service of notice of rule on behalf of respondents. 3. Having regard to the controversy involved which is in narrow compass, with the consent of the learned advocates for the parties, the matter is taken up for hearing. 4. This petition is filed challenging the notice dated 31.03.2021 issued under section 148 of the INCOME TAX ACT , 1961 [for short ‘the Act’] for A.Y. 2015-16. The Notice is signed by the respondent- Assessing Officer at 6:53 p.m. on 31.03.2021. There is nothing on the record to show that the notice was not issued on 31.03.2021. It is not in dispute that the notice is issued on 31.03.2021 and accordingly, the notice cannot be said to be a time barred notice. 5. The above facts are recorded in view of the fact that the petitioner is one of the partner of one M/s. Mayur Dye-chem Intermediates (LLP) and where the other partners’ notices were stated to be issued after 31.03.2021. 6. The petitioner filed return of income for A.Y. 2015-16 on 29.09.2015 declaring total income of Rs. 52,06,570/-. 7. The petitioner was a shareholder in Mayur Dye-chem Intermediates Ltd which was converted into Mayur Dye-chem Intermediate LLP vide order dated 04.09.2014 passed by the Ministry of Corporate Affairs (MCA). The case of the petitioner was selected for scrutiny and a notice under section 143(2) was issued on 31.07.2016 under Limited Scrutiny under CASS and the Assessment Order under section 143(3) was passed on 26.12.2017 accepting the returned income. 8. The impugned notice dated 31.03.2021 was issued after recording following reasons: “3. The erstwhile company was in business of Manufacturing, trading and export of chemicals and Mayur Dyechem Intermediates LLP has continued with the same business. Hetal Mayurkumar Patel held 1,17,000 shares (1.12% holding @ book value of Rs. 11,70,000/-) in the erstwhile company, and as a result of conversion of this Company into LLP, was given 1.12% partnership interest in Mayur Dyechem Intermediates LLP in lieu of shares held in erstwhile company. The financial statements of the erstwhile company clearly shows that the turnover for FY 2013-14 was Rs. 199.09 crores and that total company valued at Rs. 150,64,36,613/- (Share capital: Rs. The financial statements of the erstwhile company clearly shows that the turnover for FY 2013-14 was Rs. 199.09 crores and that total company valued at Rs. 150,64,36,613/- (Share capital: Rs. 10,43,10,920/- Reserve & Surplus: Rs. 140,21,25,693/-) as on 03.09.2014 as per its books. The actual net-wroth of the said company should have been much higher considering that Land and some other assets continue to be reocrded on book value. Hence, the value of share in Mayur Dyechem Intermediates LLP received by Hetal Mayurkumar Patel as a result of this conversion of company into LLP amuonts to Rs. 1,57,02,090/- (i.e. 1.12% of Rs. 150,64,36,613/-) even at book value, which is a very conservative figure. 4. In short, Hetal Myurkumar Patel had originally invested amount of Rs. 11,68,390/- in equity shares of Mayur Dyechem Intermediates Limited and in lieu of such share, because of conversion of this company into LLP, got partnership stake in LLP causing a gain amounting to at least Rs. 1,57,03,700/- even @ book value (gain @market value in much higher). … …. … … 5.3 It is discernible from a cursory glance of Sec. 47 that the ‘transfers’ referred to in the said statutory provision would not be chargeable to income tax under the head “Capital gains” under section 45 of the Act if all the conditions prescribed are fulfilled. In other words, though the transactions referred to in Section 47 are ‘transfers’, however, the same subject to cumulative satisfaction of the conditions contemplated in the respective sub-sections would fail beyond the sweep of chargeability to income tax as ‘Capital Gains’ under section 45 of the Act. 6. In the instant case, the erstwhile company had the turnover for FY 2013-14 was Rs. 199.09 crores, which is clearly more than the limit of Rs. 60 lakhs as prescribed in Section 47(xiiib)(e). Hence, the conditions provided in section 47(xiiib) are clearly not satisfied and the transaction of conversion of company into LLP ought to have been regarded as transfer and is chargeable to ‘capital gains’ u/s. 45. 199.09 crores, which is clearly more than the limit of Rs. 60 lakhs as prescribed in Section 47(xiiib)(e). Hence, the conditions provided in section 47(xiiib) are clearly not satisfied and the transaction of conversion of company into LLP ought to have been regarded as transfer and is chargeable to ‘capital gains’ u/s. 45. Upon conversion of Mayur Dyechem Intermediates Limited into Mayur Dyechem Intermediates LLP, Hetal Mayurkumar Patel’s interest in the shares of Mayur Dyechem Intermediates Limited got extinguished and hence, the transaction is placed to the decision of Hon’ble Apex Court in case of CIT vs. Grace Collis 248 ITR 323 (SC) wherein it was held that the extinguishment of rights in a capital asset includes extinguishment of rights independent of and otherwise than on account of transfer. The value of share in Mayur Dyechem Intermediates LLP amounts to Rs. 1,68,725,090/- (i.e. 1.12% of Rs. 150,64,36,613/-) even at book value, which is very conservative figure. To sum up, Mr. Rajeshkumar Somabhai Patel had originally invested amount ofRs. 11,70,000/- in equity shares of Mayur Dyechem Intermediates Limited and in lieu of such shares, because of conversion of this Company into LLP, got partnership stake in LLP amounting to at least Rs. 1,68,72,090/- even @ book value (market value is much higher) and the capital gains of Rs. 1,57,02,090/- remained to be taxed in AY 2015-16 in view of the fact that the conditions laid down in section 47(xiiib) were clearly breached. 7. Therefore, an amount of Rs. 1,57,02,090/- remained undisclosed and is required to be added to the total income to the assessee.” 9. The petitioner thereafter, preferred objection before the respondent-Assessing Officer on 28.02.2022 which was disposed of by the order dated 07.03.2022. 10. Learned advocate Mr. B.S.Soparkar submitted that the impugned notice is issued only on account of mere change of opinion as the same is issued beyond the period of four years and there is no failure on the part of the petitioner to truly and fully disclosed all the material facts relevant for the assessment during the regular course of assessment. 11. B.S.Soparkar submitted that the impugned notice is issued only on account of mere change of opinion as the same is issued beyond the period of four years and there is no failure on the part of the petitioner to truly and fully disclosed all the material facts relevant for the assessment during the regular course of assessment. 11. It was submitted that in case of the Company as well as the LLP, thorough scrutiny was undertaken by the respondent- Assessing Officer and thereafter, assessment orders were passed which are placed on record and in the case of the petitioner also, the scrutiny assessment order is passed and therefore, the respondent-Assessing Officer could not have assumed the jurisdiction to reopen the assessment as per the proviso to section 147 of the Act as applicable for the Assessment Year 2015-16 under the old regime. 12. It was submitted that the escapement of income must be on failure of the petitioner to disclose truly and fully all material facts whereas, in the present case there is no failure on the part of the petitioner. In fact, the reasons are wholly erroneous and the failure, if any, is on the part of the Assessing Officer in not recording the correct reasons. It was therefore, submitted that the impugned notice issued by the respondent-Assessing Officer is liable to be quashed and set aside. 13. Per contra, learned Senior Standing Counsel Ms. Maithili Mehta for the respondent submitted that admittedly, the petitioner is not entitled to exemption under section 47(xiiib)(e) of the Act as the turnover of the company which is converted into LLP is more than Rs. 60 Lakh in the previous year. 14. It was submitted that the transfer of shares of the petitioner from the Company to LLP is liable to capital gains and therefore, the respondent-Assessing Officer has rightly formed a reason to believe that there is escapement of income of Rs. 1,57,02,090/- being the difference between the investments made by the petitioner in the shares of the company and the amount of capital which is attributed to the petitioner in the LLP on conversion from company to LLP. It was therefore, submitted that no interference is required to be made by this Court while exercising extraordinary jurisdiction under Article 226 of the Constitution of India. 15. It was therefore, submitted that no interference is required to be made by this Court while exercising extraordinary jurisdiction under Article 226 of the Constitution of India. 15. Considering the submissions made by learned advocates for the respective parties and material placed on record there is nothing on record to show that there was failure on the part of the petitioner to disclose truly and fully all material facts relevant for the assessment as the impugned notice is issued beyond the period of four years after completion of Assessment Year on 31.03.2021 for the Year under consideration. 16. It is also pertinent to note that the respondent-Assessing Officer has failed to consider the contention raised on behalf of the petitioner that the petitioner is not liable to capital gains as the Company is converted into LLP, without there being any change in shareholdings of the petitioner. The petitioner was holding 1.12% shares of the Company which is the same in the LLP and therefore, there is no transfer of any asset in the hands of the Company on conversion to LLP. It also appears that the respondent-Assessing Officer has issued the impugned notice only on mere change of opinion by referring to section 47(xiiib)(e) to come to a prima facie conclusion that there is escapement of the income. 17. The Hon’ble Court in case of CIT vs. Kelvinator of India Ltd reported in 320 ITR 561 has held 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? …. …. ….. ….. 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 reopen the assessment. Therefore, post1st 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 reopen. 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…..” 18. In view of the above dictum of law and for the foregoing reasons, the petition succeeds and is accordingly allowed. The impugned notice dated 31.03.2021 is hereby quashed and set aside. Rule is made absolute.