Tarun Agarwala, J.

1. The petitioner has filed the present writ petition for the quashing of the notice dated 23rd January, 2001 issued under Section 148 of the Income Tax Act, 1961 (hereinafter referred to as the Act). The petitioner is a public limited company carrying on the business of publishing a Hindi newspaper Dainik Jagran from various places. For the assessment year 1997-98, the return of income was initially processed under Section 143(1)(a) of the Act. Subsequently, the return was picked up for scrutiny and notices under Section 143(2) and 142(1) of the Act along with a detailed questionnaire covering various issues was served upon the assessee. Once such query based in the questionnaire was with regard to the justification of the valuation of the purchase consideration on copyright under the copyright purchase agreement dated 25th January, 1997 where the petitioner company had acquired the copyright of the hindi newspaper "Dainik Jagran" from the owner of the copyright, namely, the firm Jagran Publication.

2. In response to the query raised by the Assessing Officer in proceedings under Section 143(3) of the Act, the petitioner filed a detailed reply dated 7th January, 1998 justifying the valuation of the purchase of the copyright at Rs.17 crores. The petitioner contended that at the time of planning of public issue of equity shares at a premium during 1995, the Merchant Bankers including the lead issue Managers were of the firm opinion that the ownership of copyright was an essential prerequisite for a successful public issue of equity shares on a premium. The petitioner contended that mentioning of non-ownership of copyright of publishing Dainik Jagran was a risk factor which could dissuade the investors from subscribing to the proposed public issue of equity shares at a premium. It was also pointed out by the petitioner that the intrinsic worth of the said copyright and the valuation thereof may also be gathered from the fact that interest free security deposit to the owners of the copyright had been increased to Rs.15 crores as early as on 30.1.1995.

3. The petitioner in its reply dated 7.1.1998 further gave its justification for the purchase of copyright and not charging any amount from other companies publishing Dainik Jagran. It was stated that under the agreement with the firm Jagran Publications, the petitioner had the sole rights of using copyright of Dainik Jagran against deposit of interest free security money with the said firm and necessary licence fees for the use of the said copyright were being paid regularly to the firm annually. The petitioner company had authorised the other companies i.e. Jagran Prakasan (Varanasi) Pvt. Ltd. to publish Dainik Jagran from Varanasi, Jagran Limited to publish Dainik Jagran from Meerut, Rohilkhand Publications Pvt. Ltd. to publish Dainik Jagran from Bareilly and Jagran Prakashan (Delhi) Pvt. Ltd. to publish Dainik Jagran from New Delhi and did not charge any amount towards copyright from these firms on account of the fact that the petitioner had retained its exclusive rights of advertisement booking in these firms/ companies. Under this arrangement, the entire advertisement revenue generated by procuring booking orders for publishing the advertisements in Dainik Jagran, Varanasi, Meerut, Bareilly and New Delhi, came to the petitioner. From the said amount, after deducting due share, as per the arrangement with the said companies, the balance amount were paid to the said companies by the petitioner.

4. The petitioner contended that the petitioner company also filed statement of the last 5 years showing the total advertisement receipts and shares paid to the said firms/companies. The details of security deposit with the firm Jagran Publications by the petitioner along with copyright use charges paid by the petitioner for the last 5 years were also filed along with the said reply.

5. The reply of the petitioner was discussed and the Assessing Officer prepared a detailed office note dated 16th March, 1998 in which the quantum of purchase consideration was examined in detail. After the close of detailed enquiry, the Assessing Officer passed an assessment order dated 16th March, 1998 under Section 143(3) of the Act accepting the sale consideration of the copyright as provided by the petitioner.

6. It transpires that an internal audit objection was issued by the Additional Commissioner of Income Tax (Audit), Kanpur relating to excess payment of consideration towards copyright. In the audit report it was stated that the consideration of Rs.17 crores paid by the petitioner to the owners of the copyright of Dainik Jagran was excessive. The report contended that the assessee company having purchased the composite copyrights became the absolute owner of the copyright. The name Dainik Jagran was being used by other sister concerns also without paying any consideration to the assessee and, consequently, concluded that a part of the consideration attributable to the territories of Varanasi, Jhansi, Meerut, Bareilly, New Delhi and Dehradun from where the newspaper was being published by other sister concerns could be said to be an expenditure wholly and exclusively for business purpose. According to the audit report, part of the purchase consideration was liable to be disallowed as not for the purpose of business and that a sum of Rs.8.5 crores was to be treated as a deemed gift under Section 4(10)(c) of the Gift Tax Act. The audit report suggested that suitable action in this regard may be taken by the Assessing Officer for the assessment year in question.

7. In response to the said audit objection, the Assessing Officer by its order dated 4th July, 2000 justified his assessment order contending that the fixation of the purchase consideration of its quantum was examined in detail by the Assessing Officer and that the implication as well as the inferences drawn in the audit objection were palpably misconceived. The Assessing Officer held that the detailed inquiries in respect of the issue of valuation was made by him and only thereafter the assessment order was passed. For facility, the extract of the reply submitted by the Assessing Officer dated 4th July, 2000 is extracted hereunder:-

"Regarding the issue pertaining to deemed gift u/s 4(1)(c) of Gift Tax Act, the implications/ inferences drawn are palpably misconceived in as much as the fixation of purchase consideration and its quantum have been examined in detail looking to the dire business necessity for the assessee company to acquire such valuable copyright.

In this regard you may kindly refer to my detailed office note dated 16.13.1998 on the subject wherein the 'quantum' of purchase consideration has been examined in detail…………..

A perusal of the above extract from my detailed office note dated 16.03.1998 clearly shows that the "quantum of purchase consideration" at a fair and equitable mutually agreed valuation was pure "business transaction". Moreover it may be noted that assessee had already given security of upto Rs.15 crores to M/s Jagran Publications for simply using this copyright. So now at the time of purchase the valuation of Rs.17 crores for the copyright appears to be reasonable and no gift appears to be involved.

I have further made inquiries in respect of issue of valuation of copyright and as per my inquiries, I am given to understand that the value of copyright has been recently valued at much higher value by an independent International Firm of Chartered Accountants viz. KPMG, New Delhi (copy enclosed)."

From the aforesaid, it is clear that the Assessing Officer examined the issue of fixation of the purchase consideration in detail, which has been recorded in the office note dated 16th March, 1998. The Assessing Officer after making detailed inquiries found that the quantum of purchase consideration was a pure business transaction and that the valuation of Rs.17 crores for the copyright appears to be reasonable and that no gift appears to be involved.

8. Inspite of the aforesaid, it seems that the Assessing Officer had a change of heart and issued a notice dated 23rd January, 2001 for the assessment year 1997-98 indicating that he had reasons to believe that income for the assessment year 1997-98 had escaped assessment.

9. Reasons for reopening the assessment has been given by the Assessing Officer in its separate order dated 23rd January, 2001. The Assessing Officer contended that an amount of Rs.1,20,00,000/- has been disclosed as expenses under Section 35A of the Act being 1/14th cost of Rs.17 crores, which is the cost of copyright for the use for its business purposes. It was indicated that the assessee had permitted other companies, namely, Jagran Prakasan (Varanasi) Pvt. Ltd. to publish Dainik Jagran from Varanasi, Jagran Limited to publish Dainik Jagran from Meerut, Rohilkhand Publications Pvt. Ltd. to publish Dainik Jagran from Bareilly and Jagran Prakashan (Delhi) Pvt. Ltd. to publish Dainik Jagran from New Delhi without any consideration. It was contended that the assessee was not charging any amount on the use of the same copyright from these companies and, consequently, prima facie it shows that the expenses of Rs.1,20,00,000/- had not been used wholly and exclusively for the purpose of assesse's business under Section 37(1) of the Act and, consequently, the assessee was not entitled to claim total expenses of Rs.1,20,00,000/- as debited in his credit of loss account. The Assessing Officer further found that the assessee had paid some amount of TDS after due date on which interest under Section 201(1A) of the Act was to be paid, which had not been charged. On this basis, the Assessing Officer was of the opinion that there was reasons to believe that income had escaped assessment for the assessment year 1997-98.

10. We have heard Sri V.K. Upadhya, the learned Senior Counsel assisted by Sri Ritvik Upadhya, the learned counsel for the petitioner and Sri Govind Krishna, the learned counsel for the respondents.

11. The contention of the petitioner is, that the notice under Section 148 of the Act was without jurisdiction. The petitioner contends that the Assessing Officer having reasons to believe that the income of the petitioner had escaped assessment was patently illegal as it was not based on any fresh material for the formation of its reasons to believe. It was contended that reasons to believe was nothing else but a change of opinion, which was not permissible especially when all the relevant and material facts were fully and truly disclosed by the petitioner.

12. The learned Senior Counsel appearing for the petitioner contended that there was no new material, which came in possession of the Assessing Officer warranting the reopening of the assessment proceedings. The learned Senior Counsel contended that all the material and primary facts were placed by assessee before the Assessing Officer in the assessment proceedings under Section 143(3) of the Act and only after a detailed scrutiny, the Assessing Officer, after being satisfied with regard to the sale consideration on the copyright, had passed the assessment order. It was submitted that on the basis of the same material and in the absence of any fresh material and only on the basis of an audit objection the issuance of notice under Section 148 was patently illegal, which has been issued without any application of mind.

13. On the other hand, the contention of Sri Govind Krishna, the learned counsel for the respondent-department, is that the Assessing Officer has wide powers to reopen the assessment if he has reasons to believe that the income had escaped assessment. The learned counsel submitted that if the Assessing Officer had a reasonable ground to believe that there had been a non-disclosure of a primary fact, which has a material bearing on the question that the assessment so made was not assessed or that some income had escaped assessment, in that event, it would be sufficient to initiate proceedings for reassessment. The learned counsel submitted that the reasons disclosed by the Assessing Officer justified his action in issuing a notice under Section 148 of the Act.

14. Before proceeding further, it would be appropriate to peruse Section 147 and 148 of the Act which is extracted hereunder:-

"147. Income escaping assessment.- If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned (hereafter in this section and in sections 148 to 153 referred to as the relevant assessment year)

Provided that where an assessment under sub-section (3) of section 143 or this section has been made for the relevant assessment year, no action shall be taken under this section after the expiry of four years from the end of the relevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under section 139 or in response to a notice issued under sub-section (1) of section 142 or section 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year:

Provided further that the Assessing Officer may assess or reassess such income, other than the income involving matters which are the subject matters of any appeal, reference or revision, which is chargeable to tax and has escaped assessment.

Explanation 1 : Production before the Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso.

Explanation 2 : For the purposes of this section, the following shall also be deemed to be cases where income chargeable to tax has escaped assessment, namely :- (a) Where no return of income has been furnished by the assessee although his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax;

(b) Where a return of income has been furnished by the assessee but no assessment has been made and it is noticed by the Assessing Officer that the assessee has understated the income or has claimed excessive loss, deduction, allowance or relief in the return;

(c) Where an assessment has been made, but - (i) Income chargeable to tax has been under assessed; or

(ii) Such income has been assessed at too low a rate; or

(iii) Such income has been made the subject of excessive relief under this Act; or

(iv) Excessive loss or depreciation allowance or any other allowance under this Act has been computed."

"148. Issue of notice where income has escaped assessment.- (1) Before making the assessment, reassessment or recomputation under section 147, the Assessing Officer shall serve on the assessee a notice requiring him to furnish within such period, as may be specified in the notice, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139.

Provided that in a case -

(a) where a return has been furnished during the period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005 in response to a notice served under this section, and

(b) Subsequently a notice has been served under subsection (2) of section 143 after the expiry of twelve months specified in the proviso to subsection (2) of section 143, as it stood immediately before the amendment of said subsection by the Finance Act, 2002 (20 of 2002) but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified sub-section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice:

Provided further that in a case -

(a) where a return has been furnished during period commencing on the 1st day of October, 1991 and ending on the 30th day of September, 2005, in response to a notice served under this section, and

(b) Subsequently a notice has been served under sub-clause (ii) of sub-section (2) of section 143 after the expiry of twelve months specified in the proviso to clause (ii) of sub-section (2) of section143, but before the expiry of the time limit for making the assessment, reassessment or recomputation as specified sub- section (2) of section 153, every such notice referred to in this clause shall be deemed to be a valid notice.

Explanation. - For the removal of doubts, it is hereby declared that nothing contained in the first proviso or the second proviso shall apply to any return which has been furnished on or after the 1st day of October, 2005 in response to a notice served under this section.

(2) The Assessing Officer shall, before issuing any notice under this section, record his reasons for doing so."

15. A perusal of the aforesaid provisions indicates that the Assessing Officer has wide powers to reopen the assessment if he has reasons to believe that the income chargeable to tax has escaped assessment. However, this wide power is circumscribed and does not give jurisdiction to the Assessing Officer to reopen a completed assessment on a mere change of opinion. The reasons to believe is not based nor can it be an outcome of a change of opinion. Further, the proviso indicates that if more than four years have elapsed from the end of the relevant assessment year, in addition to the satisfaction of the Assessing Officer that he has reasons to believe, must also indicate that the assessee had failed to disclose fully and truly all material facts necessary for his assessment for that assessment year.

16. The words "reasons to believe", "change of opinion", "failure to disclose fully and truly material facts" and "material facts" have been a subject of interpretation by various High Courts and also by the Supreme Court of India.

17. In Ganga Saran & Sons (P.) Ltd. v. ITO [1981] 130 ITR 1/6 Taxman 14, the Supreme Court held :

"It is well settled as a result of several decisions of this Court that two distinct conditions must be satisfied before the Income Tax Officer can assume jurisdiction to issue notice under section 147 (a). First, he must have reason to believe that the income of the assessee has escaped assessment and secondly, he must have reason to believe that such escapement is by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment. If either of these conditions is not fulfilled, the notice issued by the Income Tax Officer would be without jurisdiction. The important words under section 147 (a) are "has reason to believe" and these words are stronger than the words "is satisfied". The belief entertained by the Income Tax Officer must not be arbitrary or irrational. It must be reasonable or in other words it must be based on reasons which are relevant and material. The Court, of course, cannot investigate into the adequacy or sufficiency of the reasons which have weighed with the Income Tax Officer in coming to the belief, but the Court can certainly examine whether the reasons are relevant and have a bearing on the matters in regard to which he is required to entertain the belief before he can issue notice under section 147 (a). It there is no rational and intelligible nexus between the reasons and the belief, so that, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the Income Tax Officer could not have reason to believe that any part of the income of the assessee had escaped assessment and such escapement was by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts and the notice issued by him would be liable to he struck down as invalid."

18. In Sheo Nath Singh v. Appellate Asstt. CIT [1971] 82 ITR 147, the Supreme Court held :-

'In our judgment, the law laid down by this court in the above case is fully applicable to the facts of the present case. There can be no manner of doubt that the words "reason to believe" suggest that the belief must be that of an honest and reasonable person based upon reasonable grounds and that the Income-tax Officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. The Income-tax Officer would be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the section. The court can always examine this aspect though the declaration or sufficiency of the reasons for the belief cannot be investigated by the court.'

19. In Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191, the Supreme Court held :

'The position, therefore, is that if there were in fact some reasonable grounds for thinking that there had been any non-disclosure as regards any primary fact, which could have a material bearing on the question of "under assessment", that would be sufficient to give jurisdiction to the Income-tax Officer to issue the notices under section 34. Whether these grounds were adequate or not for arriving at the conclusion that there was a non-disclosure of material facts would not be open for the court's investigation. In other words, all that is necessary to give this special jurisdiction is that the Income-tax Officer had when he assumed jurisdiction some prima facie grounds for thinking that there had been some non-disclosure of material facts.'

20. From a perusal of the aforesaid, it is clear that where a notice is issued within four years from the end of the relevant assessment year, the jurisdiction of the Assessing Officer is conferred where he has reasons to believe that income chargeable to income tax on escaped assessment. Explanation-2 provides the following shall be deemed to be cases where income chargeable to tax on escaped assessment, namely, where no return of income had been furnished by the assessee or where the return has been furnished by the assessee but no document has been made and the Assessing Officer noticed that the assessee has understated the income.

21. It is settled law that the Assessing Officer having reasons to believe that there had been some omission or failure to disclose fully or truly all material facts necessary for the assessment must be based on some material facts which according to the Assessing Officer is based on some reasonable belief and which would have a material bearing on the question of under assessment. If there is no material for the formation of any belief or where the purported belief was nothing but a mere change of opinion, in that case, the Assessing Officer would have no jurisdiction to initiate proceedings u/s 147 and 148 of the Act. The Assessing Officer has the power to reopen the assessment where he has reasons to believe that income chargeable to tax has escaped assessment but such re-assessment cannot be initiated on a mere change of opinion to merely re-examine an issue on the basis of information or material which was already available to the Assessing Officer at the time of the completion of the original assessment. It is settled principle of law that "reason to believe" could never be an outcome of a change of opinion. Consequently, before taking any action, the Assessing officer is required to substantiate his satisfaction in the reasons recorded by him. If such reasons recorded discloses a mere change of opinion, in that event, the assessment proceedings could not be initiated.

22. On the question of relevancy of material facts which is concomitant for the issuance of a notice u/s 147 and 148 of the Act, the Supreme Court in Calcutta Discount Co. Ltd. (supra), held that the duty of disclosing the primary facts relevant to the decision of the question before the Assessing Authority lies on the assessee and it is the onerous duty of the assessee to disclose truly and fully all the primary facts. The Supreme Court held that once all the primary facts have been disclosed, the assessee was not required to provide any further assistance by way of disclosure to the Assessing Officer. The Supreme Court held :

"Does the duty, however, extend beyond the full and truthful disclosure of all primary facts ? In our opinion, the answer to this question must be in the negative. Once all the primary facts are before the assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else far less the assessee to tell the assessing authority what inferences-whether of facts or law should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that the assessee must disclose what inferences-whether of facts or law-he would draw from the primary facts."

23. In CIT v. Kelvinator of India Ltd. [2012] 256 ITR 1/123 Taxman 433 the Full Bench of the Delhi High Court held that Section 147 of the Act did not confer any power upon the Assessing Officer to initiate reassessment proceedings on a mere change of opinion. In the said case, the assessee in his revised return of income had withdrawn the disallowance in respect of expenses on rent and depreciation of the guest house on the ground that since rent and depreciation were allowable u/S 30 and 32 of the Act, the same cannot be disallowed u/S 37 (4) of the Act. The Assessing Officer accepted the contention of the assessee in the original assessment order and accepted the withdrawal of the disallowance of guest house expenditure as submitted by the assessee in his revised return of income. Subsequently, a notice u/s 148 of the Act was issued on the ground that the tax audit report was not noticed by the Assessing Officer while passing the original assessment order. The Full Bench of the Delhi High Court held :-

"We are unable to agree with the submission of Mr. Jolly to the effect that the impugned order of reassessment cannot be faulted as the same was based on information derived from the tax audit report. The tax audit report had already been submitted by the assessee. It is one thing to say that the assessing officer had received information from an audit report which was not before the Income Tax Officer, but it is another thing to say that such information can be derived by the material which had been supplied by the assessed himself.

We also cannot accept submission of Mr. Jolly to the effect that only because in the assessment order, detailed reasons have not been recorded on analysis of the materials on the record by itself may justify the assessing officer to initiate a proceeding under section 147 of the Act. The said submission is fallacious. An order of assessment can be passed either in terms of sub-section (1) of section 143 or sub-section (3) of section 143. When a regular order of assessment is passed in terms of the said sub-section (3) of section 143 a presumption can be raised that such an order has been passed on application of mind. It is well known that a presumption can also be raised to the effect that in terms of clause (e) of section 114 of the Indian Evidence Act the judicial and official acts have been regularly performed. If it be held that an order which has been passed purportedly without application of mind would itself confer jurisdiction upon the assessing officer to reopen the proceeding without anything further, the same would amount to giving premium to an authority exercising quasi judicial function to take benefit of its own wrong."

24. The aforesaid decision was affirmed by the Supreme Court in CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561/187 Taxman 312 wherein the Supreme Court held that the "reason to believe" indicated in the notice u/s 148 was a mere change of opinion and that there was no tangible material to come to a conclusion that there was a escapement of income from the assessment.

25. We also find that reassessment proceedings have been initiated on the basis of an audit report. We are of the opinion that the audit report does not amount to information under Section 147(b) of the Act.

26. In CIT v. Lucas T.V.S. Ltd. [1998] 234 ITR 296 (Mad.) held that reassessment proceedings cannot be reopened on the basis of an opinion formed on the basis of an audit report and the same is not valid. The said decision was affirmed by the Supreme Court in CIT v. Lucas T.V.S. Ltd. [2001] 249 ITR 306/117 Taxman 366.

27. In Indian & Eastern Newspaper Society v. CIT [1979] 119 ITR 996/2 Taxman 197 the Supreme Court held that the opinion of the internal audit party at a point of law cannot be regarded as information within the meaning of Section 147(b) of the Act for the purpose of reopening an assessment. Similarly, in IL & FS Investment Managers Ltd. v. ITO [2008] 298 ITR 32 (Bom.) the assessee had claimed depreciation on intangible assets. Subsequently, an audit objection was raised to a substantial portion of the depreciation amount, which was claimed in the intangible asset. Based on this audit objection, notice under Section 148 of the Act was issued. The Bombay High Court quashed the reassessment proceedings holding that once the Assessing Officer had opposed the reopening at the initial stage and subsequently reopened the assessment proceedings, the Court held that the Assessing Officer had not formed his own opinion that the income had escaped.

28. In Asstt. CIT v. Rajesh Jhaveri Stock Brokers (P.) Ltd. [2007] 291 ITR 500/161 Taxman 316 the Supreme Court held that at the stage of issuance of notice under Section 148 of the Act the only question to be considered is whether there was relevant material on which a reasonable person could have formed the requisite belief. Whether the material would conclusively proof of escapement of income was not the concern at that stage.

29. In the light of the aforesaid, we find that the reasons recorded by the Assessing Officer no where states that there was a failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment of that assessment year. On the other hand, we find that in proceedings under Section 143(3) of the Act, the petitioner had disclosed all the primary facts relevant to the decision on the question of the consideration paid for purchase of copyright before the Assessing Officer. We also find that detailed discussion was made by the

Assessing Officer and that he had recorded a detailed note on 16th March, 1998 wherein the quantum of purchase consideration was examined in detail. We also find that no new facts have come to light other than the facts disclosed by the assessee. Once all the primary facts have been disclosed, the assessee was not required to provide any further assistance. It is for the Assessing Officer to assimilate the primary facts disclosed by the assessee and draw inferences, which could be reasonably drawn. We find that the entire material had been placed by the petitioner before the Assessing Officer at the time when the original assessment was made and that the Assessing Officer had applied its mind to that material and accepted the contention canvassed by the assessee. Merely because the tax audit report opined that there was excess expenditure shown and that the excess payment should be treated as a deemed gift under Section 4(1)(c) of the Gift Tax Act on the basis of the same material is in our opinion a clear case of change of opinion. We find that the Assessing Officer has dealt with the audit report and justified his assessment order indicating in its order dated 4th July, 2000 that the issue pertaining to deemed gift and the purchase consideration was examined in detailed looking the business necessity for the petitioner company to acquire the copyright and held that the quantum of purchase consideration as disclosed by the petitioner was reasonable and was a true business transaction and that no gift appeared to be involved. 30. In the light of this assertion made by the Income Tax Officer, it was no longer open for him to take a somersault and issue a notice under Section 148 of the Act holding that he had reasons to believe that income had escaped assessment for the assessment year in question. 31. We find that the primary facts had been disclosed by the petitioner. We further find that the Assessing Officer had discussed the issue and passed a detailed order in its office note dated 16th March, 1998. The Court finds that the Assessing Officer had applied its mind and made necessary inquiry and, upon verification of facts, passed the assessment order. The Full Bench of the Delhi High Court in the case of Kelvinator of India Ltd. (supra), which was subsequently affirmed by the Supreme Court has held that where an assessment order has been passed under Section 143(3) of the Act, a presumption can be drawn that such an order had been passed on due application of mind. We are of the opinion that once the Assessing Officer had made an assessment on the primary facts and documents placed before it, the Assessing Officer could not at another point of time form another opinion on the same primary facts and arrive at a conclusion that he had committed an error or come to a conclusion that he has now reasons to believe that income had escaped assessment and reopen the assessment proceedings. Further, we are of the opinion that on the basis of an audit report, notice under Section 148 of the Act could not be issued as such audit report cannot be regarded as "information" within the meaning of 147(b) of the Act for the purpose of reopening an assessment. 32. In view of the aforesaid, we are satisfied that the petitioner has made out a case for a writ of certiorari. We are of the opinion that the notice issued by the respondent under Section 148 of the Act is wholly illegal and has been issued without any application of mind and is quashed. The writ petition is allowed.