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2014 (11) TMI 652 - AT - Income TaxScope of Explanation 1 to Section 147 – scope of term “amounts to disclosure” – Change of opinion – Principle of consistency - Whether the CIT(A) erred in ignoring Explanation 1 to Section 147 wherein production before the AO of account books or other evidence from which material evidence could, with due diligence, have been discovered by the AO will not necessarily amount to disclosure within the meaning of the foregoing proviso – Held that:- The AO has reopened the assessment u/s. 147 of the Act by issuing notice u/s. 148 on 27.3.2012, which is after expiry of four years from the end of the AY - the assessment had been reopened by the AO for the reason that the business expenditure claimed by assessee is not allowable as according to him income derived by assessee from interest is to be assessed as income from other sources and not as business income. So far as the other reason viz., discrepancy between the interest income shown by assessee and as appearing in the TDS certificate, as per the AO’s own observation there is no such discrepancy - it needs to be examined whether there is failure on the part of assessee to disclose fully and truly all material facts which could have enabled the Assessing Officer to reopen the assessment beyond four years - assessee in the return of income as well as statement of accounts has not only disclosed the sources of income earned by it but has also shown the expenditure claimed - there are no other additional information or fresh materials on record on the basis of which the AO has formed his belief that income has escaped assessment - Only on the basis of information and materials furnished by assessee himself which was considered at the time of original assessment, the AO has reopened the assessment by coming to a different opinion that interest earned by assessee has to be assessed under the head income from other sources and not as business income. This is only a change of opinion by the AO on re-appreciation of same set of facts and materials considered at the time of original assessment - reopening of assessment on a mere change of opinion would amount to review of earlier order passed by the AO which is not permissible under the Act - the AO cannot treat the income in a different manner contrary to the system of accounting followed by assessee consistently over the years - assessee has disclosed all material facts in the return of income filed by it as well as during the scrutiny assessment proceedings - there being no failure on the part of assessee to disclose fully and truly all material facts, reopening of assessment beyond the period of four years, is without jurisdiction and legally invalid –the order of the CIT(A) is upheld – Decided against revenue.
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