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2014 (12) TMI 91 - ITAT MUMBAIReopening of assessment u/s 147 - Applicability of section 40(a) - Whether utilisation of services in India is enough to attract its taxability in India and thus the assessee is duty bound to deduct tax at source as otherwise provisions of section 40(a) are liable to be attracted or not - Held that:- During the course of original assessment proceedings the assessee furnished all the required details with regard to advertisement expenditure incurred and the commission paid to non-resident - the reason as to why section 40(a) is not applicable was also mentioned - the AO has thoroughly examined the facts of the case and had also noted that the assessee is having transactions with non-resident, which implies that the AO had taken note of Annexure-9 to Tax Audit Report – in Praful Chunilal Patel Versus MJ Makwana / Assistant Commissioner Of Income-tax [1998 (2) TMI 538 - GUJARAT High Court] it has been rightly held that when a regular assessment is made in terms of section 143(3) of the Act a presumption can be raised that such an order has been passed by application of mind since judicial and official acts are deemed to have been regularly performed - merely because a new incumbent AO has a different view, the Revenue cannot take benefit of its own wrong and arbitrarily assume that there is escapement of income, without bringing on record any fresh tangible material to show that there is justification for forming an opinion that assessee’s income escaped assessment - mere subjective satisfaction of the AO, on the basis of the same set of material, would amount to change of opinion and cannot be equated to the expression “reasons to believe”, in which event the reassessment proceedings is to be treated as void ab initio. Since the AO had taken note of the fact that the assessee had business connection with certain foreign clients and some expenditure was also incurred in that connection – thus, the view taken by the CIT(A) that change of opinion can result in reopening of assessment within four years, is held to be not in consonance with the spirit of provisions of section 147/148 of the Act – following the decision in Commissioner of Income Tax, Delhi Versus M/s. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA] wherein it has been held that the AO sought to reopen the assessment on mere change of opinion which is not permissible and the notice issued u/s 148 of the Act is not in accordance with law – thus, the reassessment proceedings to be set aside – Decided in favour of assessee.
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