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2023 (7) TMI 800 - ITAT SURATReopening of assessment u/s 147 - Admissibility of interest expenses claimed by assessee u/s 57(iii) - change of opinion - As assessee argued in original assessment deduction was allowed on the same set of fact and even in the excess deduction was allowed will be changed of opinion - HELD THAT:- The use of the words 'reason to believe' in section 147 has to be interpreted schematically as the liberal interpretation of the word would have the consequence of conferring arbitrary powers on the AO who may even initiate such reassessment proceedings merely on his change of opinion on the basis of same facts and circumstances which have already been considered by him during the original assessment proceedings. Such could not be the intention of the legislature. The said provision was incorporated in the scheme of the IT Act so as to empower the Assessing Authorities to re-assess any income on the ground which was not brought on record during the original proceedings and escaped his knowledge; and the said fact would have material bearing on the outcome of the relevant assessment order. Section 147 does not allow the re-assessment of an income merely because of the fact that the assessing officer has a change of opinion with regard to the interpretation of law differently on the facts that were well within his knowledge even at the time of assessment. Doing so would have the effect of giving the AO the power of review and section 147 confers the power to re-assess and not the power to review. Thus reopening under section 147 is nothing but based on changed of opinion on same set of facts, which is not valid. Thus, the action of reopening of assessment is set aside. Decided in favour of assessee.
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