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2013 (2) TMI 533 - AT - Income TaxReopening of Assessment – As per AO calculation of deduction under section 80HHC, is not as per the definition of “indirect cost” given in Explanation (d) to sub-section (3) of section 80HHC - Assessee firm has claimed excess deduction which has resulted to that extent in escapement of income – As per assessee assessment/intimation passed under section 143(1)(a) has become final and therefore, the reopening is bad in law because it was done merely on the basis of a change of opinion – Held that:- Main provision of section 147 covers the case of the intimation for the purposes of reassessment. Thus if the AO has ‘reason to believe’ that income had escaped assessment, it confers jurisdiction to reopen the assessment. So long as ingredients are fulfilled, the officer is free to initiate proceedings under section 147 of the Act. In the case of Asst.CIT Vs. Rajesh Jhaveri Stock Brokers P.Ltd [2007 (5) TMI 197 - SUPREME COURT] it was pointed out that expression “reason to believe” in section 147 would mean cause or justification. If the AO has cause or justification to know or suppose that income had escaped assessment, it could be said to have reason to believe that income had escaped assessment - Further case of an intimation under section 143(1)(a) is also covered by the main provision of section 147 as substituted with effect from 1.4.1989 - Grant of relief u/s.80HHC of the Act in deducting the indirect cost was contrary to the provisions therein, under Explanation (b) to sub-section (3), the AO took steps to reopen the assessment u/s.147 of the Act – Case was referred back to CIT(A) to decide after considering the above mentioned decision - Appeals partly allowed for statistical purposes.
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