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2014 (1) TMI 129 - AT - Income TaxValidity of assessment u/s 143 r.w.s 147 - Held that:- The recording of reasons before the issue of notice under section 148 has absolutely no nexus with the assessment made - Even though assessee belongs to Satyam Group of Companies, there is no evidence of siphoning of funds or escapement of income - What the Assessing Officer has done in the assessment is denial of the explanations given by the assessee with reference to various investments made through the books of accounts, various credits and loans obtained and also addition to fixed assets on the reason that the evidences have not been filed - Following Ganga Saran & Sons P. Ltd. vs. ITO and others [1981 (4) TMI 5 - SUPREME Court] - If there is no rational nexus between the "reasons" and the "belief", so that on such reasons the A.O. cannot have reason to believe that any part of the income of the assessee has escaped assessment and such escapement was by reason of omission or failure on the part of the assessee to disclose fully and truly all material facts, the notice issued by the A.O. is to be struck as invalid. Following Hindustan Lever Ltd. vs. R.B. Wadkar, ACIT (No.1) [2004 (2) TMI 41 - BOMBAY High Court] - The assessment made under sec.143(3) cannot be reopened under sec. 148 beyond period of 4 years as there is no failure on the part of the assessee to disclose fully and truly all the material facts in the original assessment itself. Reopening of the assessment is not permissible as there is no tangible material – Following Ranjit Reddy vs. Dy.CIT, Hyderabad (2013) 144 ITD 361 [2013 (6) TMI 424 - ITAT HYDERABAD] - One needs to give a schematic interpretation to the words 'reasons to believe' failing which, section 147 would give arbitrary power to Assessing Officer to reopen assessments on the basis of mere change of opinion, which cannot be per se reason to reopen. The A.O. has no power to review; he has the power to reassess - The A.O. has power to reopen, provided there is 'tangible material' to come to the conclusion that there is escapement of income from assessment. Reasons must have a live link with the formation of the belief – Decided in favour of assessee.
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