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2014 (5) TMI 845 - AT - Income TaxValidity of reopening of assessment Reason to believe - Reduction of Claim of Deduction U/s 80 IB of the Act - Held that:- Assessee contended that the reopneing of assessment vide notice u/s 148 dated 31st March 2010 is beyond four years from the end of the assessment year - the reassessment is not valid in view of the proviso to section 147 of the Income Tax Act - since no disallowance has been made by the AO in the reassessment proceedings u/s 80IB thus, the grounds for reopening of the assessment becomes infructuous Decided in favour of Assessee. Reduction in the Claim of Deduction U/s 80HHC of the Act Held that:- The original assessment was completed u/s 143(3) and after expiry of four years - The AO has reopened the assessment vide notice u/s 148 issued on 31st March 2010 - the assessee has made the reference to Circular No. 772 dated 23.12.1980 and claimed that when the deduction is claimed for more than 100% only in such cases suitable safeguard is provided to prevent undue advantage of double deduction - Relying upon Lalitha Chem Industries Pvt. Ltd Vs. DCIT [2013 (11) TMI 1494 - BOMBAY HIGH COURT] - the AO has power to re-assess but has no power to review an assessment - The power of re-assessment could only be exercised if certain pre-conditions are satisfied - the AO must have reason to believe that income chargeable to tax has escaped assessment. For reopening the assessment the primary condition to be satisfied is that the AO must have reason to believe that the income chargeable to tax has escaped assessment and this reason to believe must be based on some tangible material and cannot be a mere assertion of the AO - the reopening of assessment after four years from the end of the assessment year in the case of the assessee is without any tangible material on the basis of which the AO could have formed the belief that the income assessable to tax has escaped assessment and further since the assessment has been reopened after expiry of four years - in the absence of any allegation that income assessable to tax has escaped assessment by the reason of failure on the part of the assessee to disclose fully and truly all material facts relevant for the assessment, the reopening is hit by the proviso to section 147 - the reopening of assessment is not sustainable and set aside Decided in favour of Assessee.
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