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2014 (6) TMI 112 - AT - Income TaxValidity of Re-opening of assessment u/s 143(3) r.w. section 147 of the Act – Mere change of opinion - Eligibility for deduction u/s 80IA of the Act – Held that:- The assessment originally completed u/s 143(3) was reopened by him without there being any new information or material coming to his possession after completion of the assessment – Relying upon Commissioner of Income-tax-VI, New Delhi Versus Usha International Ltd. [2012 (9) TMI 767 - DELHI HIGH COURT] - the expression “change of opinion” postulates the formation of opinion and then change thereof - what it implies in the context of section 147 is that the AO should have formed his opinion at the first instance i.e. in the proceedings u/s 143(3) and thereafter by initiating reassessment proceedings u/s 147, the AO proposed to take different view – also in Commissioner of Income Tax, Delhi Versus M/s. Kelvinator of India Limited [2010 (1) TMI 11 - SUPREME COURT OF INDIA] it has been held that fulfilment of only condition viz, that the AO should have reason to believe that income has escaped assessment confers jurisdiction to reopen the assessment - It was held that although the power to reopen the assessment is much wider post 1st April 1989, one needs to give schematic interpretation to the words “reason to believe” failing which, section 147 would give arbitrary powers to the AO to reopen assessment on the basis of “mere change of opinion” which cannot be per se reason to reopen. The issue relating deduction allowable to the assessee u/s 80IA was examined by the AO during the course of assessment proceedings originally completed u/s 143(3), the deduction claimed by the assessee us/ 80IA was recomputed by the AO by rejecting the basis adopted by the assessee for apportionment of Overhead of head office and sales depots to the Kanpur Unit and taking turnover as basis for such apportionment - This issue thus was examined and decided by the AO on application of mind and in the absence of any “tangible material” coming to his possession after completion of original assessment, the reopening of the assessment by the AO on recompute the deduction eligible to the assessee u/s 80IA was clearly based on a “mere change of opinion” which is not permissible in law – Decided in favour of Assessee.
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