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2014 (7) TMI 429 - AT - Income TaxValidity of reopening of assessment u/s 147 of the Act – Change of opinion - Held that:- Notice u/s 148 of the Act was issued on 31/03/2011, which is beyond 4 years from the end of the AY - as can be seen, section 147 of the Act empowers AO to assess income chargeable to tax which has escaped assessment for any AY - the first proviso to section 147 of the Act makes it clear that in a case where an assessment u/s 143(3) or section 147 has been made no action can be taken after expiry of 4 years from then end of the AY unless the escapement of income is attributable to failure on the part of the assessee to disclose fully and truly all material facts necessary for assessment - it needs to be examined whether in the present case there is any failure on the part of the assessee to disclose fully and truly all material facts necessary for its assessment - the AO has reopened assessment only on the basis of the Director’s report for the previous year 2003-04 and the computation of income as well as P&L A/c of the assessee, which were furnished along with the return of income and formed part of the record when the assessment order u/s 143(3) read with section 153A was passed by the AO on 31/12/2007. There are no fresh/tangible material available before the AO for reopening of assessment - AO on re-appreciation of the same material, which is already available on record at the time of original assessment has formed his belief for reopening assessment is not permissible as it does not amount to non-disclosure of any material facts truly and fully by the assessee – Relying upon Parashuram Pottery Works Co. Ltd., Vs. ITO [1976 (11) TMI 1 - SUPREME Court] - the duty of the assessee in any case does not extend beyond making a true and full disclosure of primary fact. It is for the AO to draw correct inference from the primary facts - It is not the responsibility of the assessee to advise the AO with regard to inference which he should draw from the primary fact. Entire reassessment is on the basis of the materials disclosed by assessee, which formed part of the record at the time of completion of the original assessment u/s 143(3) read with section 153A of the Act - the AO having completed original assessment on verifying all these facts and materials, reopening of assessment on self-same facts and material on a mere change of opinion, that too after expiry of four years from the assessment year is not permissible in law - the action of the AO u/s 147 of the Act is clearly without jurisdiction – there is no infirmity in the order of CIT(A) in holding that the reopening of assessment u/s 147 of the Act in the present case is unsustainable in law - the disallowance made by the AO will also not be sustainable in view of the reasoning given by the CIT(A), which is not only reasonable, but, in accordance with the statutory provisions - the conclusion drawn by the CIT(A) on the issue of disallowance of interest is also just and proper and deserves to be upheld - the decision of the CIT(A) both on the issue of validity of proceeding u/s 147 of the Act as well as on the merits of disallowance made by the AO – Decided against Revenue.
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