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2017 (11) TMI 1144 - AT - Income TaxReopening of assessment - reason to believe - wrong calculation of 80-O, 80HHC & 80IA deduction and interest payable at compound interest rate to APSEB - Held that:- These matters had come up for appeal in the year 1997-98 & 98-99 and dealt by him in detail in the orders of those years which were identical in present appeal. Reopening without any appropriate satisfaction/reason is not done as per the law by the Assessing Officer. Thus, the assessee’s case gets support from the Hon’ble Apex Court judgment in case of Kelvinator India (P) Ltd. [2010 (1) TMI 11 - SUPREME COURT OF INDIA] wherein it is held that “post-1st April, 1989, power to re-open is much wider. However, one needs to give a schematic interpretation to the words "reason to believe" failing which, we are afraid, Section 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. We must also keep in mind the conceptual difference between power to review and power to re-assess. AO has no power to review; he has the power to re-assess. But re-assessment has to be based on fulfillment of certain pre-condition and if the concept of "change of opinion" is removed, as contended on behalf of the Department, then, in the garb of re-opening the assessment, review would take place. One must treat the concept of "change of opinion" as an in-built test to check abuse of power by the Assessing Officer. Hence, after 1st April, 1989, Assessing Officer has power to re-open, 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. Our view gets support from the changes made to Section 147 of the Act, as quoted hereinabove. Under the Direct Tax Laws (Amendment) Act, 1987, Parliament not only deleted the words "reason to believe" but also inserted the word "opinion" in Section 147 of the Act. However, on receipt of representations from the Companies against omission of the words "reason to believe", Parliament reintroduced the said expression and deleted the word "opinion" on the ground that it would vest arbitrary powers in the Assessing Officer.” The appeal of the assessee is allowed on the ground that the CIT(A) erred in upholding the re-opening of the assessment u/s 147 of the Act - Decided in favour of assessee.
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