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2020 (5) TMI 482 - AT - Income TaxReopening of assessment u/s 147 - assumption of jurisdiction by the AO u/s 147 - HELD THAT:- There is no dispute and it is a settled legal proposition that for assumption of jurisdiction u/s 147, the AO must form a prima facie opinion on the basis of material that there is an escapement of income, the opinion formed may be subjective but the reasons recorded or the information available on record must show that the opinion is not a mere suspicion, the reasons recorded and/or the documents available on record must show a nexus and relevancy to the opinion formed by the AO regarding escapement of income and the reasons are required to be read as they were recorded by the AO. It is for the AO to disclose and open his mind through the reasons recorded by him and he has to speak through the reasons. We find that the reopening of the completed assessment u/s 143(3) is without bringing any fresh material on record and where the material relied upon has already been examined by the Assessing officer during the original assessment proceedings, it clearly amounts to change of opinion which as per settled jurisprudence, cannot be sustained and notice so issued u/s 148 seeking to reopen the assessment is liable to be set-aside. Another contention which has been raised by AR is that in the reasons so recorded, the Assessing officer has not alleged that there is failure on the part of the assessee to disclose fully and trully all material facts and where the powers u/s 147 have to be exercised by the AO after a period of four years, there has to be a failure to disclose fully and truly all material facts and information by the assessee which is not alleged by the AO in the instant case. These are all primary facts as to the treatment done by the assessee in its books of accounts of the compensation so paid by it which are duly disclosed and where on appreciation of such primary facts, the AO is of the view that such expenditure is in nature of capital expenditure and not revenue expenditure, it is his inference and analogy which has drawn basis review of such primary facts. As far as onus on the assessee to disclose the primary facts are concerned, the same has been satisfied and there is no such failure and infact, in the reasons so recorded, there is no allegation made by the AO that there is any such failure on the part of the assessee company and as we have stated above, it is for the AO to disclose and open his mind through the reasons recorded by him and he has to speak through the reasons. We agree with the contention so advanced by the ld AR that this being a jurisdiction requirement and in absence of any such failure on part of the assessee company, the AO cannot assume jurisdiction u/s 147 - Decided in favour of assessee.
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