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2021 (12) TMI 870 - AT - Income TaxValidity of reassessment proceedings - Proof of Change of opinion - initiation of reassessment proceedings on the ground that there is interest income and interest expenses which was shown Nil in the column of loan funds - HELD THAT:- The reopening in the present case has been done on the claim of interest expenses. The assessee in the original return of income has not mentioned the amount regarding loan funds. As per Section 147, Explanation-3 for the purpose of assessment or reassessment under this section, the Assessing Officer may assess or reassess the income in respect of any issues which are escaped assessment and such issue comes to the notice subsequently in the course of proceedings under this section, notwithstanding that the reason for said issue has not been included in the reasons recorded under sub Section-2 of Section 148. The contention of the assessee that there is change of opinion is not a valid contention as in the present case the assessee has not decided the issue related to notice whether issue within the period of four years from the end of relevant Assessment Year. In the present case, the assessee admittedly stated that Tax Consultant committed error by not mentioning loan fund in the original return of income. The Assessing Officer in the original assessment dated 12.02.2016 has never doubted the claim of interest and there is no mention of actual disclosure of claim of interest at any stage of its Assessment Order. Thus, the Assessing Officer in assessment under Section 143(3) of the Act has not noticed that there is escapement of certain issues in the Assessment Order/assessment proceedings. Thus, explanation of section 147, to be specific Explanation-3, will come into picture and it will not amount to change of opinion. Thus, ground no. 1 of assessee's appeal is dismissed. Merits of the case Assessee has explained before the Assessing Officer that the loan fund was mentioned in the return of income filed in response to notice under Section 148 of the Act and thus the assessee has made valid claim of interest expenses on borrowed fund. The same should have been allowed by the Assessing Officer. Hence, the appeal of the assessee is partly allowed.
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