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2022 (1) TMI 644 - AT - Income TaxValidity Reopening of assessment u/s 147 - new tangible material before the assessing officer to reopen the concluded proceedings - Notice beyond period of four years - HELD THAT:- It is evidently clear that in original assessment u/s. 143(3) r.w.s. 153A of the Act, for assessment year 2007-08, dated 24/12/2010, the assessing officer had examined the issue relating to M/s. AZ Jewels. Hence, in the reassessment proceedings, there was no any new tangible material before the assessing officer to reopen the concluded proceedings. We note that in reassessment proceedings, the assessing officer targeted the transaction relating to M/s. AZ Jewels, which had already been examined by the assessing officer in the original assessment proceedings. On appeal by the department to the Supreme Court in M/S. KELVINATOR OF INDIA LIMITED [2010 (1) TMI 11 - SUPREME COURT]) it was held that though the power to reopen under the amended section 147 is much wider, one needs to give a schematic interpretation to the words "reason to believe" failing which section 147 would give arbitrary powers to the AO to re-open assessments on the basis of "mere change of opinion", which cannot be per se reason to re-open. One must also keep in mind the conceptual difference between power to review and power to re-assess. The AO has no power to review; he has the power to re-assess. But re-assessment has to be based on fulfilment 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. Thus, based on these facts we note that reassessment proceedings initiated by the assessing officer are not in accordance with the provisions of section 147. Reassessment proceedings were initiated after the expiry of four years. We note that scrutiny assessment has been completed in the case of the assessee for the assessment year 2007-08, vide order u/s. 143(3) r.w.s. 153A dated 24-12-2010 accepting the returned income and therefore, the impugned notice issued u/s. 148 of the Act on 27-03-2014, is beyond the statutory period of 4 years, from the end of the relevant assessment year ending on 31-03-2012, which is ab-initio void; since there is no failure on the part of the assessee to disclose fully and truly all the material facts necessary to complete the original assessment. Thus, reassessment proceedings are bad in law. No failure on the part of the assessee to disclose fully and truly all the material facts necessary to complete the original assessment, hence reassessment proceedings needs to be quashed. - Decided in favour of assessee.
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