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2022 (3) TMI 136 - AT - Income TaxReassessment order u/s 147 - Eligible reasons for reopen the assessment - distinction between the “ reason to suspect” and the “reason to believe” - default in valuation of stock - HELD THAT:- It is important here to note that though the main reason for reopening was in respect of purported accommodation benefit assessee received, (details not discussed because it is evident from a perusal of the reasons recorded supra). It is noted from the reassessment order pursuant to reopen that the AO has not made any addition on this score. In other words no adverse view has been taken by the AO in respect of allegation of accommodation benefit as alleged in the reasons recorded to re-open. Therefore, it is seen that AO dropped this issue while framing reassessment after being satisfied with the explanation given by the assessee and after verifications. So this issue loses its significance and need to be ignored for further adjudication of the legal issue as if it was not part of the ‘reasons recorded’ by the AO to justify re-opening the assessment of the assessee. The issue regarding valuation of stock was duly enquired into by the earlier AO in the original assessment proceedings which culminated in the assessment order u/s 143(3) Since the AO has reopened this issue (valuation of stock) merely on perusal of the assessment records and not on the basis of any fresh materials, the Ld. CIT(A) has rightly opined that action of the AO to examine this issue again by resorting to re-opening, can at best to be termed as ‘change of opinion’. And it is settled position of law that “change of opinion” cannot confer jurisdiction on the AO to reopen the duly completed assessment u/s 143(3) of the Act. The reason is that the AO does not enjoy the power of review. Therefore in the present case it is clear that the action of the present AO tantamount to review the action of the earlier AO who has accepted the valuation of stock in his scrutiny assessment u/s 143(3) of the Act dated 16.03.2015. Therefore, the present AO lacks jurisdiction u/s 147 of the Act to reopen the completed assessment u/s 143(3) of the Act dated 16.03.2015 merely on “change of opinion”. In the light of the aforesaid discussion, we hold that the Ld. CIT(A) has rightly appreciated the contentions raised by the assessee regarding the legal ground raised by the assessee against the validity of the reopening and has rightly held the action of the AO to be bad in law - Decided in favour of assessee.
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