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2022 (10) TMI 990 - HC - Income TaxReopening of assessment u/s 147 - Claim for compensation paid/provided to the profit and loss account (P&L Account) - ITAT confirmed the order of the CIT(A) holding that since there was no fresh tangible material in the possession of the Assessing Officer on the basis of which a belief could be formed for escapement of income, the re-opening notice was bad in law - HELD THAT:- As observed by the ITAT that since the impugned issue was examined by the A.O., in view of the query asked by him, which was properly replied with proper details after which the original assessment order under Section 143(3) came to be passed accepting the impugned claim, the AO did not have the shield of Explanation-1 to Section 147 to justify the re-opening which was done without there being any fresh tangible material in the possession of the Assessing Officer. The above findings of fact have not been controverted by the Revenue. As recorded in the Tribunal order that the Assessing Officer before recording the reasons for reopening has made reference to the same documents/material which were also on the record of the Assessing Officer in the original assessment proceedings under Section 143(3). We, therefore, observe that there does not appear to be any fresh tangible material that has come into the possession of the Assessing Officer before recording the reasons for re-opening the assessment. Even in the recorded reasons, the Assessing Officer clearly states that his observations are based “on a perusal of records” but no fresh or new tangible material has been referred to or brought on record. The re-opening is within a period of four years from the end of the relevant assessment year. Therefore, it is important that the officer reopening a assessment has reason to believe based on tangible material that income has escaped assessment. What we observe from the aforesaid facts is that the dis-allowance of the claim of Rs. 6,50,00,000/- on account of compensation is based on record that was already with the AO at the time of the proceedings under Section 143 (3) of the Act. There is no new or fresh tangible material that has been brought on record. This appears to be an attempt to view the same material from a different angle of perception. It is nothing but a case of change of opinion, which cannot be permitted. We also agree with the Tribunal that since the impugned issue was examined by the A.O. on a query raised by him and which was replied to with details during the original scrutiny proceedings, Explanation 1 to Section 147 would not be applicable in the facts of the case. - Decided in favour of assessee.
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