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2024 (3) TMI 1154 - AT - Income TaxReopening of assessment u/s 147 - Reasons to believe for escapement of income - power of reopening v/s review - notice issued after expiry of four (4) years - assessee claim of deduction u/s 80IB(10) - HELD THAT:- As in the original assessment, the AO had noted about the housing project in question and noted that the assessee had claimed deduction u/s 80IB(10) and after verification of the claim has accepted the claim after due application of mind. And it is further, noted from perusal of the reasons recorded AO had belief of escapement of income only after verifying the records of the assessee viz assessment folder wherein original assessment proceedings would be available including assessee’s submission on this issue. Therefore, we find that there was no new/tangible material other than the documents already available in the original assessment records. In such a scenario, it can be safely inferred that AO has re-opened the assessment on mere change of opinion, which impugned action AO is not permitted to do because he doesn’t enjoy the power of review as held in the case of CIT v/s Kelvinator of India Ltd., [2010 (1) TMI 11 - SUPREME COURT] wherein after taking note of the amendment brought to section 147 of the Act w.e.f. 1st April 1989 has held that though, post amendment the power to re-opening is much wider, however, a schematic interpretation to the words “reason to belief’ has to be given, otherwise, the AO would exercise arbitrary power by re-opening the assessment on mere change of opinion. The Hon'ble Court clarified that the AO has no power to review but has power to re-assess and such power to re-assess has to be based on fulfilment of certain pre-conditions one of which is, such re-assessment cannot be on the basis of a mere change of opinion. The Hon'ble Court held, even after 1st April 1989, the AO has power to re-open provided there is tangible material to come to the conclusion that there is escapement of income from assessment. In the present case, AO only on re-appraisal of the material available at the time of original assessment has re- opened the assessment under section 147 of the Act by forming a belief that the assessee is not eligible to claim deduction under section 80IB(10) of the Act due to non-completion of the project within the stipulated time. Thus, considering the facts and material on record in the light of well settled legal principle leads to the irresistible conclusion that the AO has re-opened the assessment on mere change of opinion without having in his possession any tangible material. Therefore, it amounts to review of the original assessment order passed in case of the assessee, which is legally impermissible. Therefore re-opening assessment un/s147 of the Act in the instant case is not valid - Decided in favour of assessee.
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