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2018 (1) TMI 778 - AT - Income TaxRe-opening of assessment - reasons to believe - notice u/s 154 issued requiring the assessee to explain reasons for non deduction of tds - re-opening on the basis of audit objection - deduct tax either u/s 194C or u/s 194I - Held that:- Rectification of mistake apparent from the record cannot be equated with the power of reopening under section 147 and 148 which is conferred on the Assessing Officer to reopen the cases under assessments when the conditions mentioned in the said sections are satisfied. The object and purpose of the two provisions is separate and the preconditions and requirements are different. The words "reasons to believe" when income chargeable to tax has escaped assessment has a different connotation and requirements and cannot be equated with the power under section 154 to rectify the mistakes apparent from the record. From the above facts, it is clear that the assessee duly disclosed all material facts before the A.O. during the assessment proceedings by furnishing all the details, producing books of accounts and the A.O. duly examined those details and books of accounts and had the TDS provision been applicable on such payments, he would not have disallowed a sum of ₹ 3,00,000/- out of machinery rent paid by the appellant. It is pertinent to mention here that no new material has come on record which goes to show that these payments are to be disallowed u/s 40(a). Also the contract under reference was machinery hire contract and not a contract for carrying out any work within the meaning of limb (a) of section 194C of the Act The issue regarding machinery rent has already been considered vide para no.2 of the original assessment order made "u/s 143(3) in which an addition of ₹ 3,00,000/- has already been made, secondly, the appellant explained the same during the course of proceedings u/s 154. On these facts of the assessee's case, it cannot be held that the A.O. can entertain the "reason to believe" for income chargeable to tax escaping assessment. A.O. rejected all the object ions raised by the assessee against initiation of re-assessment proceedings on the ground that the Assessing Officer has not examined the above expenses with regard to provision of tax deduction at source i.e. disallowance U/s 40(a)(ia) of the Income Tax Act, 1961. Hence, there is no change of opinion. Change of opinion comes to the rescue of the assessee only when Assessing Officer has taken one of the permissible views at the time of original proceeding. A wrong application of law can not be held as a permissible view and that can always be changed for appreciating law and in support of his findings. - Decided against revenue
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