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2019 (3) TMI 82 - HC - Income TaxReopening of assessment - Original assessment u/S. 143(3) - basis of change of opinion - Failure to disclose truly and fully all material facts necessary for assessment - eligible for tax benefits u/s 80IA - HELD THAT:- Assessee is a Contractor who is engaged in the construction work in respect of a Project on behalf of the developer and earns profit at various stages of the construction and does not have stakes in the financial viability of the project. AO held that he is being paid regularly for the work done by him and at no stage of work it owns any of the projects. AO held that the assessee is not a developer within the meaning of Sec. 80IA and, therefore, will not be eligible for tax benefits u/S. 80IA. ITAT held that there was no new material before the AO for assumption of valid jurisdiction for initiation of re-assessment proceedings and reopening of assessment u/S. 147/148. As held that reopening was done based upon the same material which was before the Assessing Officer during the regular assessment proceedings and there was no new tangible material. Court has carefully gone through the order passed by the Tribunal. The aforesaid order makes it very clear that reassessment proceedings by issuing notice u/s 148 were done merely on the basis of change of opinion. There was no tangible material to arrive at a conclusion that there was escapement of income by the assessment. AO has the power to reopen assessment provided there is tangible material to come to a conclusion that there is escapement of income from assessment and the reason must have a live link with formation of belief. In the present case as the reassessment proceedings were initiated on the basis of same material which was available before the AO and mere change of opinion led to reassessment. Department has certainly placed reliance upon a judgment case of Kalyanji Mavji & Co., Vs. Commissioner of Income Tax West Bengal reported in [1975 (12) TMI 2 - SUPREME COURT] however, the apex Court in the case of Indian & Eastern Newspaper Society [1979 (8) TMI 1 - SUPREME COURT] after taking into account the judgment delivered in the case of Kalyanji Mavji [1975 (12) TMI 2 - SUPREME COURT] has held that change of opinion does not empower the AO to reopen the assessment and, therefore, the judgment relied upon by the learned counsel is of no help to the Department.
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