TMI Blog2014 (11) TMI 652X X X X Extracts X X X X X X X X Extracts X X X X ..... r there is failure on the part of assessee to disclose fully and truly all material facts which could have enabled the Assessing Officer to reopen the assessment beyond four years - assessee in the return of income as well as statement of accounts has not only disclosed the sources of income earned by it but has also shown the expenditure claimed - there are no other additional information or fresh materials on record on the basis of which the AO has formed his belief that income has escaped assessment - Only on the basis of information and materials furnished by assessee himself which was considered at the time of original assessment, the AO has reopened the assessment by coming to a different opinion that interest earned by assessee has to be assessed under the head income from other sources and not as business income. This is only a change of opinion by the AO on re-appreciation of same set of facts and materials considered at the time of original assessment - reopening of assessment on a mere change of opinion would amount to review of earlier order passed by the AO which is not permissible under the Act - the AO cannot treat the income in a different manner contrary to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om other sources, the expenditure claimed cannot be allowed as per section 57(iii) of the Act. Further, Assessing Officer also noted that there is discrepancy between the interest income shown by assessee in the return of income and the interest income appearing in the TDS certificate. On the basis of the aforesaid facts, AO formed an opinion that income has escaped assessment and accordingly, reopened the assessment by issuing notice u/s. 148 of the Act on 27.3.2012. During the assessment proceedings which followed, assessee submitted that assessee being a NBFC, interest income had been rightly treated as income from business. It was submitted that one of the main objects of the company as per the Memorandum and Articles of Association is to invest in deposits. The Assessing Officer, however, did not accept the submissions of assessee. Though the Assessing Officer admitted that one of the objects as per the Memorandum and Articles of Association is to invest in deposits but the interest income earned by assessee from deposits with the bank has to be treated as income from other sources as assessee is not engaged in the business of money lending or any other business activity. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were examined by the assessing officer and he was satisfied about both and accepted the return of income. 4.7 Now after some years, no further information has been collected by the assessing officer. Based on the same information and the same file, the assessing officer was changed his opinion that the income accepted as Income from Business is now to be assessed under another head and the expenditure is not to be allowed. This is clearly a change of opinion based on the review of the case and not based on any other information on record. The aforementioned judgments of the Hon'ble Supreme Court are clearly applicable. Accordingly, I hold that the reopening is not in order being an obvious change of opinion. 5. With the aforesaid observations the learned CIT(A) allowed the appeal of assessee. 6. The learned DR submitted before us that though assessee did not have any income under the head business but wrongly claimed business expenditure against the income earned from interest on deposits with bank. It was submitted that as there is under assessment/escapement of assessment to the extent of wrong claim made by assessee, the Assessing Officer was empowered under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 143(3) or section 147 of the Act, no action shall be taken u/s. 147 after expiry of four years from the relevant assessment year unless any income chargeable to tax has escaped assessment due to failure on the part of assessee to disclose fully and truly all material facts necessary for his assessment for that assessment year. As would be evident from the aforesaid proviso the condition precedent for reopening the assessment beyond a period of four years in case of an assessment completed u/s. 143(3) of the Act, is there must be failure on the part of assessee to disclose fully and truly all material facts necessary for his assessment. On examining the facts of the present case in the light of the aforesaid statutory provisions, it appears that the assessment had been reopened by the Assessing Officer for the reason that the business expenditure claimed by assessee is not allowable as according to him income derived by assessee from interest is to be assessed as income from other sources and not as business income. 9. So far as the other reason viz., discrepancy between the interest income shown by assessee and as appearing in the TDS certificate, as per the Assessing Officer&# ..... X X X X Extracts X X X X X X X X Extracts X X X X
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