INCOME TAX ACT, 1961

Section 147

Reassessment - Validity - Notice under section 148 issued to assessee alleging that benefit of section 80-I wrongly extended. -

Asssessee claimed deduction under section 80-I in year 1997-1998. AO while framing assessment under section 143(3), issue of deduction was gone into detail by AO and a portion of it was disallowed. Thereafter, notice under section 148 was issued to assessee alleging that benefit of section 80-I was wrongly extended. Tribunal set aside order holding that primary condition of section 147, 'reason to believe' did not exist and it was merely a case of change of opinion at best, which was not permitted. Held: Powers under section 147 have been now defined without any equivocation and without going too deep into it, it is safe to say that a mere change of opinion cannot be considered within the ambit of phrase reason to believe. Had revenue been aggrieved of assessment order passed under section 143(3) of the Act, it would had the recourse under section 263 but present short cut method could not be allowed. Contention of department was that the phrase 'conceptual difference' between power to review and power to reassess, some how changes the law. This argument was flawed because invocation of section 147 can only be on basis of tangible material which has come to knowledge of AO after the assessment. The question of law did not arise.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

SUBSCRIBE FOR FULL CONTENT