Dismissing the appeal of the revenue the Court held that  if the Department had been aggrieved by the order passed under section 143(3) , it could have recourse under section 263 but reopening the assessment under section 147 could not be allowed. The Department had not been able to deny that in the original order under section 143(3) the issue of deduction did arise and after discussing it a particular finding was given. Mere change of opinion could not be considered within the ambit of the phrase “reason to believe”.

An Explanation is always subordinate to the main provision (as the name suggests, only to explain). The powers under section 147 of the Income-tax Act, 1961 have been defined without any equivocation. Mere change of opinion could not be considered within the ambit of the phrase “reason to believe”.( AY. 1997-98)