Reassessment on mere change of opinion is impermissible without fresh material or a valid reason to believe.

Reassessment under section 147 cannot be initiated on a mere change of opinion on material already examined in a completed scrutiny assessment. A valid reopening requires a rational basis for "reason to believe" founded on fresh material, external information, or a change in law; the provision does not confer a power of review on the Assessing Officer. An assessment under section 143(3) carries a presumption of application of mind, and the absence of detailed reasons in the assessment order does not, by itself, justify reopening. On these principles, reopening based only on a fresh appraisal of the same facts is impermissible.

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Issues: Whether reassessment under section 147 of the Income-tax Act, 1961 can be initiated merely because the Assessing Officer has changed his opinion on the same material already on record.

Analysis: The reassessment notice was issued after a completed scrutiny assessment and no fresh material, external information, or change in law was shown to have emerged after the original assessment. The statutory expression "reason to believe" requires a rational foundation based on relevant material, and it cannot be equated with a mere fresh appraisal of the same facts. The amendment to section 147 did not confer a power of review on the Assessing Officer. The departmental circular explaining the amendment also indicated that the provision was not intended to permit reopening on mere change of opinion. An assessment completed under section 143(3) carries a presumption of application of mind, and the absence of detailed discussion in the assessment order does not by itself justify reopening.

Conclusion: Reassessment on a mere change of opinion is not permissible, and the reopening in the present case was invalid.

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