Reassessment under s.148 upheld: omission of relevant material prima facie permits reopening under amended s.147, petitions dismissed

HC held reassessment notices issued under s.148 were valid and petitions challenging them were dismissed. The court found the impugned action was not a mere prohibited change of opinion: where relevant material existed but was not consciously considered in the original assessment, the omission amounts to a mistake permitting reassessment under amended s.147. If facts were consciously considered and a different view later taken, that would be a change of opinion; on the present facts, prima facie omission justified reopening.

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Issues involved:
The judgment involves the issue of jurisdiction under article 226 of the Constitution of India regarding reassessment and resultant notices u/s 148 of the Income-tax Act, 1961, based on "change of opinion" or new opinion on finding out a mistake upon existing material.

Jurisdiction and Reassessment:
The petitioners argued that the impugned notice for reassessment was without jurisdiction, as reassessment cannot be made based on a "change of opinion" when all relevant facts were considered by the Assessing Officer previously. However, the Revenue contended that a bogus claim for depreciation on non-existent machinery was made by the assessee, justifying the reassessment.

Legal Interpretation:
The court noted that a mere change of opinion does not empower the Assessing Officer to conduct reassessment, but the power to assess within four years is applicable even if all relevant facts were disclosed initially, in case of a mistake. The court analyzed the reasons for issuing the notice u/s 148, highlighting the claim of depreciation on non-existent machinery.

Reason to Believe and Change of Opinion:
The court discussed the distinction between "reason to believe" and "change of opinion," emphasizing that if a mistake is detected on an issue not previously considered, it does not constitute a mere change of opinion. The case law and observations from previous judgments were considered to determine the validity of the reassessment in the present case.

Final Decision:
The court concluded that the authority had jurisdiction to issue the notices u/s 148 based on the information received regarding the bogus claim of depreciation. The petitions were dismissed, emphasizing that the observations made at the interim stage should not influence the final decision based on the merits and materials presented during the reassessment process. No costs were awarded in the judgment.

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