Notices under section 148 quashed for AYs 1991-93 as mere change of opinion, not new material under section 147

HC held that notices under s.148 for assessment years 1991-92, 1992-93 and 1993-94 were without jurisdiction and quashed. Although the revenue contended that manufacture of colour film rolls did not qualify for deduction under s.80-I, the Assessing Officer relied solely on a reconsideration of the same facts and orders already on record, with no new material, information or change of law between the assessments and formation of belief under s.147. The Court found this to be a mere change of opinion, which cannot sustain reopening under s.147/148, and struck down the impugned notices.

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Issues Involved:
1. Entitlement to Investment Allowance u/s 32A.
2. Entitlement to Deduction u/s 80-I.
3. Validity of Reopening Assessments u/s 147/148.

Summary:

1. Entitlement to Investment Allowance u/s 32A:
The petitioner, a public limited company engaged in manufacturing photosensitive film, claimed investment allowance u/s 32A for the assessment year 1990-91. The Assessing Officer disallowed this claim, citing that colour film rolls were included in the prohibited list in the Eleventh Schedule of the Income-tax Act, 1961. The Commissioner of Income-tax (Appeals) later observed that after the exclusion of "cinematographic films" from the Eleventh Schedule, there was no justification for including colour film rolls in the same list. However, the Commissioner held that the petitioner was not entitled to investment allowance for the current year but could claim it in the next assessment year.

2. Entitlement to Deduction u/s 80-I:
For the assessment years 1991-92, 1992-93, and 1993-94, the petitioner initially did not claim any deduction u/s 80-I. After the Commissioner's order, the petitioner claimed deduction u/s 80-I, which was allowed by the Assessing Officer for all three years. The Assessing Officer noted that the petitioner fulfilled the conditions laid down in sub-section (2) of section 80-I and was entitled to the deduction, relying on the Commissioner's finding that colour roll film was not an item specified in the Eleventh Schedule.

3. Validity of Reopening Assessments u/s 147/148:
The Assessing Officer issued notices u/s 147/148 to reopen the assessments for the years 1991-92, 1992-93, and 1993-94, claiming that income had escaped assessment because the deduction u/s 80-I was wrongly allowed. The petitioner argued that all relevant facts were disclosed, and the reopening was merely a "change of opinion," which is not permissible. The court held that the Assessing Officer had no new material or information and merely re-evaluated the same facts, constituting a change of opinion. This does not provide jurisdiction to initiate proceedings u/s 147. The court quashed the notices issued u/s 148 for all three assessment years, stating that the absence of new material meant the Assessing Officer lacked jurisdiction to reopen the assessments.

Conclusion:
The court allowed the petitions, quashing the notices u/s 148 for the assessment years 1991-92, 1992-93, and 1993-94, due to the absence of new material and the reopening being based on a mere change of opinion. No order as to costs was made.

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