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of <h1>Reassessment under section 147 invalid where based solely on assessment records; change of opinion cannot justify section 148 notices</h1> HC held that reassessment proceedings initiated under section 147 for AYs 1997-98 and 1998-99 were invalid, as the only basis for reopening was an alleged ... Reassessment proceedings - section 147/147 - reasons for reopening an assessment - Held that: - The only reason which has been given seeking reopening of the assessment for the years 1997-98 and 1998-99 is that suppression of sales has taken place on account of the fact that when average price of the closing stock is mul-tiplied with the quantity of the sales in the year then the value of the sales would be at a higher figure than that as declared by the assessee. - he reasons given for seeking reopening of the assessment contains the expression 'perusal of the case record reveals' clearly showing that it is on the basis of the same assessment record as was filed by the assessee, during the relevant assessment years - merely change in an option can not be the basis for reassessment - notice u/s 148 quashed. Issues: (i) Whether the notices issued under section 148 read with section 147 of the Income-tax Act, 1961 for the assessment years in question are valid where the reasons for reopening are based on the existing assessment record and amount to a change of opinion.Issue (i): Validity of reopening assessments under section 147/148 where reasons rely on material already available and considered in the original section 143(3) assessments.Analysis: The reasons for reopening rely on perusal of the same assessment record that was available to and considered by the assessing authority at the time of passing orders under section 143(3). The asserted groundscomputation by applying average closing stock value to annual sales and claims regarding allowance of depreciation and deductions for PF/ESIdo not arise from new material but from a different approach or opinion taken subsequently by the revenue. The methodology of applying a single average closing-stock price uniformly to sales across the year is not a factually compelled or newly discovered basis and could have been explored during the original assessment. The entries and audit documentation relating to stock valuation and deductions were part of the record considered for allowance under sections 80HHC and 80-IA. No fresh material demonstrating concealment or newly discovered facts is identified to justify reassessment under the Explanation provisions to section 147.Conclusion: The reopening notices under section 148 read with section 147 are invalid because the reasons recorded show only a change of opinion based on the same record and not on any new material; therefore reassessment cannot be initiated on that basis. This conclusion is in favour of the assessee.Final Conclusion: The impugned notices under section 148 are quashed and the revenue is prohibited from framing reassessments on the stated reasons; the writ petitions are allowed with quantified costs.Ratio Decidendi: Reopening of assessment under section 147 requires reasons based on material not previously considered or newly discovered facts; a reassessment cannot be validly based solely on a change of opinion derived from the same record that was available at the time of assessment under section 143(3).
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