Reassessment after block assessment remains permissible where income escaped assessment and no prior opinion was formed on the issue.

Section 147 permits reassessment where income has escaped assessment even after a block assessment under Chapter XIV-B, subject to the statutory safeguards; the reopening was therefore valid in favour of the Revenue. Reassessment is not barred by change of opinion unless the Assessing Officer had actually formed a view on the same issue in the original proceedings, and the record here showed omission or oversight rather than any concluded opinion. On that basis, the reopening was not invalid as a mere change of opinion. The Tribunal's order was set aside, the Revenue's appeals succeeded, and the matter was remanded for decision on the remaining merits, including the deemed dividend question.

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Issues: (i) Whether proceedings under section 147 of the Income-tax Act, 1961 could be initiated after block assessment under Chapter XIV-B. (ii) Whether reopening was invalid as a mere change of opinion.

Issue (i): Whether proceedings under section 147 of the Income-tax Act, 1961 could be initiated after block assessment under Chapter XIV-B.

Analysis: Section 147 applies to an assessment under the Act where income chargeable to tax has escaped assessment. The provision does not carve out any exception for assessments completed under Chapter XIV-B. If income subsequently comes to notice as escaped assessment, the Assessing Officer retains power to reassess, subject to the statutory safeguards.

Conclusion: The reopening under section 147 after block assessment was valid and this issue was decided in favour of the Revenue.

Issue (ii): Whether reopening was invalid as a mere change of opinion.

Analysis: The record showed that the Assessing Officer had not formed any opinion on the taxability of the amount as deemed dividend during the block assessment. The case was one of omission or oversight, not a concluded view later sought to be reviewed. The governing principle is that reassessment is permissible where income has escaped assessment due to mistake, oversight, or lack of due application of mind, provided there is tangible material and a live link with the belief of escapement.

Conclusion: The reopening was not barred by the doctrine of change of opinion and this issue was decided in favour of the Revenue.

Final Conclusion: The Tribunal's order was set aside, the Revenue's appeals succeeded, and the matter was sent back for decision on the remaining merits including the deemed dividend question.

Ratio Decidendi: Section 147 permits reassessment where income has escaped assessment even after block assessment, and the bar against change of opinion applies only when a view on the same issue was actually formed in the original proceedings.

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