Change of opinion bars reassessment after scrutiny assessment where full disclosure existed and no new tangible material emerged.

Reopening under section 147 after a scrutiny assessment under section 143(3) requires reason to believe that income has escaped assessment, and, where the first proviso applies, failure to fully and truly disclose material facts. The change of opinion bar applies when the Assessing Officer had already formed a view on the material and later seeks a different view on the same material. Lack of discussion in the assessment order does not by itself show no opinion, because regularity of official acts may be presumed under section 114(e) of the Evidence Act. On full disclosure and no tangible new material, reopening would amount to an impermissible review; section 263 is the proper remedy for an erroneous assessment.

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Issues: Whether reassessment under section 147 of the Income-tax Act, 1961 could be validly initiated in respect of an assessment completed under section 143(3), where the assessee had furnished full and true material facts, and whether the principle of change of opinion would bar reopening even when the assessment order does not expressly discuss every query or issue, including the relevance of section 114(e) of the Indian Evidence Act, 1872.

Analysis: Reassessment after a scrutiny assessment under section 143(3) requires reason to believe that income has escaped assessment, and where the first proviso applies there must also be failure to disclose fully and truly all material facts. The expression change of opinion applies where the Assessing Officer had already formed an opinion on the material placed before him and later seeks to take a different view on the same material. The absence of discussion in the assessment order does not by itself establish absence of opinion, because an assessee has no control over the manner in which the order is drafted and the regularity of official acts may be presumed under section 114(e) of the Indian Evidence Act, 1872. If the assessee made full and true disclosure of primary facts and the assessment was made under section 143(3), reopening on the same material without tangible new material would amount to a review in the guise of reassessment. If the Assessing Officer had not examined a subject matter at all, the case is one of no opinion and not of change of opinion. Where an erroneous assessment prejudicial to the Revenue is involved, the appropriate remedy is section 263 and not reopening on the same material.

Conclusion: Reassessment cannot be sustained merely on a change of opinion where a scrutiny assessment under section 143(3) was made on full and true disclosure of material facts and no new tangible material exists; the questions referred are answered against the Revenue and in favour of the assessee.

Ratio Decidendi: After a scrutiny assessment under section 143(3), the Assessing Officer cannot reopen the assessment under section 147 on the same material merely because he now takes a different view; tangible new material or, where applicable, failure of full and true disclosure is necessary to avoid the bar of change of opinion.

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