Court quashes reassessment based on Valuation Officer's report. Assessing Officer's change of opinion not sustainable.

The court quashed the reassessment proceedings, finding that it was not sustainable as it was based solely on the Valuation Officer's report without proper application of mind by the Assessing Officer, constituting a change of opinion. The court set aside the impugned order and notices, allowing the writ petition with no orders as to costs. The question of whether assessments under Section 153A can be reassessed under Section 147/148 was left open.

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Issues Involved:
1. Validity of reassessment under Section 147/148 for assessments framed under Section 153A.
2. Use of Valuation Officer's report as the basis for reassessment.
3. Allegation of change of opinion by the Assessing Officer.
4. Exemption of income applied towards charitable purposes under Section 11.

Detailed Analysis:

1. Validity of Reassessment under Section 147/148 for Assessments Framed under Section 153A:
The petitioner argued that reassessment under Section 147/148 is not permissible for assessments framed under Section 153A, which is conducted pursuant to a search. The petitioner contended that Section 147 pertains to assessments under Section 143(3) and does not apply to assessments under Section 153A. The court, however, did not delve deeply into this issue as it quashed the reassessment on other grounds.

2. Use of Valuation Officer's Report as the Basis for Reassessment:
The court scrutinized the reliance on the Valuation Officer's report for initiating reassessment. The court referred to precedents, including the Supreme Court's judgment in Dhariya Construction Co., which held that a Valuation Officer's report alone cannot justify reassessment. The Assessing Officer must apply his mind to the report and form a belief that income has escaped assessment. In this case, the court found that the Assessing Officer did not demonstrate application of mind and merely accepted the report, which was not permissible.

3. Allegation of Change of Opinion by the Assessing Officer:
The petitioner contended that the reassessment was a mere change of opinion, which is not allowed under the law. The court agreed, noting that the Assessing Officer had all the relevant information during the original assessment and had consciously decided not to make any additions based on the construction expenditure. The subsequent valuation report was used as a pretext to revisit the concluded assessment, amounting to a change of opinion.

4. Exemption of Income Applied Towards Charitable Purposes under Section 11:
The petitioner argued that any income applied towards the construction of the school building should be exempt under Section 11 as it was for charitable purposes. The court did not need to address this argument in detail since it quashed the reassessment on other grounds.

Conclusion:
The court found merit in the petition and quashed the reassessment proceedings. It held that the reassessment was not sustainable as it was based on the Valuation Officer's report without proper application of mind by the Assessing Officer, constituting a change of opinion. The court set aside the impugned order and notices, allowing the writ petition with no orders as to costs. The question of whether assessments under Section 153A can be reassessed under Section 147/148 was left open.

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