Section 54B exemption and reopening on change of opinion remain under further consideration in a Bombay High Court tax dispute.

The article examines whether exemption under Section 54B of the Income-tax Act could properly be allowed and whether reopening under Section 148 was sustainable where the Revenue relied on an audit objection and the assessee invoked the principle that a mere change of opinion cannot justify reassessment. It also notes the dispute over whether the land retained its agricultural character and the possible relevance of proceedings under the Urban Land (Ceiling and Regulation) Act, 1976. No final merits determination was recorded; the matter was kept for further consideration, with interim directions for completion of assessment and protection against recovery.

---

---

Issues: Whether the propriety of allowing exemption under Section 54B of the Income-tax Act, 1961, and the validity of reopening under Section 148 of the Income-tax Act, 1961 on the basis of a change of opinion required further consideration.

Analysis: The matter concerned an assessment year for which assessment proceedings were still pending. The Court noted the revenue's reliance on an audit objection, the response of the Deputy Commissioner supporting the original allowance, and the contention that a mere change of opinion cannot justify reopening. The parties also disputed whether the land retained the character of agricultural land and the impact of proceedings under the Urban Land (Ceiling and Regulation) Act, 1976.

Outcome: No final adjudication was recorded on the merits of the reopening or exemption issue. The matter was listed for further consideration, and interim directions were issued for completion of assessment and protection against recovery.

---