Court quashes assessment re-opening for 2011-2012 due to change of opinion.

The court quashed the notice re-opening the assessment order for the assessment year 2011-2012, as it found the reasons provided by the Assessing Officer to be a mere change of opinion. The court held that the exclusion of CENVAT and VAT amounts from the valuation of stocks, which led to alleged undervaluation, had already been explained during the original assessment process. Additionally, the court determined that the non-inclusion of CENVAT and VAT in stock valuation did not impact tax liability, leading to the decision to allow the petition and reject the reassessment.

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Issues:
1. Validity of notice re-opening assessment order for the assessment year 2011-2012.
2. Examination of value of opening and closing stock in original scrutiny assessment.

Analysis:
1. The petitioner challenged a notice issued by the Assessing Officer seeking to re-open the assessment order for the assessment year 2011-2012. The notice was based on the Assessing Officer's belief that income had escaped assessment due to the exclusion of CENVAT and VAT amounts from the valuation of closing stock, resulting in alleged undervaluation of approximately Rs. 2.26 crores. The petitioner contended that the issue of stock valuation was already examined in the original scrutiny assessment, and the exclusion of CENVAT and VAT was revenue neutral. The court noted that the Assessing Officer's reasons for re-opening the assessment were based on the inclusion of CENVAT and VAT amounts in the valuation of stocks, which the petitioner had already explained during the original assessment process. The court held that permitting re-opening would amount to a mere change of opinion and quashed the notice, allowing the petition.

2. The Assessing Officer argued that the petitioner should have included CENVAT and VAT amounts in the valuation of both opening and closing stocks, alleging that the exclusion led to tax avoidance. However, the petitioner had already clarified during the original assessment process that they followed an exclusive method of accounting for excise duty and taxes. The court observed that the non-inclusion of CENVAT/VAT in the valuation of stocks would not alter the tax liability. The court concluded that reassessment was not permissible based on the grounds presented, and therefore, the notice re-opening the assessment order was quashed, and the petition was allowed.

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