Change of opinion bars reassessment, and disputed interest accrual cannot alone justify belief of escaped income.

Reassessment on issues already examined in the original scrutiny assessment is impermissible when it rests only on a change of opinion, even if the assessment order does not expressly discuss the point. The document also states that disputed interest on a loan transaction, where the entitlement to interest was unsettled and referred to arbitration, did not by itself justify a belief that income had escaped assessment. On both grounds, the reopening could not be sustained, and the assessee prevailed.

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Issues: (i) whether reassessment could be initiated on issues already examined in the original scrutiny assessment and thus amount to a mere change of opinion; (ii) whether the alleged non-accounting of interest income on a disputed loan transaction furnished a valid basis to believe that income had escaped assessment.

Issue (i): whether reassessment could be initiated on issues already examined in the original scrutiny assessment and thus amount to a mere change of opinion.

Analysis: The reassessment notice was founded on multiple recorded reasons, two of which related to matters that had admittedly been examined during the original scrutiny assessment. Once an issue has been considered in the original assessment, reopening on the same material cannot be sustained merely because the Assessing Officer did not make an addition or did not expressly discuss the point in the assessment order. Such action would amount to a change of opinion.

Conclusion: Reopening on those issues was not permissible and the finding was in favour of the assessee.

Issue (ii): whether the alleged non-accounting of interest income on a disputed loan transaction furnished a valid basis to believe that income had escaped assessment.

Analysis: The third recorded reason concerned interest on a loan advanced to a third party, where the receipt of interest itself was uncertain and the matter had been referred to arbitration. On the facts, the Tribunal found that the assessee was justified in not offering the interest to tax when there was no clear stipulation for such interest and the entitlement itself remained unsettled at the relevant time. In these circumstances, the material did not justify a belief that income had escaped assessment.

Conclusion: The third ground also could not sustain the reopening and the finding was in favour of the assessee.

Final Conclusion: The reassessment action failed on all recorded grounds, and the Revenue's appeal was dismissed.

Ratio Decidendi: Reassessment cannot be founded on a mere change of opinion in respect of issues already scrutinised, and disputed or uncertain accrual of income does not by itself establish escapement of income for reopening purposes.

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