Reassessment cannot rest on a change of opinion when no fresh material emerges after the original assessment.

Reassessment under section 147(b) requires fresh information or new material; a mere later reappraisal of facts already examined at the original assessment stage is insufficient. Here, the Income-tax Officer had specifically enquired into the separation-agreement receipts, obtained the assessee's explanation and agreements, and consciously decided not to tax any part of the amount. As no subsequent information came to light, reopening on the same material amounted only to a change of opinion. The reassessment proceedings were therefore invalid in law and the issue was decided in favour of the assessee.

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Issues: Whether the reassessment proceedings initiated under section 147(b) of the Income-tax Act, 1961, were valid in law.

Analysis: The original assessment was completed after the Income-tax Officer had specifically enquired into the receipts from the separation agreement, called for details, received the assessee's explanation and the relevant agreements, and taken a conscious decision not to tax any part of the amount. No fresh information or new material came into possession of the Income-tax Officer thereafter. The reopening was founded only on a later reappraisal of the same material already considered at the original assessment stage. In the absence of any subsequent information, section 147(b) could not be invoked merely because the officer later formed a different view on the same facts.

Conclusion: The reassessment proceedings were invalid in law and the issue is answered in favour of the assessee.

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