Change of opinion bars reassessment, while concurrent findings that lease deeds were sham sustained the later assessments.

Reassessment under section 35 of the Kerala Agricultural Income-tax Act could not be validly initiated for 1970-71 where the original assessing officer had already examined the lease deeds and the successor officer reopened the matter only on a different view of the same material, amounting to a mere change of opinion. By contrast, the assessments for 1971-72 and 1972-73 were sustained because the Tribunal's concurrent factual finding that the lease deeds were sham transactions and that the assessee remained in possession of the plantation was supported by valid reasons and did not warrant interference.

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Issues: (i) Whether the reassessment proceedings for 1970-71 were validly initiated under section 35 of the Kerala Agricultural Income-tax Act, 1950; (ii) Whether the assessments for 1971-72 and 1972-73 could be sustained on the basis that the lease deeds were sham transactions and the assessee remained in possession of the plantation.

Issue (i): Whether the reassessment proceedings for 1970-71 were validly initiated under section 35 of the Kerala Agricultural Income-tax Act, 1950.

Analysis: The material facts relating to the lease deeds were already before the original assessing officer, who had applied his mind to their genuineness and to the consequent tax position. The successor officer reopened the assessment only because he later took a different view on the same materials and treated the leases as sham. Such reopening was based on a mere change of opinion and not on any new valid ground available to justify action under section 35. The additional reliance placed on alleged violation of section 74 of the Kerala Land Reforms Act, 1963 was not the basis on which the reassessment had been initiated.

Conclusion: The reassessment proceedings for 1970-71 were not validly initiated, and the answer on this issue was in favour of the assessee.

Issue (ii): Whether the assessments for 1971-72 and 1972-73 could be sustained on the basis that the lease deeds were sham transactions and the assessee remained in possession of the plantation.

Analysis: The question was one of fact. The Tribunal found that the lease deeds were sham and nominal documents created to evade tax liability, and that the assessee continued in possession of the entire plantation after 14 October 1968. Those concurrent findings of the assessing authority, the first appellate authority, and the Tribunal were supported by valid reasons and did not call for interference.

Conclusion: The assessments for 1971-72 and 1972-73 were rightly sustained, and the answer on this issue was against the assessee.

Final Conclusion: The reference was answered by holding that reopening of the 1970-71 assessment was invalid, but the assessments for 1971-72 and 1972-73 were upheld on the factual finding that the leases were sham.

Ratio Decidendi: Reassessment cannot be initiated on a mere change of opinion where the original assessing authority had already applied its mind to the same material, but concurrent factual findings that a transaction is sham will ordinarily be sustained when supported by reasons.

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