Court quashes reassessment notices, citing lack of disclosure and change of opinion. Assessing Officer's actions based on existing records.

The court quashed the notices for reopening assessments in all petitions, citing a lack of failure to disclose material facts and a change of opinion. The Assessing Officer's actions were deemed based on existing records, leading to the dismissal of notices issued beyond four years. The court highlighted the interconnected nature of issues scrutinized during the original assessment, preventing reassessment on the same grounds. Additionally, the principle of merger was invoked, barring reassessment on matters previously addressed in appeals. The court's decision was to dispose of the petitions accordingly.

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Issues Involved:
1. Validity of the notices for reopening of assessment beyond four years.
2. Examination of the issue during original scrutiny assessment and the concept of change of opinion.
3. Principle of merger and its applicability.
4. Applicability of Supreme Court judgment in Apollo Tyres Limited v. Commissioner of Income Tax regarding adjustments in book profit computation under Section 115JB.

Detailed Analysis:

1. Validity of the notices for reopening of assessment beyond four years:
The petitioner challenged the validity of notices issued beyond the period of four years from the end of the relevant assessment year, arguing that there was no failure on their part to disclose all material facts necessary for assessment. The court noted that the reasons for reopening did not indicate any such failure by the assessee. The Assessing Officer had proceeded on the basis of material already on record, forming a belief that income chargeable to tax had escaped assessment. The court concluded that this was not a case where the assessee failed to disclose fully and truly all material facts necessary for assessment. Consequently, all notices issued beyond the period of four years were set aside.

2. Examination of the issue during original scrutiny assessment and the concept of change of opinion:
The court examined whether the issue was scrutinized during the original assessment proceedings. The Assessing Officer had issued notices calling for various details, including those related to deferred government grants, subsidies, and contributions, as well as the working of book profit under Section 115JB. The petitioner had responded with detailed explanations. The court observed that the Assessing Officer had considered the petitioner’s treatment of government grants and subsidies and made additions in the normal computation of income. The court held that the issues of normal computation and book profit under Section 115JB were interconnected and had been scrutinized. The court emphasized that reopening the assessment on the same issue would amount to a change of opinion, which is not permissible.

3. Principle of merger and its applicability:
The petitioner argued that the issue of incremental 5% of government grants was a subject matter of appeal before the Commissioner, and thus, on the principle of merger, it would not be open for the Assessing Officer to resort to reassessment. The court noted that the Commissioner (Appeals) had upheld the addition made by the Assessing Officer in the normal computation of income. The court held that the principle of merger would apply, and it would not be open for the Assessing Officer to reopen the assessment on the same issue.

4. Applicability of Supreme Court judgment in Apollo Tyres Limited v. Commissioner of Income Tax regarding adjustments in book profit computation under Section 115JB:
The petitioner contended that, based on the Supreme Court judgment in Apollo Tyres Limited, no adjustments in the assessee’s computation of book profit could be made while computing income for the purpose of Section 115JB. The court did not find it necessary to examine this contention in detail, as the notices for reopening were quashed on other grounds.

Conclusion:
The court quashed the respective notices for reopening the assessment in all the petitions, emphasizing that the reopening was based on a change of opinion and that the principle of merger applied. The petitions were disposed of accordingly.

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