High Court quashes Income Tax Act s.148 notice for reassessment, citing lack of jurisdiction & change of opinion.

The High Court of Madhya Pradesh quashed the notice under s. 148 of the Income Tax Act for reassessment of the assessment years 1975-76, 1976-77, and 1977-78. The court held that the assessing officer lacked jurisdiction to reopen the assessments based on a mere change of opinion without new information, citing legal precedent. The petitions were allowed, the notice for reassessment was quashed, and the refund of the security deposit was directed to the petitioner, with each party bearing their own costs.

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Issues involved:
Petitions under arts. 226 and 227 challenging notice under s. 148 of the Income Tax Act for reassessment under s. 147(b) for the assessment years 1975-76, 1976-77, and 1977-78.

Judgment Details:

Issue 1: Jurisdiction to reopen assessment under s. 147(b) of the Act
The court considered the reasons given by respondent No. 1 for reopening the assessment for the years in question. It was noted that no new information had come to light, and it appeared to be a mere change of opinion by the assessing officer. Citing the Supreme Court decision in Indian and Eastern Newspaper Society v. CIT, it was held that an error discovered on reconsideration of the same material does not give the assessing officer the power to reopen the assessment. As such, the court concluded that respondent No. 1 had no jurisdiction to issue the notice under s. 148 of the Act and proceed with reassessment for the mentioned years.

Issue 2: Legal Precedent and Conclusion
Drawing on legal precedents, the court emphasized that a change of opinion based on the same material from the original assessment does not warrant reopening the assessment. In light of the Supreme Court's clear pronouncement on the matter, the court allowed the petitions, quashed the notice issued by respondent No. 1 for reassessment, and directed the refund of the outstanding security deposit to the petitioner after verification. The parties were ordered to bear their own costs in this regard.

In conclusion, the High Court of Madhya Pradesh held that the notice under s. 148 of the Income Tax Act for reassessment of the assessment years 1975-76, 1976-77, and 1977-78, along with the reassessment proceedings, were quashed due to the assessing officer's lack of jurisdiction in reopening the assessments based on a mere change of opinion without new information.

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