Reopening assessments requires fresh verifiable material; mere change of opinion on previously considered facts cannot sustain a reassessment notice.

Reopening an assessment under Section 148 requires reasons to believe grounded in fresh, verifiable material showing escapement of income or omission to disclose material facts; a mere change of opinion on facts already considered does not suffice. Here, discrepancies in sundry creditors were examined at original assessment and in later rectification proceedings, and no new material distinct from that record existed. Applying the settled fresh material test, the reopening notice dated 29.03.2014 failed the statutory threshold and was quashed, with the writ allowed for the assessee.

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Issues: Whether the notice dated 29.03.2014 issued under Section 148 of the Income-tax Act, 1944 for reopening assessment for Assessment Year 2007-08 was valid where the same facts had been considered at original assessment under Section 143(3) and in subsequent proceedings under Section 154 which were dropped.

Analysis: The re-assessment notice challenged the genuineness and verifiability of large sundry creditors disclosed by the assessee. At the time of the original assessment under Section 143(3) of the Income-tax Act, 1944 the Assessing Authority had examined discrepancies in creditors' accounts, considered explanations and account copies produced by the assessee and recorded satisfaction regarding purchases. Proceedings under Section 154 of the Income-tax Act, 1944 were later initiated on the same facts and were subsequently dropped. The settled legal test requires that reopening under Section 148 must be founded on reasons to believe based on fresh material showing escapement of income due to omission or failure to disclose material facts; mere change of opinion on the same material does not satisfy the statutory requirement. The factual record in this case shows no new material distinct from that available at original assessment or in the Section 154 proceedings; therefore the statutory threshold for reasons to believe was not met.

Conclusion: The notice dated 29.03.2014 under Section 148 of the Income-tax Act, 1944 is quashed. The writ petition is allowed in favour of the assessee.

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