Validity of Income Tax Act Section 148 notice assessed; change of opinion rejected, prior issues final. Commissioner and Tribunal decisions upheld.

The High Court addressed the validity of a notice under Section 148 of the Income Tax Act 1961 based on cash payments made by the assessee. The court rejected the revenue's argument that invoking Section 148(1) constituted a change of opinion, emphasizing that once an issue and evidence are presented to an authority, ignoring it precludes later reopening on that ground. The court upheld the decisions of the Commissioner and Tribunal, dismissing the revenue's appeal.

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Issues:
1. Validity of notice under Section 148 of the Income Tax Act 1961 based on cash payments made by the assessee.
2. Invocation of Section 148(1) of the Act and the doctrine of change of opinion.

Analysis:
1. The High Court addressed the issue of the validity of the notice under Section 148 of the Income Tax Act 1961. The appeal was filed by the revenue against the orders of the Commissioner of Income Tax (Appeal)-3, Gurgaon and the Income Tax Appellate Tribunal Division Bench 'A', Chandigarh. The court noted that a search was conducted under Section 132(1) of the Act, leading to proceedings and an order under Section 143(3) of the Act. Subsequently, a notice under Section 148(1) was issued, alleging cash payments made by the assessee in violation of Section 40A(3) read with Rule 6DD of the Income Tax Rules 1962. The Commissioner and Tribunal held that the issue of cash payments was already before the Assessing Officer, and invoking Section 148(1) was considered a change of opinion. The court rejected the argument that no opinion was formed in the original assessment order, emphasizing that the issue and evidence were before the authority, which chose to ignore it. The court held that once an issue and evidence are presented to an authority, ignoring it precludes later reopening on that ground.

2. The court further analyzed the invocation of Section 148(1) of the Act and the doctrine of change of opinion. It was argued that without an opinion, there can be no change of opinion. However, the court dismissed this argument, stating that when an issue and evidence are clearly before an authority and are disregarded, the authority cannot later decide to reopen the matter on that ground. The court emphasized that the revenue's remedy was to challenge the original order if the issue of cash payments was overlooked by the Assessing Officer. Since the revenue did not pursue this course and proceeded with invoking Section 148(1), the court upheld the decision of the Commissioner and Tribunal, dismissing the appeal filed by the revenue.

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