Invalid reopening of assessment under Income Tax Act Section 148; constitutes change of opinion; quashed notice.

The court held that the reopening of the assessment under Section 148 of the Income Tax Act was invalid as it constituted a mere change of opinion, did not meet the conditions under Section 147, and involved issues already pending in appeal. Therefore, the court quashed the notice and proceedings.

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Issues Involved:
1. Validity of the reopening of the assessment under Section 148 of the Income Tax Act, 1961.
2. Whether the reopening was based on a mere change of opinion.
3. Compliance with the conditions under Section 147 for reopening beyond four years.
4. Examination of the subject matter of appeal, reference, or revision in the context of reopening.

Issue-wise Detailed Analysis:

1. Validity of the reopening of the assessment under Section 148 of the Income Tax Act, 1961:
The writ applicant challenged the Notice dated 30.03.2018 issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for the A.Y. 2011-12. The main contention was that the conditions precedent for invoking Section 147 were not satisfied. The assessee argued that they had fully and truly disclosed all necessary material facts during the original assessment, and the reopening was unjustified as it was based on the same set of facts already scrutinized. The court noted that the original assessment had undergone detailed scrutiny, and the reopening was not justified as it was based on the same material facts, indicating a mere change of opinion.

2. Whether the reopening was based on a mere change of opinion:
The court emphasized that mere change of opinion cannot be a basis for reopening a completed assessment. The original assessment involved detailed scrutiny under Section 143(3), where the Assessing Officer had considered all relevant details and disallowed part of the deduction claimed under Section 80IA. The court referred to the case of CIT Vs. Kelvinator India Ltd, which established that the concept of "change of opinion" must be treated as an in-built test to check the abuse of power by the Assessing Officer. Since the reopening was based on the same material facts, it was deemed a mere change of opinion and thus invalid.

3. Compliance with the conditions under Section 147 for reopening beyond four years:
The court reiterated that for reopening beyond four years, two conditions must be satisfied: (a) there must be a reason to believe that income chargeable to tax has escaped assessment, and (b) such escapement occurred due to the failure of the assessee to disclose fully and truly all material facts necessary for assessment. The court found that the assessee had disclosed all primary facts during the original assessment, and the reopening was not based on any new tangible material. Therefore, the reopening did not comply with the conditions under Section 147.

4. Examination of the subject matter of appeal, reference, or revision in the context of reopening:
The court noted that the issue of disallowance under Section 80IA was already decided by the CIT (Appeals) and was pending before the Second Appellate Authority. According to the third proviso to Section 147, the Assessing Officer cannot reopen an assessment on matters that are the subject of any appeal, reference, or revision. The court referred to the case of Prashant Project Ltd. Vs. ACIT, which held that reopening cannot be based on issues already canvassed in appeal and determined in appellate proceedings. Thus, the reopening was invalid as it involved matters pending in appeal.

Conclusion:
The court concluded that the reopening of the assessment was invalid as it was based on a mere change of opinion, did not comply with the conditions under Section 147, and involved matters pending in appeal. Consequently, the impugned notice and proceedings were quashed and set aside.

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