Reopening of assessment upheld where fresh material on property undervaluation justified reason to believe escaped income existed.

Reopening of assessment under Section 147 was treated as valid where fresh information on undervaluation of immovable property emerged after scrutiny assessment under Section 143(3). The sale deed value, stamp duty valuation and proceedings under Section 47A of the Indian Stamp Act were treated as new material showing a possible shortfall in long-term capital gains, satisfying the reason to believe requirement. The challenge based on change of opinion was rejected because the material had not been considered in the original assessment, and the reassessment was upheld.

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Issues: Whether reopening of assessment under Section 147 of the Income-tax Act, 1961 on the basis of audit objection and additional information regarding undervaluation of immovable property was valid, or whether it was barred as a mere change of opinion.

Analysis: The original assessment had been completed under Section 143(3) of the Income-tax Act, 1961 after scrutiny of the assessee's disclosures. The reopening was founded on information that the sale deed value, stamp duty valuation, and the proceedings under Section 47A of the Indian Stamp Act revealed a possible undervaluation of the property and a corresponding shortfall in long-term capital gains. These facts were treated as new material which had not been considered in the original assessment. On that basis, the statutory requirement of reason to believe under Section 147 was held to be satisfied and the challenge based on change of opinion was rejected.

Conclusion: The reopening under Section 147 of the Income-tax Act, 1961 was held to be valid and sustainable, against the assessee.

Final Conclusion: The reassessment proceedings were upheld, and the writ petitions challenging the reopening and the consequential assessment did not succeed.

Ratio Decidendi: Reassessment is permissible when subsequent information reveals material not considered in the original scrutiny and gives rise to a reason to believe that income has escaped assessment; it is not invalid merely because the assessee had earlier disclosed related facts.

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