Reopening of assessment upheld where registered sale deed in the relevant year supported reason to believe that income had escaped assessment.

A completed assessment may be reopened where the transfer of immovable property was not completed by a registered instrument in the earlier year and the registered sale deed was executed only in the relevant assessment year. The earlier scrutiny assessment did not bar reassessment as a mere change of opinion because the unregistered sale agreement and power of attorney did not effect title transfer, and the Assessing Officer had recorded reason to believe that income had escaped assessment. The writ challenge to the reopening notice therefore failed and the reassessment was upheld.

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Issues: Whether the notice issued for reopening the completed assessment under Section 147 of the Income-tax Act, 1961 was liable to be quashed on the ground of change of opinion and absence of reason to believe, in the context of an unregistered sale agreement, power of attorney, and a later registered sale deed.

Analysis: The petitioner had relied on an earlier scrutiny assessment to contend that the transaction relating to immovable property had already been examined and that reopening was merely a change of opinion. The Court held that an unregistered sale agreement and power of attorney did not effect a completed transfer of title, and that the later registered sale deed in the relevant assessment year furnished a basis for the Assessing Officer to form a belief that income chargeable to tax had escaped assessment. The Court also noted that the reopening reasons and the order disposing of objections were supported by the statutory framework governing reassessment and by the principle that writ interference at the notice stage is limited where the authority has recorded reasons to believe.

Conclusion: The reopening notice was upheld and the challenge to reassessment failed.

Ratio Decidendi: Where a registered conveyance is executed only in the relevant assessment year, the Assessing Officer may reopen a completed assessment on the basis of reason to believe that income has escaped assessment, and an earlier scrutiny cannot bar reopening as a mere change of opinion when the transfer was not completed by a registered instrument.

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