Court quashes notice and order due to lack of approval and valid reasons for reopening.

The court allowed the petition, quashing the notice and order, citing the lack of proper approval and the absence of valid reasons for reopening.

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Issues involved:
1. Amendment of petition post amalgamation with another company.
2. Reopening of assessment under Section 147 of the Income Tax Act.
3. Approval under Section 151 for issuing notice under Section 148.
4. Justification for reopening based on alleged escapement of income.
5. Assessment of specific issues related to capital payment, depreciation, and prior period expenses.

Amendment of Petition Post Amalgamation:
The petitioner, a pharmaceutical company, sought leave to amend the petition after amalgamating with another company. The amendment was allowed as it did not change the nature of the petition. The petitioner had filed returns for A.Y.-2006-2007, which were later revised. The scrutiny assessment was completed, and an order was passed assessing the total income. Subsequently, the petitioner received a notice for reopening under Section 147, which led to objections being filed and rejected by the respondent.

Approval for Reopening Notice:
The petitioner challenged the approval granted under Section 151 for issuing the notice under Section 148. The court found discrepancies in the approval date and the date of reasons recorded for reopening. The respondent's explanation was rejected, leading to the conclusion that the sanction was not properly obtained, warranting the quashing of the notice.

Reopening of Assessment and Alleged Escapement of Income:
The petitioner argued that the reopening, done more than four years after the relevant assessment year, should be barred unless there was a failure to disclose material facts. The reasons for reopening were scrutinized, and it was found that there was no indication of non-disclosure or a valid basis for reopening. The court held that a change of mind cannot justify reopening if all points were considered during the assessment proceedings.

Assessment of Specific Issues:
The reasons for reopening raised three issues related to capital payment, depreciation, and prior period expenses. The court analyzed each issue in detail. For the capital payment, the court noted that details were provided during the assessment proceedings, and the issue was considered. Regarding depreciation, the court found no non-disclosure as the assessment order contained a computation of depreciation. The court cited legal precedents to emphasize that a mere error does not justify reopening. For prior period expenses, the petitioner had explained the treatment during the assessment proceedings, indicating that the issue was already considered. The court concluded that change of opinion is not a valid reason to reopen assessments.

Judgment:
The court allowed the petition, quashing the notice and order, citing the lack of proper approval and the absence of valid reasons for reopening. The petition was disposed of accordingly.

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