Court sets aside notice under Income Tax Act, citing impermissible change of opinion.

The Court allowed the Petition, setting aside the notice issued under Section 148 of the Income Tax Act, 1961. The Court found that the reasons for reopening the assessment constituted a clear case of impermissible change of opinion, as the issue had already been considered in the original assessment order and in previous revision proceedings under Section 263. The Court emphasized the importance of adhering to legal procedures and prohibiting assessments based on mere changes of opinion, underscoring the need for assessing officers to act in accordance with the law.

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Issues:
1. Validity of notice issued under Section 148 of the Income Tax Act, 1961 for assessment year 2008-09.
2. Grounds for reopening assessment based on profit from the sale of investments.
3. Challenge to the notice on grounds of change of opinion and previous revision proceedings under Section 263 of the Act.

Analysis:
1. The Petitioner challenged the notice issued under Section 148, contending that the reasons for reopening were recorded after the notice was issued, which should render the notice invalid. Additionally, the Petitioner argued that the same issue was already considered during the assessment proceedings and the assessment order discussed the matter, indicating a change of opinion in reopening the assessment. Moreover, the subject matter of the reasons for reopening was also part of revision proceedings under Section 263, which were subsequently dropped. The Petitioner asserted that the assessing officer cannot reopen the assessment on the same issue after revision proceedings.

2. The Respondent argued that the profit made on flats by the Petitioner in the real estate business should be treated as stock in trade and the profit from the sale of flats should be considered as business receipts rather than capital gains, aligning with the assessing officer's stance for reopening the assessment based on this premise.

3. The Court analyzed the contentions and found merit in the Petitioner's arguments. It noted that the assessing officer had already considered the issue of profit on the sale of investments in the original assessment order, disallowing certain expenses and adding them back to the total income. The Court concluded that the grounds for reopening the assessment constituted a clear case of change of opinion, which is impermissible. Additionally, the Commissioner's initiation of revision proceedings under Section 263 on the same issue, followed by their withdrawal, further supported the Court's decision that the assessing officer could not validly reopen the assessment based on the same issue.

4. Ultimately, the Court allowed the Petition, quashing and setting aside the notice dated 28th March, 2013 issued under Section 148 of the Income Tax Act, 1961. The Court's decision was based on the findings that the reasons for reopening the assessment were not valid due to being a result of a change of opinion and having been subject to previous revision proceedings under Section 263, which were subsequently dropped.

5. The judgment highlights the importance of adherence to legal procedures and the prohibition against reopening assessments based on a mere change of opinion, emphasizing the need for assessing officers to ensure the validity and legality of their actions in accordance with the provisions of the Income Tax Act, 1961.

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