Validity of Income Tax Act Section 148 Notices Upheld for Reopening Assessments

The court upheld the validity of notices issued under section 148 of the Income Tax Act for reopening assessments for the years 2016-2017 and 2017-2018. It was determined that the reopening was justified based on new material from the insight portal, indicating the petitioner's involvement in a scheme not previously known during the initial assessment. The court emphasized that the Assessing Officer's subjective satisfaction, supported by objective assessment, justified the reopening. The court also found the approval under section 151 to be adequate, based on an objective evaluation of the new information, dismissing the petitions and affirming the consequential orders.

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Issues Involved:
1. Validity of notices issued under section 148 of the Income Tax Act for reopening assessments for the years 2016-2017 and 2017-2018.
2. Whether the reopening of assessments was based on new material or merely a change of opinion.
3. Adequacy of the approval under section 151 of the Income Tax Act.

Detailed Analysis:

1. Validity of Notices Issued Under Section 148:
The primary issue was whether the respondent was justified in issuing notices under section 148 of the Income Tax Act for reopening the assessments for the years 2016-2017 and 2017-2018. The petitioner argued that there was no fresh material available to the Assessing Officer, and the reopening was based on a mere change of opinion. The court noted that the Assessing Officer received information from the "insight portal" indicating that the petitioner was involved in a lucky draw networking scheme, which was not available during the initial assessment. The court held that the expression "reason to believe" includes the subjective satisfaction of the Assessing Officer based on objective assessment, and the new information justified the reopening of the assessments.

2. New Material vs. Change of Opinion:
The petitioner contended that the reopening was based on a change of opinion since the same Assessing Officer had previously scrutinized the returns and issued the assessment orders. The court rejected this argument, stating that the new information from the insight portal constituted fresh material that was not available during the original assessment. The court emphasized that the term "reason to believe" should not be equated with the final conclusion of escapement of income but rather the cause or justification for reopening. The court cited the case of Assistant Commissioner of Income Tax Vs. Rajesh Jhaveri Stock Brokers P. Ltd., which clarified that the formation of belief by the Assessing Officer is within the realm of subjective satisfaction and does not require final ascertained facts at the initiation stage.

3. Adequacy of Approval Under Section 151:
The petitioner argued that the approval for reopening under section 151 of the Act lacked due application of mind. The court found this argument unconvincing, noting that the approval was based on the same insight portal information that led to the issuance of the notices. The court held that the material was examined and assessed objectively, and the approval could not be construed as lacking due application of mind. The court reiterated that the statutory authority's decision-making powers should not be taken over by the court, as established in D.N. Jeevaraj Vs. Chief Secretary, Government of Karnataka.

Conclusion:
The court dismissed the petitions, affirming the validity of the notices issued under section 148 and the consequential orders. The court held that the reopening of the assessments was justified based on new material (insight portal information) and not merely a change of opinion. The approval under section 151 was found to be adequate and based on an objective assessment of the new information. The court also deprecated the practice of relying on multiple repetitive judgments, emphasizing that a single relevant judgment suffices to support a legal argument.

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