Court quashes reassessment notices for lack of tangible material, exceeding jurisdiction.

The court held that the notices for reopening the assessment under Section 147/148 of the Income Tax Act were issued based on a mere change of opinion without tangible material, exceeding the Respondents' jurisdiction. The reassessment was deemed impermissible, and the court quashed the notices, granting relief to the Petitioners as per the prayer clauses without awarding costs.

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Issues Involved:
1. Reopening of assessment under Section 147/148 of the Income Tax Act, 1961.
2. Deduction of compensation paid under Section 48 of the Income Tax Act, 1961.
3. Allegation of non-disclosure of material facts.
4. Concept of "change of opinion" in tax reassessment.

Detailed Analysis:

1. Reopening of Assessment under Section 147/148:
The Petitioners filed their income tax returns for the Assessment Year 2016-2017, which were initially accepted by the Assessing Officer after a limited scrutiny. However, the Assessing Officer later issued notices under Section 148 to reopen the assessment, citing reasons related to the deduction of compensation paid. The Petitioners challenged these notices, arguing that there was no tangible material to justify the reopening and that it was merely a "change of opinion."

2. Deduction of Compensation Paid under Section 48:
The core issue revolved around the deduction of Rs. 1,64,45,000/- claimed by the Petitioners under Section 48 of the Income Tax Act. This amount was paid as compensation to previous buyers due to the cancellation of a sale agreement. The Assessing Officer initially allowed this deduction, but later questioned its validity, arguing that the compensation was not directly related to the transfer of the property and should not be deducted from the capital gains.

3. Allegation of Non-Disclosure of Material Facts:
The Respondents contended that the Petitioners had not disclosed the sale deed and the memorandum of understanding (MOU) during the initial assessment, which constituted fresh or tangible material sufficient for reopening the assessment. However, the court observed that there was no allegation of suppression or concealment of these documents in the reasons recorded at the time of issuing the notice for reopening the assessment.

4. Concept of "Change of Opinion":
The court emphasized that the reassessment was based on a mere change of opinion, which is not permissible. The court cited several precedents, including the Supreme Court's ruling in Commissioner of Income Tax Vs Kelvinator of India Ltd., which held that a mere change of opinion cannot justify reopening an assessment. The court reiterated that the Assessing Officer has no power to review his own order under the guise of reassessment.

Conclusion:
The court concluded that the impugned notices for reopening the assessment were issued in excess of the jurisdiction conferred upon the Respondents. The reassessment was based on a mere change of opinion, and there was no tangible material to justify the reopening. Consequently, the court quashed and set aside the impugned notices, making the rule absolute in terms of the prayer clauses (a) and (b) in both petitions. There was no order for costs in both petitions.

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