Income Tax Notice Invalid: Change of Opinion Barred. Court rules in favor of petitioner.

The court held that the notice issued under section 148 of the Income Tax Act for reopening the assessment was illegal as it amounted to a change of opinion by the Assessing Officer, which is impermissible. The court found that all material facts necessary for assessment were disclosed during the original assessment, and there was no failure on the part of the petitioner. Consequently, the court set aside the notice and the order disposing of objections against it, ruling in favor of the petitioner.

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Issues Involved:
1. Validity of notice under section 148 of the Income Tax Act, 1961 for reopening assessment.
2. Alleged failure to disclose fully and truly all material facts necessary for assessment.
3. Change of opinion by the Assessing Officer.
4. Jurisdiction of the Assessing Officer to reopen assessment beyond four years.

Issue-wise Detailed Analysis:

1. Validity of Notice under Section 148:
The petitioner challenged the notice dated 13.03.2018 issued under section 148 of the Income Tax Act, 1961 for reopening the assessment for the Assessment Year 2011-2012. The petitioner argued that the reasons for reopening were already discussed during the original assessment proceedings under section 143(3) and that the issuance of the notice was a mere change of opinion by the Assessing Officer, which is not permissible under the Act.

2. Alleged Failure to Disclose Fully and Truly All Material Facts:
The petitioner contended that all relevant details, including those related to the Guarantee Commission, excess interest payment, disallowance under section 14A, and income reconciliation as per 26AS, were provided during the original assessment proceedings. The Assessing Officer had considered these details and passed the assessment order without making any additions. Therefore, there was no failure on the part of the petitioner to disclose fully and truly all material facts necessary for assessment.

3. Change of Opinion by the Assessing Officer:
The court observed that the grounds for reopening the assessment, such as payment of Guarantee Commission, excess interest over 12%, disallowance under section 14A, and income reconciliation, were already considered during the original assessment proceedings. The court held that reopening the assessment on the same grounds amounts to a change of opinion, which is not permissible. The concept of "change of opinion" was emphasized as an in-built test to check the abuse of power by the Assessing Officer, as laid down by the Supreme Court in the case of CIT v. Kelvinator of India Ltd.

4. Jurisdiction of the Assessing Officer to Reopen Assessment Beyond Four Years:
The court noted that to confer jurisdiction to the Assessing Officer to reopen the assessment beyond four years, two conditions must be satisfied: the Assessing Officer must have reason to believe that income has escaped assessment, and this must be due to the failure of the assessee to disclose fully and truly all material facts necessary for assessment. In this case, the court found that all material facts were available with the Assessing Officer during the original assessment, and there was no failure on the part of the petitioner. Therefore, the reopening of the assessment was based on a mere change of opinion and was not justified.

Conclusion:
The court concluded that the impugned notice dated 13.03.2018 issued under section 148 of the Act for reopening the assessment for the Assessment Year 2011-2012 was illegal and liable to be set aside. Consequently, the order dated 3.10.2018 disposing of the objections against the notice was also set aside. The petition was allowed, and the rule was made absolute to the aforesaid extent, with no order as to costs.

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