Invalid reassessment quashed by High Court due to lack of new material, deeming it impermissible change of opinion.

The High Court held that the reassessment proceedings were unsustainable as the Assessing Officer did not have any new material or failure to disclose facts by the petitioner during the regular assessment. The Court deemed the reassessment as a change of opinion, which is impermissible. It was found that the jurisdictional conditions under section 147 of the Income Tax Act were not met, leading to the quashing of the order of assessment, notice of demand, and penalty notice. No costs were awarded in this judgment.

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Issues:
Challenge to notice under section 148 of the Income Tax Act and order of assessment under section 147 read with section 144/144B as bad and illegal.

Analysis:
The petitioner challenged the notice under section 148 of the Income Tax Act and the order of assessment dated 22nd March 2022. The petitioner's return of income for the assessment year 2014-15 was processed under section 143(3) by the Assessing Officer. The issues related to the petitioner's investment in NCL Research and Financial Limited were examined, leading to an addition of Rs.27,27,657. The AO found the investment in NCL Research and Financial Limited to be bogus, based on the information collected. The AO initiated penalty proceedings under section 271(1)(c) due to inaccurate particulars of income provided by the assessee.

The notice under section 148 dated 30th March 2021 sought to reopen the assessment for the assessment year 2014-15, stating that income chargeable to tax had escaped assessment. The reasons supplied for reopening the assessment highlighted discrepancies in the purchase and sale of shares of NCL Research and Financial Limited. The AO concluded that the entire transaction was part of an accommodation entry, leading to unexplained investment by the assessee. The AO held that the long term capital gain claimed by the assessee was unexplained income from other sources, not capital gain.

The petitioner objected to the reopening, citing that the issue had already been considered during the initial assessment. The AO, however, proceeded with the reassessment and added an amount under 'income from other sources.' The main contention was that the reassessment proceedings were unsustainable as the AO reviewed the earlier order passed under section 143(3) of the Act.

The High Court analyzed the case and found that the reassessment proceedings were unsustainable. The Court highlighted that the AO did not present any new material or failure to disclose facts by the petitioner during the regular assessment. The Court emphasized that the reassessment was based on a change of opinion, which is impermissible in law. Citing previous judgments, the Court held that the jurisdictional conditions under section 147 of the Act were not satisfied, rendering the order of assessment, notice of demand, and penalty notice quashed. No costs were awarded in this judgment.

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