Court sets aside reassessment due to lack of new material and change of opinion by Assessing Officer. Petition allowed.

The court found that the jurisdictional conditions for reopening the assessment were not met, as there was no new tangible material and the reassessment was based on a change of opinion by the Assessing Officer. The petition was allowed, and the order rejecting objections to the notice and the notice itself were set aside.

---

---

Issues Involved:
1. Validity of the notice under section 148 of the Income Tax Act, 1961.
2. Jurisdictional requirements for reopening an assessment.
3. Presence of new tangible material for reassessment.
4. Allegation of change of opinion by the Assessing Officer.

Detailed Analysis:

1. Validity of the notice under section 148 of the Income Tax Act, 1961:
The petitioner challenged the notice dated 31st March 2021 issued under section 148 for reopening the assessment for the year 2014-15, alleging that the Assessing Officer (AO) had reasons to believe that the income chargeable to tax had escaped assessment. The petitioner also contested the order dated 8th February 2022, which rejected their objections to the notice.

2. Jurisdictional requirements for reopening an assessment:
The petitioner argued that the jurisdictional requirement for reopening the assessment had not been satisfied. Specifically, the AO did not state in the recorded reasons that there was any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. This is a critical jurisdictional precondition that was not met, rendering the reassessment proceedings unsustainable.

3. Presence of new tangible material for reassessment:
The petitioner contended that there was no new tangible material with the AO to support his 'reason to believe.' The reassessment proceedings were deemed a change of opinion since the AO had already scrutinized the transactions during the original assessment. The AO relied on information from the Investigation Wing without verifying whether the issue had been previously addressed or disclosed by the assessee.

4. Allegation of change of opinion by the Assessing Officer:
The court noted that the validity of reassessment proceedings must be tested based on the reasons recorded by the AO, which cannot be supplemented by subsequent pleadings. The assessment was sought to be reopened beyond four years from the end of the relevant assessment year, necessitating the AO to show that there was a failure on the part of the petitioner to disclose fully and truly all material facts necessary for the assessment. The recorded reasons did not indicate any such failure, leading to the conclusion that the AO had arbitrarily initiated the reassessment proceedings.

The court referenced the judgment in Hindustan Lever Ltd. v. R. B. Wadkar, which emphasized that the reasons recorded must be clear, unambiguous, and based on evidence, establishing a vital link between the reasons and the evidence. The court found that the AO had not satisfied this requirement.

Additionally, the court cited Aroni Commercials Ltd. v. Deputy Commissioner of Income-tax, which held that once a query is raised and replied to during the assessment proceedings, it is presumed that the AO has considered the issue. Any subsequent reassessment on the same issue would constitute a change of opinion, which is not a valid ground for reopening an assessment.

The Supreme Court's decision in Commissioner of Income Tax v. Kelvinator of India Ltd. was also referenced, which stated that the AO has no power to review but can reassess based on tangible material indicating escapement of income. The reasons must have a live link with the formation of the belief, which was missing in this case.

Conclusion:
The court concluded that the jurisdictional conditions were not met, and the reassessment proceedings were based on a change of opinion. Consequently, the petition was allowed, and the impugned order dated 8th February 2022 and the notice dated 31st March 2021 under section 148 were set aside. No order as to costs was made.

---