Court quashes notice for escaped income assessment, emphasizing full disclosure to avoid challenges.

The court quashed a notice for escaped income assessment issued beyond the limitation period for Assessment Year 1998-99, as it was based on a change of opinion by the Assessing Officer rather than new evidence of escaped income. The court granted a writ of Certiorari, emphasizing the significance of disclosing all material facts during assessment to prevent challenges arising from a change of opinion.

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Issues involved: Impugning a notice for escaped income assessment under Section 147 of the Income Tax Act, 1961 for Assessment Year 1998-99.

Summary:
The petitioner challenged a notice issued by Respondent No. 1 regarding escaped income assessment for the Assessment Year 1998-99. The notice was issued after the four-year limitation period, triggering the proviso to Section 147 of the Act, requiring income to have escaped assessment due to the assessee's failure to disclose material facts. The reasons to believe for reopening the assessment indicated a change of opinion by the Assessing Officer (A.O.), as the issue had been disclosed and explained during the assessment proceedings. The A.O. had reduced the deduction under Section 80-O based on expenditure incurred in India, similar to previous years' actions. The A.O. had considered the submissions and bills provided by the assessee during the assessment proceedings, contradicting the reasons to believe that bills were not produced. A further objection raised by Respondent No. 1 regarding an amendment to the law during the assessment year was countered by evidence of the assessee's compliance with the amendment. The Court held that the re-opening of the assessment was unjustified, as it was based on a change of opinion rather than any new evidence of escaped income. The Court granted the writ of Certiorari, quashing the impugned notice and reassessment proceedings for the Assessment Year 1998-99.

The judgment highlights the importance of disclosing all material facts during assessment proceedings to avoid challenges based on a change of opinion by the Assessing Officer.

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