Court quashes notice under Section 148, emphasizing limited reassessment power. Objections upheld, reopening deemed unwarranted.

The court allowed the petition, quashing the notice under Section 148 and rejecting the objections raised by the petitioner. The judgment emphasized that the Assessing Officer's power is limited to reassessment, not review, and mere change of opinion is not a valid reason for reopening. The petitioner's objections were upheld, and the impugned notice was deemed unwarranted.

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Issues involved:
The judgment involves challenging a notice issued under Section 148 of the Income Tax Act, 1961 for Assessment Year 2017-18 by a Co-operative Society engaged in banking and allied activities. The petitioner contested the re-assessment of total income based on the treatment of Long Term Capital Gain (LTCG) and Short Term Capital Gain (STCG) from the sale of securities.

Details of the Judgment:

Issue 1: Reopening of Assessment
The petitioner challenged a notice under Section 148 for Assessment Year 2017-18, citing lack of new material for re-assessment. The respondent relied on Circular No. 665 of the CBDT from 1993, arguing that gains from securities should be treated as business income. The petitioner contended that the Assessing Officer had already considered LTCG and STCG during the initial assessment.

Issue 2: Legal Interpretation
The petitioner argued that the respondent's reasons for reopening lacked a live link to new material and constituted a mere change of opinion. The petitioner referenced Circular No. 665 and the treatment of securities by banks as stock-in-trade or investment. The Assessing Officer had allowed the LTCG and STCG based on the sale of Government Securities as investments, not stock-in-trade.

Issue 3: Judicial Precedent
Citing the case of Commissioner of Income Tax versus Kelvinator of India Limited, the petitioner contended that a mere change of opinion cannot justify reassessment. The court found that the reasons recorded by the respondent did not provide sufficient grounds for reopening the assessment within the four-year period.

Conclusion:
The court allowed the petition, quashing the notice under Section 148 and rejecting the objections raised by the petitioner. The judgment emphasized that the Assessing Officer's power is limited to reassessment, not review, and mere change of opinion is not a valid reason for reopening. The petitioner's objections were upheld, and the impugned notice was deemed unwarranted.

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