Reopening of Assessment Quashed Due to Lack of Non-Disclosure Proof and Change of Opinion by Revenue Authority.

The HC allowed the petition, determining that the Revenue failed to demonstrate non-disclosure of material facts by the petitioner. The court found that the reopening of the assessment was based solely on a change of opinion. Consequently, the impugned notice dated 27th March 2021, the order dated 22nd March 2022, and related notices were quashed and set aside. The petition was allowed without any order as to costs.

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Issues Involved:
1. Full and true disclosure of material facts during the original assessment.
2. Reopening of assessment based on a 'change of opinion'.

Summary:

Issue 1: Full and True Disclosure of Material Facts
The court examined whether the petitioner failed to disclose fully and truly all material facts during the original assessment, which led to the finalization of the assessment order and income escaping assessment. The court noted that the notice under Section 148 of the Income-tax Act, 1961, was issued more than four years after the expiry of the relevant assessment year, making the proviso to Section 147 applicable. The court found that the reasons to believe, as stated in the notice, indicated no non-disclosure of material facts. The court highlighted that the petitioner had provided all necessary documents, including financial statements, Form No. 56F, and other relevant details during the original assessment. The court concluded that there was no failure on the part of the petitioner to make a full and true disclosure, thus answering the first issue in favor of the petitioner.

Issue 2: Reopening of Assessment Based on a 'Change of Opinion'
The court considered whether the reopening of the assessment was based on a 'change of opinion'. It was evident that the original order was passed based on all necessary information available at the time of the regular assessment. The court noted that the Assessing Officer (AO) had allowed deductions under Section 10AA of the Act after thorough examination in previous assessment years. The language of the notice and the order rejecting the petitioner's objections indicated that the reopening was based on a different view on the same set of facts. The court cited previous judgments, including Ananta Landmark Pvt. Ltd. v. Deputy Commissioner of Income Tax, which held that reopening based on a change of opinion is impermissible. The court concluded that the reopening of the assessment was merely based on a change of opinion, thus answering the second issue in favor of the petitioner.

Conclusion
The court allowed the petition, holding that the Revenue failed to show non-disclosure of facts by the petitioner and that the reason to believe there was escapement of income was purely based on a change of opinion. The impugned notice dated 27th March 2021, the order dated 22nd March 2022, and the consequential notices were quashed and set aside. The petition was allowed with no order as to costs.

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