Court Quashes Notice to Reopen 2017-18 Tax Assessment; Change of Opinion Violates Section 10 AA Principles

The court allowed the petition, quashing the notice proposing to reopen the completed assessment for Assessment Year 2017-18 and the order disposing of objections. It ruled in favor of the petitioner, finding that the officer's decision to change his opinion regarding the exemption under Section 10 AA of the Income Tax Act was unjustified and contrary to established legal principles, particularly referencing the SC decision in CIT Vs. Kelvinator of India Ltd. The court deemed the notice based on a "change of opinion" rather than any substantive new information or legal basis.

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Issues involved:
The challenge in the petition is to the notice proposing to reopen the completed assessment for Assessment Year 2017-18 and the order disposing of objections. The main issue is whether the petitioner was eligible for exemption under Section 10 AA of the Income Tax Act.

Assessment of the completed assessment:
The petitioner, a company, filed its return of income for Assessment Year 2017-18 and later filed a revised return. The petitioner claimed exemption under Section 10 AA of the Act for a foreign exchange fluctuation gain treated in the capital account. The respondent initially accepted this claim and passed an assessment order. However, a notice was issued proposing that the petitioner was not eligible for the exemption, leading to the challenge in the petition.

Change of opinion and retrospective amendment:
The petitioner argued that the notice was based on a "change of opinion" as the same officer who initially accepted the claim later sought to revise it. The respondent contended that the petitioner revised its return due to a retrospective amendment to the Finance Act, not just a change of opinion. The court noted that the officer's actions were contrary to established principles, citing the Supreme Court decision in CIT Vs. Kelvinator of India Ltd.

Judgment:
The court allowed the petition, quashing the impugned notice and the order disposing of objections. The court found that the officer's decision to change his opinion abruptly was unjustified and not in line with legal principles, leading to the ruling in favor of the petitioner.

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