Change of opinion bars reassessment when the same issue was already queried and answered in original assessment proceedings.

Reassessment under Section 148 was impermissible where the Assessing Officer had already raised a specific query on the warranty provision during the original Section 143(3) assessment, called for information, and received a reply. The issue was therefore treated as having been examined in the original proceedings, even though the assessment order did not expressly discuss it. Reopening on the same material amounted to a mere change of opinion and could not supply the requisite reason to believe that income had escaped assessment. The reassessment notice was quashed in favour of the assessee.

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Issues: Whether reassessment under Section 148 of the Income-tax Act, 1961 was valid when the same issue had been queried during the original assessment under Section 143(3) and the assessee had responded to it.

Analysis: The assessment records showed that the Assessing Officer had specifically examined the provision for warranty during the original assessment proceedings. A query on that very issue had been raised, information had been called for, and a reply had been furnished. In such circumstances, the issue must be treated as having been considered in the original assessment, even if the assessment order did not expressly discuss it. Reopening on the same material amounted to a change of opinion, and such change cannot furnish the requisite reason to believe that income had escaped assessment.

Conclusion: The reassessment notice was unsustainable and was quashed. The issue was decided in favour of the assessee.

Final Conclusion: The Court held that reassessment cannot be initiated merely because the Assessing Officer later adopts a different view on an issue already examined in the original assessment proceedings.

Ratio Decidendi: Where a specific query on an issue is raised in the original assessment and the assessee responds, reassessment on the same issue is impermissible if it is founded only on a change of opinion.

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