Reassessment for change of opinion fails where reopening rests only on material already examined in the original assessment.

Reassessment was invalid where the reopening rested only on material already examined in the original assessment and no fresh tangible material was shown to justify a belief of escapement of income. The recorded reasons relied on the existing assessment record, including foreign currency translation reserve and interest accrued but not due, so the attempt amounted to an impermissible change of opinion rather than a lawful reassessment. As the reassessment lacked jurisdiction, the additions made pursuant to it were not adjudicated on merits and were treated as academic. The assessee's appeals were allowed and the Revenue's appeal failed.

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Issues: (i) Whether the reassessment proceedings for the assessment years under appeal were valid when the notices were founded only on material already available on record and no fresh tangible material was shown; (ii) whether the additions on merits survived after the reassessment was quashed.

Issue (i): Whether the reassessment proceedings for the assessment years under appeal were valid when the notices were founded only on material already available on record and no fresh tangible material was shown.

Analysis: The reasons recorded for reopening showed reliance on the original assessment record and not on any external or newly discovered information. The reassessment was sought on matters which had already been available to the Assessing Officer during the regular assessment, including the treatment of foreign currency translation reserve and interest accrued but not due. In such a situation, reopening amounts to a review of the completed assessment and not a permissible reassessment. The presence of a live link between fresh tangible material and the formation of belief was absent, and the reopening was therefore hit by the prohibition against change of opinion.

Conclusion: The reassessment proceedings were invalid and were quashed in favour of the assessee.

Issue (ii): Whether the additions on merits survived after the reassessment was quashed.

Analysis: Once the reassessment itself was held to be without jurisdiction, the challenges to the additions made in consequence of that reassessment no longer required adjudication.

Conclusion: The merits of the additions were not adjudicated and stood rendered academic.

Final Conclusion: The reassessment for both assessment years was set aside, the assessee's appeals were allowed, and the Revenue's appeal failed.

Ratio Decidendi: Reassessment cannot be sustained where it is founded only on material already examined in the original assessment and no fresh tangible material exists to justify a belief of escapement of income.

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