Reassessment under section 147 after amendment: change of opinion alone will not invalidate reopening when reason to believe exists.

Reassessment under section 147 was examined in light of the post-1 April 1989 amendment, under which the Assessing Officer needs only reason to believe that income has escaped assessment. The earlier, stricter requirement tied to full and true disclosure was treated as governing the pre-amendment regime, so the assessee's reliance on that law was misplaced. On the facts, reopening could not be rejected merely as a change of opinion on the same material. Reopening under section 147 was therefore justified, and the matter was remitted for consideration on merits by the first appellate authority.

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Issues: Whether reassessment under section 147 of the Income-tax Act, 1961 was valid when the earlier assessment had allowed the deduction and no fresh material was shown to have come to the Assessing Officer.

Analysis: The scope of section 147 after the amendment with effect from 1-4-1989 was considered in contrast with the pre-amendment provision. The amended provision requires only that the Assessing Officer have reason to believe that income chargeable to tax has escaped assessment, and the earlier requirement of omission or failure to disclose fully and truly all material facts is no longer the governing condition in the same form. The earlier Supreme Court decision relied upon by the assessee was treated as arising under the pre-amended law. The Tribunal held that, on the facts, reopening could not be invalidated merely on the ground of change of opinion in the manner suggested by the assessee.

Conclusion: Reopening under section 147 was held to be justified.

Final Conclusion: The Revenue succeeded on the jurisdictional issue, and the matter was sent back for decision on merits by the first appellate authority.

Ratio Decidendi: After the 1-4-1989 amendment to section 147, reassessment may be initiated where the Assessing Officer has reason to believe that income has escaped assessment, and the earlier assessment cannot be reopened only on the basis that a different view is now taken on the same material if the statutory preconditions are otherwise met.

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