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Issues: Whether the notice under section 148 and the consequent reassessment order for the assessment year 2011-12 (Annexures-K and V) are legally valid, having regard to the requirement of tangible material / "reason to believe" and the prohibition against reopening based on mere change of opinion; and whether the impugned proceedings are barred by limitation.
Analysis: The Court examined the statutory framework governing reassessment, including the pre- and post-amendment regime of sections 147 to 151 of the Income-tax Act, 1961 and the safeguards introduced by section 148A. The Court applied the settled tests from Supreme Court authority (including Kelvinator) that reopening under section 147 requires tangible material and that reasons must have a live link to the formation of belief, and that reassessment cannot be based on mere change of opinion. The material on record (original notices, replies, and the assessment order) was evaluated to determine whether relevant facts were previously disclosed and whether the reasons recorded for reopening established non-disclosure of material facts or disclosed new tangible material. The Court also considered the time-limitation scheme in section 149 and the proviso to section 147 as relevant to reopening beyond the limitation period.
Conclusion: The impugned notice dated 30.03.2018 (Annexure-K) and the reassessment order dated 26.10.2018 (Annexure-V) are illegal and without jurisdiction. The reasons recorded do not disclose tangible material or a live link justifying reopening and amount to impermissible change of opinion. Consequently, the impugned notice and order are quashed and the petition is allowed in favour of the assessee.
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