Reopening of assessment cannot be sustained as mere change of opinion where original scrutiny fully considered disclosed material; notice quashed.

Reopening under Section 148 was quashed because the asserted reasons relied on either an already deleted clerical-error addition or on cash deposits that had been specifically examined and accepted in the original scrutiny assessment; the court treated the reassessment attempt as a prohibited change of opinion where material facts were fully disclosed and considered, and therefore the notice dated 12.01.2021 and the order disposing objections dated 02.12.2021 were set aside in favour of the assessee.

---

---

Issues: Whether the notice under Section 148 of the Income-tax Act, 1961 and the order disposing of objections to the reasons for reopening the assessment for A.Y. 2013-14 are legally sustainable.

Analysis: The reopening notice relied on two primary reasons: (i) an alleged clerical error in change in inventory claimed to cause underassessment of Rs.35,752; and (ii) alleged undisclosed cash deposits totalling Rs.5,11,47,000 said to be unexplained cash credits. The assessment proceedings had been a scrutiny assessment in which specific queries about the cash deposits were raised, responses were furnished by the assessee and the cash book was produced for verification. The Assessing Officer accepted the explanations and made no addition in the original assessment under Section 143(3). The first ground (clerical error) has been rendered otiose by the deletion of the related addition by the appellate tribunal. The remaining ground pertains to the same cash deposits that were specifically examined and accepted in the original scrutiny assessment. Reopening on that basis amounts to a mere change of opinion by the revenue, which cannot by itself sustain reassessment where material facts were fully disclosed and considered in the original proceedings.

Conclusion: The notice under Section 148 of the Income-tax Act, 1961 dated 12.01.2021 and the order disposing of objections dated 02.12.2021 are quashed; outcome is in favour of the assessee.

---