2026 (3) TMI 1419 - HC - Income Tax

Reassessment based on a mere change of opinion fails when the original scrutiny already examined the same deduction claim.

The Bombay HC held that reassessment could not be sustained where the deduction claim had already been specifically examined in the original scrutiny ... Reassessment of assessment - review v/s reopening - change of opinion - Audit objection as basis for reopening - Reopening on same material - permission to re-look or re-examine the documents that were filed and considered by him in the original assessment proceedings - deduction u/s 80G in respect of expenses incurred on Corporate Social Responsibility (CSR) is allowable. HELD THAT: - The Court found that, during the original assessment, the claim for deduction under Section 80G had been specifically scrutinised; queries were raised, replies and supporting documents were furnished, and the claim was thereafter substantially allowed with only a minor disallowance. The return itself disclosed that the CSR expenditure disallowed in computation had been claimed as donation under Section 80G, and those materials were already before the assessing authority. It is settled law that the proceedings under Section 148 of the IT Act cannot be initiated to review the earlier stand adopted by the assessing officer. The assessing officer cannot initiate reassessment proceedings to have a re-look or re-examine the documents that were filed and considered by him in the original assessment proceedings. In these circumstances, the subsequent reopening founded on the audit memo did not rest on any new tangible material, but merely sought to revisit the earlier view taken on the same record. The Court held that reassessment cannot be used as a power of review, and reopening on such basis amounts to a mere change of opinion, which is impermissible under the scheme of Section 147. [Paras 20, 23, 24, 25, 28] The impugned notice under Section 148A(b), the order under Section 148A(d), and the notice under Section 148 were quashed on the sole ground that the reassessment proceedings were based on a mere change of opinion; all other grounds were left open. Final Conclusion: The Court allowed the writ petition and quashed the impugned reassessment proceedings for Assessment Year 2018-19, holding that the reopening was founded only on a change of opinion on material already examined in the original assessment. All other grounds raised in challenge to the reassessment were expressly kept open. Issues: Whether reassessment proceedings could be sustained when the deduction under Section 80G had already been examined and allowed in the original scrutiny assessment and the reopening was founded on an audit objection on the same material.Analysis: The original assessment showed that the deduction claim had been specifically scrutinised through queries, responses, and supporting documents. The relevant CSR-related donations were disclosed in the return, examined during assessment, and only a minor disallowance was made. The reassessment was initiated on the very same material after the audit wing expressed a different view. Reassessment cannot be used to review or re-examine material already considered in the original assessment, and the absence of any fresh tangible material meant the reopening was based only on a different opinion on the same facts.Conclusion: The reassessment proceedings were invalid as they amounted to a mere change of opinion. The impugned notice, order, and consequential notice were quashed in favour of the assessee.Final Conclusion: The writ petition succeeded and the reassessment action was set aside because the jurisdictional precondition for reopening was not met.Ratio Decidendi: A concluded assessment cannot be reopened on the same material merely because the Revenue later adopts a different view, and an audit objection by itself does not justify reassessment without fresh tangible material.