Reopening based on audit objection and old records was held invalid as a mere change of opinion.

Reassessment under sections 147 and 148 was invalid where the reopening was based only on a Revenue audit objection and material already examined in the original scrutiny assessment under section 143(3). The recorded reasons showed no fresh tangible material or independent satisfaction; reopening on the same facts amounted to a mere change of opinion. The statutory requirement of reason to believe was therefore not met, as an audit objection cannot replace the assessing authority's own quasi-judicial satisfaction. The reassessment notice was quashed and the reassessment order was set aside in favour of the assessee.

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Issues: Whether reassessment proceedings initiated under sections 147 and 148 were valid when they were based solely on a Revenue audit objection and material already available on record, without fresh tangible material or independent satisfaction.

Analysis: The original assessment had been completed under section 143(3) after scrutiny of the assessee's records and disclosures. The reasons recorded for reopening showed that the formation of belief was founded on the same material already on record and on the audit objection, without any new factual foundation. In such circumstances, reopening amounts to a mere change of opinion. The statutory requirement of reason to believe cannot be satisfied by a review of an already examined issue, and an audit objection by itself does not substitute for independent judicial or quasi-judicial satisfaction for reassessment.

Conclusion: The reassessment notice was invalid and the consequent reassessment order was quashed. The issue was decided in favour of the assessee.

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