Reassessment based on change of opinion was invalid where the Section 10AA deduction had already been examined and allowed.

Reopening of scrutiny assessment under Section 148 was invalid where the Section 10AA deduction had already been specifically examined and allowed under Section 143(3). The recorded reasons relied on a reappraisal of the same material, not fresh tangible material, and the first reason was contrary to settled law on set-off of losses, the second depended on a later condition inapplicable to the year, and the third ignored that the claim had been disclosed and considered in the original assessment. The reassessment was a mere change of opinion and an impermissible review, so the notice and consequential orders were without jurisdiction and quashed.

---

---

Issues: Whether reassessment proceedings initiated under Section 148 of the Income-tax Act, 1961 for Assessment Year 2017-18 were valid when the original assessment under Section 143(3) had already examined and allowed the deduction under Section 10AA of the Income-tax Act, 1961.

Analysis: The deduction under Section 10AA had been specifically queried during the original scrutiny assessment, the assessee had furnished details and explanations, and the claim was accepted under Section 143(3). The recorded reasons for reopening did not rest on any fresh tangible material but only on a reappraisal of the same record. The first reason, based on setting off losses of ineligible units before granting Section 10AA deduction, was contrary to the binding legal position. The second reason, relating to bringing foreign exchange into India within six months, depended on a condition introduced only later and was inapplicable to the relevant year. The third reason, that the claim was made through manual computation rather than in the specified return schedule, was also unsustainable because the claim had in fact been disclosed and considered in the original assessment. The reopening was therefore a mere change of opinion and an impermissible review of the completed assessment.

Conclusion: The reassessment notice and the consequential orders were held to be without jurisdiction and were quashed.

---