Reassessment reopening barred by change of opinion where primary facts were fully disclosed and no new material existed.

Reassessment under sections 147 and 148 requires the assessing officer to have reasons to believe, based on material, that income escaped assessment because of the assessee's failure to make a full and true disclosure of primary facts. Disclosed balance-sheets, directors' reports and profit and loss accounts formed part of the return and showed the relevant sales and internal consumption figures, so the primary facts were already before the officer. A later reappraisal of the same facts on a different view of law amounted only to a change of opinion, which could not sustain reopening. The notices were therefore invalid and the reassessment proceedings failed.

---

---

Issues: Whether the notices issued for reopening the completed assessments under section 148 of the Income-tax Act, 1961 were valid in law, and whether the assessee had failed to disclose fully and truly all material facts necessary for assessment so as to justify action under section 147.

Analysis: The relevant balance-sheets, directors' reports, and profit and loss accounts filed with the returns disclosed the sales figures of the Metco division and also indicated that a substantial portion represented internal consumption by another division of the company. These materials formed part of the return and were not mere private records. On that footing, the disclosed facts were sufficient to put the assessing officer in possession of the primary facts relevant to the claim for relief under section 15C of the Indian Income-tax Act, 1922. The records and affidavit evidence did not establish that the officer who issued the notices had formed the requisite belief on the basis of new or undisclosed material; rather, the reopening appeared to stem from a re-examination of the same facts in the light of a later view of the law. Such a retrospective reconsideration was not enough to satisfy the statutory conditions for reopening.

Conclusion: The notices under section 148 were invalid and the preconditions for reopening were not satisfied. The decision is in favour of the assessee.

Final Conclusion: The reopening proceedings could not be sustained, and the impugned notices and consequential assessments were set aside.

Ratio Decidendi: Reassessment under sections 147 and 148 can be initiated only where the assessing officer has reasons to believe, founded on material, that income escaped assessment because of the assessee's failure to make a full and true disclosure of primary facts; a mere change of opinion or reappraisal of disclosed facts does not confer jurisdiction.

---