Reassessment based on change of opinion fails when all material facts were already before the tax officer.

Reopening of a completed assessment under section 34(1)(b) was impermissible where the Income-tax Officer already had before him all material facts relied on for the original assessments, including the borrowings, investment of part of those funds in the agency firm, common partners, and absence of interest. The requirement was fresh information giving reason to believe that income had escaped assessment, and the Explanation to section 34(1) did not help because the issue was not lack of diligence in finding primary facts but the absence of new information. A later different view in a subsequent assessment was only a change of opinion and could not justify reassessment.

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Issues: Whether the Income-tax Officer was justified in reopening the assessments for the relevant years under section 34(1)(b) of the Indian Income-tax Act, 1922 on the basis of information said to have been discovered later.

Analysis: The assessments could be reopened only if, in consequence of information in his possession, the Income-tax Officer had reason to believe that income had escaped assessment. All the material facts relied upon for reopening were already before him during the original assessments, including the borrowings, the investment of part of those funds in the agency firm, the common partners, and the fact that no interest had been charged. The record also showed conscious consideration of the relevant account. The Explanation to section 34(1) did not assist the revenue because the issue was not want of diligence in discovering primary facts, but whether there was any new information at all. A later different view taken in a subsequent assessment could not amount to fresh information.

Conclusion: The reopening was not justified and the answer to the reference was in the negative, in favour of the assessee.

Final Conclusion: Reassessment under section 34(1)(b) could not be sustained where the relevant facts were already known to the Income-tax Officer and the reopening rested only on a later change of opinion.

Ratio Decidendi: Reopening of a completed assessment is impermissible when the material facts were already before the assessing officer and the attempt to reopen is founded only on a subsequent change of opinion rather than fresh information.

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