Reopening based on change of opinion failed where cash credits were already examined and primary facts were disclosed.

Reopening of assessment under section 147(a) was invalid where the original assessment had already examined the cash credits, accepted the assessee's explanation, and relied on the depositors' statements. A later enquiry by the income-tax inspector only led the successor officer to reassess the same material and reach a different view, which amounted to a mere change of opinion and did not establish failure to disclose fully and truly all primary facts. On that basis, the statutory condition for reopening was not met and the notice under section 148 was quashed; the question of satisfaction under section 151(2) was left undecided.

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Issues: Whether the notice issued under section 148 read with section 147(a) of the Income-tax Act, 1961 was without jurisdiction on the ground that there was no failure to disclose fully and truly all material facts and that the reopening was based only on a change of opinion.

Analysis: The original assessment had already examined the cash credits and the assessing officer had accepted the assessee's explanation and the statements of the depositors produced. The reopening was initiated after a later enquiry by the income-tax inspector, which led the successor officer to take a different view of the same cash credits. On those facts, the material relied upon did not show non-disclosure of primary facts by the assessee; it only showed a subsequent reappraisal of the earlier material. In these circumstances, the statutory condition for action under section 147(a) was not satisfied, and the notice could not be sustained. The question of the Commissioner's satisfaction under section 151(2) was left undecided.

Conclusion: The notice under section 148 read with section 147(a) was held to be without jurisdiction and was quashed in favour of the assessee.

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