Law:

Section:

Section 147(b) of the income-tax act, 1961-Reassessment-Information-Petitioner-company let out its land and structures thereon and received rent-Company claimed it as business income but ito assessed it as income from other sources-Later ito initiated reassessment proceeding on the grounds that audit objections had been raised against said assessment and that assessment of said rental income as income from other sources was not justified-Whether reassessment justified-Held, on facts, no Facts The petitioner-company purchased an open plot with some buildings constructed thereon. After certain alterations were made, a portion of the land along with the structures thereon was let out on rent. For the first time in the assessment year 1954-55, the petitioners showed in their return, the rental income as an income from business, but the ITO assessed it as income from other sources. The company made alterations in the structures from time to time. The rental income were assessed as income from other sources. In March 1978, the ITO served notice under section 148 on the petitioner-company and proposed to reopen the assessments for the years 1973-74 to 1976-77. According to the notice, the IAC had reason to believe that the income chargeable to tax for the relevant years had escaped assessment within the meaning of section 147. On writ: Held It is now well settled that mere change of opinion was not sufficient to warrant initiation of reassessment proceeding. The petitioners had, from time to time, disclosed all the relevant material in respect of the amount of rent and the compensation received for the relevant years. According to the correspondence between the petitioner and the ITO, the latter was under an impression that the assessment in respect of the rent as the income from other sources was not correct because only buildings and not the connected paraphernalia had been let out. This was nothing short of a change of opinion, not entitling the ITO to reopen the assessment. It further seemed that the ITO had proceeded to initiate reassessment proceeding because of an audit objection raised. It is well settled that the ITO must complete the assessment on the…

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