Law: Income Tax Act, 1961

Section: 147,148

Income-tax-Reassessment---Necessary material placed by assessee before Revenue--­Different view on same material---Mere change of opinion---Reassessment proceedings were not valid---Indian Income Tax Act, 1961, Ss. 147 & 148. The assessment of the assessee for the assessment year 1985-86 was completed at Rs.1,61,020 after considering the long term capital gain and long term capital loss on the sale of silver. Subsequently a notice under sections 147/148 of the Income Tax Act, 1961, was issued on the ground that the amount of interest paid towards the loan taken for the purchase of silver could not be included in the price of silver or the cost of silver. On a writ petition filed to quash the proceedings: Held, that there was no material placed on record to show that the petitioners had suppressed any material fact or had failed to disclose fully and truly all material facts necessary for assessment. Earlier the Assessing Officer considered the capitalisation of the amount of interest in computing the capital loss. Now on the same material the succeeding officer had taken a different view and hence, it was nothing but a change of opinion. Accordingly, the reassessment proceedings were liable to be quashed. THIS JUDGMENT DELIVERED BY: B.C. PATEL, J.---The petitioner has approached this Court by invoking. Article -226-of the Constitution of India challenging notice, dated August 28, 1995, Annexure "A", issued by the respondent under section 148 of the Income Tax Act, 1961 (hereinafter referred to as "the Act"). The short facts as they emerge from the record are as under: The petitioner filed his return of income for the assessment year 1985-86 declaring total income at Rs.5,000. Later on, a revised return was tiled showing loss of Rs.1,01,023. After scrutiny of the petitioner's case under section 143(3) of the Act, an assessment order, annexure B, came to be passed, which was challenged by preferring an appeal before the Commissioner of Income-tax (Appeals), which was pending at the relevant time. On or about December 17, 1990, the Assessing Officer, vide annexure C, called upon the petitioner to furnish certain information which was sent by the petitioner on…

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