Law:

Section:

Section 10 of the Interest-tax Act, 1974 - Interest escaping assessment - Assessment years 1993-94 and 1994-95 - Income including income on account of interest was assessed to income-tax for both assessment years, holding that petitioner was not an investment company - Thereafter, pursuant to an objection raised by audit that 'assessee was liable to pay interest-tax under Interest-tax Act, 1974', and instructions of Central Board of Direct Taxes to take remedial measure wherever there is an audit objection, Joint Commissioner issued impugned notices under section 10 on ground that income from interest chargeable to tax had escaped assessment - Whether change of opinion is not a ground for reopening assessment - Held, yes - Whether since instant case was a clear case of change of opinion based on opinion of audit, initiation of proceeding for reopening assessment would not be justified - Held, yes FACTS Income including income on account of interest was assessed to income-tax for assessment years 1993-94 and 1994-95 holding that the petitioner was not an investment company. After completion of the regular assessment under section 143(3) for the relevant assessment years, on the basis of the returns filed by the assessee, the revenue audit raised an objection after examining the income-tax assessment records that the assessee was liable to pay interest-tax. The Joint Commissioner issued the impugned notices under section 10 seeking to reopen the assessment of the income for the concerned assessment years on the ground that income from interest chargeable to tax for the relevant years escaped assessment within the meaning of section 10. The assessee in the instant writ petition challenged the said notices on the ground that condition precedent for exercise of power under that section did not exist and that the change of opinion was not a ground for reopening the assessment. HELD The submission made by the revenue that the audit does have power to point out a fact, which has been overlooked by the Income-tax Officer, was correct but did not apply to the facts of the instant case because in the instant case, according to the affidavit of the Joint Commissioner, the…

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