The assessee, a company engaged in manufacturing switchgear and lighting solutions, had filed its return for A.Y. 2016–17 declaring nil income, with tax computed under Section 115JB. The case was selected for scrutiny and the Assessing Officer (AO), after examining all relevant documents including tax audit reports and details of loans and advances, passed an assessment order under Section 143(3) accepting the returned income.

Subsequently, the AO initiated reassessment proceedings by issuing a show cause notice under Section 148A(b), alleging escapement of income of Rs. 4.21 crore. The assessee contended that the issue relating to loans and advances had already been examined during the original assessment proceedings and all relevant details were furnished at that time. Despite this, the AO passed an order under Section 148A(d) and issued notice under Section 148.

Issue Before Court: Whether reassessment proceedings under Section 148 can be initiated on the basis of material already examined during original assessment, amounting to a mere change of opinion.

HC Decided: The Gujarat High Court held that the reassessment proceedings were invalid as they were based on a mere change of opinion. It noted that the issue forming the basis of reopening loans and advances had already been thoroughly examined during the original scrutiny assessment and all relevant details were on record.

The Court reiterated that the Assessing Officer does not have the power to review his own decision under the guise of reassessment. Reopening of assessment must be based on new tangible material and not on reappreciation of existing facts. Relying on settled law, the Court held that reassessment initiated merely to take a different view on the same material is impermissible. Accordingly, the impugned order under Section 148A(d) and the notice issued under Section 148 were quashed.