The Supreme Court dismissed the Revenue's SLP challenging the Gujarat High Court's quashing of a reassessment under Section 148, affirming that a mere change of opinion cannot sustain reopening of assessment.
SC Affirms Gujarat HC: Reassessment Cannot Rest on Change of Opinion
The Supreme Court has dismissed the Revenue's Special Leave Petition challenging the Gujarat High Court's decision to quash a reassessment initiated under Section 148 of the Income Tax Act. The Court declined to interfere, upholding the High Court's finding that the reassessment was based solely on a change of opinion, which is impermissible under settled law.
The Gujarat HC had ruled that the reopening of the assessment lacked valid grounds, as the incriminating material relied upon was already available during the original assessment. The High Court emphasized that a mere difference in opinion between assessing authorities does not constitute new information warranting reassessment under Section 148.
The reassessment proceedings were quashed on the ground that 'change of opinion' cannot be the basis for invoking jurisdiction under Section 148.
Practitioners must note that the Supreme Court’s refusal to intervene reinforces the principle that reassessment orders lacking tangible new information or material are vulnerable to being struck down. Taxpayers may challenge reassessments grounded only in re-evaluation of previously disclosed facts.
Citations
- CIT v. Rajesh Jhaveri Stock Brokers (P) Ltd. (2007) 293 ITR 523 (Guj)
- Gujarat High Court judgment in ITA No. ___ of 2022
