CIT v Atul Mohan Bindal

Facts

• The assessee filed returns and original assessment was completed under S.143(3)
• The AO had considered and allowed certain deductions during original assessment
• Subsequently, the CIT formed the view that the deductions were wrongly allowed
• Notice under S.148 was issued to reopen the assessment
• The assessee challenged the reopening as a mere change of opinion

Issues

1. Whether reassessment under S.147 can be initiated on a change of opinion when the issue was already considered
2. What constitutes "reason to believe" for valid reassessment

Held

• S.147 does not permit reopening merely because the AO later forms a different opinion on the same facts
• "Reason to believe" requires tangible material that was not available or not considered during original assessment
• Where the AO applied his mind to an issue and formed a view, reopening on the same material = change of opinion = impermissible
• Reassessment quashed

Ratio Decidendi

The power to reassess is not a power to review. S.147 requires new tangible material or information establishing that income escaped assessment. If the same facts and same legal position were before the AO and he took a conscious view, merely because that view is later found debatable does not justify reopening.