Facts
The petitioner filed an income tax return for AY 2018-19, declaring an income of ₹27.26 crores
Source reference: p. 2The case was selected for scrutiny under Section 143(3), focusing on taxable capital gains from the sale of shares and a claim under Section 54F
Source reference: p. 2Following multiple notices under Section 142(1) and detailed responses from the petitioner, the Assessing Officer (AO) passed an order on 12.03.2021 accepting the return
Source reference: p. 2, 5Subsequently, the respondent initiated reassessment proceedings via notice dated 21.03.2022 under Section 148A, alleging that because of a change in company directors, the capital gains should be treated as business income
Source reference: p. 2-3Despite the petitioner's objections, the respondent passed an order under Section 148A(d) and issued a notice under Section 148 on 07.04.2022
Source reference: p. 3Issues
1. Whether the Revenue can initiate reassessment proceedings under Section 148 based on information already examined during the original scrutiny assessment under Section 143(3)
Source reference: p. 32. Whether the reassessment notice constituted an impermissible "change of opinion" rather than the discovery of new information
Source reference: p. 4Law Applied
The court applied the provisions of Section 147 and 148 of the Income Tax Act, 1961, which govern the reopening of assessments based on "reason to believe" that income has escaped assessment
Source reference: p. 3-4It heavily relied on the landmark precedent *CIT v. Kelvinator of India Ltd. (2010)*, which established that while the power to reopen is wide post-1989, it does not permit a "change of opinion"
Source reference: p. 6The rule dictates that an Assessing Officer has the power to reassess but possesses no power to review their own earlier assessment if all material facts were previously disclosed and considered
Source reference: p. 7Reasoning
The court observed that during the original scrutiny assessment, the AO had issued specific notices regarding the computation of capital gains and Section 54F claims, to which the petitioner had provided comprehensive particulars
Source reference: p. 2, 5The AO’s original order dated 12.03.2021 explicitly stated that the explanation regarding these issues was accepted after perusing the material on record
Source reference: p. 6The court reasoned that the current reassessment was not based on "new information" flagged by the system, but was an attempt to re-examine the same documents and transactions already scrutinized
Source reference: p. 4Applying the *Kelvinator* principle, the court found that since no new material facts were brought to light, the revenue was merely seeking a "relook," which qualifies as an arbitrary "change of opinion" and an abuse of power
Source reference: p. 6-7Holding
The court answered the issues in favor of the petitioner, holding that the AO cannot exercise the power to re-examine information already on record to arrive at a different conclusion
The court concluded that the initiation of reassessment was a clear case of "change of opinion" and lacked jurisdiction
Source reference: p. 7Consequently, the High Court quashed and set aside the order dated 07.04.2022 passed under Section 148A(d) and the consequential notice issued under Section 148
Source reference: p. 7Rule was made absolute
Source reference: p. 7Original Court PDF
Dignesh Pramukhlal Patel v. Assistant Commissioner of Income Tax Circle 3(1)(1), Ahmedabad [2026:GUJHC:10/03/2026]
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