Facts
The petitioner, a company engaged in manufacturing low voltage switchgear, filed its return for Assessment Year (AY) 2016-17, which was selected for scrutiny assessment
Source reference: p.2During the original assessment under Section 143(3) of the Income Tax Act, 1961, the Assessing Officer (AO) issued a notice under Section 142(1) specifically requesting details regarding a loan/advance of Rs. 4,21,22,151/-
Source reference: p.2, 5The petitioner provided comprehensive responses, including Tax Audit Reports and details of litigation concerning the said amount, after which the AO accepted the return on 27.12.2018
Source reference: p.2, 6Subsequently, on 09.03.2023, the respondent initiated reassessment proceedings under Section 148A(b) regarding the same transaction.
Source reference: p.3Despite the petitioner claiming non-service of the notice, the respondent passed an order under Section 148A(d) on 24.03.2023, alleging escapement of income and issued a notice under Section 148
Source reference: p.3, 4Issues
Whether the reassessment proceedings initiated under Section 148 of the Act were based on a "mere change of opinion" regarding facts already scrutinized during the original assessment
Source reference: p.3, 6Whether the Assessing Officer has the jurisdiction to review a concluded assessment on the same set of facts and information previously available on record
Source reference: p.3-4, 6Law Applied
The court primarily applied the principle that reassessment cannot be a "change of opinion" as established under Section 147 of the Income Tax Act, 1961
Source reference: p.6It relied on the landmark precedent *CIT v. Kelvinator of India Limited* [(2010) 320 ITR 561 (SC)], which distinguishes between the "power to assess/re-assess" and the "power to review"
Source reference: p.6The rule dictates that the concept of "change of opinion" serves as an in-built test to check the abuse of power, ensuring that an AO does not re-open a case to substitute a predecessor’s view with their own on the same material
Source reference: p.7Reasoning
The Court examined the petitioner’s original response to the Section 142(1) notice and found that the specific amount of Rs. 4,21,22,151/- had been "threadbare examined" during the initial scrutiny
Source reference: p.3, 5-6The petitioner had previously submitted the Tax Audit Report, computation of income, and details of Section 138 Negotiable Instruments Act litigation explaining the write-off of said loans
Source reference: p.6The Court observed that the respondent’s current reasons for reopening were identical to the issues already considered and settled in the Assessment Order dated 27.12.2018
Source reference: p.6Consequently, applying the *Kelvinator* doctrine, the Court reasoned that the AO was attempting to exercise a "power to review" under the garb of "re-assessment," which is impermissible as there was no new "tangible material" or "information" that was not already part of the original record
Source reference: p.6-7Holding
The Court answered the issues in the affirmative, holding that the reassessment was a result of a mere change of opinion and thus lacked jurisdiction
The High Court allowed the writ petition and quashed the impugned order dated 24.03.2023 passed under Section 148A(d) and the consequential notice issued under Section 148 of the Act
Source reference: p.7Rule was made absolute with no order as to costs
Source reference: p.7Original Court PDF
Pierlite India Private Limited v. Income Tax Officer, Ward 3(1)(1), Ahmedabad [2026:GUJHC:12690]
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