The High Court affirmed the Tribunal’s order quashing reassessment proceedings under section 147, holding that a mere change of opinion does not grant jurisdiction to reopen an assessment, even if initiated within four years. The assessment was reopened on the ground that a provision for prior-period interest expense under section 37(1) was wrongly allowed. However, the Court found that the assessee had disclosed all material facts in its return of income, Form 3CD, and annual reports during the original assessment. Since the ‘reason to believe’ was formed by reviewing the same material without any new tangible information, the reassessment was held to be invalid.
(AY. 2002-03)