TAX PICKINGS- DELHI HIGH COURT'S FULL BENCH JUDGMENT ON CHANGE OF OPINION

In CIT vs. Usha International Ltd., [2012] 348 ITR 485 (Delhi) [FB], it was held as under (pages 496 and 497 of 348 ITR) :

“13. It is, therefore clear from the aforesaid position that:

(1) Reassessment proceedings can be validly initiated in case return of income is processed under section 143 (1) and no scrutiny assessment is undertaken. In such cases there is no change of opinion.

(2) Reassessment proceedings will be invalid in case the assessment order itself records that the issue was raised and is decided in favour of the assessee. Reassessment proceedings in the said case will be hit by the principle of change of opinion.

(3) Reassessment proceedings will be invalid in case an issue or query is raised and answered by the assessee in original assessment proceedings but thereafter the Assessing Officer does not make any addition in the assessment order. In such situations it should be accepted in the issue was examined but the Assessing Officer did not find any ground or reason to make addition or reject the stand of the assessee. He forms an opinion.

The reassessment will be invalid because the Assessing Officer had formed an opinion in the original assessment though he had not recorded his reasons."

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