A survey under section 133A was conducted at assessee’s business and office premises pursuant to which books of account and other documents including loose papers were impounded. On basis of seized documents, Assessing Officer passed an assessment order under section 143(3). Subsequently, Assessing Officer initiated reassessment proceedings taking a view that in terms of entries recorded on a loose paper impounded during survey, certain income chargeable to tax had escaped assessment. Whether on facts, initiation of reassessment proceedings was based on mere change of opinion and, thus, impugned reassessment proceedings deserved to be quashed. Held, yes [In favour of assessee]. 

Facts of the Case:

• A survey under section 133A was conducted at assessee’s business and office premises in course of which its books of account and other documents including loose papers were found and impounded.
• On the basis of seized documents, the Assessing Officer passed an assessment order under section 143(3) determining taxable income of assessee.
• Subsequently, the Assessing Officer initiated reassessment proceedings taking a view that in terms of entries recorded on a loose paper impounded during survey, certain income chargeable to tax had escaped assessment.
• Accordingly, the Assessing Officer made addition to assessee’s income in course of reassessment proceedings.
• The Commissioner (Appeals) upheld the validity of reassessment proceedings. However, he deleted the addition considering the assessee’s case on merits.
• The Tribunal noticed that the assessment order under section 143(3) was passed after duly considering the materials discovered during the course of the survey. The Tribunal thus set aside the reassessment proceedings holding that it was based on a mere change of opinion.

Held on Appeal:

• On a perusal of the assessment order rendered under section 143(3), it becomes abundantly clear that the Assessing Officer had not only referred to the impounded documents and records found in course of the survey under section 133A from the business and office premises of assessee, but also those were test checked and evaluated in undertaking that exercise.
• There is, thus, no reason whatsoever to differ from the finding recorded by the Tribunal to this effect. The assessment order assuredly did follow amongst others on the scrutiny of these impounded documents and records. Not only these had remained with the department since after the impounding thereof, these were examined and tested for working out the tax liability of the assessee for the assessment year in question.
• In this view of the matter, the endeavour on the part of the Assessing Officer to initiate a re-assessment proceeding under section 147/148 on the purported ground that the same records/documents did disclose that certain amount had escaped assessment, is unconvincing and untenable as well. Such a conclusion in the singular facts and circumstances of the case, does certainly stem from a change in opinion, entertained by the Assessing Officer.

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