Assessing Officer not entitled to reopen assessment for his change of opinion

Reassessment is a tool of the Income Tax  Department. It gives the Assessing Officer the power to reassess income, of an assessee which has not been assessed due to some reason. Various issues crop up during such reassessment process.
There are many judgments of the Supreme Court and High courts regarding reopening of assessment.

Sec. 147 and Section 148 of the Income Tax Act:


The general rule says that after the completion of assessment it is final and binding. Sec. 147 and Section 148 of the Act deals with the conditions for reopening the assessment.

According to the provisions of Sec. 147 of the Income Tax Act an Assessing Officer can reopen an assessment if the conditions stated therein are fulfilled.

But the Assessing Officer has to record the reasons having a relation with the belief for the said opinion. Those reasons cannot be altered later on. Moreover the Assessing Officer must have some reason to believe that any income to be taxed has escaped assessment for any financial year.

Normally any action cannot be taken under section 147 of the Act , after the completion of four years from the end of the said assessment year.

The Supreme Court and High courts have repeatedly held that the prerequisite conditions are mandatory upon the Assessing Officer for the purpose of reopening the assessment and failure to fulfill makes the reopening of assessment void.

In case of failure to fulfill the conditions laid down, the High Courts will pass necessary orders to prevent such consequences. The Assessment order will be considered to be invalid and will be set aside.


An assessee can ask for supplying the reasons if he comes to challenge the notice for reassessment.

For passing an order under section 147 recording of reasons and communication of the order to the assessee is compulsory. The objections on behalf of the assessee should also t be considered.

Section 148 does not allow to record reasons between date of issue of notice and its service. Only reasons recorded by Assessing officer can be taken into consideration. No new reason can be allowed.

In many cases, reassessment proceedings are conducted only due to ‘change of opinion ‘of the Assessing Officer. But now the courts have a very strict view over the matter.