Reassessment based on change of opinion

The assessee before Hon’ble Bombay High Court was a public limited company. In the profit and loss account the assessee had made provision for deferred taxation. During the course of assessment proceeding, the Learned Assessing Officer called upon the assessee to show cause as to why the provisions for deferred taxation made in the profit and loss account were not taken into account for calculating the book profit under section 115JB. In reply the assessee submitted that the provisions for deferred taxation was made in accordance of with Accounting Standard 22 and it could not be taken into account for determining the book profit as it was not covered by any of the clauses (a) to (f) set out in the Explanation to section 115JB. Thereafter the Learned Assessing Officer completed the assessment u/s. 143(3) without making any addition to the book profit on account of provisions for deferred taxation. Subsequently, notice u/s. 148 was issued on the ground that that the book profits of the assessee had been under assessed. The assessee objected to the re-opening, however the same has been rejected by the Learned Assessing Officer. Being aggrieved by the above order the assessee preferred Writ Petition before Hon’ble Bombay High Court. Hon’ble High Court allowed the writ petition and held that the reasons recorded by the Assessing Officer for reopening the assessment showed that neither the explanation given by the assessee and accepted by the Assessing Officer was found to be erroneous nor was there any other material/information on the basis of which a prima facie opinion was formed to the effect that by not increasing the book profit with the amount of the provision for deferred taxation, income chargeable to tax had escaped assessment. Thus, the reopening of the assessment was not based on any material but merely on change of opinion without any basis. The notice under section 148 was not valid and was liable to be quashed.