The reassessment based on a mere change of opinion is not a valid ground for reopening an assessment under Section 147 of the I.T. Act. The reasons for reopening an assessment must have a live link with the formation of the belief and cannot be supplemented by additional material. The Assessing Officer must have a conscious application of mind during the initial assessment.

JUDGMENT

M. S. Sonak, J. - Heard the learned counsel for the parties.

2. The learned counsel agree that a common judgment and order can dispose of both these petitions because the issues of law and fact are almost identical. The Petitioner in Writ Petition No.48 of 2022 is the wife of the Petitioner in Writ Petition No.47 of 2022. Given Section 5A of the Income Tax Act, 1961, separate returns were filed by the wife and the husband for the Assessment Year 2016-2017. Therefore, the issues of law and facts raised in both these petitions are identical. Accordingly, writ Petition No.47 of 2022 is taken the lead petition.

3. The Petitioners filed their income tax returns under Section 139(1) for the Assessment Year 2016-2017. This was followed by a revised return of income on 18.01.2017, declaring a total income of ?1,17,69,130/-. On 11.08.2017, their cases were considered for limited scrutiny, and a notice under Section 143(2) was issued to them.

4. Notice dated 11.08.2017 stated that the following issues have been identified for examination:

"i. Whether value of consideration for computation of capital gains has been correctly shown in the return of income.

ii. Whether deduction from capital gains has been claimed correctly.

iii. Whether investment and income relating to properties are duly disclosed.''

5. The Petitioners claim to have responded to the above notice dated 11.08.2017 by submitting all documents about the income for Assessment Year 2016-2017. In particular, the Petitioners claim that they furnished the documents relating to the sale transaction of the property, including the MOU dated 30.08.2007, the sale deed dated 14.07.2015, and the MOU dated 30.03.2016.

6. The Assessing Officer vide his order dated 19.12.2018 accepted the Petitioners returned income and consequentially the explanation furnished by the Petitioners that were backed with the relevant documents as aforesaid. In particular, the computation sheet appended to the Assessment Order dated 19.12.2018 shows that the deductions to the extent of ?1,64,45,000/- claimed by the Petitioners under Section 48 of the I.T. Act, were allowed by the Assessing Officer.

7. On 27.03.2021, the Petitioners were served with impugned notices under Section 148 of the I.T. Act seeking to reopen the assessment for the Assessment Year 2016-2017. By communication dated 01.04.2021, the Petitioners sought reasons for reopening of assessment after enclosing a copy of the return of income for Assessment Year 2016-2017.

8. On 23.12.2021, the Petitioners received the impugned notices under Section 143(2) read with Section 147 of the I.T. Act. The reasons for reopening of the assessment accompanied the impugned notices, and the same read as follows:-

"Reasons for reopening of the assessment in case of Shrikant Vasudev Naik A.Y. 2016-17 u/s. 147 of the Income Tax Act, 1961.

1. The assessee is a Individual. It has filed return of income for the assessment year 2016-17 on 18-01-2017 declaring income of Rs. 1,17,69,130/-. The case is selected for scrutiny assessment which is completed on 19.12.2018 declaring assessed income of Rs. 1,17,69,130/-.

2. It is brought to the notice of the assessing officer that assessee had received a total sales consideration of Rs. 9,93,60,000/-from the sale of ancestral property. He paid an amount of Rs. 1,64,45,000/- being damages & compensation and same has been reduced from the full value of consideration. Out of this, the assessee share is Rs. 82,22,500/-. After claiming expenses like brokerage, indexation compensation and deductions u/s 54F & 54EC, the assessee declared net capital gain of Rs.93,40,387/-.

3. It is observed from the records that the assessee has claimed expenditure of Rs.1,64,45,000/- by way of compensation and reduced from total consideration received. The assessee had received an advance towards creation of right/actionable claims in the immovable property from two companies viz. Resicom Homes pvt. Itd and M/s. DSouza.. The purchases were supposed to com