IMPORTANT POINT
Notices for reassessment under the Income Tax Act must be based on new information, not merely a change of opinion, and are subject to a four-year limitation period.

ORDER :

(Munnuri Laxman, J.) :

1) The present writ petition has been filed challenging the notice dated 26.03.2015 issued under Section 147 read with Section 148 of the Income Tax Act, 1961 and notice dated 04.08.2015 issued under Section 143(2) of the Income Tax Act, 1961.

2) The case of the writ petitioner is that the petitioner is an assessee with the Income Tax Department and he filed Income Tax Return for the assessment year 2008-2009 on 31.03.2009 declaring interest income of Rs.2,09,636/- and income from agriculture of Rs.95,563/- showing no income under the head ‘Capital Gain’. Subsequently, he realised bona fide mistake in the return with regard to capital gain and he filed an amended return disclosing the capital gains of Rs.33,52,753 claiming deduction of Rs.2,50,000/- under Section 54-F of the Income Tax Act, 1961 (herein after referred to as ‘the Act’) in the course of assessment proceedings and an amount of Rs.34,00,000/- was deposited in the FDR under capital gains scheme. The assessee received capital gain of Rs.37,75,099/- as the compensation in the land acquisition proceedings.

3) The Assessment Officer after due enquiry has passed the assessment order dated 07.12.2010 after issuing the notice under Section 143(2) of the Act. In the said assessment order, it has been clearly mentioned that the Assessment Officer has verified with the Bank and sought a clarification from the assessee with regard to FDR prepared by the assessee under the capital gains scheme, which was not utilized for the prescribed purpose within the stipulated time and he was only liable for payment of tax for the assessment year 2011-2012. In the year 2011-2012, the assessee has paid capital gain tax. Subsequently, audit objection dated 10.02.2015 was taken with regard to non-payment of capital gain tax for the assessment year 2008-2009 and such objection was taken after 6 years.

4) Basing on the above objection, notice dated 26.03.2015 was issued under Section 147 read with 148 of the Act. After service of notice, the assessee obtained reasons for issuing such a notice and the reasons recorded under order dt. 27.02.2015 do not disclose the basis for issuance of notice dated 26.03.2015. Such a decision was on account of change of opinion or re-appreciation of evidence or material, which was already been considered in the regular assessments year.

5) In response to the notice dated 26.03.2015, the assesee filed the objections, which were not properly considered and such objections were rejected vide order 26.06.2015. Subsequently, further representation dated 06.07.2015 was made to the Assessing Officer bringing to the notice of improper consideration of the questions raised by the assessee in the first objections. Such representation was also rejected vide order dated 04.08.2015. Consequently, further notice dated 04.08.2015 was issued under Section 143(2) of the Act. Challenging the said notice dt. 04.08.2015 as well as notice dt. 26.03.2015, the present writ petition has been filed.

6) The main grounds raised in the present writ petition is that the notice issued under Section 147 read with 148 of the Act was time barred. The second contention raised was that the reasons, which were the foundation for issuance of notice under Section 147 read with Section 148 of the Act were not the result of any fresh information or fresh gathering of the material, but it is the change of opinion or re-appreciation of material which is already on record and there is no suppression or concealment of any facts. Therefore, on these two grounds, the impugned notices are liable to be quashed.

7) The learned counsel appearing for the Income Tax Department vehemently opposed the claim of the writ petitioner that notices are barred by limitation. According to him, four year limitation applies only in case all the materials are fully and truly placed before the Assessing Officer, which are necessary for assessment of the relevant assessment year. In the present case, the