What actually counts as a 'change of opinion'?
Formulating an opinion and then changing it. To constitute a change of opinion the earlier assessment must, expressly or by necessary implication, have expressed a view on the subject now being reopened.
Decided by the Supreme Court (R.K. Agrawal J and Mohan M. Shantanagoudar J) on 2018-04-24, reported as (2018) 404 ITR 10 (SC); (2018) 255 Taxman 152; 302 CTR 74; [2018] 92 taxmann.com 361 (SC); Civil Appeal No. 2732 of 2007. It bears on section 147, section 148, section 10A of the Income Tax Act 1961, in Reassessment & Reopening matters.
It supplies the test Kelvinator assumes. The cutting edge is the qualification: where the original order was cryptic and said nothing, an opinion cannot easily be attributed — which is how the department answers most change-of-opinion arguments.
Binding on every court and authority in India.
Read aloud by your device. Press again to stop.
For assessment year 2001-02 the assessee, a company developing and exporting software and supplying human resource services, returned a loss of Rs 3,31,301, declaring income from both activities but claiming expenses commonly for the two and claiming deduction under s.10A on the software income. The return went to scrutiny, and a show cause notice dated 9 March 2004 asked the assessee to explain the basis on which common expenses had been allocated between the two heads and suggested how the allocation should be made. That was contested and decided by the assessment order of 29 November 2004, after which a s.154 rectification produced an income of Rs 31,63,570, set off entirely against brought-forward loss, and the assessment was made at nil. On 10 February 2005 a notice under s.148 was issued on the footing that deduction under s.10A had been allowed in excess and Rs 57,36,811 had escaped assessment; the objections were rejected on 17 August 2005. The Delhi High Court quashed both the notice and that order on 24 February 2006, and the Revenue appealed.
The Revenue's appeal was dismissed and the quashing of the reassessment upheld. Reopening merely because the officer now takes the view that excess deduction was allowed, on material already considered, is nothing but a change of opinion and is not a valid exercise of the power under s.147.
Change of opinion implies formulation of an opinion and then a change of it; to constitute change of opinion the earlier assessment must, expressly or by necessary implication, have expressed an opinion on the subject matter of reopening. Where the original assessment order is non-speaking, cryptic or perfunctory, an opinion cannot readily be attributed to the officer on matters raised later. The words 'reason to believe' must be interpreted schematically, because a liberal interpretation would confer arbitrary powers; s.147 confers the power to reassess and not the power to review.
The word change of opinion implies formulation of opinion and then a change thereof.
Upload it and we will read it, work out your deadline and draft the reply. A CA reviews before anything is filed.
Handle my notice → Ask a CA on WhatsAppFormulating an opinion and then changing it. To constitute a change of opinion the earlier assessment must, expressly or by necessary implication, have expressed a view on the subject now being reopened. This was decided by the Supreme Court (R.K. Agrawal J and Mohan M. Shantanagoudar J) and bears on section 147, section 148, section 10A of the Income Tax Act 1961. It is reported as (2018) 404 ITR 10 (SC); (2018) 255 Taxman 152; 302 CTR 74; [2018] 92 taxmann.com 361 (SC); Civil Appeal No. 2732 of 2007. It supplies the test Kelvinator assumes. The cutting edge is the qualification: where the original order was cryptic and said nothing, an opinion cannot easily be attributed — which is how the department answers most change-of-opinion arguments. If it applies to you, the first step is this: Show that the issue was expressly raised in the original proceedings, or that a view on it necessarily follows from what was decided.
For assessment year 2001-02 the assessee, a company developing and exporting software and supplying human resource services, returned a loss of Rs 3,31,301, declaring income from both activities but claiming expenses commonly for the two and claiming deduction under s.10A on the software income. The return went to scrutiny, and a show cause notice dated 9 March 2004 asked the assessee to explain the basis on which common expenses had been allocated between the two heads and suggested how the allocation should be made. That was contested and decided by the assessment order of 29 November 2004, after which a s.154 rectification produced an income of Rs 31,63,570, set off entirely against brought-forward loss, and the assessment was made at nil. On 10 February 2005 a notice under s.148 was issued on the footing that deduction under s.10A had been allowed in excess and Rs 57,36,811 had escaped assessment; the objections were rejected on 17 August 2005. The Delhi High Court quashed both the notice and that order on 24 February 2006, and the Revenue appealed. The matter was decided on 2018-04-24 by the Supreme Court (R.K. Agrawal J and Mohan M. Shantanagoudar J). On those facts the Supreme Court held as follows. The Revenue's appeal was dismissed and the quashing of the reassessment upheld. Reopening merely because the officer now takes the view that excess deduction was allowed, on material already considered, is nothing but a change of opinion and is not a valid exercise of the power under s.147.
Change of opinion implies formulation of an opinion and then a change of it; to constitute change of opinion the earlier assessment must, expressly or by necessary implication, have expressed an opinion on the subject matter of reopening. Where the original assessment order is non-speaking, cryptic or perfunctory, an opinion cannot readily be attributed to the officer on matters raised later. The words 'reason to believe' must be interpreted schematically, because a liberal interpretation would confer arbitrary powers; s.147 confers the power to reassess and not the power to review. In the words reproduced by the source cited on this page: "The word change of opinion implies formulation of opinion and then a change thereof." The decision followed or applied CIT v Kelvinator of India Ltd (2010) 320 ITR 561 (SC).
It was decided by the Supreme Court on 2018-04-24 and is reported as (2018) 404 ITR 10 (SC); (2018) 255 Taxman 152; 302 CTR 74; [2018] 92 taxmann.com 361 (SC); Civil Appeal No. 2732 of 2007. Binding on every court and authority in India. A Supreme Court decision binds every assessing officer, every Commissioner (Appeals), every bench of the Income Tax Appellate Tribunal and every High Court in India. An officer who declines to follow it is acting contrary to law, and that refusal is itself a ground of appeal. On section 147, section 148, section 10A, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The Revenue's appeal was dismissed and the quashing of the reassessment upheld. Reopening merely because the officer now takes the view that excess deduction was allowed, on material already considered, is nothing but a change of opinion and is not a valid exercise of the power under s.147. It arises in Reassessment & Reopening matters, on section 147, section 148, section 10A of the Income Tax Act 1961, and was decided by R.K. Agrawal J and Mohan M. Shantanagoudar J. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Produce the questionnaire and your reply; a silent assessment order is weaker ground than a documented enquiry. Keep the argument distinct from the merits of the addition — it is a jurisdictional point.
Still good law. Affirms the Delhi High Court in Techspan India (P.) Ltd. v. ITO [2007] 158 Taxman 182 (Delhi). Followed by the Delhi High Court in Radhika Roy v. Dy. CIT [2026] 182 taxmann.com 465/309 Taxman 72 (Delhi), decided 19 January 2026, which at para 44 read this decision together with New Delhi Television Ltd. v. Dy. CIT [2020] 424 ITR 607 (SC) as affirming that reassessment is not permissible merely on a change of opinion, and quashed a second reopening on the same transaction. The doctrine was framed under the pre-2021 'reason to believe' standard; its extension to the s.148A regime rests on High Court decisions rather than on express statutory language. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
Cite it correctly as ITO v. TechSpan India (P.) Ltd., not 'CIT v Techspan'. Note the qualification the Court itself put on the doctrine at para 12: before accepting a change-of-opinion plea a court must check that the earlier assessment expressed an opinion, expressly or by necessary implication, on the matter said to have escaped; where the original order is non-speaking, cryptic or perfunctory, an opinion cannot readily be attributed to the Assessing Officer, and not every reopening can be met by an assumed change of opinion. The plea succeeded here because the very allocation point had been raised by the show cause notice of 9 March 2004 in the original proceedings. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The Revenue's appeal was dismissed and the quashing of the reassessment upheld. Reopening merely because the officer now takes the view that excess deduction was allowed, on material already considered, is nothing but a change of opinion and is not a valid exercise of the power under s.147.
Every entry in this library links to where it was found, so you can check it yourself rather than take our word for it.
My return was only processed under 143(1). Does that stop the department reopening it later?
How much am I actually required to disclose — and can they reopen because the officer drew the wrong conclusion?
The sanctioning authority just wrote 'yes' and signed. Is that a sanction?
A reassessment was done in between. Does the two-year clock for s.263 restart from it?