MONOTECH SYSTEMS LTD.,CHENNAI V. DCIT, CORP. CIRCLE-4(1), CHENNAI

ITA 1021/CHNY/2025

AI Insights

Monotech Systems Limited appealed against the order of the Learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC), which upheld the reassessment order by the AO. The reassessment was initiated under section 147 read with section 144B of the Income-tax Act, 1961, concerning the claim of bad debts written off amounting to Rs.4,34,44,057. The AO had treated this amount as a long-term capital loss due to its non-inclusion in the slump sale consideration. The ITAT found that the issue had been previously addressed in the original assessment, and the AO's reopening of the assessment constituted a mere change of opinion, leading to the quashing of the reassessment order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784327 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 09-04-2025
• Other Referred Cases: CIT vs. Kelvinator of India Limited, JCIT v Videocon Industries Ltd
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R. ANITHA; C.I.T
• Assessee Lawyers: J. PRABHAKAR; F
• Keywords: Set aside; Business income; Difference of opinion; Change of opinion; Capital asset; Revised return; Revenue expenditure; Reassessment proceedings; Bad and doubtful debts; Corroborative evidences; Capital receipt; Reopening of assessment; Capital Gains; Assessment record; Reason to believe; Tangible material
• Section: 147; 143(3); 45(5)

Judgement Text

" आयकर अपील य अ धकरण, ‘सी’ \u000eयायपीठ, चे\u000eनई IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI \u0015ी मनु क ुमार ग\u0019र, \u000eया\u001aयक सद य एवं \u0015ी एस. आर. रघुनाथा, लेखा सद य क े सम# BEFORE SHRI MANU KUMAR GIRI, JUDICIAL MEMBER AND SHRI S. R. RAGHUNATHA, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.:1021/Chny/2025 \u001aनधा$रण वष$ / Assessment Year: 2017-18 Monotech Systems Limited, Third Floor, City Centre, 39, Thirumalai Pillai Road, T.Nagar, Chennai – 600 017. vs. DCIT, Corporate Circle -4(1), Chennai. [PAN:AABCM-8821-D] (अपीलाथ&/Appellant) ('(यथ&/Respondent) अपीलाथ& क) ओर से/Appellant by : Shri. J. Prabhakar, F.C.A. '(यथ& क) ओर से/Respondent by : Ms. R. Anitha, Addl. C.I.T. सुनवाई क) तार ख/Date of Hearing : 26.08.2025 घोषणा क) तार ख/Date of Pronouncement : 11.11.2025 आदेश /O R D E R PER S. R. RAGHUNATHA, AM: This appeal by the assessee is filed against the order of the Learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC), Delhi [‘ld. CIT(A)’] dated 27.03.2025 for the assessment year 2017-18. 2. The assessee has challenged the legality and validity of the assessment order passed u/s.147 r.w.s. 144B of the Income-tax Act, 1961(hereinafter Printed from counselvise.com :-2-: ITA. No.:1021/Chny/2025 referred to as “the Act”) dated 30.03.2022, as well as the denial of the claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/- which was added to the to the total income of the impugned year, on the following grounds: “1. The National Faceless Appeal Centre (NFAC) is not justified in upholding the validity of reopening of assessment on the premise that explanation 1 to Section 147 is applicable to the facts of the case. 2. The First Appellate Authority (NFAC) is not justified in invoking explanation 1 to Section 147 when the questionnaire during original scrutiny assessment dated 21.10.2019 adverted to furnishing of explanation on the allowability of Rs.4,34,44,057/-, the subject-matter of the present re-opening of the assessment as also ignoring the countenance thereof vide reply dated 19.11.2019. 3. The NFAC is not justified in rejecting the appeal for failure to furnish reasons recorded in writing for re-opening of assessment when the alleged reasons were furnished during the fag end of assessment proceedings without scope for countenancing the legality thereof. 4. The NFAC has no basis to hold that reason for re-opening were furnished when the spirit of the Apex Court ruling in GKN Drive Shafts case (259 ITR 19) was breached both in letter and spirit in the assessment proceedings. 5. The NFAC is not justified in observing and holding that the unrealized value of Rs.4,34,44,057/- was part of slump sale brought to tax in the earlier year and hence a long term capital asset without due regard to the substratum of the transaction on slump sale not considering the said amount claimed is de-horse the total consideration payable by virtue of its exclusion from the assets taken over there under. 6. The NFAC is not justified in omitting to notice that the claim of Rs.4,34,44,057/- is a revenue item flowing from un-recoverable dues forming part of income statement of assessment years 2015-16 and 2016- 17 and in effect an irrecoverable bad debt allowable u/s.36 of the Act. 7. The NFAC is not justified in omitting to adjudicate the claim of Rs. 45,316/- towards irrecoverable marketing expenditure admitted as income for assessment year 2015-16 and forming part of total claim of Rs.4,34,44,057/- 8. The NFAC is not justified in omitting to adjudicate the claim of Rs.1,99,36,000/- towards irrecoverable marketing expenditure admitted as income for assessment year 2016-17 and forming part of total claim of Rs.4,34,44,057/-. Printed from counselvise.com :-3-: ITA. No.:1021/Chny/2025 9. The NFAC is not justified in omitting to adjudicate the claim of Rs.2,34,62,641/- towards write off of obsolete stocks not taken over under slump sale, forming part of trading account and tantamounts to a revenue expenditure u/s.37(1) of the Act. 10. The NFAC is not justified in misconstruing the provisions of Section 45 (5) on items not forming part of slump sale and attributing contumacious conduct on the claim of short- term capital gain without due regard to the nature of expenses claimed at Rs.4,34,44,057/- representing revenue loss. 11. The NFAC failed to take into account that the faceless assessment did not have the benefit of business transfer agreement so as to interpret the impugned transaction as forming part of slump sale without any basis. 12. The NFAC is not justified in sustaining the levy of interest u/s.234B & 234C in a sum of Rs.78,42,302/-. 13. In any event the order of NFAC is legal, capricious, arbitrary, and made without due regard to the facts and circumstances of the appellant’s case and law applicable there to. 14. The appellant craves the indulgence of the Income Tax Appellant Tribunal to furnish additional grounds/supplementary ground to buttress case of the appellant. 15. For these grounds and for such other grounds that may be adduced at the time of hearing, it is prayed that the order of assessment framed be cancelled and the original assessment restored. 3. The assessee has also taken additional grounds of appeal which are as under: 01. The National Faceless Appeal Centre (NFAC) is not justified in dismissing Ground Nos 5 to 8 questioning the claim of several components of revenue expenditure aggregating to Rs.4,34,43,957/- as not arising out of the assessment order without due regard to the remand report called by them from the Assessing Officer on the same subject matter. 02. The NFAC has no basis to render the appellant order without the benefit of the remand report sought for when the Assessing Officer pursuant to remand directions vide notice dated 14.12.2024 sought clarifications on the actual write-off and duly responded to on 19.12.2024. 03. The NFAC is not justified in ignoring the reply to the remand report on 19.12.2024 justifying the claim for set-off of revenue loss arising out of reimbursements claimed as income per-se in assessment year 2016-17 aggregating to Rs.1,99,81,316/- and the balance Printed from counselvise.com :-4-: ITA. No.:1021/Chny/2025 Rs.2,34,62,641/- representing obsolete stocks no longer having marketable value and hence written off. The above additional grounds go into the factual matrix of the claim for revenue loss allowed in the original assessment and the faceless appellate authority by not adjudicating the factual issue and dismissing the ground as de-hors the assessment record goes into the root of the assessment which if left unchallenged would result in miscarriage of justice and failure to examine the substratum of reassessment proceedings. In view of the above, it is humbly submitted that the Hon’ble ITAT may be kind enough to admit the additional ground for disposal of merits of the case. 4. The assessee is a Company and filed its return of income for the year under consideration on 07.11.2017 declaring a total income of Rs.1,48,37,800/-. Thereafter, the assessee filed its revised return of income on 24.08.2018 admitting the same total income of Rs.1,48,37,800/-. The case was selected for scrutiny and accordingly assessment u/s.143(3) of the Act was completed on 28.11.2019 assessing the total income of the assessee at Rs.2,03,67,230/-. 5. Thereafter, within the end of 4 years from the end of the A.Y.2017-18, reassessment proceedings were initiated u/s.147 of the Act, by issue of notice u/s.148 of the Act on 30.03.2021. In response, the assessee filed its return of income on 13.04.2021 by declaring a total income of Rs.1,48,37,800/-. Subsequently, various statutory notices were issued to the assessee which were responded to from time to time. 6. Brief facts are that the assessee had made a slump sale during A.Y.2016- 17, the same was computed under long term capital gain and was brought to tax. However, the balance sale consideration pertaining to the above sale was received only during the subsequent years. The parties to the business transfer Printed from counselvise.com :-5-: ITA. No.:1021/Chny/2025 agreement being Konica Minolta Private Limited and Monotech System Ltd (Assessee) had a dispute in transfer of stock and debtors, which were not taken up by Konica Minolta Private Limited and the same was not considered as part of net assets. Since, the asset was not transferred, there was no question of capital gain arising on that. Those assets, were forming part of assessee’s books of accounts during the financial year 2016-17 relevant to A.Y.2017-18. As the said stock and debtors were no longer realizable, assessee decided to write off the same during the A.Y.2017-18. The company was of the opinion that, since those assets were neither part of slump sale nor part of business assets hence treated the stock and debtors by writing off as short term capital loss arising during the A.Y.2017-18. A show cause notice dated 25.03.2022 along with draft assessment order was issued to the assessee to which assessee responded on 28.03.2022. Thereafter, the reassessment was completed by the AO under section 147 r.w.s.144B of the Act, vide order dated 30.03.2022. In the said order, the AO observed that the portion of the consideration amounting to Rs.4,34,44,057/- pertaining to the slump sale of an undertaking transferred to Konica Minolta Private Limited during the financial year 2015-16, which remained unrealized, represented a long-term capital loss. Accordingly, the claim of bad debt written off amounting to Rs.4,34,44,057/- debited to the Profit and Loss Account for the year under consideration was disallowed and added back to the total income of the assessee for the year under consideration. 7. Being aggrieved, the assessee preferred an appeal before the ld.CIT(A) against the assessment order dated 30.03.2022, passed u/s.147 of the Act Printed from counselvise.com :-6-: ITA. No.:1021/Chny/2025 challenging the validity of the re-assessment proceedings and as well as the denial of the claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/- which was added to the to the total income of the impugned year .The ld. CIT(A) dismissed the appeal of the assessee with the following observations: “The contentions of the appellant have been perused but not found to be tenable. The appellant’s contention that AO has all relevant material at the time of passing of the original assessment order u/s.143(3) of the Act cannot be considered in view of the rigours of Explanation 1to 147 which is as follows: - “Explanation 1. Production before Assessing Officer of account books or other evidence from which material evidence could with due diligence have been discovered by the Assessing Officer will not necessarily amount to disclosure within the meaning of the foregoing proviso…” Further, from the order u/s.147/143(3) of the Act, it is quite clear that the reasons were duly provided to the appellant in respect of reopening of the assessment. The appellant has not furnished any documentary evidence on the contrary to prove his contentions. In view of the facts and circumstances as stated above, there is no infirmity in the reopening of the assessment of the appellant. Hence, the grounds of appeal nos. 1, 2, 3 and 11 are dismissed.” “The Contentions of the appellant have been perused but not found to be tenable. The provisions of section 45(5) of the Act are applicable to the slump sale of the appellant hence, the subsequent sale of the assets cannot be taken as Short-Term Capital Loss by the assessee. Further, it can neither be treated as bad debts or expenditure u/s.36(1)(vii) of the Act. Since, the slump sale has resulted in long term capital gains, the subsequent transaction of the sale of the assets has to take similar character and not other-wise since the appellant has sold a block of assets and a part of it cannot be treated differentially. In view of the facts and circumstances as stated above, the grounds of appeal nos. 4 and 10 are dismissed” 8. Aggrieved by the order of the ld. CIT(A), the assessee is in appeal before us. Printed from counselvise.com :-7-: ITA. No.:1021/Chny/2025 9. Before us, on the issue of re-opening, the ld. AR for the assessee narrated the above facts of the case and submitted that this legal issue raised in Ground no.1 & 2 relates to reopening and re-assessment and its validity. Bringing our attention to the reasons recorded for re-opening, ld.AR for the assessee submitted that the issue raised in the reasons was the subject matter of scrutiny in the regular assessment completed u/s.143(3) of the Act on 28.11.2019. The ld.AR submitted that the re-assessment proceedings are liable to be set aside on the ground that the same amounts to “change of opinion”, since the issue of denial of the claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/- which has been made in the re-assessment proceedings, was raised and discussed in detail during the course of the original assessment proceedings. The ld.AR further submitted that the AO had completed the original assessment after examining all relevant records called for in respect of the claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/-. In the absence of any fresh material or tangible information coming to the AO's possession, the reopening of the assessment based on the same set of facts amounts to a mere change of opinion, which is not legally sustainable. The ld.AR drew our attention to notice u/s.142(1) of the Act dated 21.10.2019, forming part of the paper book at pages 9 – 10, which was issued to the assessee during the course of the original assessment proceedings, in which the issue of the claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/- was raised during the course of original assessment proceedings. In response, evidenced at pages 11 – 14 of the paper Printed from counselvise.com :-8-: ITA. No.:1021/Chny/2025 book, the assessee produced the requisite details and documents called for which were duly examined by the AO during the course of the assessment proceedings and formed an opinion. It was further submitted that only after being satisfied with the submissions and records produced, the AO completed the assessment u/s.143(3) of the Act by making certain disallowances/additions to the total income as declared by the assessee. 10. Further, the ld.AR drew our attention to the reasons recorded for reopening the assessment at page 27 – 28 of the paper book and submitted that the issue relating to the assessee’s claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/- had already been examined by the AO in the course of the original assessment proceedings. The ld.AR contended that the reasons recorded for initiation of the reassessment proceedings are founded solely on the very same issue of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/-, which, according to the ld.AR, amounts to a mere change of opinion. The reasons recorded for reopening the assessment are reproduced hereunder for the sake of clarity. “The Assessee filed the return of income on 07.11.2017 admitting an income of Rs.1,48,37,800/-. The assessment was completed on 28.11.2019 u/s.143(3) assessing income of Rs.2,03,67,230/-. A portion of the consideration in respect of slump sale of an undertaking transferred to Konica Minolta Business Solutions India Private Limited during the FY 2015-16 to the extent of Rs.4,34,44,057/- has not received and it had been claimed as short term capital loss (STCL) and got adjusted against the other head of receipts in the year under consideration. This treatment is incorrect. The shortfall in consideration received in respect of the transfer of the Long-Term Capital receipt is a long-term capital loss and cannot be classified as a STCL. It remains an undisputed fact that the slump sale has Printed from counselvise.com :-9-: ITA. No.:1021/Chny/2025 resulted in Long Term Capital Gain Slump Sale involved transfer of Long- Term capital Asset only and it is for that reason tax at a concessional rate of 20% as been remitted against the resultant LTCG In Asst year 2016-17. This being the case, treating is as STCL in the subsequent year is grossly incorrect. The provision of section 45(5) of the Act, is relied upon to drive their contention. As pe Sec 45(5), if compensation is received subsequently, by an order of court or Tribunal, it would be treated as Capital gain in the year of receipt and not in the year of transfer. While doing so if the original asset transferred was a long-term capital asset, the subsequent receipt cannot partake the character of short-term capital gain. The corollary also holds good and hence the short fall has to be treated as loss and such loss attains the character of the original transaction. Since, the slump sale has resulted in LTCG and the subsequent year loss on account of non-realization of a portion of sale consideration has to partake an exactly similar character and not otherwise. It can neither be treated as bad debt to be eligible as expenditure u/s.36(1)(vii). Since the asset original transferred is a capital asset, and not a stock in trade, under similar circumstances, the Mumbai ITAT in the case of JCIT v Videocon Industries Ltd ( ITA no 7252/Mum/07) for the Asst Year 2003-04 dated 20.05.2011 had held that amount recoverable from a party in respect of the consideration receivable on transfer of asset not held as stock in trade cannot resultant in claim of bad debt u/s.36(1)(vii). Since provisions of section 36 (2)(i) requires that the amount claimed as bad debts should have been taken into account in computing the business income of the assessee in any of the earlier years or in the year in which it is claimed as deduction. Since the profit that had resulted in slump sale are not considered as business income in AY 2016-17 it is allowability as bad debt u/s.36(1)(vii) in the subsequent year is illogical. Therefore, even the alternative claim made by the assessee vide letter dated 25.09.2020 untenable. For the reason detailed above, the provisions of clause (c) explanation 2 to 147 are applicable to the facts of the case and the assessment year under consideration is deemed to be a case where income chargeable to tax has escaped assessment. Since, 4 years from the end of relevant assessment year has not expired in this case, the only requirement to initiate proceedings u/s.147 is reason to believe which has been recorded above. It is pertinent to mention here that in this case assessment was made as stipulated u/s.2(40) of the Act. This aspect has not been dealt.” 11. The ld.AR submitted that the AO’s initiation of reassessment proceedings regarding the claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/- was based solely on information already available Printed from counselvise.com :-10-: ITA. No.:1021/Chny/2025 on record. It was further contended that such reopening constitutes a change of opinion, which is impermissible in law, as the issue had been specifically examined and adjudicated upon during the original assessment proceedings. The assessment order was passed only after due verification and application of mind by the AO to the assessee’s claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/-. Consequently, having duly examined and accepted the assessee’s explanation and supporting evidence, the AO did not make any disallowance in respect of claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/- in the original assessment order completed u/s.143(3) dated 28.11.2019. Accordingly, in the absence of any fresh tangible material, the AO lacked the jurisdiction to reopen the assessment u/s.147 of the Act, and in doing so would effectively tantamount to a review of the earlier assessment under the guise of reassessment, which is prohibited by settled judicial precedents. 12. Therefore, the ld.AR prayed for quashing the re-assessment order passed by the AO as invalid. In support of the legal contention challenging the validity of the re-assessment proceedings, ld.AR relied on the decision of the Hon’ble Supreme Court in the case of CIT vs. Kelvinator of India Limited reported in 320 ITR 561. 13. Per contra, the ld. DR, on the other hand, strongly supported the impugned order of the ld.CIT(A) and submitted that the reassessment was validly initiated by the AO on a new issue which had not been specifically examined during the Printed from counselvise.com :-11-: ITA. No.:1021/Chny/2025 course of the original assessment completed u/s.143(3) of the Act and contended that the reopening of the assessment was in accordance with law and fully justified in the facts and circumstances of the case. 14. We have heard the rival contentions, perused material available on record and gone through the orders of lower authorities along with the paper book and case laws relied on by the assessee. In order to appreciate the contention of the ld.AR for the assessee on the issue raised in this case challenging the validity of reopening of assessment, it is relevant to refer to the reasons as recorded by the AO for reopening supra. A perusal of the reasons recorded by the AO clearly shows that the reopening of assessment was based solely on the issue of the claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/- and on no other ground. The ld.AR invited our attention to the relevant pages of the paper book supra, wherein the AO had issued a detailed questionnaire during the course of original assessment proceedings, in respect of the assessee’s claim of bad debts written off in the Profit and Loss Account for the year amounting to Rs.4,34,44,057/-. The relevant extract of the said questionnaire, as placed at page 10 of the paper book, was specifically referred to, is extracted as under: “1. Substantiate that the amount of Rs.4,34,44,057/- has already been considered as part of sale consideration of the slump sale in order to allow its loss due to non-recovery in the year under consideration.” 15. The ld. AR further invited our attention to the fact that the assessee had duly furnished its reply thereto during the course of the original assessment proceedings, providing all requisite details and explanations as were called for by Printed from counselvise.com :-12-: ITA. No.:1021/Chny/2025 the AO with regard to the assessee’s claim of bad debts written off in the Profit and Loss Account for the year amounting to Rs.4,34,44,057/-. Further, while framing the assessment order, the AO had considered the reply furnished by the assessee with regard to the claim the claim of bad debts written off in them P & L Account of the year amounting to Rs.4,34,44,057/- and the assessment order was consequently completed after taking into account the aforesaid submissions and material available on record. Therefore, in our considered opinion, the reassessment has been initiated merely on account of a change of opinion by the AO on the very same set of facts that were already examined during the original assessment proceedings. The reassessment initiated by the AO is based solely on the information already available in the assessment records, without any reference to new or tangible material which in our considered view constitutes a mere change of opinion, which is impermissible in law. The AO had examined the reply furnished on the claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/-, applied his mind, and concluded the original assessment proceedings, indicating that an opinion was formed at that stage of original assessment proceedings and consequently, it was not permissible for him to exercise his power u/s.147 of the Act on the same material available on record. 16. In light of the above facts, admittedly, the AO had fully examined the issue of the claim of bad debts written off in the P & L Account of the year amounting to Rs.4,34,44,057/- during the course of original assessment proceedings. The assessment was completed after due application of mind to the issue raised in Printed from counselvise.com :-13-: ITA. No.:1021/Chny/2025 the reasons recorded by him before the re-assessment proceedings were initiated and specific disallowances/additions were made in completing the original assessment u/s.143(3) of the Act dated 28.11.2019. Therefore, reopening the assessment u/s.147 of the Act, based on the same material amounts to a mere change of opinion, which has been consistently held by various judicial precedents to be impermissible in law. Consequently, the reassessment proceedings initiated by the AO are without jurisdiction and liable to be quashed. Accordingly, Ground no.1 & 2 raised by the assessee are allowed. 17. In the case of CIT vs Kelvinator of India Limited (supra), cited by the ld.AR for the assessee, it was held by the Hon’ble Supreme Court that after the amendment made w.e.f. 1st April, 1989, the AO has to have reason to believe that income has escaped assessment, but this does not imply that the AO can reopen an assessment on a mere change of opinion. It was held that the concept of “change of opinion” must be treated as an in-built test to check the abuse of power and hence the AO even after the amendments made in the relevant provisions from April 1, 1989 has the power to reopen an assessment provided there is tangible material to come to the conclusion that there was escapement of income from assessment. 18. The aforesaid decision was also followed by the Hon’ble Delhi High Court in the case of Usha International Ltd. 210 taxmann 188, wherein the Delhi High Court held that when the Assessing Officer completed an assessment under Section 143(3) of the Act, he is presumed to have accepted the contentions of Printed from counselvise.com :-14-: ITA. No.:1021/Chny/2025 the assessee even if there is no express reference to them in the assessment order and if within 2 years he issues a notice to re-open the assessment, it is nothing but a change of opinion. Further, the Delhi High Court in the aforesaid decision held that assessment proceedings cannot be validly reopened under Section 147 of the Act even within 4 years, if the assessee has furnished full and true particulars at the time of original assessment with reference to the income alleged to have escaped assessment, if the original assessment was made under Section 143(3) of the Act. While passing the order, the Delhi High Court made the following observation: “Reassessment proceedings will be invalid in case an issue or query is raised and answered by assessee in original assessment proceedings and Assessing Officer does not make any addition in assessment order. In such situations it should be accepted that the issue was examined but the Assessing Officer did not find any ground or reason to make addition or reject the stand of the assessee. He forms an opinion. The reassessment will be invalid because the Assessing Officer had formed an opinion in the original assessment, though he had not recorded his reasons.” 19. In light of the facts as recorded hereinabove and upon careful consideration of the judicial precedents on the issue, including the observations of the Hon’ble Supreme Court in the case of CIT v. Kelvinator of India Ltd. (supra), we are of the considered view that the initiation of reassessment proceedings in the present case has been made merely on account of a change of opinion based on the existing material on record. It is a settled proposition of law that reassessment cannot be initiated in the absence of any new tangible material or fresh information coming to the possession of the AO. Accordingly, we hold that the reassessment order, having been passed on a mere change of opinion, is unsustainable in law and is, therefore, liable to be quashed. Printed from counselvise.com :-15-: ITA. No.:1021/Chny/2025 20. Since we have quashed the assessment order on legal grounds, we do not find it necessary to adjudicate grounds raised on the merits of the case and it is kept open. 21. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 11th November, 2025 at Chennai. Sd/- Sd/- (मनु क ुमार ग\u0019र) (MANU KUMAR GIRI) \u000eया\u001aयक सद य/Judicial Member (एस. आर. रघुनाथा) (S. R. RAGHUNATHA) लेखा सद य/Accountant Member चे\u000eनई/Chennai, .दनांक/Dated, the 11th November, 2025 SP आदेश क) '\u001aत0ल1प अ2े1षत/Copy to: 1. अपीलाथ&/Appellant 2. '(यथ&/Respondent 3.आयकर आयु3त/CIT– Chennai/Coimbatore/Madurai/Salem 4. 1वभागीय '\u001aत\u001aन ध/DR 5. गाड$ फाईल/GF Printed from counselvise.com "