In the ever-evolving jurisprudence surrounding the power of Revenue to undertake reassessment, the Supreme Court in a recent decision had the occasion to analyse and explain the doctrine of ‘change of opinion’. In the case of Sanand Properties (P.) Ltd. v. JCIT^[1], the Supreme Court while upholding the reassessment has clarified that the defence of ‘change of opinion’ would be inapplicable where though the relevant documents are furnished however, there is a failure on the part of the taxpayer to specifically draw the attention of the AO to the material facts emerging from those documents.

The dispute arose in the context of reassessment proceedings where the taxpayer contended that the reopening was based entirely on documents that already formed part of the original assessment record. Clarifying the principle laid down in Kelvinator of India Ltd.^[2], the Supreme Court identified two scenarios namely, first where the material which forms the basis of reason to believe for initiating reassessment had already been considered/acted upon by the AO and second where though such material is available on record but same is neither considered nor acted upon by the AO during the original assessment proceedings. The Supreme Court held that while the material available on record may not amount to ‘tangible material’ for initiating reassessment in first scenario, it may be construed as ‘tangible material’ for reopening an assessment in the second scenario.

Rejecting the contention of the taxpayer, the Supreme Court further reaffirmed the principle laid down in the cases of Calcutta Discount Co. Ltd.^[3] and Phool Chand Bajrang Lal^[4], observing that the statutory duty of full and true disclosure is not discharged merely by producing books of account or documentary evidence. Rather, the taxpayer is required to specifically point out the material facts and relevant portions of such documents to the AO. Accordingly, the mere availability of information on record would not, by itself, preclude reassessment where the material facts were not specifically brought to the notice of the AO.

The Supreme Court further observed that explanation 1 to section 147 of the IT Act reinforces this principle by providing that the production of evidence from which material facts could have been discovered through due diligence, does not by itself amount to full and true disclosure. Consequently, where a taxpayer merely places documents on record without identifying the relevant facts contained therein, reassessment may still be permissible if income has escaped assessment on account of such omission.

The decision highlights the importance of ensuring that material facts are not only placed on record but are also adequately brought to the attention of the AO during the original assessment proceedings. While the judgment does not alter the settled position that reassessment cannot be founded on a mere change of opinion, it clarifies that the requirement of full and true disclosure extends beyond the mere production of documents.

[1] [2026] 488 ITR 337 (SC).

[2] [2010] 320 ITR 561 (SC).

[3] [1961] 41 ITR 191 (SC).

[4] [1993] 203 ITR 456 (SC).