Lack of definitive quantum of escapement and change of opinion: Gujarat HC held reopening invalid

 

The assessee had recorded purchases of ₹58.05 crore from Ruchita Chemicals LLP, which were thoroughly examined and accepted in the original assessment under Section 143(3).

From these funds, Ruchita Chemicals LLP advanced ₹7 crore to M/s Invent Asset Securitization and Reconstruction Pvt. Ltd – the entity subjected to a search.

It remained an admitted fact that the assessee had no direct or indirect nexus with Invent Assets. The High Court held that the reopening was predicated purely on presumptions and amounted to a mere change of opinion. The AO’s remark in the objection disposal – that the “exact quantum of escapement, if any, will be finalized only upon completion of assessment proceedings” – demonstrated that the AO was uncertain about quantum of escapement. Consequently, the reassessment proceedings were quashed.

The copy of the order is as under:SCA26502025_GJHC240142652025_3_25112025-2025_GUJHC_68115-DB