Reassessment requires tangible material, not suspicion or a change of opinion; unsupported comparison cannot justify reopening.

Reassessment under sections 147 and 148 is valid only where the Assessing Officer has a bona fide belief based on tangible material; it cannot be used for a roving inquiry, suspicion, or a mere change of opinion. On the facts discussed, reasons based on higher profit rate, alleged low wage expenditure, and a need to verify deduction eligibility were found insufficient because they relied on unsupported comparison material. The objection under Rule 46A did not survive independently once the reassessment itself was held unsustainable, and no separate error in the Tribunal's treatment of that issue was found. The Revenue's challenge therefore failed and the reassessment orders were sustained only to the extent not disturbed.

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Issues: (i) Whether reopening of assessment under sections 147 and 148 of the Income-tax Act, 1961 was valid on the basis of the recorded reasons. (ii) Whether the Tribunal was justified in rejecting the objection based on Rule 46A.

Issue (i): Whether reopening of assessment under sections 147 and 148 of the Income-tax Act, 1961 was valid on the basis of the recorded reasons.

Analysis: The recorded reasons rested on the assessee's higher profit rate, alleged insufficiency of wage expenditure, and the need to verify eligibility for deduction. Reassessment under section 147 cannot be used for a roving or fishing inquiry or for mere verification. The belief required for reopening must rest on tangible material and cannot amount to a mere change of opinion or suspicion. Where the assessee's own later assessments disclosed comparable profit rates and the Assessing Officer relied on an unsupported comparison with another concern from a different period, the foundation for reopening was inadequate.

Conclusion: Reopening under sections 147 and 148 was invalid and the objection was decided in favour of the assessee.

Issue (ii): Whether the Tribunal was justified in rejecting the objection based on Rule 46A.

Analysis: The challenge under Rule 46A did not survive independently once the reassessment itself was held unsustainable. No error warranting interference was found in the Tribunal's treatment of that objection.

Conclusion: The objection under Rule 46A was not accepted against the assessee.

Final Conclusion: The Revenue's challenge to the reassessment failed, and the orders setting aside the reassessment were sustained.

Ratio Decidendi: Reassessment can be initiated only on the basis of a bona fide belief founded on tangible material, and not for verification, suspicion, or a mere change of opinion.

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