Reassessment requires tangible material; reopening based only on existing return disclosures was held invalid.

Reassessment under section 147 requires recorded reasons supported by tangible material indicating escapement of income; reopening cannot rest only on material already disclosed in the original return. The assessee had already disclosed the interest income and treaty exemption claim, and the reasons for reopening referred only to that same material without any fresh information coming to the Assessing Officer's notice. Because the original return had been processed under section 143(1) did not by itself justify reassessment, the reopening was held invalid and the proceedings under section 147 were quashed in favour of the assessee.

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Issues: Whether reassessment under section 147 was valid when the original return had been processed under section 143(1) and the recorded reasons did not disclose any fresh or tangible material.

Analysis: The assessee had disclosed the interest income and the claim for treaty exemption in the original return. The reasons recorded for reopening referred only to the same material already on record and did not mention any new information coming to the Assessing Officer's notice. Reopening must be tested on the basis of the recorded reasons and the material referred to therein. In the absence of tangible material, the mere fact that the return was earlier processed under section 143(1) did not by itself justify reassessment.

Conclusion: The reassessment was held invalid and the initiation of proceedings under section 147 was quashed in favour of the assessee.

Final Conclusion: The appeal succeeded because the reopening itself was found unsustainable, and the assessment made pursuant to it could not stand.

Ratio Decidendi: Even where the original return is processed under section 143(1), reassessment under section 147 requires tangible material forming a reason to believe that income has escaped assessment; a reopening unsupported by such material is invalid.

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