Reassessment notices fail where reasons are undisclosed and no sustainable basis exists to believe income escaped assessment.

Reassessment notices under sections 147 and 148 of the Income-tax Act were held invalid because the assessing authority did not disclose the reasons for reopening and failed to show a legally sustainable basis for forming the requisite belief that income had escaped assessment. A suggested ground relating to interest income and a loan from the assessee's minor son was insufficient, particularly where the authority could have verified the position from the completed assessment and other available material before reopening. The notices were therefore quashed as an unlawful exercise of reassessment power.

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Issues: Whether the notices issued for reopening assessments under sections 147 and 148 of the Income-tax Act, 1961 were valid when the reasons for reopening were not disclosed and the stated basis was found to be unsustainable.

Analysis: The notices merely asserted escapement of income, but the assessing authority declined to disclose the reasons for reopening. The record did not show any sustainable foundation for invoking the power to reopen, and even the suggested basis that interest income had not been disclosed because of a loan from the petitioner's minor son did not justify resort to reassessment proceedings. The authority could have ascertained the position from the completed assessment of the son and other available material, and failure to do so did not confer power to reopen the concluded assessments.

Conclusion: The notices under sections 147 and 148 were illegal and liable to be quashed, in favour of the assessee.

Ratio Decidendi: Reassessment under sections 147 and 148 cannot be sustained unless the reopening is founded on a legally sustainable basis and a proper jurisdictional satisfaction exists to believe that income has escaped assessment.

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