Reassessment reopening upheld where disclosure, bogus creditors, and enquiry materials supported a live link to escapement of income.

Reopening under section 148 was upheld where the assessee's own disclosure petition, admitted peak credits in fictitious names, and enquiry materials showing bogus or untraceable creditors gave a rational connection and live link to the belief that income had escaped assessment under section 147. The Court held that these materials were neither vague nor extraneous, and that the successor assessing officer's affidavit could be relied on when the original officer had retired, provided it matched the recorded reasons. Objections based on limitation under section 149(a)(ii), sanction under section 151(1), the amount alleged to have escaped assessment, and rejection of the disclosure petition were rejected on the facts.

---

---

Issues: Whether the notice issued for reopening the assessment under section 148 was valid in law, including whether there was material to form the requisite belief under section 147, whether the notice was within time under section 149(a)(ii), and whether the sanction under section 151(1) and the reliance on the disclosure petition were sufficient.

Analysis: The assessment had originally been completed under the 1922 Act, but the later material included the assessee's own disclosure petition, the admitted introduction of peak credits in fictitious names, and enquiries showing that the alleged creditors were bogus or not traceable. The Court held that these materials were not vague or extraneous and that they supplied a rational connection and live link for the belief that income had escaped assessment due to failure to disclose fully and truly all material facts. It further held that, where the original assessing officer was unavailable due to retirement, the affidavit of the successor who had acquainted himself with the records and whose statements matched the recorded reasons could be considered. The objections based on lapse of time, the amount alleged to have escaped assessment, and rejection of the disclosure petition were rejected on the facts.

Conclusion: The reopening notice and the consequential reassessment proceedings were upheld as valid, and the challenge was rejected.

---