Reassessment requires tangible material and real reason to believe, not verification requests or a mere change of opinion.

Reassessment under the Income-tax Act can be initiated only on a valid reason to believe, supported by relevant and tangible material showing escaped assessment; it cannot rest on conjecture, a mere request for verification, or a change of opinion on material already disclosed. On the facts, the recorded reasons relied mainly on entries already shown in the returns and accounts, without identifying fresh material or non-disclosure, and the objection orders reflected non-application of mind, including an incorrect reference to a search and seizure operation. The reopening notices under section 148 and the orders rejecting objections were therefore unsustainable in law.

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Issues: Whether the reassessment notices issued under section 148 of the Income-tax Act, 1961, and the orders rejecting objections thereto were sustainable in law on the basis of recorded reasons showing escaped assessment and application of mind.

Analysis: Reassessment under section 147 can be initiated only where the Assessing Officer has reason to believe that income has escaped assessment, and such belief must rest on relevant and tangible material with a live nexus to the formation of belief. Mere conjecture, verification requests, or a different view on the same disclosed material cannot justify reopening, because reassessment is not a power of review. The recorded reasons in these cases proceeded largely on admitted disclosures in the returns and accounts, such as interest, advertisement, consultancy expenses, sundry creditors, and depreciation, without showing any fresh material or non-disclosure by the assessee. The repeated observation that matters "need verification" reflected guesswork rather than a legally sustainable belief. The order rejecting objections for one assessment year also contained an obviously incorrect reference to a search and seizure operation, which reinforced the absence of application of mind.

Conclusion: The reopening proceedings were held unsustainable because the notices under section 148 and the orders rejecting objections were founded on non-application of mind and a mere change of opinion, and not on valid reasons to believe.

Ratio Decidendi: Reassessment can be validly initiated only on the basis of relevant, tangible material showing escaped assessment, and not on conjecture, mere verification, or a change of opinion on material already disclosed by the assessee.

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