Reassessment on disclosed facts fails where no fresh tangible material supports a bona fide belief of escaped income.

Reassessment under section 147 was held invalid because the reopening rested only on material already disclosed in the return, computation and audit report, with no fresh tangible material to create a live nexus with a bona fide belief that income had escaped assessment. The recorded reasons merely reappraised earlier facts, including the taxpayer's note that IT support service receipts were not royalty or fees for technical services under the treaty. Since the jurisdictional condition of objective material was not satisfied, the reopening lacked legal foundation and was quashed in favour of the assessee.

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Issues: Whether the reassessment initiated under section 147 of the Income-tax Act, 1961 was valid in the absence of tangible material forming a reason to believe that income had escaped assessment.

Analysis: The assessee had disclosed the relevant receipts in its return computation and audit report, including a specific note stating that the IT support service receipts were not royalty or fees for technical services under the treaty. The reasons for reopening were based on material already available from earlier proceedings and did not bring any fresh tangible material demonstrating escapement of income. For reopening under section 147, the existence of a reason to believe must rest on a live link with objective material showing escapement of income; mere reappraisal of disclosed facts is insufficient. As the recorded reasons were identical to those considered in earlier years and no new material was shown, the jurisdictional requirement for reassessment was not satisfied.

Conclusion: The reassessment proceedings were invalid and without jurisdiction, and the reopening was quashed in favour of the assessee.

Ratio Decidendi: Reassessment under section 147 can be sustained only where the Assessing Officer has tangible material creating a live and rational nexus with a bona fide belief of escapement of income; in the absence of fresh material, reopening on already disclosed facts is not permissible.

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