Reassessment notice requires recorded material showing escaped income and failure to disclose material facts before reopening can stand.

Reassessment under the Income-tax law turns on jurisdictional preconditions: the Income-tax Officer must have, at the time of issuing notice, material giving rise in good faith to a reason to believe that income escaped assessment because the assessee failed to disclose fully and truly all material facts. The record must disclose that foundational material before the Court; later information requests cannot by themselves establish the earlier belief or its basis. On the limitation point, the notice was not treated as invalid, but the reopening ultimately failed because the revenue could not justify the statutory conditions for reassessment on the record.

---

---

Issues: (i) Whether the notice for reassessment was barred by limitation and whether the successor Act could revive a time-barred power to reopen; (ii) Whether the revenue had shown material to support the Income-tax Officer's belief that income had escaped assessment because of failure to disclose fully and truly all material facts.

Issue (i): Whether the notice for reassessment was barred by limitation and whether the successor Act could revive a time-barred power to reopen.

Analysis: The relevant escaped income was stated to exceed one lakh rupees. Under the earlier regime, no limitation operated for reopening in such a case, and therefore the later statutory provisions did not revive any extinguished right to reopen. The cited authorities dealing with time-barred reopenings were held inapplicable on those facts.

Conclusion: The notice was not invalid on the ground of limitation.

Issue (ii): Whether the revenue had shown material to support the Income-tax Officer's belief that income had escaped assessment because of failure to disclose fully and truly all material facts.

Analysis: Reopening under the reassessment provisions requires the existence of jurisdictional conditions, namely reason to believe based on material showing escapement of income attributable to omission or failure to disclose fully and truly all material facts. The Board's prior satisfaction does not replace the statutory duty to record reasons, and the material supporting the belief must be placed before the Court. The record disclosed no such material, and the later notices seeking information did not establish the earlier existence of the requisite belief or its factual basis.

Conclusion: The revenue failed to justify the reopening, and the notice was liable to be quashed.

Final Conclusion: The reassessment notice could not be sustained because the statutory preconditions for reopening were not established on the record.

Ratio Decidendi: A reassessment notice is valid only if the Income-tax Officer had, at the time of issuance, material giving rise in good faith to a reason to believe that income escaped assessment due to non-disclosure of material facts, and that foundational material must be demonstrable before the Court.

---