Reassessment jurisdiction and AIR-based reopening fail where notice is unauthorized, reasons are unsupported, and mandatory notice is absent.

Reassessment is invalid where the notice is issued by a non-jurisdictional Assessing Officer, because jurisdiction must rest with the officer duly vested over the assessee and a later transfer does not cure the defect. Reopening cannot rest on AIR information alone; without independent tangible material or a live nexus showing escapement of income, the recorded reasons are insufficient. In reassessment, notice under section 143(2) remains mandatory, and its absence is fatal. On the merits, cash deposits supported by withdrawals and business receipts cannot justify an addition where relevant bank and cash-flow material is ignored.

---

---

Issues: (i) Whether the reassessment notices and consequential assessments were invalid because they were issued by a non-jurisdictional Assessing Officer; (ii) Whether the reopening was sustainable on the basis of AIR information alone without independent tangible material establishing reason to believe; (iii) Whether the reassessment failed for want of notice under section 143(2) and whether the addition under section 69A could survive in light of cash withdrawals and business receipts.

Issue (i): Whether the reassessment notices and consequential assessments were invalid because they were issued by a non-jurisdictional Assessing Officer.

Analysis: Jurisdiction to issue a notice under section 148 must rest with the Assessing Officer who is vested with authority over the assessee under the relevant statutory allocation of jurisdiction. The record showed that the notice was issued by one ward and the assessment was completed by another, while the department failed to produce the jurisdictional order or any material showing valid conferral of authority on the issuing officer. The transfer of the case after issuance of notice did not cure the initial lack of jurisdiction.

Conclusion: The notice under section 148 was invalid and the reassessment based on it was unsustainable.

Issue (ii): Whether the reopening was sustainable on the basis of AIR information alone without independent tangible material establishing reason to believe.

Analysis: The reasons recorded referred only to AIR information about cash deposits and did not disclose any independent tangible material, live nexus, or fresh objective basis showing escapement of income. Reopening cannot rest on mere suspicion or a desire to make further enquiry; the material must rationally connect with the belief that income has escaped assessment. The recorded reasons were treated as insufficient on that test.

Conclusion: The reopening was not sustainable on the recorded reasons.

Issue (iii): Whether the reassessment failed for want of notice under section 143(2) and whether the addition under section 69A could survive in light of cash withdrawals and business receipts.

Analysis: The requirement of notice under section 143(2) is mandatory in reassessment proceedings, and absence of such notice is fatal. On the merits, the assessee produced cash-flow explanations, bank statements, withdrawals, and business-related materials showing that the deposits were linked to earlier withdrawals and receipts. The addition was made by ignoring relevant material and by proceeding on conjectures rather than on a complete appreciation of the bank transactions.

Conclusion: The reassessment was vitiated for want of valid notice, and the addition under section 69A was also not justified.

Final Conclusion: The reassessment notices and the additions made in both years were set aside, and the assessee succeeded on all substantial grounds.

Ratio Decidendi: A reassessment is invalid when the notice is issued without jurisdiction and without a live, tangible nexus between the recorded material and the belief of escapement of income, and the mandatory notice requirement under section 143(2) cannot be dispensed with in reassessment proceedings.

---