Reopening under section 147 fails when recorded reasons rest on a false premise about the assessee's reply and cash deposits.

A reopening under section 147 must rest on a valid reason to believe that income has escaped assessment, even where the original assessment was accepted without scrutiny and the change of opinion doctrine does not apply. Here, the assessee had replied to the cash-deposit query and supported the source with material, but the recorded reasons incorrectly stated that no explanation had been furnished. A belief based on that ? no, English. A belief based on incorrect facts could not sustain reopening, and the notice could not be saved by later improving the recorded reasons. The reopening notice was invalid and was quashed.

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Issues: Whether the reopening notice under section 147 was sustainable when the recorded reasons proceeded on the incorrect assumption that the assessee had not replied to the query regarding cash deposits.

Analysis: The assessment had originally been accepted without scrutiny, so the doctrine of change of opinion was not attracted. Even so, reopening required a valid reason to believe that income chargeable to tax had escaped assessment. The assessee had in fact responded to the query, explained the source of the cash deposits, and furnished supporting material. The recorded reasons wrongly stated that no explanation had been furnished and proceeded on that basis. A belief formed on such wrong facts could not sustain reopening, and the attempt to justify the notice by improving the recorded reasons was impermissible.

Conclusion: The reopening notice was invalid and was quashed.

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