Reassessment reopening needs bona fide belief of escapement, not mere verification of third-party information.

Reopening of assessment under section 147 requires relevant material giving rise to a bona fide, prima facie belief that income has escaped assessment; a mere desire for detailed verification of third-party information is insufficient. On the recorded reasons, the Assessing Officer only referred to information from a third-party search and a need to investigate transactions, which did not satisfy the jurisdictional precondition for reopening. The notice was therefore without authority of law, the reassessment was quashed, and the merits of the additions were not examined; the time-limit objection was not separately decided once invalidity of the reopening was found.

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Issues: Validity of reopening of assessment under section 147 of the Income-tax Act, 1961, including whether the recorded reasons disclosed a bona fide "reason to believe" that income had escaped assessment and whether the notice issued was within the permissible time limits.

Analysis: The reasons recorded showed that the reopening was initiated on information received from a third-party search and for "detailed verification" of transactions, rather than on a definite or prima facie conclusion that income had escaped assessment. The requirement under section 147 is the existence of relevant material giving rise to a bona fide belief of escapement of income, and not merely a desire to investigate or verify the truth of information. On the facts recorded, the Assessing Officer expressed only a probable possibility of escapement and did not satisfy the jurisdictional precondition for reopening. In that view, the notice was without authority of law and the reassessment could not be sustained. The time-limit objection was not independently adjudicated in detail once the reopening itself was held invalid.

Conclusion: Reopening under section 147 was invalid and the reassessment was quashed in favour of the assessee.

Final Conclusion: The appeal succeeded on the jurisdictional challenge to reassessment, and the merits of the additions were not examined.

Ratio Decidendi: Reassessment cannot be initiated under section 147 on the basis of a mere request for verification or investigation of third-party information; there must first be relevant material leading to a bona fide prima facie belief that income has escaped assessment.

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