Reassessment reopening failed where recorded reasons showed only cash loan acceptance, not escapement of taxable income.

Reopening under section 148 was invalid because the recorded reasons referred only to acceptance of a cash loan and an alleged violation of section 269SS, without showing escapement of income chargeable to tax. A cash loan, by itself, is not income, so the jurisdictional condition for reassessment was not satisfied. The defect in the recorded reasons was not cured by the assessment order, which proceeded on the same footing. The notice under section 148, the order disposing of objections, and the assessment order were quashed and set aside.

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Issues: Whether notice issued under section 148 of the Income-tax Act, 1961 for reassessment was valid when the recorded reasons referred only to acceptance of a cash loan and alleged contravention of section 269SS, without disclosing any escapement of income chargeable to tax.

Analysis: The reasons recorded for reopening did not state that any income chargeable to tax had escaped assessment. They proceeded only on the basis that the assessee had accepted a cash loan and thereby violated section 269SS. A cash loan, by itself, could not be treated as income, and the jurisdictional precondition for invoking section 148 was therefore absent. The assessment order also proceeded on the same basis and did not cure the foundational defect in the reopening.

Conclusion: The notice under section 148, the order disposing objections, and the assessment order were quashed and set aside. The issue was decided in favour of the assessee.

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