Reassessment jurisdiction fails where reopening reasons rest on the wrong assumption that no return was filed.

Reassessment under sections 147 and 148 depends on recorded reasons that establish jurisdiction on a correct factual foundation. Where the reasons state that an assessee was a non-filer, but the record shows a return had in fact been filed under section 139, the foundational assumption is materially wrong and the belief of escapement cannot sustain reopening. The defect is not cured by the assessment order, and the reassessment is treated as void ab initio for want of valid jurisdiction.

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Issues: Whether reassessment under sections 147 and 148 of the Income-tax Act, 1961 was valid when the recorded reasons proceeded on the incorrect factual assumption that the assessee had not filed its return of income.

Analysis: The recorded reasons formed the foundation of jurisdiction for reopening the assessment. They stated that the assessee was a non-filer, whereas the record showed that the return had in fact been filed under section 139 of the Income-tax Act, 1961. The inconsistency was material because the belief of escapement of income was built on a factually incorrect premise. Once the basic fact assumed in the reasons was shown to be wrong, the reopening could not be sustained. The defect was not cured by the assessment order, and the reassessment was therefore treated as invalid in law.

Conclusion: The reassessment proceedings were held to be void ab initio and the challenge to jurisdiction succeeded in favour of the assessee.

Final Conclusion: The legal ground against reopening succeeded, the revenue's appeal failed, and the assessee obtained relief on the jurisdictional issue.

Ratio Decidendi: Reassessment under sections 147 and 148 cannot be sustained when the recorded reasons for reopening are founded on an erroneous and material factual assumption that goes to the existence of jurisdiction.

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