Reassessment material must be income-tax relevant; foreign-exchange remittance letters cannot justify reopening concluded assessments.

Reassessment under the income-tax law requires relevant material bearing on escapement of income, and letters issued under a separate foreign-exchange regime cannot, by themselves, supply that foundation. The foreign-exchange letters regulated remittance limits abroad, not the allowability of income-tax deductions, and any contravention under that regime had to be addressed under the foreign-exchange law. Because the remittance ceiling did not convert previously allowed deductions into escaped income, the reassessment notices lacked jurisdiction and were quashed. The appeals succeeded.

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Issues: Whether notices issued for reassessment under the Income-tax Act could be sustained on the basis of letters issued under the Foreign Exchange Regulation Act and whether those letters constituted relevant information giving rise to a reason to believe that income had escaped assessment.

Analysis: The reopening was founded on two government letters dealing with foreign-exchange remittance limits. Those letters operated under a different statutory regime and regulated remittances abroad, not the computation or allowability of income-tax deductions. Any excess remittance or contravention under that regime was a matter for action under the foreign-exchange law and could not, by itself, furnish material for reopening concluded income-tax assessments. The existence of ceilings on remittances did not convert previously allowed deductions into income escaping assessment, and the Income-tax Officer could not invoke reassessment power on an irrelevant foundation.

Conclusion: The reassessment notices were without jurisdiction and were liable to be quashed.

Final Conclusion: The appeals succeeded, the High Court order was set aside, and the reassessment notices were struck down.

Ratio Decidendi: Reassessment under the income-tax law can be initiated only on relevant material bearing on escapement of income, and an administrative restriction under a different statute governing foreign-exchange remittances cannot constitute such material.

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