Reassessment validity requires tangible material; an expert report alone cannot justify notice without independent evidence of escapement.

Reassessment under sections 147 and 148 requires tangible material giving the Assessing Officer reason to believe that income has escaped assessment; the belief cannot rest on vague or conjectural material. An expert commission report, without independent application of mind or concrete evidence of actual escapement, is insufficient. Here, the report only suggested a lower declared export price than the prevailing international price and did not show receipt of consideration over and above invoice value. The reassessment notice and all consequential proceedings were therefore without jurisdiction and could not be sustained.

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Issues: Whether reassessment proceedings under sections 147 and 148 of the Income-tax Act, 1961 were valid when the recorded reasons were founded only on an expert commission report and not on independent tangible material showing escapement of income.

Analysis: For valid reassessment, the Assessing Officer must have reason to believe, based on relevant and material grounds, that income has escaped assessment. The belief cannot rest on vague, remote, or conjectural material, and there must be a rational nexus between the material and the inference of escapement. An expert report or opinion, by itself, is not sufficient unless the Assessing Officer applies independent mind to some concrete information indicating actual escapement of income. In the present case, the report only suggested that the declared export price was lower than the prevailing international price. It did not discover any material showing receipt of consideration over and above the invoice value, nor did the Assessing Officer bring any independent material on record.

Conclusion: The reassessment notice and the consequential proceedings were without jurisdiction and could not be sustained.

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