Invalid reassessment reopening where recorded reasons had factual errors and lacked a live nexus to escapement of income.

Reopening of assessment under the Income-tax Act was held unsustainable because the recorded reasons contained material factual errors, including incorrect references to the assessment year, the return filed, and alleged TDS details. The reassessment was not based on a live nexus between tangible material and a belief that income had escaped assessment, and the approval under Section 151(1) was treated as mechanical and without proper application of mind. As the jurisdictional foundation itself was defective, the reopening and resulting assessment were quashed; the remaining grounds were left undecided as academic.

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Issues: Whether the reopening of assessment under Section 147 of the Income-tax Act, 1961 was valid in the facts of the case.

Analysis: The recorded reasons for reopening were found to contain material inaccuracies and inconsistencies, including erroneous references to the assessment year, the assessee's returns, and alleged TDS filings. The reassessment was held to rest on non-existent or irrelevant facts rather than on a live link between tangible material and the formation of belief that income had escaped assessment. The approval granted under Section 151(1) of the Income-tax Act, 1961 was also treated as mechanical and without proper application of mind. Since the foundation for invoking reassessment jurisdiction was defective, the reopening could not be sustained.

Conclusion: The reopening of assessment under Section 147 of the Income-tax Act, 1961 was invalid and without jurisdiction, and the assessment order was quashed.

Final Conclusion: The appeal succeeded on the jurisdictional challenge, while the other grounds were left undecided as academic.

Ratio Decidendi: Reassessment jurisdiction can be assumed only on a valid formation of belief based on relevant material, and where the recorded reasons suffer from material factual errors and lack a live nexus with escapement of income, the reopening and the resulting assessment are void.

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