Mechanical reassessment reopening beyond three years fails where escaped income threshold is not properly established.

Reopening beyond three years required the Revenue to satisfy the higher jurisdictional threshold under section 149(1)(b) on a proper, reasoned application of mind to the material. The notice and order were based on mixed and inconsistent figures drawn from separate information heads, and the record did not establish escaped income exceeding the statutory threshold of Rs. 50 lakh. Because the Assessing Officer adopted a cumulative and mechanical approach without differentiating the underlying material, the reassessment was treated as lacking jurisdiction and the addition could not be sustained.

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Issues: Whether the reassessment initiation and consequent addition were invalid because the alleged escapement, on the facts recorded, did not cross the statutory threshold for reopening beyond three years and the proceedings were initiated mechanically.

Analysis: The reassessment notice was issued beyond three years from the relevant assessment year, so the reopening had to satisfy the higher jurisdictional threshold under section 149(1)(b) of the Income-tax Act, 1961. The material relied upon by the Assessing Officer proceeded on mixed and inconsistent figures, including sale and purchase transactions in immovable property and TDS-related information, and the record showed that the impugned addition ultimately rested on an amount of about Rs. 47 lakh. The notice under section 148A(b) and the order under section 148A(d) were found to have been framed without proper differentiation between the separate information heads and with a cumulative approach that did not establish escapement exceeding Rs. 50 lakh. This amounted to mechanical reopening and non-application of mind.

Conclusion: The reassessment action was held to be invalid and the reopening failed for want of jurisdiction.

Final Conclusion: The assessee succeeded on the jurisdictional challenge, and the impugned reassessment and sustained addition could not be upheld.

Ratio Decidendi: For reopening beyond three years, the statutory threshold of escaped income must be satisfied on a proper and reasoned application of mind to the material, and a mechanical or composite reopening based on an incorrect appreciation of figures cannot confer jurisdiction.

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