Reassessment requires recorded reasons showing failure of full and true disclosure before reopening a completed assessment.

Reassessment under sections 147 and 148 requires recorded reasons showing that the assessee failed to disclose fully and truly all material facts, especially where the original assessment was completed under section 143(3). In the absence of a clear recorded satisfaction on that jurisdictional requirement under the first proviso to section 147, the reopening cannot be sustained in law. On the facts stated, the reopening was invalid and the reassessment was quashed.

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Issues: Whether the reassessment proceedings initiated under section 147 read with section 148 of the Income-tax Act, 1961 were valid in the absence of clear recorded reasons showing failure by the assessee to disclose fully and truly all material facts.

Analysis: The assessment year in question had already been completed under section 143(3) of the Income-tax Act, 1961. The reopening was initiated thereafter by notice under section 148, but the recorded basis did not disclose any clear finding that the assessee had failed to make a full and true disclosure of income as required by the first proviso to section 147. In the absence of such recorded satisfaction, the reopening could not be sustained in law.

Conclusion: The reopening was held invalid and the reassessment was quashed.

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