Reopening of assessment for alleged missing certificate must rest on recorded reasons; absent support, reassessment invalid and appeal allowed.

Reopening an assessment under reason-to-believe/suspect must be justified by the reasons recorded; materials referred only in an affidavit cannot validate a notice. The sole basis here - alleged allowance of interest deduction without a required certificate - did not fall within the statutory proviso making filing mandatory, so absence of a certificate did not establish non-disclosure. Reliance on postassessment audit objection was insufficient because it was not reflected in the reasons. Consequence: reassessment jurisdiction was invalidly invoked and the assessee's appeal succeeded.

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Issues: Whether the notice dated 28 March 2021 under Section 148 read with Section 147 of the Income-tax Act, 1961 (and the order dated 9 February 2022 disposing of objections) was validly issued/assumed where reopening was predicated on absence of a certificate under the third proviso to Section 24(b), more than four years after the assessment; and whether Explanation 1 to Section 147 or an audit objection supplied the requisite post-assessment tangible material or established a failure to disclose fully and truly all material facts.

Analysis: Applicable legal framework includes the requirements for reopening under Section 147 (and the proviso applicable where original assessment under Section 143(3) was completed more than four years earlier), the need for a reason to believe that income has escaped assessment, the proviso that such escapement must result from failure to disclose fully and truly all material facts, the test that the belief must have a rational nexus to the material relied upon (not a mere change of opinion), the role of Explanation 1 to Section 147 regarding discovery of primary facts with due diligence, and the requirement of tangible material coming into the Assessing Officer's possession after completion of the original assessment. The recorded reasons relied solely on the absence of a certificate under the third proviso to Section 24(b) despite undisputed primary facts showing the property was let out and the annual value was not taken to be nil under Section 23(2). The third proviso's certificate requirement applies only where the second proviso (special capped deduction for certain self-occupied situations) is attracted; it was not attracted here. The reasons thus lacked a legally relevant link between the material and the belief of escapement; no fresh tangible material post-assessment was shown in the reasons; disclosures in the return and documents filed with it and in specific replies during assessment could not be equated to a failure to disclose within the proviso to Section 147 or to fall within Explanation 1 so as to sustain reopening.

Conclusion: The notice under Section 148 dated 28 March 2021 and the order disposing of objections dated 9 February 2022 are quashed and set aside; the assumption of jurisdiction to initiate reassessment proceedings is not valid.

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