Reopening assessments requires genuine reason based on correct facts; unverified AIR material and mechanical sanction invalidate reassessment.

Reopening of assessment requires a genuine reason to believe formed on correct facts and a real application of mind; reliance on incorrect premises or unverified third party information vitiates jurisdiction. The AO recorded reasons repeatedly alleging non filing despite the record showing an e filed return and audited disclosure, and the approval was given mechanically without independent satisfaction. Applying precedent that mechanical sanction and reproduction of AIR data without verification are inadequate, the Tribunal concluded the statutory preconditions for valid reassessment were absent and quashed the reopening and reassessment order, dismissing the Revenue appeal.

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Issues: Whether the reassessment proceedings initiated by issuance of notice under Section 148 read with Section 147 of the Income-tax Act, 1961 are valid where the Assessing Officer recorded reasons premised on the assessee not having filed return and on AIR information, despite records showing a return was filed and disclosure made; and whether approval under Section 151 was accorded mechanically.

Analysis: The Tribunal examined the reasons recorded by the Assessing Officer and the approval proforma, noting that the recorded basis for reopening repeatedly stated the assessee had not filed a return while the assessment record itself recorded an electronically filed return and disclosure of the property in the audited balance sheet. The Tribunal applied the legal requirement that jurisdiction to reopen under Section 147/148 arises only upon a genuine reason to believe formed by the AO based on correct facts and a real application of mind. Reliance was placed on authoritative decisions establishing that reasons based on incorrect facts, mere reproduction of AIR information without verification, or mechanical approval under Section 151 vitiate jurisdiction. The Tribunal found the AO did not verify AIR information, proceeded on erroneous premises, and the approving authority granted sanction in a mechanical manner without true satisfaction; therefore the statutory preconditions for valid reopening were not met.

Conclusion: The notice issued under Section 148 and the consequent reassessment under Section 147 are invalid and the reassessment order is quashed; the Revenue's appeal is dismissed and the order of the ld. CIT(A) quashing the reopening is upheld.

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