Reassessment based on an incorrect factual premise is void when reopening and approval rest on non-existent non-disclosure.

Reassessment was invalid because the recorded reasons and sanction under section 151 proceeded on the mistaken premise that the assessee had not filed a return and had not disclosed the capital transaction. The return and computation showing disclosure of the property transaction were already on record, so the jurisdiction assumed for reopening was vitiated by incorrect foundational facts. The defect went to the root of the reassessment and no remand was required because the relevant material was already available. The reassessment was held void, and the jurisdictional challenge succeeded in favour of the assessee.

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Issues: (i) Whether the reassessment proceedings were valid when the recorded reasons and approval proceeded on the incorrect assumption that the assessee had not filed the return and had not disclosed the capital transaction.

Analysis: The return of income and the computation showing disclosure of the property transaction were already on record. The reopening was initiated on the belief that no return had been filed, and the approval under section 151 was granted on that mistaken factual premise. Since the foundational facts for reopening were incorrect, the jurisdiction assumed for reassessment was vitiated. The matter did not require remand because the relevant material was already available on record and the defect went to the root of the reassessment.

Conclusion: The reassessment was held to be invalid and the jurisdictional challenge was allowed in favour of the assessee.

Final Conclusion: The appeal succeeded only on the reopening issue, while the remaining grounds were left undecided, resulting in partial relief to the assessee.

Ratio Decidendi: Reassessment cannot be sustained where the reasons recorded and the approval for reopening rest on an incorrect foundational fact going to jurisdiction, rendering the proceedings void.

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