Reassessment jurisdiction under section 148A fails where adverse material is withheld and the assessee's objections are not meaningfully considered.

Section 148A requires the Assessing Officer to furnish the material suggesting escapement of income, consider the assessee's reply, and then decide whether notice under section 148 should issue. Where the adverse material is not supplied and the reply is not meaningfully dealt with, the reassessment process is procedurally defective and the assumption of jurisdiction is vitiated. On the stated facts, the order under section 148A(d) merely repeated departmental information and did not answer the assessee's factual objections, so the consequential reassessment notice under section 148 was treated as invalid and quashed.

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Issues: Whether the reassessment proceedings and the notice issued under section 148 of the Income-tax Act, 1961 were vitiated because the Assessing Officer did not supply the adverse material relied upon at the stage of section 148A and did not meaningfully consider the assessee's reply.

Analysis: The statutory scheme of section 148A requires the Assessing Officer to furnish the information suggesting escapement of income, consider the assessee's reply, and then decide whether notice under section 148 should be issued. The assessee specifically objected that the material relied upon by the Assessing Officer was not supplied and that the reply pointing out factual inaccuracies in the reopening basis was not dealt with. The order under section 148A(d) merely repeated the departmental information and did not answer the assessee's factual objections. In such circumstances, the procedural safeguards built into the reassessment framework were not complied with and the assumption of jurisdiction stood vitiated.

Conclusion: The reassessment order and the consequential notice under section 148 were held to be valid jurisdiction and were quashed, in favour of the assessee.

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