Reassessment requires independent belief on tangible material, and scrutiny assessment fails without a mandatory section 143(2) notice.

Reassessment under sections 147 and 148 cannot be sustained where the Assessing Officer acts only on Investigation Wing information and suspicion without independent application of mind or tangible material; the reopening was therefore invalid. A scrutiny assessment under section 143(3) read with section 147 also fails where no notice under section 143(2) is issued for the relevant assessment year, because that notice is mandatory and the defect is not cured by participation. On these principles, the reassessment proceedings and resulting assessment order were quashed.

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Issues: (i) Whether reassessment under sections 147 and 148 was valid when initiated only on information from the Investigation Wing without independent application of mind or tangible material; (ii) Whether the assessment framed under section 143(3) read with section 147 was invalid for want of a notice under section 143(2) for the relevant assessment year.

Issue (i): Whether reassessment under sections 147 and 148 was valid when initiated only on information from the Investigation Wing without independent application of mind or tangible material.

Analysis: The reasons recorded showed that the reopening was based on information received from the Investigation Wing and on an expressed suspicion that income had escaped assessment. The recorded reasons did not disclose an independent inquiry by the Assessing Officer or a live link between objective material and the formation of belief. Reopening on mere suspicion, or for verification through a fishing and roving exercise, does not satisfy the statutory requirement of reason to believe.

Conclusion: The reopening was held invalid and the ground challenging jurisdiction was allowed in favour of the assessee.

Issue (ii): Whether the assessment framed under section 143(3) read with section 147 was invalid for want of a notice under section 143(2) for the relevant assessment year.

Analysis: The notice under section 143(2) was issued for a different assessment year and not for the year under consideration. Since issuance of notice under section 143(2) is mandatory for a valid scrutiny assessment, the defect went to the root of the assessment proceedings and could not be cured by participation in the proceedings.

Conclusion: The assessment was held liable to be quashed for absence of the mandatory notice and the ground was allowed in favour of the assessee.

Final Conclusion: The reassessment proceedings and the resulting assessment order could not survive, and the appeal succeeded with the assessment quashed.

Ratio Decidendi: Reassessment jurisdiction can be assumed only on the basis of independent formation of belief founded on tangible material, and a scrutiny assessment is invalid unless the mandatory notice under section 143(2) is issued for the relevant year.

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