Final appellate finding bars reassessment on same facts; fresh material must be pursued under the correct reopening provision.

A reassessment notice issued under section 148 read with section 147(a) was held invalid because a prior appellate finding that the original reopening was unjustified had become final and binding on the department. That concluded finding negatived the statutory basis for reopening on the same foundational facts, so the department could not disregard it and proceed again under section 147(a). Any genuinely fresh material would have had to be considered, if at all, under section 147(b), not section 147(a), and that route was time-barred on the facts noted. The notice was therefore without jurisdiction and was quashed.

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Issues: Whether a reassessment notice under section 148 of the Income-tax Act, 1961, founded on section 147(a), was valid when an earlier appellate finding that the original reopening was unjustified had become final and binding on the department.

Analysis: The earlier appellate order held that the original assessment had already been made after enquiry into the loans and that no valid basis existed for reopening under section 34(1)(a) of the 1922 Act. The department's appeal against that finding was withdrawn, with the result that the finding remained undisturbed and binding. A reassessment cannot be initiated again on the same foundational facts by disregarding a concluded finding which negatives the statutory basis for believing that income has escaped assessment. If any fresh material or information had emerged, the proper provision would have been section 147(b), not section 147(a). The attempt to proceed under section 147(a) on the asserted new material could not therefore be sustained, particularly when proceedings under section 147(b) were time-barred.

Conclusion: The notice under section 148 read with section 147(a) was without jurisdiction and invalid.

Final Conclusion: The assessee succeeded in obtaining quashing of the reassessment notice, and the respondents were directed to cancel it.

Ratio Decidendi: A final and binding appellate finding that the original assessment was not amenable to reopening on the existing facts precludes a subsequent reassessment on the same basis under section 147(a), and fresh material, if any, must be pursued only under the provision legally appropriate to that material.

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