Reassessment notice requires independent bona fide belief on relevant material; borrowed satisfaction cannot justify reopening.

A reassessment notice under section 148 was invalid where the reopening officer did not independently form a bona fide belief, on relevant material, that income had escaped assessment because of failure to disclose fully and truly all material facts. The record showed only a statutory recital and action initiated at the instance of another officer, while the relied-on material came from a separate proceeding concerning a benamidar allegation. On those facts, the statutory condition precedent for reopening under section 147(a) was not met, and the notice was liable to be struck down.

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Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961, for reopening the assessment for assessment year 1961-62 was validly issued on the existence of reason to believe based on relevant material.

Analysis: The reopening power under section 147(a) of the Income-tax Act, 1961, could be exercised only if the Income-tax Officer had reason to believe, in good faith, that income chargeable to tax had escaped assessment because of omission or failure to disclose fully and truly all material facts necessary for the assessment. The material relied upon by the Revenue was the finding in another proceeding that the assessee's wife was a benamidar in a partnership concern. However, the record showed that the reopening officer did not independently apply his mind to any concrete material of his own before forming the requisite belief. The proposal and order sheet largely repeated the language of the statute, while the letter forwarding the proposal showed that the action was initiated at the behest of another officer rather than on an independently formed belief. On these facts, the statutory condition precedent for reopening was not satisfied.

Conclusion: The notice under section 148 was invalid and liable to be struck down, and the assessee succeeded.

Ratio Decidendi: A reassessment notice can stand only where the assessing authority independently forms, on relevant material, a bona fide belief that escapement of income occurred due to nondisclosure of primary facts; a mere statutory recital or borrowed satisfaction is insufficient.

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