Reassessment notices upheld where objective material supported a bona fide belief of escaped income from non-disclosure.

Reassessment under section 148 was treated as valid where objective material, including large deposits, bank credits and remittances, gave rise to a bona fide belief that income had escaped assessment because material facts were not fully and truly disclosed. The prior settlement and earlier assessment of some items did not, on the facts found, rule out the possibility that other amounts represented undisclosed income from earlier years. The notices were therefore sustained as having a sufficient jurisdictional basis, and the challenge to the reassessment proceedings failed.

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Issues: Whether the notices issued under section 148 of the Income-tax Act, 1961 for reopening the assessments for the assessment years 1946-47 to 1950-51 were validly founded on a reason to believe that income had escaped assessment because of the assessee's failure to disclose material facts fully and truly.

Analysis: The assessments sought to be reopened were based on large deposits, bank credits, and remittances which, in the authority's view, were disproportionate to the disclosed income and assets of the assessee and could indicate concealed income accumulated over several years. The prior settlement and the fact that some items had been considered in the assessment for 1951-52 did not, on the facts found, exclude the possibility that other amounts represented earlier undisclosed income. Applying the principle that reassessment can be initiated where there is material giving rise to a bona fide belief that income has escaped assessment because material facts were not fully and truly disclosed, the Court held that the Income-tax Officer had sufficient jurisdictional basis to issue the notices.

Conclusion: The notices under section 148 were upheld and the challenge to the reassessment proceedings failed.

Final Conclusion: The writ application was rejected, and the reassessment notices for the earlier assessment years were sustained as validly issued.

Ratio Decidendi: Reassessment is permissible when objective material reasonably supports a bona fide belief that income escaped assessment due to non-disclosure of material facts, even if the suspected concealment is inferred from later discovered accumulations spread over earlier years.

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