Reassessment notice invalid for mere change of opinion; fresh material and full disclosure failure were not shown.

Reopening under section 148 requires material supporting a bona fide belief that income escaped assessment because the assessee failed to disclose fully and truly all material facts. Here, the later investigation into alleged bogus hundi loan transactions in subsequent years had no nexus with the relevant assessment year and did not show suppression of similar transactions in that year. The reassessment was therefore based on a mere change of opinion rather than fresh material meeting the statutory precondition. The notice was held without jurisdiction, the reassessment notice was quashed, and the writ petition succeeded.

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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 1960-61 was valid, and whether the prerequisite belief that income had escaped assessment by reason of the assessee's failure to disclose fully and truly all material facts was satisfied.

Analysis: The reasons furnished for reopening were based on a later investigation said to show that certain hundi loan transactions in subsequent years were bogus. The materials did not disclose any nexus between those later findings and the assessment year in question, nor did they show that the assessee had suppressed any loan transactions of that kind in the relevant year. On the facts stated, the reopening was founded on a mere change of opinion and not on discovery of fresh material giving rise to the statutory belief required for reassessment.

Conclusion: The notice under section 148 was jurisdiction and could not be sustained; the conditions precedent for reopening were not met, and the challenge succeeded.

Final Conclusion: The reassessment notice was quashed and the writ petition was allowed because the statutory basis for reopening the completed assessment was absent.

Ratio Decidendi: A reassessment notice can be sustained only when the authority has material giving rise to a bona fide reason to believe that income escaped assessment due to the assessee's failure to make full and true disclosure; a mere change of opinion does not confer jurisdiction.

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