The assessee’s case, which had been concluded under scrutiny, was sought to be reopened by a notice under Section 148. The reasons recorded alleged that the assessee had failed to disclose a property transaction. However, the High Court noted that the reasons were founded on fundamentally incorrect facts, including details of the return of income and the original assessment order, which pertained to a different legal entity and not the assessee. When the assessee pointed out these errors in its objections, the Assessing Officer failed to address them and instead made further mistakes in the order disposing of the objections. The High Court held that the jurisdictional pre-requisite of having a ‘reason to believe’ that income has escaped assessment must be based on correct facts. As the Assessing Officer proceeded on entirely wrong information, demonstrating a total non-application of mind, there could be no valid reason to believe that income had escaped assessment. Accordingly, the Court quashed the notice and the consequential proceedings. (AY. 2016‑17)