What are the conditions for initiating a reassessment proceeding?

As per Section 147 of the Income Tax Act, the Assessing Officer must have a ‘reason to believe’ that the taxpayer’s income has escaped assessment or has been underassessed. This reason must be based on tangible material and not mere suspicion or change of opinion. The reassessment notice must be issued within the specified time limits, typically 4 years from the end of the relevant assessment year. However, in cases of income escaping assessment due to failure to disclose fully and truly all material facts, the time limit is extended to 6 years.