JUDGMENT These two writ petitions challenge two separate notices dated March 23, 2005, issued under section 148 of Income-tax Act, 1961 ("the Act"), seeking to reopen assessment for assessment years 1998-99 and 1999-2000, respectively. counsel are agreed that facts and issues arising for consideration in both petitions are identical. Therefore, for sake of convenience, we shall refer to facts in Writ Petition No. 1360 of 2006 before considering issues involved in this group of petitions. petitioner filed its return of income for assessment years 199899 on November 2, 1998, disclosing loss of Rs. 4.98 lakhs. On March 30, 2001, Assessing Officer passed order under section 143(3) of Act determining petitioner's income at Rs. 47.11 lakhs. In course of assessment, Assessing Officer held that interest paid on borrowings was business expenditure to be allowed as revenue expenditure. On above basis, interest to extent of Rs. 10.31 crores paid on borrowings was allowed as expenditure to determine petitioner's income at Rs. 47.11 lakhs. On March 23, 2005, impugned notice seeking to reopen assessment year for year 1998-99 was issued. reasons in support of impugned notice as furnished to petitioner read as under: "11. Reasons for belief that income has escaped assessment: While completing assessment for assessment year 200102, it was held that advances made to various concerns for promoting and nurturing, with end intention of acquiring these concerns was not part of business activities. Therefore, it was held that these advances were of capital nature. 2. During year under consideration assessee has claimed that advances made for promoting and nurturing is business and interest of Rs. 10,31,89,562 on borrowings as business expenditure. However, interest paid on these advances is also of capital nature required to be disallowed. Accordingly, interest paid on these advances is also of capital nature requires to be disallowed. 3. Therefore, I have reason to believe that income chargeable to tax to extent of payment of interest of Rs. 10,31,89,562 on borrowings has escaped assessment. Hence, proposal for reopening assessment under section 147 of Income-tax Act, 1961, is put up for approval of Commissioner of Income-tax-12, Mumbai, under section 151(1) of Income-tax Act, 1961." petitioner, by its letter dated December 23, 2005, objected to reasons furnished in support of impugned notice dated March 23, 2005. However, Assessing Officer by order dated March 20, 2006, rejected petitioner's objection by common order for both assessment years 1998-99 and 1999- 2000. Mr. Andhyarujina, learned senior counsel appearing for petitioner, in support of petitions submits- (a) notices have been issued beyond period of four years from end of relevant assessment year without in any manner indicating any failure on part of petitioner to disclose truly and fully all material facts for purposes of assessment in petitioner's case; (b) impugned notices are result of mere change of opinion. Therefore, there is no jurisdiction to issue it; and (c) assessment order dated March 30, 2001, was subject matter of appeal proceedings under Act. Therefore, in view of doctrine of merger, original order of assessment sought to be reopened has merged into appellate order. Therefore, impugned notices are not sustainable. As we found substance in submissions made on first issue, namely, impugned notices having been issued beyond period of four years from end of relevant assessment year, reasons in support do not indicate any failure on part of petitioner to submit fully and truly all material facts necessary for assessment, we stopped Mr. Andhyarujina from making his submissions in support of other issues raised by him. We informed Mr. Andhyarujina that we will hear him on other submissions, if it is necessary, after hearing Revenue on this issue. We, therefore, called upon from Mr. Arvind Pinto, learned counsel appearing for Revenue, to address us on above issue of failure to disclose truly and fully all material facts necessary for assessment in absence of there being any indication of same in reasons recorded for issuing impugned notices. Mr. Pinto, learned counsel for Revenue, relies upon reasons furnished in support of impugned notices and upon order dated March 20, 2006, dismissing petitioners' objections to impugned notices. Thus, on above basis it is submitted that petitions be dismissed. Admittedly, impugned notices have been issued beyond period of four years from end of relevant assessment year in both petitions. reasons as furnished to petitioner, reproduced herein above, do not indicate even remotely any failure on part of petitioner to disclose truly and fully material facts necessary for assessment. reasons proceed on basis that for subsequent assessment year, Assessing Officer has held interest paid on borrowings is capital in nature and, therefore, not allowable as expenditure. Consequently, it is submitted that income chargeable to tax has escaped assessment. However, reasons nowhere indicate any failure on part of petitioner to disclose truly and fully material facts necessary for assessment. reliance by Mr. Pinto upon order dated March 20, 2006, rejecting petitioner's objections and affidavit-in-reply dated July 24, 2006, to contend that there has been failure on part of petitioner to disclose fully and truly all material facts necessary for assessment is not permissible. This court has time and again held that reopening of assessments under section 148 of Act beyond period of four years from end of relevant assessment year has to specify failure on part of petitioner to disclose fully and fully all material facts necessary for assessment. It is only on satisfaction of above jurisdictional requirement that notice under section 148 of Act can be issued by Assessing Officer seeking to reopen assessment beyond period of four years from end of relevant assessment year. impugned notices would stand or fall on basis of reasons recorded at time when impugned notices were issued. These reasons cannot be improved upon, substituted or supplemented either by affidavits or while disposing of objections of petitioner as held by this affidavits or while disposing of objections of petitioner as held by this court in Hindustan Lever Ltd. v. R. B. Wadkar, Asst. CIT (No. 1) reported in [2004] 268 ITR 332 (Bom). In view of above, respondent-Revenue has to justify impugned notices only on basis of reasons recorded at time of issuing notices. reasons, as recorded and furnished to petitioner, do not disclose even remotely any failure on part of petitioner to disclose truly and fully material facts necessary for assessment during relevant assessment years 1998-99 and 1999-2000. Thus, impugned notices dated March 23, 2005, being without jurisdiction cannot be sustained. In view of above, both impugned notices dated March 23, 2005, issued under section 148 of Act seeking to reopen assessment for assessment years 1998-99 and 1999-2000 are quashed and set aside. petitions allowed. Rule made absolute. No order as to costs. *** Business India v. Joint Commissioner of Income-tax