JUDGMENT judgment of court was delivered by S. Ravindra Bhat J.-The Revenue is aggrieved by order of Income- tax Appellate Tribunal (hereinafter referred to as "the ITAT") dated July 15, 2011, in I. T. A. No. 1874/Del/2011. Income-tax Appellate Tribunal affirmed order of Commissioner of Income-tax (Appeals) but had set aside assessee's second reassessment, pursuant to notice under section 147 of Income-tax Act, 1961, for assessment year 2002-03. It is urged that findings are erroneous that reopening of proceedings was warranted in circumstances of case. assessee, statutory Central Government corporation, filed its return declaring loss of Rs. 2,65,77,24,891. return was processed under section 143(1). It was later selected for scrutiny, and notice was served upon assessee on October 17, 2003, under section 143(2). During course of scrutiny assessment, Assessing Officer ("the AO") framed detailed questionnaire concerning 18 issues, and asked assessee to furnish replies and relevant details. assessee furnished requisite details in detailed reply and also annexed necessary documents. Assessing Officer, thereafter, completed assessment on February 22, 2005. In this initial assessment, Assessing Officer disallowed certain amounts including exemption claimed under section 10(29) of Act as well as certain categories of income and purchase. (while matter stood thus, on March 17, 2006, Assessing Officer issued reassessment notice, this time alleging that exemption claimed under section 10(29) was inadmissible. He sought to add back sum of Rs. 15,90,10,698. This was premised also, inter alia, on footing that section 37 could not have been sought recourse to, by assessee in circumstances. This reassessment notice (hereinafter called "first reassessment notice") was set aside by Appellate Commissioner on October 25, 2007. matter attained finality. Yet again, on December 20, 2007, Assessing Officer issued second reassessment notice under section 147-this time not only including amounts sought to be added earlier but also other amounts such as prior period expenses, deferred expenditure claimed for purchase of dunnage, its treatment in books and debiting of unabsorbed expenditure in profit and loss account. This reassessment proceedings and order was challenged by assessee. Commissioner of Income-tax (Appeals), by order dated February 11, 2011, was of opinion that second reassessment notice in fact was impermissible "change of opinion". He also considered merits of additions and recorded that they were untenable. Revenue's appeal to Income-tax Appellate Tribunal was rejected by impugned order. It is argued that examination of assessee's reply to questionnaire clearly reveals that while it had originally not claimed these allowances, it did so in revised return filed by it. This has led to enquiry by Assessing Officer who ultimately chose not to pursue matter in light of assessee's reply dated February 10, 2005. Assessing Officer categorised this as "reason to believe", under section 147 of Act and sought to justify reopening in circumstances of case. Counsel for assessee urged that upon opening of original reassessment pursuant to first reassessment notice dated March 17, 2006, it was open to Assessing Officer to look into entire record and bring to tax such amounts as found necessary. Not having do so, Assessing Officer could not have fallen back on record, in absence of "tangible material" or fresh reason, which alone could have provided him rationale to issue reassessment notice. So far as questions sought to be urged is concerned it is as evident from above discussion that second reassessment notice was based upon re- appreciation of original record. This court notices that Commissioner of Income-tax (Appeals) as well as Income-tax Appellate Tribunal have concurrently ruled that whatever material or explanation in respect of issues sought to be raised in second reassessment notice to assessee were part of record and could have been noticed in first reassessment proceedings. Furthermore, Commissioner of Income-tax (Appeals) and Income- tax Appellate Tribunal considered elaborately on merits of addition and held that effort of Assessing Officer to bring such amounts to tax was not justified. Income-tax Appellate Tribunal pertinently noticed as under: "The formation of such belief exhibiting escapement of income or reasons should have direct nexus with information enabling Assessing Officer to form such belief. interdiction provided in first proviso appended to section 147 puts and embargo upon powers of Assessing Officer. It contemplates that if assessment under section 143(3) has been made for relevant assessment year and four years have expired from end of relevant assessment year then such notice would not be issued unless any income chargeable to tax has escaped assessment for such assessment year by reason of failure on part of assessee to make return under section 139 or in response to notice issued under section 142(1) or section 148 or to disclose fully and truly all material facts necessary for his assessment for that assessment year. Admittedly, assessee has filed return under section 139 of Income-tax Act, 1961. only requirement left is whether assessee can be charged with allegation that it failed to disclose all material facts fully and truly in respect of income escaped. Thus, operative force of proviso is that Assessing Officer should demonstrate, failure of assessee to disclose all material facts fully and truly, which gives rise to escapement of income. In this connection, we have gone through record carefully. first item referred to by Assessing Officer in reasons relates to allowability of certain expenditure which has to be ascertained whether incurred wholly and exclusively for purpose of business or not. Assessing Officer, thereafter, referred to certain expenditure. In questionnaire issued on January 14, 2005, at Sr. No. 5, Assessing Officer called for explanation of assessee on one item is: 'Expense incurred on engineering division has been charged to revenue instead of capitalising it with project/capital assets.' Apart from this one query, assessee has placed on record details of all other expenses referred to by Assessing Officer in reasons. learned counsel for assessee at time of hearing, referred schedule No. 5 at pages 125 and 126 of paper book which contains details of miscellaneous expenses on page 125 at Sr. No. 5, assessee has made reference to deferred revenue expenses written off. Similarly at Sr. No. 8, it refers to dunnage. At Sr. No. 24, expenses relating to quality improvement expenses (ISO) has been shown and at Sr. No. 32, expenses related to unabsorbed (ISO) has been shown and at Sr. No. 32, expenses related to unabsorbed overhead on capital work has been shown. learned counsel for assessee, thereafter, referred to page 133 and pointed out that assessee has placed on record income and expenditure account relating to prior periods. In this connection, it has referred loss on write off assets also which is sought to be enquired by Assessing Officer in these reasons. net Rs. 1,70,42,520 worked out by assessee in income and expenditure account has duly been taken in computation of income. For buttressing this, learned counsel for assessee drew our attention towards annexure B at page 22 of paper book wherein computation of assessable income/loss has been placed on record. In this computation, he pointed out that prior period expenditure charged to profit and loss account has been added at Rs. 1,70,42,520. learned counsel for assessee similarly explained other items. After going through all details, we find that assessee has disclosed all material facts fully and truly. Assessing Officer has merely made mention in reasons that it failed to disclose all material facts fully and truly. We have gone through accounts which were made available to Assessing Officer in original round of litigation. When Assessing Officer sought to reopen assessment at first instance, he did not make reference to these aspects though he made reference to allowability of expenses under section 37 of Income-tax Act, 1961. In view of above discussion, we are of view that assessee has demonstrated on record, that all facts relevant for assessment of its income have been declared by it fully and truly." This court had in judgment reported as Honda Siel Power Products Ltd. v. Deputy CIT [2012] 340 ITR 53 (Delhi) held that page 81 paragraph 13 held that question as to whether there is failure or omission to disclose fully and truly material facts as essentially one of fact. This was affirmed by Supreme Court in Honda Siel Power Products Ltd. v. Deputy CIT [2012] 340 ITR 64 (SC). Supreme Court ruling in CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC)'is authority for view that "reason to believe" on which reassessment can be validly ordered should necessarily be based on "tangible material" which Assessing Officer comes by after assessment. Necessarily, such material is outside record. Straying from this clear path would be sliding down slippery slope into quagmire of reappreciation of existing material and-even process of reasoning which is impermissible as it is forbidden "merits review". Reassessment, if permitted in such instances would be route which (to borrow phrase from another context) "unlocks gate which shuts" Assessing Officer's review on merits (Attorney General for New South Wales v. Quin [1990] 64 Aust LJR 237). In view of above discussion this court is of opinion that impugned order does not suffer from any infirmity. appeal is, consequently, dismissed. *** Commissioner of Income-tax v. Central Warehousing Corporation