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2018 (1) TMI 810 - HC - Income TaxReopening of assessment - recording the reasons for initiating the reassessment proceedings - legality of notice - sufficiency and adequacy of the reasons - Held that:- A perusal of the reasons recorded by the AO for issuing notice u/s 148 reveals that the re-assessment proceedings has been initiated against the assessee on the basis of the material impounded during the survey of M/s Akash Amar Agrotech Pvt. Ltd. and post survey investigation. As during the relevant A.Y. the assessee has shown agriculture income of ₹ 15,24,600/- in lieu of sale of agriculture land which has been claimed as exempt from tax. As main business activity of the appellant assessee as per its own record is purchase and sale for the purpose of development and subsequent sale, which forms the source of its revenue. The factum of the appellant assessee entering into development agreement for the purpose of development and sale of the land has also come on record. Thus where the return filed by the assessee was not subjected to scrutiny assessment, the belief formed by the AO after due examination of the material on record that the income of the assessee chargeable to tax during the relevant assessment year has escaped assessment cannot be said to be arbitrary or irrational or there exists no rational and intelligible nexus between the reasons and the belief. It is true that the reasons recorded or the material available on record must have nexus to the subjective opinion formed by the AO regarding the escapement of the income but then, while recording the reasons for belief formed, the AO is not required to finally ascertain the factum of escapement of the tax and it is sufficient that the AO had cause or justification to know or suppose that income had escaped assessment [see Rajesh Jhaveri Stock Brockers Pvt. Limited’s case (2007 (5) TMI 197 - SUPREME Court )]. It is also well settled the sufficiency and adequacy of the reasons which have led to formation of a belief by the Assessing Officer that the income has escaped the assessment cannot be examined by the court. - Decided against assessee.
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