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TMI Blog2010 (4) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 (hereinafter referred to as "the said Act"). The facts are that the assessee in his original return of income filed on 30.11.1998 had shown a long term capital gain of Rs 40,953/-. The said return was processed under Section 143(1) on 22.03.2002. Subsequently, by a letter dated 17.03.2003, the Deputy Director of Income Tax (Investigation) informed the Assessing Officer of the assessee that during the course of investigation Shri Satish Goel, proprietor of M/s R. K. Aggarwal and Company has stated on oath that the transactions through bank account No. 003097 of Corporation Bank were only paper transactions in which the party was intending to take bills paid in cash and issue cheques/ drafts showing the said amounts as sale of shares. It wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03 to initiate proceedings u/s 148 in respect of cases pertaining to this ward. Thus, I have sufficient information in my possession to issue notice u/s 148 in the case of M/s SFIL Stock Broking Ltd. on the basis of reasons recorded as above." 4. Thereafter, during the re-assessment proceedings, the Assessing Officer made an addition of Rs 20,70,000/- by holding that the assessee could not explain the source of the entries. Being aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), who confirmed the order passed by the Assessing Officer. Thereafter, the appellant preferred a second appeal before the Income Tax Appellate Tribunal in which an additional ground with regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Tribunal had erred. He submitted that a substantial question did arise for the consideration of this Court. In particular, the learned counsel for the appellant / revenue relied upon the following portion of the Supreme Court decision in Rajesh Jhaveri (supra):- "16. Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word "reason" in the phrase "reason to believe" would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... harat Maruti Ltd. v. CIT: 223 CTR 269 (Del) and CIT v. Batra Bhatta Company: 174 Taxman 444 (Del). The learned counsel for the assessee/ respondent also submitted that the decision of the Supreme Court in the case of Rajesh Jhaveri (supra) was also clear in stating that there must be a belief which must be arrived at by the Assessing Officer and that there must be some material before the Assessing Officer so as to arrive at such a belief in order that the expression "reason to believe" is triggered. He submitted that in the present case, if one were to examine the reasons recorded prior to issuance of the notice under Section 148, there is only an information which has purportedly been received from the Deputy Director of Income Tax (Inves ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... did not say that it was not necessary for the Assessing Officer to form a "belief" and that the mere fact that there was some material on record was sufficient. 9. In the present case, we find that the first sentence of the so-called reasons recorded by the Assessing Officer is mere information received from the Deputy Director of Income Tax (Investigation). The second sentence is a direction given by the very same Deputy Director of Income Tax (Investigation) to issue a notice under Section 148 and the third sentence again comprises of a direction given by the Additional Commissioner of Income Tax to initiate proceedings under Section 148 in respect of cases pertaining to the relevant ward. These three sentences are followed by the follow ..... X X X X Extracts X X X X X X X X Extracts X X X X
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