9911796707
TMI Blog2004 (7) TMI 33X X X X Extracts X X X X X X X X Extracts X X X X ..... ised the following substantial question of law: "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in holding that the reassessments for the assessment years 1972-73, 1973-74, 1974-75 and 1977-78 in the case of the assessee were completed by the Assessing Officer without reason to believe that income has escaped assessment and therefore the reassessments are liable to be set aside?" The original assessments for the assessment years 1972-73, 1973-74, 1974-75 and 1977-78 were sought to be reopened invoking section 147 of the Income-tax Act by issuing a notice under section 148 of the Income-tax Act, of course based on a search said to have taken place on February 20, 1980. During the sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials available, but the sufficiency of the material is not so relevant. Once the materials are available for reopening the completed assessment during the search held on February 22, 1980, it cannot be said that there was no reason to believe for reopening the assessment, as the confession alleged to have been made by the respondent/assessee strongly supports the reason to believe for reopening the assessment. Inter alia, learned counsel for the Revenue contends that suffice it for the Assessing Officer to act upon the approximate quantification of the alleged escaped income. It is therefore contended that the decision of the Tribunal that there are no reasons to believe for reopening the assessment, is liable to be set aside. In thi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on to believe for the Department to reopen the assessment are materials which lacks specific, relevant and reliable criterions, such materials are liable to be rejected only on the ground that they may be reason to suspect, but not reason to believe, vide Phool Chand Bajrang Lal's case [1993] 203 ITR 456. The above proposition is also supported by another decision of the apex court reported in ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC), wherein it was held as follows: "The existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the belief. The expression 'reason to believe' does not mean a purely subjective satisfaction on the part of the Income-tax Officer. The reason must be held in go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n, requirement of law such as the live link or close nexus between the material coming to the notice of the Income-tax Officer and the formation of his belief that there has been escapement of the income of the assessee should be satisfied. Otherwise, the power conferred under section 147 of the Income-tax Act would amount to arbitrary and unreasonable exercise. Hence, while making it clear that the authorities do have the power to reopen the assessment under section 147, the materials relied on for such purpose should not be vague but should be definite, specific, relevant and reliable. In the instant case, the Assessing Officer relied upon the confession alleged to have been made by the assessee obtained on the date of search, i.e., on F ..... X X X X Extracts X X X X X X X X Extracts X X X X
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