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Facts
The assessee, Sri Dhrub Narayan Parihast, challenged reassessment proceedings for AY 2009-10 initiated under Section 148, based on information from the DDIT (Inv) Dhanbad. The information alleged undeclared income from professional work, sale of land, and investments in property/land by the assessee and his parents. The assessee contended that the reasons recorded by the Assessing Officer were vague, lacked independent application of mind, and constituted a fishing and roving inquiry, thus invalidating the reassessment.
Held
The Tribunal observed that the reasons for reopening the assessment in the assessee's case were identical to those recorded for his mother, Smt. Maheshwari Devi. The Hon'ble Jurisdictional High Court had previously quashed the reopening in the mother's case, ruling that the reasons amounted to 'reason to suspect' rather than 'reason to believe' and lacked a live link to income escapement. Following this precedent, the Tribunal quashed the reassessment proceedings and the assessment order for the assessee.
Key Issues
Whether the reasons recorded by the Assessing Officer for initiating reassessment proceedings constituted a valid 'reason to believe' for income escaping assessment, or merely a 'reason to suspect' based on vague information.
Sections Cited
Section 148 of the Income Tax Act, 1961, Section 147 of the Income Tax Act, 1961, Section 143(3) of the Income Tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, IN THE INCOME TAX APPELLATE TRIBUNAL,
Before: S/HRI GEORGE MATHAN & RATNESH NANDAN SAHAYRATNESH NANDAN SAHAYRATNESH NANDAN SAHAY
Assessment Year : 2009-2010 Sri Dhrub Narayan Parihast, Sri Dhrub Narayan Parihast, Vs. Income Tax Office, Ward- Income Tax Office, Ward S/O. S/O. Shri Shri Deo Deo Narayan Narayan 3(1), Deoghar Parihast, Parihast, Dhanuk Dhanuk Tola, Tola, Jousagarhi, Deoghar. Jousagarhi, Deoghar. PAN/GIR No. .BMRPP 9353 D (Appellant (Appellant) .. ( Respondent Respondent) Assessee by : Shri Devesh Poddar, Adv Poddar, Adv Revenue by : Shri Khub Chand Pandya,, ld Sr DR Revenue by , ld Sr DR Date of Hearing : 18/08/202 2025 Date of Pronouncement : 18/08/2 2025 O R D E R Per Bench This is an appeal filed by the assessee against the order of the ld This is an appeal filed by the assessee against the ord This is an appeal filed by the assessee against the ord CIT(A), CIT(A), Dhanbad Dhanbad dated 19.9.2019 in Appeal No.CIT(A),Dhanbad/10147/2016 Dhanbad/10147/2016-17 for the assessment year for the assessment year 2009-2010.
Shri Devesh Poddar, Shri Devesh Poddar, ld AR appeared for the assessee. Shri appeared for the assessee. Shri Khub Chand Pandya, ld Sr DR ld Sr DR represented on behalf of the revenue. represented on behalf of the revenue.
Ld A.R. of the assessee has filed writ Ld A.R. of the assessee has filed written synopsis as follows: ten synopsis as follows:
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Ld AR drew our attention to page 5 of paper book which is the reasons recorded for the purposes of reopening, which reads as follows: P a g e 5 | 9 “Information is received from the DDIT (Inv) Dhanbad vide F.No.DDIT(Inv)DHN/T392X/2015-16/1318 dated 28th MARCH, 2016 THAT Shri Dhrub Narayan Parihast S/O Shri Deo Narayan Parihast, Dhanuktola, Deoghar has earned income of Rs.12 lakhs to 15 lakhs annually from his profession as purohit/puja work. He also earned income of Rs.one crore approx on sale of land but income tad return has not filed for the A.Y. 2009-10. He has invested more than Rs. One crore in house property during the calender year 2009- & 2010. He has also invested in land in the name of his mother and father. Some of these land properties have also been sold during the calendar year 2009 & 2010 earning lakhs of rupees from these sale transaction which need to be verified. In view of the above facts, I have reason to believe that the income from purohit/puja works and income from sale of land have escaped assessment. Therefore, it is necessary to issue notice u/s.148 of the Income tax Act 1961 to assess the income of the assessee for the A.Y. 2009-10. Since more than four years have been passed from the end of the relevant assessment year and tax effect on income escaping assessment is more than one lakh, hence the approval of Pr. Commissioner of Income Tax is necessary. Therefore, the proposal is being sent to the Pr. CIT, Dhanbad for kind perusal and approval.”
It was the submission that the reasons recorded is clearly a fishing and roving enquiry and under similar circumstances, the Hon’ble Jurisdictional High Court of Jharkhand in Tax Appeal No.36 of 2020 dated 21.11.2022 in the case of the assessee’s mother has quashed the reopening by referring the decision of Hon’ble Supreme Court in the case of ITO vs Lakhmani Mewal Das, (1976) 103 ITR 437 (SC) as also the decision of Hon’ble Jurisdictional High Court in the case of Naveen Kumar Jaiswal vs Income Tax Department –W.P.(T) No.675 of 2022 (Ranchi) reported in 2022 SCC Online Jhar 189. It was the submission that as the Hon’ble Jurisdictional High Court has quashed the identical reasons recorded for P a g e 6 | 9 reopening of assessment in assessee’s mother case, the impugned reasons recorded are liable to be quashed.
In reply, ld Sr DR vehemently supported the order of the AO and ld CIT(A). It was the submission that the order of the ld CIT(A) be upheld.
We have considered the rival submissions. A perusal of the facts in the present case clearly shows that the assessee was working as “Head Pujari” in Shiv Temple during the impugned period. The Assessing Officer has reopened the assessment on the basis of investigation report. The Hon’ble Jurisdictional High Court has in the case of assessee’s mother quashed the reopening by holding as follows:
“9. By going through the aforesaid definition it is abundantly clear that before opening any re-assessment proceedings the assessing Officer has to record reason to believe that any income chargeable to tax has escaped assessment for the relevant assessment year. Now coming back to the case we have to analyze as to whether the Assessing Officer was having any reason to believe that the Assessee had escaped assessment. For brevity, reason recorded by the AO is extracted herein below: "03.03.2016. Information is received from the DDIT (Inv), Dhanbad vide F.No. DDIT (Inv)/ DHN/T392X/2015-16/1318 dated 28th March, 2016 that Smt. Maheshwari Devi W/o Shri Deo Narayan Parihast, Dhanukdtola, Deoghar has sold 35 acres land amounting to Rs. One crore but income Tax return has not filed for the A.Y 2009-10. He has invested huge amount in land during the year. Some of these land properties have also been sold during the year and earning lakhs of rupees from these sale transaction which need to be verified. In view of the above facts, I have reason to believe that the income from sale of land have escaped from assessment. Therefore, it is necessary to issue notice u/s 148 of the Income Tax Act, 1961 to assess the income of the assessee for the A.Y 2009-10.
P a g e 7 | 9 Since more than four years have been passed from the end of the relevant assessment year and tax effect on income escaping assessment is more than one lah. Hence, the approval of Pr. Commissioner of Income Tax is necessary. Therefore, the proposal is being sent to the Pr. Commissioner of Income tax, Dhanbad for kind perusal and approval."
By going through the aforesaid reason mentioned at Annexure-1, it appears that the assessing officer himself made it clear that the issue of the corresponding sale transaction required to be verified. Now the law is no more res integra, inasmuch as, the Assessing Officer cannot take recourse of reassessment proceeding just for the purpose of verification. There is a difference between reason to believe and reason to suspect. In the case of Income Tax Officer Versus Lakhmani Mewal Das, reported in [1976] 103 ITR 437 (SC) it has been succinctly defined that the reason for the formation of the believe must be held in good faith and should not be a mere pretence the powers of Income Tax Officer to reopen assessment, though wide, or not plenary the words of statute are "reason to believe" and not "reason to suspect". It is therefore essential that before such action is taken the requirement of law should be satisfied. Further, this Court in the case of Naveen Kumar Jaiswal Versus Income Tax Department- W.P.(T) No. 675 of 2022 (Ranchi) reported in 2022 SCC Online Jhar 189, has held at paragraph 11 and 12 has held as under; "11. It is well settled principles with regard to reassessment. A reassessment proceeding is to be adjudged on the basis of "reason to believe" disclosed to the Assessee and the said reasons cannot be supplemented by the revenue as the reasons have to speak for themselves.”
As it is noticed that the reasons recorded in assessee’s case is identical to the reasons recorded in assessee’s mother, which has been quashed by the Hon’ble Jurisdictional High Court, respectfully following the principles laid down by the Hon’ble Jurisdictional High Court (supra) in the case of assesse’s mother i.e. Smt.Maheshwari Devi, the reopening in respect of the impugned case stands quashed. Consequently, the impugned assessment order stands quashed.
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In the result, appeal of the assessee stands allowed.
Order dictated and pronounced in the open court on 18/08/2025.