ITO v. Lakhmani Mewal Das

103 ITR 437Supreme Court of India1976#69 most cited

What is ITO v. Lakhmani Mewal Das authority for?

For reassessment proceedings, the 'reason to believe' that income has escaped assessment must be based on some material and not mere suspicion, establishing a live link between the information and the belief. Furthermore, for reassessment beyond four years, there must be a specific finding of the assessee's failure to disclose fully and truly all material facts.

721

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2001 to 2026.

Also referred to as

ITO v. Lakhmani Mewal Das · Section 147 · Section 148 · reason to believe · reassessment · escaped income · failure to disclose material facts · live link · beyond four years · material facts · bogus claim

Also reported as

2 SCC 302153 Taxmann 282

Sections most often in play

Section 147Section 148Section 143(3)Section 151Section 142(1)Section 68Section 250Section 132

Issues it is cited on

undisclosed foreign income and assetssection 149(1)(c)section 4(2)section 201(3)section 147(a)section 158basection 150true and full disclosurelive linkunexplained jewellerysection 148(2)beyond four years

Judgments citing ITO v. Lakhmani Mewal Das

SUNRISE STRUCTURALS & ENGINEERING PVT LTD,NAGPUR vs. ASSISTANT/ DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-4 NAGPUR, NAGPUR

In the result, appeal filed by the assessee stands allowed

ITA 167/NAG/2025[2019-20]Status: DisposedITAT Nagpur10 Apr 2026AY 2019-20

Bench: Shri Pawan Singh & Shri Khettra Mohan Roysunrise Structural & Acit/Dcit, Circle-4, Engineering P. Ltd., A10, Vs Nagpur Hingna Midc, Nagpur (Urban), Nagpur-440016 Pan : Aaccs 3220 M Assessee Respondent Assessee By : Shri K.P. Dewani, Advocate Revenue By : Shri Surjit Kumar Saha, Sr. Dr Date Of Hearing : 25.02.2026 Date Of Pronouncement : 10.04.2026 O R D E R

For Appellant: Shri K.P. Dewani, AdvocateFor Respondent: Shri Surjit Kumar Saha, Sr. DR
Section 115BSection 143(1)Section 147Section 148Section 148ASection 234BSection 250Section 69C

…eipt of information is no evidence to form belief of escapement of income. No live link / nexus between belief of escapement and material on record. Reliance on : i) 130 ITR 1 (SC) Ganga Saran & Sons Pvt. Ltd. vs ITO & Ors. (P- 175 – 184) (182) [Vol.- II] ii) 103 ITR 437 (SC) ITO vs Lakhmani Mewaldas (P- 124 - 134) (132, 133) [Vol.- III] iii) [2024] 164 taxmann.com 763 (Bombay) 6 Modern Living Solutions (P.) Ltd. vs. Income-tax Officer (P- 255 - 266) (266) [Vol.- IV] iv) [2023] 149 taxmann.com 219 (Bom.) B.U. Bhandari Autolines (P.) Ltd. vs. ACIT (P- 6 – 9) (8) (Gist) H) Copy of report received from DGGI Z…

G S BUILDWELL PRIVATE LIMITED,DELHI vs. INCOME TAX OFFICER, WARD 10(1), DELHI, DELHI

In the result, appeal of the assessee is allowed

ITA 6581/DEL/2025[2012-13]Status: DisposedITAT Delhi08 Apr 2026AY 2012-13

Bench: Shri Raj Kumar Chauhan & Shri Manish Agarwal[Assessment Year : 2012-13] G.S.Buildwell Pvt.Ltd. Vs Ito A-12, Swasthya Vihar, Ward-10(1) East Delhi, Delhi-110092. Delhi Pan-Aaccg1781H Appellant Respondent Appellant By Shri Suresh Kumar Gupta, Ca Respondent By Shri Rajesh Kr. Dhanistha, Sr.Dr Date Of Hearing 17.02.2026 Date Of Pronouncement 08.04.2026

Section 132Section 133(6)Section 143(3)Section 148

…of the same by passing a speaking order. 32. Reverting back to the two expressions as noticed above, we may mention that these two expressions were examined and interpreted in great detail by the Supreme Court in Income-tax Officer v. Lakhmani Mewal Das[1976] 103 ITR 437. That was also a case where notice under section 148 of the Act was put to challenge. Though provisions of section 147 of the Act as it existed then have since been reconstructed and have undergone change, the two key expressions continue to retain their relevance in so far section 147 of the Actis concerned. It may further be noticed that in Lak…

LASCO CHEMIE PRIVATE LIMITED,DELHI vs. INCOME TAX OFFICER, WARD-15(2), NEW DELHI, DELHI

In the result, the appeal filed by the assessee is allowed

ITA 3811/DEL/2025[2012-13]Status: DisposedITAT Delhi08 Apr 2026AY 2012-13

Bench: Shri S Rifaur Rahman & Shri Vimal Kumarlasco Chemie Private Vs. Income Tax Officer, Limited, Ward-15(2), Delhi 10489 Kalptaru, Sadar Thana Road Motia Khan, New Delhi 110055 "थायीलेखासं./जीआइआरसं./Pan/Gir No: Aabcl 3502 E Appellant .. Respondent

For Appellant: Sh. Rohit Jain, AdvFor Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Section 143(3)Section 147Section 148Section 149Section 151Section 250

…similarly held in the following decisions: - Ganga Saran & Sons (P) Ltd vs. ITO 130 ITR 1 (SC) - Sheo Nath Singh vs. ACIT 82 ITR 148 (SC) - Biria VXL vs. ACIT 217 ITR 1 (Guj) - Multiscreen Media (P) Ltd. vs UOI 324 ITR 54 (Bom.) - ITO vs. Lakhmani Mewal Das 103 ITR 437, 448 (SC) 17. Reason to believe', it is submitted, cannot be equated with reason to suspect [refer Krown Agro Foods (P) Ltd vx ACIT: 375 ITR 460 (Deli. GS P a g e | 10 Lasco Chemie (P) Ltd. (AY 2012-13) Engineering & Construction Corporation vs DDIT (International Taxation): 357 ITR 335 (Del) 18. It is submitted that reassessment initiated mer…

INFINITY INTERNATIONAL,AHMEDABAD vs. NFAC, DELHI PRESENT JURIS. THE ITO, WARD-3(3)(1), AHMEDABAD

In the result, appeal of the assessee is dismissed

ITA 518/AHD/2025[2016-17]Status: DisposedITAT Ahmedabad10 Mar 2026AY 2016-17

Bench: Dr. B.R.R. Kumar, Vice-Shri Siddhartha Nautiyalinfinity International, Nfac, Delhi Vs. H-611, Titanium City Centre, Present Jurisdiction 100 Ft. Anandnagar Road, Ito, Ward 3(3)(1), Satellite, Ahmedabad-380015 Ahmedabad [Pan: Aaefi 2610 J] (Appellant) .. (Respondent) Appellant By: Shri S.N. Soparkar, Sr. Advocate & Ms. Ukti Shah, Ar Respondent By: Shri Alpesh Parmar, Cit-Dr Date Of Hearing 07.01.2026 Date Of Pronouncement 10.03.2026 O R D E R Per Dr. B.R.R. Kumar, Vice-:-

For Appellant: Shri S.N. Soparkar, Sr. AdvocateFor Respondent: Shri Alpesh Parmar, CIT-DR
Section 143(3)Section 147Section 148Section 153(3)Section 250Section 68

…IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI SIDDHARTHA NAUTIYAL, JUDICIAL MEMBER Infinity International, NFAC, Delhi Vs. H-611, Titanium City Centre, Present Jurisdiction 100 Ft. Anandnagar Road, ITO, Ward 3(3)(1), Satellite, Ahmedabad-380015 Ahmedabad [PAN: AAEFI 2610 J] (Appellant) .. (Respondent) Appellant by: Shri S.N. Soparkar, Sr. Advocate, & Ms. Ukti Shah, AR Respondent by: Shri Alpesh Parmar, CIT-DR Date of Hearing 07.01.2026 Date of Pronouncement 10.03.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the asse…

INCOME TAX OFFICER WARD 7.2.1 AHMEDABAD, AHMEDABAD vs. RAGHAVBHAI GORDHANBHAI NAROLA, AHMEDABAD

Appeals of the Revenue are hereby dismissed, whereas, all the Cross Objections filed by the assessee are hereby allowed

ITA 1268/AHD/2025[2016-17]Status: DisposedITAT Ahmedabad09 Feb 2026AY 2016-17

Bench: Shri Sanjay Garg & Shri Makarand V. Mahadeokar

For Appellant: Shri Biren Shah, ARFor Respondent: Shri Hargovind Sinh, Sr.DR
Section 143(1)(a)Section 148Section 250

…t and thereby in starting proceedings u/s 147 is open to challenge in a court of law. The entire law as to what would constitute "reason to believe" has been summed up by the hon'ble Supreme Court in the case of "Income Tax Officer v Lakhmani Mewaldas" (1976) 103 ITR 437. Reliance in this respect can also be placed on the decision of the Hon'ble Punjab & Haryana High Court in the case of 'CIT vs Paramjit Kaur' (2008) 311 ITR 38 (P&H), wherein, making identical observations, the Hon'ble High Court has held ITA Nos.1266 to 1268/Ahd/2025 (By Revenue) & CO Nos.55 to 57/Ahd/2025 (By Assessee) ITO vs. Raghavbhai Gord…

INCOME TAX OFFICER WARD 7.2.1 AHMEDABAD, AHMEDABAD vs. RAGHAVBHAI GORDHANBHAI NAROLA, AHMEDABAD

Appeals of the Revenue are hereby dismissed, whereas, all the Cross Objections filed by the assessee are hereby allowed

ITA 1267/AHD/2025[2015-16]Status: DisposedITAT Ahmedabad09 Feb 2026AY 2015-16

Bench: Shri Sanjay Garg & Shri Makarand V. Mahadeokar

For Appellant: Shri Biren Shah, ARFor Respondent: Shri Hargovind Sinh, Sr.DR
Section 143(1)(a)Section 148Section 250

…t and thereby in starting proceedings u/s 147 is open to challenge in a court of law. The entire law as to what would constitute "reason to believe" has been summed up by the hon'ble Supreme Court in the case of "Income Tax Officer v Lakhmani Mewaldas" (1976) 103 ITR 437. Reliance in this respect can also be placed on the decision of the Hon'ble Punjab & Haryana High Court in the case of 'CIT vs Paramjit Kaur' (2008) 311 ITR 38 (P&H), wherein, making identical observations, the Hon'ble High Court has held ITA Nos.1266 to 1268/Ahd/2025 (By Revenue) & CO Nos.55 to 57/Ahd/2025 (By Assessee) ITO vs. Raghavbhai Gord…

INCOME TAX OFFICER, WARD 7.2.1, AHMEDABAD vs. RAGHAVBHAI GORDHANBHAI NAROLA, AHMEDABAD

Appeals of the Revenue are hereby dismissed, whereas, all the Cross Objections filed by the assessee are hereby allowed

ITA 1266/AHD/2025[2013-14]Status: DisposedITAT Ahmedabad09 Feb 2026AY 2013-14

Bench: Shri Sanjay Garg & Shri Makarand V. Mahadeokar

For Appellant: Shri Biren Shah, ARFor Respondent: Shri Hargovind Sinh, Sr.DR
Section 143(1)(a)Section 148Section 250

…t and thereby in starting proceedings u/s 147 is open to challenge in a court of law. The entire law as to what would constitute "reason to believe" has been summed up by the hon'ble Supreme Court in the case of "Income Tax Officer v Lakhmani Mewaldas" (1976) 103 ITR 437. Reliance in this respect can also be placed on the decision of the Hon'ble Punjab & Haryana High Court in the case of 'CIT vs Paramjit Kaur' (2008) 311 ITR 38 (P&H), wherein, making identical observations, the Hon'ble High Court has held ITA Nos.1266 to 1268/Ahd/2025 (By Revenue) & CO Nos.55 to 57/Ahd/2025 (By Assessee) ITO vs. Raghavbhai Gord…

ARYAN SHARE AND STOCK BROKERS LIMITED,CHENNAI vs. ITO, CORPORATE WARD 1(1) CHE, CHENNAI

In the result, appeal filed by the assessee is allowed

ITA 2756/CHNY/2025[2017-18]Status: DisposedITAT Chennai02 Feb 2026AY 2017-18

Bench: Shri Aby T. Varkey & Shri S.R.Raghunatha

For Appellant: Mr.Praveen Kumar BansalFor Respondent: Mr.Kumar Chandan, JCIT
Section 147Section 148Section 69A

…assessment. Hence, according to him, the impugned action of the AO reopening the assessment is wholly without jurisdiction and cited several case laws including the decision of the Hon’ble Supreme Court in the case of ITO v. Lakhmani Mewal Das reported in 103 ITR 437. Drawing our attention to the reasons recorded by the AO which is placed at page no.56 of the PB he submitted that a bare reading of the same would reveal that he (AO) received information that assessee had received fund to the tune of ₹7,15,11,173/- from M/s. Orange during the financial year under consideration. And as per such information, M/…

DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, RAJKOT, RAJKOT vs. CLASSIC NETWORK PVT. LTD., RAJKOT

In the result, appeal filed by the assessee in ITA No

ITA 287/RJT/2024[2016-17]Status: DisposedITAT Rajkot30 Jan 2026AY 2016-17

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1, RAJKOT vs. CLASSIC NETWORK PVT. LTD., RJAKOT

In the result, appeal filed by the assessee in ITA No

ITA 286/RJT/2024[2014-15]Status: DisposedITAT Rajkot30 Jan 2026AY 2014-15

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

CLASSIC NETWORK PRIVATE LIMITED,RAJKOT vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL -1, RAJKOT, RAJKOT

In the result, appeal filed by the assessee in ITA No

ITA 178/RJT/2024[2017-18]Status: DisposedITAT Rajkot30 Jan 2026AY 2017-18

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

CLASSIC NETWORK PRIVATE LIMITED,RAJKOT vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL - 1, RAJKOT, RAJKOT

In the result, appeal filed by the assessee in ITA No

ITA 177/RJT/2024[2016-17]Status: DisposedITAT Rajkot30 Jan 2026AY 2016-17

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

CLASSIC NETWORK PRIVATE LIMITED,RAJKOT vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL -1 RAJKOT, RAJKOT

In the result, appeal filed by the assessee in ITA No

ITA 176/RJT/2024[2014-15]Status: DisposedITAT Rajkot30 Jan 2026AY 2014-15

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

M/S. CLASSIC NETWORK LIMITED,,RAJKOT-GUJARAT vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1,, RAJKOT-GUJARAT

In the result, appeal filed by the assessee in ITA No

ITA 291/RJT/2022[2019-20]Status: DisposedITAT Rajkot30 Jan 2026AY 2019-20

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

M/S. CLASSIC NETWORK LIMITED,,RAJKOT-GUJARAT vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1,, RAJKOT-GUJARAT

In the result, appeal filed by the assessee in ITA No

ITA 290/RJT/2022[2018-19]Status: DisposedITAT Rajkot30 Jan 2026AY 2018-19

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

M/S. CLASSIC NETWORK LIMITED,,RAJKOT-GUJARAT vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1,, RAJKOT-GUJARAT

In the result, appeal filed by the assessee in ITA No

ITA 289/RJT/2022[2015-16]Status: DisposedITAT Rajkot30 Jan 2026AY 2015-16

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

M/S. CLASSIC NETWORK LIMITED,,RAJKOT-GUJARAT vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1,, RAJKOT-GUJARAT

In the result, appeal filed by the assessee in ITA No

ITA 288/RJT/2022[2013-14]Status: DisposedITAT Rajkot30 Jan 2026AY 2013-14

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1,, RAJKOT-GUJARAT vs. M/S. CLASSIC NETWORK LIMITED,, RAJKOT-GUJARAT

In the result, appeal filed by the assessee in ITA No

ITA 275/RJT/2022[2019-20]Status: DisposedITAT Rajkot30 Jan 2026AY 2019-20

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1,, RAJKOT-GUJARAT vs. M/S. CLASSIC NETWORK LIMITED,, RAJKOT-GUJARAT

In the result, appeal filed by the assessee in ITA No

ITA 274/RJT/2022[2018-19]Status: DisposedITAT Rajkot30 Jan 2026AY 2018-19

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1,, RAJKOT-GUJARAT vs. M/S. CLASSIC NETWORK LIMITED,, RAJKOT-GUJARAT

In the result, appeal filed by the assessee in ITA No

ITA 273/RJT/2022[2015-16]Status: DisposedITAT Rajkot30 Jan 2026AY 2015-16

Bench: Dr. Arjun Lal Saini & Dr. Dinesh Mohan Sinha

…ns must have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion. The Hon’ble Supreme Court in ITO vs Lakhmani Mewal Das [1976 ]103 ITR 437 has lucidly explained the power of assessing officer to bring to tax income escaping assessment u/s.147 of the Act. The Hon’ble Court first held that the section provides that there must exist “reasons to believe“ and not “reasons to suspect”. The following were the relevant observations: “The fact that the words "definite information" which wer…

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