“reason to believe”

ReassessmentSection 147Section 1474,202 judgments

The decision most relied on for reason to believe is CIT v. Kelvinator of India Ltd. (320 ITR 561), cited in 1,673 judgments on BharatTax.

Leading authorities on reason to believe

CIT v. Kelvinator of India Ltd.

320 ITR 561 · 2010 · Supreme Court

1,673

citing judgments

An Assessing Officer cannot initiate reassessment proceedings under Section 147 of the Income Tax Act based on a mere change of opinion. Reassessment is permissible only when there is fresh tangible material leading to the belief of income escapement, not merely a review of existing facts.

CIT v. Durga Prasad More

82 ITR 540 · 1971 · Supreme Court

1,579

citing judgments

Tax authorities must judge evidence using the test of human probabilities and consider the apparent as real until there are reasons to believe it is not. They can rely on circumstantial evidence and the preponderance of probabilities to determine the genuineness of transactions.

ACIT v. Rajesh Jhaveri Stock Brokers Pvt. Ltd.

291 ITR 500 · 2007 · Supreme Court

1,030

citing judgments

For initiating reassessment proceedings under Section 147, the Assessing Officer needs only prima facie material providing a reason to believe that income has escaped assessment. Conclusive proof or the sufficiency/correctness of the material is not required at the stage of issuing the notice under Section 148.

Raymond Woollen Mills Ltd. v. ITO

236 ITR 34 · 1999 · Supreme Court

862

citing judgments

For reassessment proceedings under Section 148, the Assessing Officer only needs prima facie material to have a reason to believe income has escaped assessment. Conclusive proof or evaluation of the sufficiency and correctness of such material is not required at the stage of issuing the notice.

ITO v. Lakhmani Mewal Das

103 ITR 437 · 1976 · Supreme Court

721

citing judgments

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.

CIT v. Jet Airways (I) Ltd.

331 ITR 236 · 2011 · High Court

694

citing judgments

The Assessing Officer loses jurisdiction and the entire reassessment becomes invalid if no addition is made in respect of the income that formed the basis of the reopening. Explanation 3 to Section 147 does not permit assessing other escaped income unless an addition is made for the original income forming the reason to believe.

PCIT v. Meenakshi Overseas Pvt. Ltd.

395 ITR 677 · 2017 · High Court

471

citing judgments

Reassessment proceedings initiated solely based on an investigation wing/appraisal report, without the Assessing Officer's independent application of mind to form a 'reason to believe' that income has escaped assessment, are beyond jurisdiction, bad in law, and void ab initio.

CIT v. Kelvinator of India Ltd.

256 ITR 1 · 2002 · High Court

439

citing judgments

An Assessing Officer cannot reopen an assessment under Section 147 based on a mere change of opinion regarding the same material available during the original assessment. Reopening requires fresh, tangible material or information that leads to a reason to believe income has escaped assessment.

Judgments citing reason to believe

Shri Rajesh Bhavarlal Jain, Mumbai vs. Incometax Officer 21(3)(1), Mumbai

In the result, the appeal of the assessee is partly allowed

ITA 3605/MUM/2024[2011-12]Status: DisposedITAT Mumbai09 Dec 2024AY 2011-12

Bench: Shri Amarjit Singh & Shri Sunil Kumar Singhassessment Year: 2011-12

For Appellant: Shri Nisheeth DoshiFor Respondent: Shri R.R. Makwana, Sr. DR

Section 143(3)Section 234ASection 274Section 69C

material facts for determination of income. We find that there is tangible material on the basis of which the AO has formed reason to believe after referring the material available on record. Therefore, we find that at the stage of reopening of assessment, the assessing officer is not required ... prove the 8 Shri Rajesh Bhavarlal Jain A.Y. 2011-12 escapement of income but to link the information received with reason to believe that income has escaped assessment. Therefore, we do not find any merit in this ground of appeal filed by the assessee about the validity of reopening

Kay Power and Paper Limited, Satara vs. Income Tax Officer, Ward-2, Satara

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

ITA 1437/PUN/2024[2016-17]Status: DisposedITAT Pune06 Dec 2024AY 2016-17

Bench: Shri R. K. Panda & Shri Vinay Bhamore

For Appellant: Shri Ashwani KumarFor Respondent: Shri Ramnath P Murkunde

Section 139Section 139(1)Section 143(1)Section 148Section 148A

assessee company. Referring to the notice issued u/s 148A(b) of the Act dated 24.05.2022 which is the basis for arriving at „reason to believe‟ that the income has escaped assessment is concerned, he drew the attention of the Bench to the contents of the notice and submitted that

Kay Power and Paper Limited, Satara vs. Income Tax Officer, Ward-2, Satara

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

ITA 1436/PUN/2024[2015-16]Status: DisposedITAT Pune06 Dec 2024AY 2015-16

Bench: Shri R. K. Panda & Shri Vinay Bhamore

For Appellant: Shri Ashwani KumarFor Respondent: Shri Ramnath P Murkunde

Section 139Section 139(1)Section 143(1)Section 148Section 148A

Dy Commissioner of Inocme Tax, Circle -2, Nagpur vs. M/S N Kumar Construction Co .Pvt.Ltd, Nagpur

ITA 252/NAG/2018[2012-13]Status: DisposedITAT Nagpur06 Dec 2024AY 2012-13

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Manoj G. MoryaniFor Respondent: Shri Vikash Agrawal

Section 131Section 143(2)Section 148Section 68

that he was involved in bogus transaction with the assessee and provided ‗accommodation entries‘ in the form of agriculture receipts-Same would constitute reason to believe that income chargeable to tax had escaped assessment-However, it was mandatory for the Revenue to produce A for cross-examination by the assessees

Dy Commissioner of Inocme Tax, Circle -2, Nagpur vs. M/S N Kumar Construction Co .Pvt.Ltd, Nagpur

ITA 247/NAG/2018[2010-11]Status: DisposedITAT Nagpur06 Dec 2024AY 2010-11

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Manoj G. MoryaniFor Respondent: Shri Vikas Agrawal

Section 131Section 148Section 68

that he was involved in bogus transaction with the appellant and provided ‗accommodation entries‘ in the form of agriculture receipts-Same would constitute reason to believe that income chargeable to tax had escaped assessment-However, it was mandatory for the Revenue to produce A for cross-examination by the appellants ... that he was involved in bogus transaction with the appellant and provided ‗accommodation entries‘ in the form of agriculture receipts-Same would constitute reason to believe that income chargeable to tax had escaped assessment-However, it was mandatory for the Revenue to produce A for cross-examination by the appellants

Ramanathan Adaikalavan, Coimbatore, Tamil Nadu vs. The Income Tax Officer, National Faceless Assessment Centre, New Delhi

In the result, the appeal of the assessee is allowed

ITA 557/CHNY/2024[2014-15]Status: DisposedITAT Chennai06 Dec 2024AY 2014-15

Bench: Shri Aby T Varkey & Shri Amitabh Shuklaआयकर अपील सं./ Ita No.557/Chny/2024 निर्ाारण वर्ा /Assessment Years: 2014-15 Ramanathan Adaikalavan, Deputy Commissioner Of Income Tax, No.80, Ansari Street, Ram Nagar, Non-Corporate Circle-2, Coimbatore-641009. Coimbatore [Pan: Aanpa6846P] (प्रत्यर्थी/Respondent) (अपीलार्थी/Appellant) अपीलार्थी की ओर से/ Assessee By : Shri P.M.Kathir, Advocate. प्रत्यर्थी की ओर से /Revenue By : Ms.Gouthami Manivasagam, Jcit सुिवाई की तारीख/Date Of Hearing : 05.11.2024 घोर्णा की तारीख /Date Of Pronouncement : 06.12.2024 आदेश / O R D E R Per Amitabh Shukla, A.M :

For Appellant: Shri P.M.Kathir, AdvocateFor Respondent: Ms.Gouthami Manivasagam, JCIT

Section 143(3)Section 147Section 148Section 250Section 55A

Hence, I am satisfied that the assessee’s case is fit case to be reopened u/s 147 of the act as I have reason to believe that the income chargeable to tax had escaped assessment within the meaning of the provisions of the said section. 7 Escapement of income chargeable ... taking recourse to 148 proceedings. Thus as vividly pronounced by Hon’ble Apex Court in the Kelvinator of India Limited that the “reason to believe” on which a reassessment can be validly ordered should necessarily be based on “tangible material” which an assessing officer comes by after the assessment

Adala Bhanu Rekha, Hyderabad vs. DCIT., Circle-6(1), Hyderabad

In the result, appeal filed by the assessee is allowed

ITA 583/HYD/2024[2017-18]Status: DisposedITAT Hyderabad05 Dec 2024AY 2017-18

Bench: Shri Manjunatha G. & Shri K. Narasimha Charyआ.अपी.सं /Ita No.583/Hyd/2024 (निर्धारण वर्ा/Assessment Year: 2017-18) Adala Bhanu Rekha Vs. Dcit Hyderabad Circle-6(1) [Pan : Accpa8679F] Hyderabad (Appellant) (Respondent) निर्धाररती द्वधरध/Assessee By: Shri Bg Reddy, Ar रधजस् व द्वधरध/Revenue By:: Shri Srinath Sadanala, Dr सुिवधई की तधरीख/Date Of Hearing: 25/11/2024 घोर्णध की तधरीख/Date Of 05/12/2024 Pronouncement: आदेश / Order Per. Manjunatha G., A.M: This Appeal Filed By The Assessee Is Directed Against The Order Dated 31/03/2024 Of The Learned Commissioner Of Income Tax (Appeals) [Learned Cit(A)], National Faceless Appeal Centre (Nfac), Delhi, Relating To A.Y.2017-18 On The Following Grounds :

For Appellant: Shri BG Reddy, ARFor Respondent: : Shri Srinath Sadanala, DR

Section 143(3)Section 147Section 148Section 54F

proviso to section 147 of the Act. Even as per main provisions of section 147 of the Act, if the Assessing Officer has reason to believe that if any income chargeable to tax has escaped assessment for any assessment year, he may subject to provisions of section ... section 147 of the Act, it is abundantly clear that there should be reasonable belief of escapement of income from tax and such reason to believe should be on the basis of fresh tangible material came to the possession of the Assessing Officer, subsequent to completion of original assessment proceedings

R R Paints Private Limited, Mumbai vs. Deputy Commissioner of Income Tax Circle 15(3)(1), Mumbai

The appeal is partly allowed

ITA 1112/MUM/2024[2012-2013]Status: DisposedITAT Mumbai05 Dec 2024AY 2012-2013

Bench: Shri Saktijit Dey & Ms Padmavathy S, Am

For Appellant: Shri R.R. Makwana, Sr. DR

Section 143(3)Section 147Section 148Section 151

Proviso to section 147 which reads as under is applicable in assessee's case – Income escaping assessment. 147. If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections ... reopening of an assessment beyond a period of four years has been fulfilled. The statement in the reasons for reopening "I have reasons to believe that income of Rs. 7,66,66,663/- which was chargeable to tax has escaped assessment by reason of failure on the part

DCIT-CC-3(4), Mumbai vs. Dinesh Lakhmichand Rohira, Mumbai

ITA 5463/MUM/2024[2015-16]Status: DisposedITAT Mumbai04 Dec 2024AY 2015-16

Bench: Justice (Retd.) C V Bhadang, Hon’Ble & Shri B R Baskaran, Hon’Ble

For Appellant: Shri Ravindra PathakFor Respondent: Shri R R Makwana, Sr. DR

Section 132Section 132(4)Section 143(1)Section 147Section 148Section 69A

objected to the re-opening on the basis of the information and material produced. According to the assessee, the Assessing Officer had no reason to believe that income chargeable to tax had escaped assessment, within the meaning of section 147 of the Act. It was contended that there

ACIT-CC-7(3), Mumbai vs. Dharmanath Buildtech and Farms Private Limited, Mumbai

ITA 5462/MUM/2024[2009-10]Status: DisposedITAT Mumbai04 Dec 2024AY 2009-10

Bench: Justice (Retd.) C V Bhadang, Hon'Ble & Shri B R Baskaran, Hon'Ble

Section 143(3)Section 147Section 148

DCIT(2015) 56 taxmann.com 86 Bombay), whereby the Hon'ble High Court is of the view that Assessing Officer must have reason to believe the income eligible to tax has escaped assessment. This belief must be a prima facie view and not a final/concluded view. 4. On facts and circumstances ... opening cannot be said to be based on any change of opinion. It is submitted that the Assessing Officer has to have a 'reason to believe' that the income chargeable to tax has escaped assessment, which is a sine qua non for re-opening of the assessment. It is pointed

Chaitalee Sachin Deokar, Mumbai vs. Commissioner of Income Tax, -It -2, Mumbai

In the result, both the appeals filed by the assessee are

ITA 2806/MUM/2024[2013-14]Status: DisposedITAT Mumbai04 Dec 2024AY 2013-14

Bench: Shri Sandeep Gosain & Ms. Padmavathy S

Section 143(3)Section 263Section 69Section 69BSection 69C

further linked by any reason to come to conclusion that assessee had indulged in any activity which could give rise to reason to believe on part of Assessing Officer that income chargeable to tax had escaped assessment, reassessment was an evidence of a fishing enquiry and not a reasonable belief

Manju Madhusudan Dhoot L/H of Late Madhusudan Dhoot, Ahmednagar vs. ITO Ward 1, Ahmednagar

In the result, both the appeals of the assessee are partly allowed

ITA 1920/PUN/2024[2009-10]Status: DisposedITAT Pune03 Dec 2024AY 2009-10

Bench: Dr.Manish Boradआयकर अपील सं. / Ita Nos.1919 & 1920/Pun/2024 "नधा"रण वष" / Assessment Years : 2007-08 & 2009-10

For Appellant: Shri Mahavir JainFor Respondent: Shri B.S.Rajpurohit

Section 144Section 250

null and void. 2) The Ld. CIT(A) failed to appreciate that the reopening u/s.148 was on reason to suspect and not on reason to believe and therefore, the reopening u/s.147 and the consequential reassessment be declared null & void. 3] The Ld. CIT(A) erred in confirming the addition

Manju Madhusudan Dhoot, L/H of Late Madhusudan Dhoot, Ahmednagar vs. ITO, Ward 1, Ahmednagar

In the result, both the appeals of the assessee are partly allowed

ITA 1919/PUN/2024[2007-08]Status: DisposedITAT Pune03 Dec 2024AY 2007-08

Bench: Dr.Manish Boradआयकर अपील सं. / Ita Nos.1919 & 1920/Pun/2024 "नधा"रण वष" / Assessment Years : 2007-08 & 2009-10

For Appellant: Shri Mahavir JainFor Respondent: Shri B.S.Rajpurohit

Section 144Section 250

Gajendra Pal Sharma, Meerut vs. ITO Ward 1(2), Ghaziabad

In the result, the appeal of the assessee in ITA No

ITA 532/DEL/2024[2012-13]Status: DisposedITAT Delhi03 Dec 2024AY 2012-13

Bench: Shri Challa Nagendra Prasad & Shri Naveen Chandra

For Appellant: Shri P.S. Kashyap, CAFor Respondent: Shri Krishna Ramavat, Sr. DR

Section 133(6)Section 147Section 148Section 151Section 151(2)Section 285BSection 69

that assessee has escaped assessment. iii) The Id. Assessing Officer has recorded incorrect facts and on the basis of incorrect facts forms the reason to believe. iv) That there is no proper compliance of section 151(2) of the Act. 2. That on facts and in law addition ... PCIT granted approval u/s 151 in a mechanical manner. It was further argued that the Assessing Officer has reason to suspect and not reason to believe that income chargeable to tax has escaped assessment. Hence, notice u/s 148 dated 30.03.2019 is liable to be quashed. 10. In support

Lakhmi Chand Yadav, Faridabad vs. ITO, Ward-1(4), Faridabad

In the result, the appeal filed by the revenue is dismissed and the substantial questions of law are answered against the revenue

ITA 516/DEL/2020[2011-12]Status: DisposedITAT Delhi03 Dec 2024AY 2011-12

Bench: Sh. Satbeer Singh Godara & Sh. M. Balaganeshita No. 516/Del/2020 : Asstt. Year : 2011-12 Lakhmi Chand Yadav, Vs Income Tax Officer, Village Mirzapur Hardet Haveli Ward-1(4), Mujehri, Faridabad, Haryana-121004 Faridabad-121001 (Appellant) (Respondent) Pan No. Aaepy4744P Assessee By : Sh. M. K. Gupta, Ca Revenue By : Sh. B. S. Anand, Sr. Dr Date Of Hearing: 25.11.2024 Date Of Pronouncement: 03.12.2024 Order Per Satbeer Singh Godara: This Assessee’S Appeal For Assessment Year 2011-12, Arises Against The Order Of Cit(A), Faridabad Dated 28.11.2019 In Case No. 10339/2018-19 In Proceedings U/S 143(3)/147 Of The Income Tax Act, 1961 (In Short “The Act”).

For Appellant: Sh. M. K. Gupta, CAFor Respondent: Sh. B. S. Anand, Sr. Dr

Section 133ASection 143Section 143(3)Section 147Section 148Section 260A

question of the validity of the impugned reopening itself once the learned Assessing Officer had initiated section 148/147 proceedings after recording his only reason to believe that the said cash deposits 3 Lakhmi Chand Yadav assessable in the assessee’s hands had escaped assessment. Case ... Majinder Singh Kang, Atlas Cycle Industries and CIT Versus Mehak Finvest Pvt. Ltd.21 9. In Sri. N. Govindaraju it was held that "reason to believe" that any income chargeable to tax had escaped assessment is one aspect of the matter; if reason exists, the Assessing Officer can undoubtedly assess

ACIT Circle, Karnal vs. Mahesh Timber Pvt. Ltd., Karnal

ITA 1330/DEL/2020[2011-12]Status: DisposedITAT Delhi02 Dec 2024AY 2011-12

Bench: Shri Satbeer Singh Godara & Shri M. Balaganeshassessment Year: 2011-12 Vs. Mahesh Industries Pvt. Ltd., Acit, Circle-Karnal, Timber Market, Haryana Sadar Bazar, Karnal, Haryana Pan :Aafcm3302F (Appellant) (Respondent) With Assessment Year: 2011-12 Acit, Vs. M/S. Mahesh Timber Pvt. Circle – Karnal, Ltd., Haryana Timber Market, Sadar Bazar, Karnal, Haryana Pan :Aaccm5526G (Appellant) (Respondent) With C.O. No.19/Del/2021 [Arising Out Of Ita No.1329/Del/2020] Assessment Year: 2011-12 Vs. Acit, Mahesh Industries Pvt. Ltd., Timber Market, Circle-Karnal, Sadar Bazar, Karnal, Haryana Haryana Pan :Aafcm3302F (Appellant) (Respondent) With C.O. No.20/Del/2021 [Arising Out Of Ita No.1330/Del/2020] Assessment Year: 2011-12

Section 143(3)Section 148

dated 30th December, 2018; that the Assessing Officer had in fact set into motion his section 148/147 reopening jurisdiction after recording the sole reason to believe that the assessee had received funds amounting to Rs.2,95,00,000/- from Sh. Raman Kumar, who had transferred funds to various entities, which

ACIT Circle, Karnal vs. Mahesh Industries Pvt. Ltd., Karnal

ITA 1329/DEL/2020[2011-12]Status: DisposedITAT Delhi02 Dec 2024AY 2011-12

Section 143(3)Section 148

Raghav Commodities, Jaipur vs. ITO Ward 6(2), Jaipur

In the result, the appeal of the assessee is partly allowed as indicated

ITA 943/JPR/2024[2015-2016]Status: DisposedITAT Jaipur29 Nov 2024AY 2015-2016

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Sh. Tarun Mittal, CAFor Respondent: Sh. Arvind Kumar, CIT-DR

Section 142(1)Section 147Section 148Section 148A

mind by the AO to tangible materials and reasons and the AO failed to demonstrate live link between tangible material and formation of reason to believe that income had escaped assessment. 15. In view of the above, we hold that the reassessment made in the section 143(3) read with

Ashok Sharma, Kota vs. Dy. Commissioner of Income Tax Circle-2 - Kota, Kota

ITA 359/JPR/2024[2014-2015]Status: DisposedITAT Jaipur29 Nov 2024AY 2014-2015

For Appellant: Shri Priyank Kabra (C.A.) (V.C.)For Respondent: Shri Anup Singh (Addl.CIT)

Section 143(3)Section 147Section 40A(3)

hiring or leasing goods carriages). No deduction shall be allowed in respect of such expenditure. In view of the above, as there was reason to believe that by reason of the omission or failure on the part of the assessee, to disclose fully and truly all material facts necessary ... Vardhman Industries (2014) 363 ITR 625 (Raj) (paper book pg. no. 119-121), while reiterating the principle that the words ‘reason to believe' did not admit of conferment of arbitrary powers to the AO to reopen assessment on the basis of mere change of opinion. The Court held at para

Rakesh Kumar Singrodia, Mukundgarh Mandi, Jhunjhunu vs. ITO, WD 1, Jhunjhunu, Rajasthan

In the result, the appeal of the assessee is allowed

ITA 1168/JPR/2024[2018-19]Status: DisposedITAT Jaipur29 Nov 2024AY 2018-19

Bench: DR. S. SEETHALAKSHMI (Judicial Member)

For Appellant: Shri Pratik Jain, CA (V.H)For Respondent: Shri Gautam Singh Choudhary, JCIT

Section 131Section 133ASection 142(1)Section 143(2)Section 147Section 148Section 148ASection 37(1)Section 68

with six entities managed and operated by Mr. Ashok Kumar Gupta for an aggregate amount of Rs. 41,29,000/-. Ld. AO has reasoned to believe that said income has escaped assessment and therefore, notice u/s. 147 was issued and thereafter an order u/s. 148A ... Vivek Kumar Kalki Trading 2017-18 5,14,675 Compnay Total 41,29,000/- (b) The AO had reason to believe that income chargeable to tax had escaped assessment within the meaning of sec. 147. Accordingly, the AO issued notice u/s. 148 dated 29.03.2022 to the assessee, calling