“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

M, Ahakalika Nagari Sahakari Pat Sanstha, Pune vs. ITO, Ward 6(1), Pune

In the result, the appeal of assessee is allowed for statistical purpose

ITA 318/PUN/2024[2010-11]Status: DisposedITAT Pune18 Sept 2024AY 2010-11

Bench: Shri R.K. Panda & Ms. Astha Chandra

For Appellant: Shri Mahavir JainFor Respondent: Shri Ramnath P. Murkunde

Section 143(2)Section 144Section 148Section 80P(2)(a)

failed to file a return for A.Y. 2010-11 either u/s 139 or in response to notice u/s 144 and I have strong reason to believe that no return was filed prior to A.Y. 2014-15. The appellant had not shown the details of the bank account in Sampada Sahakari

Bharat Yashwant Gawas, Sindhudurg vs. ITO, Ward 1, Kudal

Accordingly grounds of appeal raised by the Assessee are allowed

ITA 1261/PUN/2024[2013-14]Status: DisposedITAT Pune18 Sept 2024AY 2013-14

Bench: Dr.Dipak P. Ripote & Shir Vinay Bhamoreआयकर अपील सं. / Ita No.1261/Pun/2024 िनधा"रण वष" / Assessment Year: 2013-14 Bharat Yashwant Gawas, Vs The Income Tax Officer, Gavthanwadi Zolambe, Ward-1, Kudal. Doodamarg, Sindhudurg, - 416510. Maharashtra. Pan: Aukpg5256A Appellant/ Assessee Respondent / Revenue Assessee By Shri Umesh Kumar Madhukar Mali – Ar Revenue By Shri Sandeep P Sathe – Jcit(Dr) Date Of Hearing 20/08/2024 Date Of Pronouncement 18/09/2024 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Is An Appeal Filed By Assessee Against The Order Of Ld.Commissioner Of Income Tax(Appeal)[Nfac], Passed Under Section 250 Of The Income Tax Act, Dated 28.11.2023 For The A.Y.2013-14. The Assessee Has Raised The Following Grounds Of Appeal : Bharat Yashwant Gawas [A]

Section 148Section 250Section 69A

observed as under : Quote,“The important words under section 147(a) are "has reason to believe" and these words are stronger than the words "is satisfied". The belief entertained by the ITO must not be arbitrary or irrational. It must be reasonable or in other words it must be based ... properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the ITO could not have reason to believe that any part of the income of the assessee had escaped assessment” Unquote. 7 Bharat Yashwant Gawas [A] 7. The assessing officer should have reasons

Aadhunik Infrastructure Development Private Limited, Jalgaon vs. The Deputy Commissioner of Income Tax, Circle-1, Jalgaon

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

ITA 439/PUN/2023[2012-13]Status: DisposedITAT Pune18 Sept 2024AY 2012-13

Bench: Shri R. K. Panda & Shri Vinay Bhamoreassessment Year : 2012-13

For Appellant: Shri Kishor B PhadkeFor Respondent: Shri Ramnath P Murkunde

Section 143(3)Section 14ASection 271(1)(c)Section 68

perused the information received. After analysing the information as well as AIR information, return of income filed and assessment records, therefore, I have reason to believe that the income of Rs.50,00,000/- has escaped the assessment for A.Y 2012-13 in case of the assessee. 6. In this case ... lapsed from the end of the assessment year in this case, the requirement to initiate the proceedings u/s 147 of the Act are reason to believe that income for the year under consideration has escaped the assessment because of failure on part of the assessee to disclose fully and truly

ITO, Ward-1(1), Solapur vs. Ms. Kshirsagar Fabrics, Solapur

In the result, the appeal filed by the Revenue is dismissed

ITA 97/PUN/2024[2009-10]Status: DisposedITAT Pune17 Sept 2024AY 2009-10

Bench: Shri R. K. Panda & Ms Astha Chandraassessment Year : 2009-10

For Appellant: Shri Nikhil PathakFor Respondent: Shri Sourabh Nayak, Addl. CIT

Section 143(3)Section 147Section 148Section 40A(3)

seen that the assessee failed to disclose the fully and truly all material facts necessary for assessment year under consideration, since it is reasoned to believe that the above income chargeable to tax to the extent of Rs.66,20,000 is escaped income for the assessment year under consideration. Considering ... seen that the assessee failed to disclose the fully and truly all material facts necessary for assessment year under consideration, since it is reasoned to believe that the above income chargeable to tax to the extent of Rs.66,20,000 is escaped income for the assessment year under consideration Considering

Johar Hasan Zojwalla, Kalyan vs. ACIT, Circle 3, Kalyan

In the result, the appeal by the assessee is allowed

ITA 1669/MUM/2024[2009-10]Status: DisposedITAT Mumbai16 Sept 2024AY 2009-10

Bench: Shri Om Prakash Kant & Shri Sandeep Singh Karhail

For Appellant: Shri Subodh RatnaparkhiFor Respondent: Shri Ashish Kumar, Sr. AR

Section 142(1)Section 143(2)Section 143(3)Section 147Section 148Section 2(22)(e)Section 250Section 56(2)(i)

that the issue of deemed dividend was not considered/discussed during the course of Scrutiny Assessment, Therefore, in view of the above, I have reason to believe that the amount of Rs. 29,80,340/- has escaped assessment for A.Y. 2009-10 due to failure on part of assessee to disclose ... scrutiny assessment proceedings. Johar Hasan Zojwalla. 13. For initiating the proceeding under section 147 of the Act, the AO is required to have “reason to believe” that income chargeable to tax has escaped assessment. In the present case, reassessment proceedings are nothing but a mere change of opinion

DCIT CC 1(1), Mumbai vs. Rajendra S Karnavat, Mumbai

ITA 3067/MUM/2024[2012-13]Status: DisposedITAT Mumbai13 Sept 2024AY 2012-13

Bench: Shri Om Prakash Kant & Shri Sunil Kumar Singh

For Appellant: Shri Sunil HirawatFor Respondent: Smt. Mahita Nair, Sr.DR

Section 148

assessee received accommodation entries of purchase of diamonds through the firms controlled and managed by ‘Sh Bhanwarlal Jain Group', the AO recorded reason to believe that income escaped assessment and issued notice u/s. 148 of the Income Tax Act, 1961 (in short ‘the Act'). In the re-assessment completed

Manipal Financial Services, Chennai vs. ITO, Business Ward Xv(4), Chennai

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

ITA 947/CHNY/2024[2005-06]Status: DisposedITAT Chennai12 Sept 2024AY 2005-06

Bench: Shri Mahavir Singhand Shri Manoj Kumar Aggarwalआयकर अपील सं./Ita No.:947/Chny/2024 िनधा"रण वष"/Assessment Year:2005-06 Manipal Financial Services, The Income Tax Officer, 328, Plaza Centre, Business Ward Xv(4), Vs. 129 Gn Chetty Road, Chennai. Chennai – 600 006. Pan: Aakfm 7449R (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Shri S. Sridhar, Advocate ""यथ" क" ओर से/Respondent By : Ms. R.Anita, Jcit सुनवाई क" तारीख/Date Of Hearing : 10.09.2024 घोषणा क" तारीख/Date Of Pronouncement : 12.09.2024 आदेश /O R D E R Per Mahavir Singh: This Appeal By The Assessee Is Arising Out Of The Order Of The Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre, Delhi In Order No.Itba/Nfac/S/250/2023-24/ 1061661390(1) Dated 28.02.2024. The Assessment Was Framed By The Income Tax Officer, Business Ward Xv(4), Chennai For The Assessment Year 2005-06 U/S.147 R.W.S. 143(3) Of The Income Tax Act, 1961 (Hereinafter The ‘Act’) Vide Order Dated 25.03.2013. 2. The First Issue In This Appeal Of Assessee Is As Regards To The Order Of Cit(A)-Nfac Confirming The Action Of The Ao In Assuming Jurisdiction U/S.147 Of The Act & Consequently Confirmed The Reassessment Order.

For Appellant: Shri S. Sridhar, AdvocateFor Respondent: Ms. R.Anita, JCIT

Section 143(1)Section 143(3)Section 147Section 148Section 47

with effect from April 1, 1989. The relevant part of the new Section 147 is as follows : "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

Jaiprakash Jindal, Mumbai vs. The ITO, Ward 20(2)(1), Mumbai

In the result, appeals of the assessee bearing ITA Nos

ITA 3280/MUM/2024[2010-11]Status: DisposedITAT Mumbai12 Sept 2024AY 2010-11

Bench: Shri Anikesh Banerjee () & Shri Gagan Goyal () - 2010-11 - 2009-10

Section 143(2)Section 143(3)Section 147Section 148Section 250

powers of the Income-tax Officer to reopen assessment, though wide, are not plenary. The words of the statute are "reason to believe" and not "reason to suspect". The reopening of the assessment after the lapse of many years is a serious matter. The Act, no doubt, contemplates the reopening

Atul U Rege HUF, Mumbai vs. Jurisdiction Circle 24(1), Mumbai

In the result, the appeal by the assessee is allowed for statistical purposes

ITA 4881/MUM/2023[2012-13]Status: DisposedITAT Mumbai12 Sept 2024AY 2012-13

Bench: Shri. Amarjit Singh & Shri. Sandeep Singh Karhail

For Appellant: Ms. Parna SamantFor Respondent: Shri. Manoj Kumar Sinha, (Sr. DR)

Section 143(3)Section 147Section 148Section 250Section 68

appreciation of facts and the reasons recorded are such that they could not have formed the basis or live link for forming a "reason to believe". 4. The learned Commissioner of Income Tax (Appeals), erred in not appreciating that the assessing officer merely relied on the information received from

Big Boss Foods Pvt. Ltd., Burdwan vs. ACIT, Cir. 1, Burdwan

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

ITA 398/KOL/2024[2013-14]Status: DisposedITAT Kolkata11 Sept 2024AY 2013-14

Bench: Sri Rajesh Kumar & Pradip Kumar Choubey

Section 143(3)Section 147Section 148Section 151(1)Section 250Section 40

decisions it has been held that there being no new material in the hands of Revenue leading to the view that there was reason to believe that there was escapement of assessment, there was mere change of opinion and hence notice u/s 148 of the Act is liable ... disclose fully and truly all material facts necessary for his assessment for that year and that the Income-tax Officer has reason to believe that the income chargeable to tax has escaped assessment for that year. In the absence of any such omission or failure on the part

Smt. Lakshmi Agarwal, Jaipur vs. ITO, Ward-4(5), Jaipur

In the result, the appeal of the assessee is dismissed with no orders as to costs

ITA 286/JPR/2024[2011-12]Status: DisposedITAT Jaipur11 Sept 2024AY 2011-12

Bench: recording satisfaction for issuance of notice since the information is specific. Thus the reasons recorded for re-opening is on borrowed satisfaction and not on any satisfaction by the AO. The

For Appellant: Shri P.C. Parwal, CAFor Respondent: Mrs. Monisha Choudhary, Addl. CIT-DR

Section 147Section 148Section 68Section 69C

LAKSHMI AGARWAL VS ITO, WARD 4(5), JAIPUR primarily condition for initiating action u/s 147 is that the AO must have reason to believe that any income chargeable to tax has escaped assessment. From recording of reasons it is evident that only basis for reopening the assessment is the information ... basis to ignite/ trigger "reason to suspect". The AO has to carry out further examination to convert the "reason to suspect" into "reason to believe". If the AO acts on borrowed satisfaction and without application of mind, the reopening is void. Balaji Health Care

Mr. Mohammadali Gulam Rasoal Shaikh, Mumbai vs. Income Tax Officer Ward, 20(2)(1), Mumbai

In the result, appeal of the assessee is allowed for statistical purposes

ITA 3223/MUM/2024[2012-13]Status: DisposedITAT Mumbai11 Sept 2024AY 2012-13

Bench: Shri Anikesh Banerjee & Shri Gagan Goyal, Accountantmr. Mohammadali Gulam Rasoal Shaikh R. No. 4, 2Nd Floor, Hari Jairam Building, Moulana Azad Road, Jacob Circle, Byculla, Mumbai 400 011 Pan No.: Creps9674R ...... Appellant Vs. Ito Ward 20 (2) (1) Piramal Chamber, Lalbaug Parel, Mumbai – 400 011 ..... Respondent

For Appellant: NoneFor Respondent: Shri Anoop Hiwase, Ld. AR

Section 139Section 143Section 147Section 148Section 250Section 44ASection 68

Gulam Rasoal Shaikh income for A.Y. 2012-13, the source of cash deposited with the bank account remains unexplained. Therefore the AO has reason to believe that the Income Chargeable to tax has been escaped assessment within the meaning of section 147 of the Act for the failure