“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

Dy. Commissioner of Income Tax Central Circle-1(4), Kolkata vs. K Kalpana Industries India Ltd, Kolkata

In the result, both the appeals of the revenue for Assessment Year

ITA 815/KOL/2023[2011-12]Status: DisposedITAT Kolkata21 Mar 2024AY 2011-12

Bench: Dr. Manish Borad, Hon’Ble & Shri Sonjoy Sarma, Hon’Blei.T.A. Nos. 815 & 816/Kol/2023 Assessment Year: 2011-12 & 2012-13 Deputy Commissioner Of Income K Kalpana Industries India Ltd., Tax, Central Circle-1(4), Kolkata Vs Kolkata 28, Pretoria Street Kolkata - 700071 [Pan : Aabck2239D] अपीलाथ"/ (Appellant) "" यथ"/ (Respondent) Assessee By : Shri Ravi Tulsiyan, Fca Revenue By : Shri Rakesh Kumar Das, Cit, D/R सुनवाई क" तारीख/Date Of Hearing : 06/02/2024 घोषणा क" तारीख /Date Of Pronouncement: 21/03/2024 आदेश/O R D E R Per Dr. Manish Borad: The Present Appeals Are Directed At The Instance Of The Revenue Against The Order Of The Learned Commissioner Of Income Tax (Appeal), Kolkata [Hereinafter The “Ld. Cit(A)”] Evenly Dt. 25/09/2023, Passed U/S 250 Of The Income Tax Act, 1961 (“The Act”) For The Assessment Years 2011-12 & 2012-13. 2. The Registry Has Pointed Out That There Is A Delay Of 34 Days & 11 Days In Filing Of These Appeals By The Department For Assessment Year 2011-12 & 2012-13 Respectively. After Hearing The Ld. D/R We Are Convinced That It Was Prevented By Sufficient Cause From Filing These Appeals On Time. Though The Department Has Not Filed Any Petition/Application For Condonation, The Hon’Ble Apex Court In The Case Of Sesh Nath Singh & Ors. V. Baidyabati · Sheoraphuli Cooperative Bank

For Appellant: Shri Ravi Tulsiyan, FCAFor Respondent: Shri Rakesh Kumar Das, CIT, D/R

Section 143(3)Section 148Section 250Section 28Section 5

taxable income, but same was not done. Therefore I am convinced that the assessee suppressed its income & reduce tax liabilities. I have, therefore, reason to believe that income has escaped assessment in the hands of the assessee for the A. Y. 2011-12. 6 I.T.A. Nos. 815 & 816/Kol/2023 Assessment Year

Priyasha Meven Finance Limited, Mumbai vs. Assistant Commissioner of Income Tax Circle 4(2)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3814/MUM/2023[2015-16]Status: DisposedITAT Mumbai21 Mar 2024AY 2015-16

Bench: Shri Aby T. Varkey, Jm & Shri S Rifaur Rahman, Am आयकर अपील सं/ I.T.A. No.3814/Mum/2023 (निर्धारण वर्ा / Assessment Years: 2015-16) Priyasha Meven Finance बिधम/ Acit, Circle-4(2)(1) Ltd Room No. 642/669, Vs. R 404 Rotunda Building, Aayakar Bhawan, M. K. Bombay Samachar Marg, Road, Mumbai-400020. Fort-400001. स्थधयी लेखध सं./जीआइआर सं./Pan/Gir No. : Aadcp2042F (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) Assessee By: Shri Mani Jain Revenue By: Shri H. M. Bhatt (Sr. Dr) सुनवाई की तारीख / Date Of Hearing: 05/03/2024 घोषणा की तारीख /Date Of Pronouncement: 21/03/2024 आदेश / O R D E R Per Aby T. Varkey, Jm: This Is An Appeal Preferred By The Assessee Against The Order Of The Ld. Commissioner Of Income Tax (Appeals)/Nfac, Delhi, Dated 28.08.2023 For Ay. 2015-16. 2. The Assessee Has Challenged The Validity Of The Reopening By Ao (Jurisdiction) U/S 147 Of The Income Tax Act, 1961 (Hereinafter “The Act”). So The Legal Issue Is Taken Up First. According To The Ld. Ar, The Assessee Had Not Taken This Legal Issue Before The Ld. Cit(A). However, According To Him, Since It Is A Legal Issue, It Can Be Raised For The First Time Before This Tribunal & For Such A Preposition Relied Upon The Decision Of The Hon’Ble Supreme Court In The Case Of Ntpc Vs. Cit (229 Itr 383) (Sc). Per Contra, The Ld. Dr Objects To Raising Of This Legal Issue Before This Tribunal For The First Time. According To Him, The Assessee Had Not Taken Up This Issue Before The Ld. Cit(A), Therefore, The Same Should Be Remanded Back To The File Of The Ld.

For Appellant: Shri Mani JainFor Respondent: Shri H. M. Bhatt (Sr. DR)

Section 143(1)Section 147Section 148

SEBI order against the director of assessee company) at best could have triggered “Reason to Suspect” and not the essential condition precedent viz “Reasons to believe, escapement of income”. According to the Ld. AR, when the AO got information (in this case ex-parte SEBI interim order) against director ... SEBI dated 20.08.2015” (which was challenged by assessee before the SAT Authorities) and it can only trigger “Reasons to Suspect” and not “Reasons to believe, escapement 5 A.Y. 2015-16 Priyasha Meven Finance Ltd of income”. And the AO has alleged in the reason to reopen that there is escapement

Reena Rakesh Kothari, Mumbai vs. Income Tax Officer, WD-26(2)(5), Mumbai

In the result, appeal of assessee is allowed

ITA 2184/MUM/2023[2015-16]Status: DisposedITAT Mumbai21 Mar 2024AY 2015-16

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm Reena Rakesh Kothari Income Tax Officer 28-A, Kamgar Nagar, Ward 26(2)(5), S.G. Barve Marg, Kautilya Bhavan, Vs. Kurla (East), Bandra, Mumbai-400 051 Mumbai-400 024 (Appellant) (Respondent) Pan No. Ahlpk7422J Assessee By : Shri Prakash Jhunjhunwala, Ca Revenue By : Smt. Mahita Nair, Dr Date Of Hearing: 19.02.2024 Date Of Pronouncement : 21.03.2024

For Appellant: Shri Prakash Jhunjhunwala, CAFor Respondent: Smt. Mahita Nair, DR

Section 10Section 139Section 142Section 143Section 147Section 148Section 151Section 68

reason, approval/ sanction u/s 151 of the act is accorded. Thus, such approval/ sanction are also without application of mind. 014. Thus no reason to believe can be formed by LD AO with respect to escapement of income prior to the dates for filing of Return of Income. Explanation

Maple Destinations and Dreambuild Pvt. Ltd., New Delhi vs. DCIT, Circle- 16(1), New Delhi

ITA 1509/DEL/2018[2012-13]Status: DisposedITAT Delhi21 Mar 2024AY 2012-13

Bench: Shri N.K.Billaiya & Shri Yogesh Kumar U.S.M/S. Maple Deputy Commissioner Of Destinations & Income Tax, Dreambuild Pvt. Ltd. Vs. Circle -16(1), Farm No. 3E, Dera New Delhi Mandi Bandh Road, Mandi. Village Tehsil Hauzkas, Mehrauli, New Delhi Pan : Aahcm2850J (Appellant) (Respondent) Appellant By Sh. K. Sampath, Sh. Raj Kumar, Adv. & Sh. Vishal Sahgal, Ca Respondent By Sh. Subhra Jyoti Chakraborty, Cit Dr

Section 147Section 148Section 69

DCIT basis of which a reasonable person could have formed a belief that income had escaped assessment. Thus, there was reason to believe that income of the assessee company to the extent of Rs. 6.61 Crores had escaped assessment on account of failure on the part of the assessee ... present case. It is well settled law that, for an assessment to be re-opened what is required that the AO should have reason to believe that the income of assessee had escaped assessment and the said belief should be an honest and reasonable person based on reasonable grounds

M/S Neel Metal Products Ltd., New Delhi vs. DCIT, New Delhi

In the result, the appeal of the assessee is allowed

ITA 5083/DEL/2010[2005-06]Status: DisposedITAT Delhi21 Mar 2024AY 2005-06

Bench: Shri Kul Bharat & Shri Pradip Kumar Kedia

For Appellant: Shri Salil Aggarwal, Senior AdvocateFor Respondent: Shri Anuj Garg, Sr.DR

Section 143(1)Section 143(3)Section 147Section 148Section 148(2)Section 32

applicable in the case of plant and machinery and 15% on electrical fittings. In view of the above facts I have reason to believe that the income chargeable to tax has escaped assessment for AY 2003-04. Issue notice u/s. 148 of the IT Act. Assistant Commissioner of Income ... point. (iii) The AO has failed to assign the quantum of escapement. (iv) The AO as per the recorded reasons has held ‘reason to believe’ towards escapement on chargeable income qua A.Y. 2003-04 whereas the subject assessment year in question relates to Assessment Year 2005-06. The ld. counsel

M/S Josan Industries, Jalalabad vs. DCIT, Cl-1, Intl. Taxation, Chandigarh

In the result, the appeal is partly allowed as indicated

ITA 66/CHANDI/2023[2015-16]Status: DisposedITAT Chandigarh19 Mar 2024AY 2015-16

Bench: Shri A.D. Jain & Shri Vikram Singh Yadavआयकर अपील सं./ Ita Nos. 64 To 66/Chd/2023 "नधा"रण वष" / Assessment Years : 2013-14, 2014-15 & 2015-16 Josan Industries, Vs. The Dcit Circle-1, बनाम Jalalabad, International Taxation, H.O., Guruharshai, Chandigarh Punjab "थायी लेखा सं./Pan No. Aaafj7294F अपीलाथ"/Appellant ""यथ"/Respondent

For Appellant: Shri Tej Mohan Singh, AdvocateFor Respondent: Shri J.S. Kahlon, CIT DR

Section 144CSection 147Section 148Section 234Section 68

That the Ld. Assessing Officer has erred in law as well as on facts in as much as there has been no reason to believe that there was an escapement of income in as much as the reasons recorded are based only on suspicion, conjectures and estimation and s such ... That the Ld. Assessing Officer has erred in law as well as on facts in as much as there has been no reason to believe that there was an escapement of income in as much as the reasons recorded are based only on suspicion, conjectures and estimation and as such

M/S Josan Industries, Jalalabad vs. DCIT, Cl-1, Intl. Taxation, Chandigarh

In the result, the appeal is partly allowed as indicated

ITA 65/CHANDI/2023[2014-15]Status: DisposedITAT Chandigarh19 Mar 2024AY 2014-15

For Appellant: Shri Tej Mohan Singh, AdvocateFor Respondent: Shri J.S. Kahlon, CIT DR

Section 144CSection 147Section 148Section 234Section 68

M/S Josan Industries, Jalalabad vs. DCIT, Cl-1, Intl. Taxation, Chandigarh

In the result, the appeal is partly allowed as indicated

ITA 64/CHANDI/2023[2013-14]Status: DisposedITAT Chandigarh19 Mar 2024AY 2013-14

For Appellant: Shri Tej Mohan Singh, AdvocateFor Respondent: Shri J.S. Kahlon, CIT DR

Section 144CSection 147Section 148Section 234Section 68