“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

ACIT-1(1)(1), Mumbai vs. M/S. Hindustan Petroleum Corporation Ltd, Mumbai

In the result, appeal filed by the revenue is dismissed

ITA 1994/MUM/2023[2003-04]Status: DisposedITAT Mumbai07 Feb 2024AY 2003-04

Bench: Shri Aby T Varkey, Hon'Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 80I

rightly been allowing the claim right from AY 1989-90 to AY 2005-06, Hence, the Assessee submits that there is no reason to believe that income escaped assessment and reconsideration of the same issue on the same set of facts will therefore mean only a change of opinion ... there is no reason to believe that income has escaped assessment. 10.5 The Assessee has relied on the Bombay High Court in its own case for AY 2002-03 in Hindustan Petroleum Corporation Limited v. DCIT (2010) 328 ITR 534 where a deduction under section 80-IB was made

Nova Estates Pvt Ltd, New Delhi vs. ITO Ward - 18(4), New Delhi

In the result appeal of the assessee is dismissed

ITA 76/DEL/2021[2007-08]Status: DisposedITAT Delhi07 Feb 2024AY 2007-08

Bench: The Ld. Ao & Despite Such Scrutiny No Addition Was Made In The Original Assessment Proceedings.

Section 143(3)Section 147Section 148Section 68Section 69C

assessee to disclose fully and trully all material facts necessary for assessment. 3. That the Ld. AO did not have any 'reason to believe' as contemplated under Section 147 of the Act for re-opening of the assessment in the case of an assessee by issuance of notice

Vishram Sahakari Awas Samiti Limited, G.Noida vs. ITO, Ward-2(5), Noida

In the result, appeal of the assessee stands allowed

ITA 1667/DEL/2021[2011-12]Status: DisposedITAT Delhi07 Feb 2024AY 2011-12

Bench: Shri Shamim Yahya & Shri Anubhav Sharma

For Appellant: Shri Ved Jain, AdvFor Respondent: Shri Amit Katoch, Sr. DR

Section 147Section 148Section 68

void-ab-initio in the absence of any addition made by the AO for the income which he has initially formed a reason to believe had escaped assessment. (ii) On the facts and circumstances of the case, the learned CIT(A) has erred both on facts ... 1667/Del/2021 M/s Vishram Sahakari Awas Samiti Limited. has no jurisdiction to make an addition on any other issue not included in the reasons to believe for reopening the assessment. (iii) That the above action of the learned CIT(A), is against the judicial pronouncements relied upon by the assessee

ITO Ward-32(2), New Delhi vs. Mahavir Singh Dagar, New Delhi

In the result, the appeal of the Revenue is dismissed

ITA 2756/DEL/2019[2006-07]Status: DisposedITAT Delhi07 Feb 2024AY 2006-07

Bench: Dr. B. R. R. Kumarsh. Yogesh Kumar Us

For Appellant: Sh. Ved Jain, Adv. &For Respondent: None

Section 147Section 148

assessee that reassessment proceedings are bad in law in the absence of any live nexus in the formation of belief and reason to believe. 3. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in not quashing the assessment

Sanyukta Developers Pvt. Ltd., New Delhi vs. ITO Ward 22(3), New Delhi

In the result, the appeal of the assessee is allowed

ITA 2455/DEL/2019[2010-11]Status: DisposedITAT Delhi06 Feb 2024AY 2010-11

Bench: Shri Challa Nagendra Prasad & Dr. B. R. R. Kumar

For Appellant: Ms. Gunjan Jain, CAFor Respondent: Sh. Vivek Vardhan, Sr.DR

Section 143Section 143(3)Section 147Section 148Section 68Section 69C

Services dated 19/01/2010 Pvt. Ltd 5. M/s Zenith Axis Bank 50,00,000/- P.O.No. 031742 Automotive Pvt Ltd. dated 19/01/2010 I have therefore, reason to believe that the taxable income of Rs. 2,30,00,000/- represented by Share Application Money/ Loans/ Advance/ Share Capital from the companies as aforesaid ... entries have been obtained 4 Sanyukta Developers P Ltd., through the entry operator, investigated and reported by the investigation wing. I therefore have reasons to believe that this amount of Rs. 2,30,00,000/- represents income of the assessee chargeable to tax and which has escaped assessment

Shri Shivajirao R.Chavan, Ahmedabad vs. The Income Tax Officer, Ward-13(2), Ahmedabad

The appeals of the assessee are allowed

ITA 435/AHD/2005[1996-1997]Status: DisposedITAT Ahmedabad05 Feb 2024AY 1996-1997

Bench: Smt.Annapurna Gupta & Smt. Madhumita Roy

For Appellant: Shri Sakar Sharma, A.RFor Respondent: Ms. Saumya Pandey Jain, Sr.DR

Section 147Section 148Section 148(2)Section 250(6)Section 271(1)(c)

bring out the law regarding reopening of cases.Section 147 of the Act is reproduced for clarity: 10 147. 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 ... assess/ reassess an assessee can be exercised by the AO for an assessment year only if he has reason to believe that income for thesaid assessment year( emphasis)has escaped assessment. Assessment under the taxation laws is year specific. Therefore belief ofescapement of income for a valid assumption of jurisdiction

The ITO, Ward-13(2), Ahmedabad vs. Shri Shivajirao R.Chavan, Ahmedabad

The appeals of the assessee are allowed

ITA 332/AHD/2005[1996-1997]Status: DisposedITAT Ahmedabad05 Feb 2024AY 1996-1997

Bench: Smt.Annapurna Gupta & Smt. Madhumita Roy

For Appellant: Shri Sakar Sharma, A.RFor Respondent: Ms. Saumya Pandey Jain, Sr.DR

Section 147Section 148Section 148(2)Section 250(6)Section 271(1)(c)

M/S International Customer Related Management Services Private Limited, Chandigarh vs. D.C.I.T., Circle 6(1), Mohali

In the result, for statistical purposes, the appeal is

ITA 436/CHANDI/2022[2008-09]Status: DisposedITAT Chandigarh01 Feb 2024AY 2008-09

Bench: SHRI A.D.JAIN (Vice President), SHRI VIKRAM SINGH YADAV (Accountant Member)

For Appellant: Shri Ajay Vohra, Sr.Advocate with Shri Hardeep Singh Chawla, AdvocateFor Respondent: Shri Rohit Sharma, CIT-DR

Section 143(3)Section 147Section 153(2)

facts and circumstances of the case and in law, the proceedings under section 147 of the Act having been initiated without there being "reason to believe' that income of the appellant had escaped assessment, the impugned order is illegal and bad in law. 4.3 That on the facts and circumstances

V City Builders and Developers LLP, Mumbai vs. ITO 30(3)(5), Mumbai

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

ITA 3289/MUM/2023[2012-13]Status: DisposedITAT Mumbai01 Feb 2024AY 2012-13

Bench: Shri Pavan Kumar Gadale & Shri Gagan Goyal & V City Builders & Ito-30(3)(5), Developers Llp, Kautilya Bhavan, बनाम/ 10 Jayambbe Co-Op Bkc, Bandra (E), Vs. Hsg Soc Ltd, Mumbai-400051. 3Rd Liberty Garden X Lane, Malad (W), Mumbai-400064. "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aajfv3123C (""थ" / Respondent) (अपीलाथ" /Appellant)

For Appellant: NoneFor Respondent: Shri Ujjwalkumar Chavhan Sr. DR

Section 148

received information from DGIT (Inv), Mumbai that the assessee is a beneficiary of the accommodation entries and therefore the AO has reason to believe that the income has escaped assessment and issued notice u/sec 148 of the Act. In compliance to the notice u/sec 148 of the Act, the assessee

ACIT, New Delhi vs. M/S. Green Gem Estates Pvt. Ltd., New Delhi

In the result, the appeal of the revenue is dismissed

ITA 1732/DEL/2016[2011-12]Status: DisposedITAT Delhi01 Feb 2024AY 2011-12

Bench: Sh. Saktijit Dey & Sh. N. K. Billaiyaassessment Year: 2011-12 Acit Vs. Green Gem Estates Pvt. Ltd. R/O B- 4/43, 2Nd Floor, Central Circle -2 New Delhi Safdarjung Enclave, New Delhi – 110029 Pan No.Aaacg3209Q (Appellant) (Respondent) Appellant By Sh. Subhra Jyoti Chakraborty, Cit Dr Respondent By Sh. Somil Aggarwal, Advocate Sh. Deepesh Garg, Advocate Sh. Shrey Jain, Advocate Date Of Hearing: 01/02/2024 Date Of Pronouncement: 01/02/2024 Order Per N. K. Billaiya, Am:

Section 133Section 147Section 148Section 66Section 68

escaped assessment and the formation of belief is possible only on the basis of certain material and if there was no such material, reason to believe cannot be entertained; certain facts, specific in nature and reliable in character, have to exist to show that assessment can be reopened

Prakash Amarlal Doulatani, Ahmedabad vs. The Income Tax Officer, Ward-3(3)(4), Ahmedabad

In the result, appeal preferred by the assessee is allowed

ITA 970/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad31 Jan 2024AY 2011-12

Bench: Shri Waseem Ahmed & Ms. Madhumita Royआयकर अपील सं./I.T.A. No. 970/Ahd/2023 ("नधा"रण वष" / Assessment Year : 2011-12) Prakash Amarlal The Income Tax Officer बनाम/ Ward -3(3)(4), Ahmedabad Doulatani Vs. 16/318, Satyagrah Chhavni, Near Bhavnirjar, Satellite Road, Ahmedabad - 380015 "थायी लेखा सं./जीआइआर सं./Pan/Gir No. : Aaspd3727B (Appellant) .. (Respondent) Shri Vihar Soni, A.R. Assessee By : Shri Urjit Shah, Sr. Dr Revenue By : सुनवाई क" तार"ख / Date Of 30/01/2024 Hearing घोषणा क" तार"ख /Date Of 31/01/2024 Pronouncement O R D E R Per Ms. Madhumita Roy - Jm: The Instant Appeal Filed At The Instance Of The Assessee Is Directed Against The Order Dated 05.10.2023 Passed By National Faceless Appeal Centre (Nfac), Delhi Arising Out Of The Order Dated 22.11.2018 Passed By The Ito, Ward-3(3)(4), Ahmedabad Under Section 143(3) R.W.S. 147 Of The Income Tax Act, 1961, (Hereinafter Referred To As ‘The Act’) For Assessment Year 2011-12, Whereby & Wherunder The Addition Made By The Ld. Ao On Account Of ‘On Money’ Has Been Confirmed.

For Appellant: Shri Urjit Shah, Sr. DR

Section 132Section 142(1)Section 143(2)Section 143(3)Section 147Section 148

disclose fully and truly income and the complete details of income by filing return of income and therefore the Ld. AO has reason to believe that income chargeable to tax has escaped assessment. Consequently, notice under Section 148 of the Act was issued on 30.03.2018 upon obtaining approval from ... basic jurisdiction to assess the income in terms of Section 147 and Section 148 of the Act where he has reason to believe that the income has escaped assessment. On the submissions of non issuance of notice under Section 143(2) of the Act, we are of the view that

Mandar Kulkurni, HUF, Vadodara vs. Income Tax Officer, Ward-1(2)(3), Vadodara

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

ITA 631/AHD/2023[2011-12]Status: DisposedITAT Ahmedabad31 Jan 2024AY 2011-12

Bench: Ms. Suchitra Kambleassessment Year: 2011-12

Section 143(3)Section 147Section 148Section 54

house property. However, the assessee, HUF, had purchased new house property in the individual capacity i.e. Mandar Kulkarni. Therefore, the Assessing Officer has reason to believe that the assessee, HUF, had not fulfilled a vital condition for the purchase of new property to be eligible for claiming deduction under Section ... assessee, Mandar Kulkarni, HUF, was found irregular and, therefore, the Assessing Officer issued show cause notice to the assessee. There was reason to believe that income to the extent of Rs18,11,020/- had escaped assessment within the meaning of Explanation 2(c) to Section 147 of the Act. Accordingly

M/S. Mukesh Lifestyle Pvt. Ltd., Kolkata vs. I.T.O., Ward - 9(1), Kolkata

In the result, the appeal of the assessee is allowed

ITA 1614/KOL/2024[2010-2011]Status: DisposedITAT Kolkata31 Jan 2024AY 2010-2011

Bench: Shri Rajesh Kumar, Am & Shri Pradip Kumar Choubey, Jm Ito, Ward 9(1) M/S Mukesh Lifestyle Pvt. Ltd. Aaykar Bhavan, 5 Th Floor, 180, Jamunalal Bajaj Street, 3Rd Floor, Kolkata-700007, P-7, Chowringhee Square, Vs. West Bengal Kolkata-700069, West Bengal (Appellant) (Respondent) Pan No. Aaecm7276R Assessee By : Shri Abhishek Bansal, Ar Revenue By : Shri Sailen Samadder, Dr Date Of Hearing: 06.01.2025 Date Of Pronouncement : 31.01.2025

For Appellant: Shri Abhishek Bansal, ARFor Respondent: Shri Sailen Samadder, DR

Section 147Section 148Section 68

case of the M/s Mukesh Lifestyle Pvt. Ltd; A.Y. 2010-11 assessee was reopened u/s 147 of the Act after recording the reasons to believe u/s 148 of the Act and after obtaining the approval of the competent authority. The notice u/s 148 of the Act was issued ... which has received funds to the tune of Rs.25 lakhs-in the F.Y. 2009-10 relating to A.Y. 2010-11. Thus, there is reason to believe that the income has escaped assessment during the A.Y. 2010-11 to the tune of Rs.25 lakhs.” 08. On perusal of the above reasons

D.C.I.T., CC-1(3), Kolkata vs. M/S. Navin Construction & Credit Pvt. Ltd., Kolkata

In the result, appeal of the revenue is dismissed and cross- objection of the assessee is allowed

ITA 580/KOL/2022[2015-2016]Status: DisposedITAT Kolkata31 Jan 2024AY 2015-2016

Bench: Shri Sanjay Garg, Hon’Ble & Dr. Manish Borad, Hon’Ble

For Appellant: Shri Akkal Dudhewala, A/RFor Respondent: Shri Abhijit Kundu, CIT, D/R

Section 133(6)Section 14ASection 250Section 35Section 35(1)Section 68

that the Assessing Officer had power to reopen the assessment provided there was some tangible material on the basis of which he has reason to believe that income chargeable to tax had escaped assessment. 7.7 The Hon'ble Supreme Court in the case of CIT Vs Lovely Exports