“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

Pramod Modi, Dholpur (Raj.) vs. Income Tax Officer, Ward - 4, Bharatpur

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

ITA 193/JPR/2021[2011-12]Status: DisposedITAT Jaipur20 Apr 2023AY 2011-12

Bench: Issuance Of Notice U/S 148 & Acted Only On Borrowed Satisfaction Which Is Not Permitted In Law. Therefore, The Action Of The Ld. Ao In Reopening The Assessment U/S 148 Deserves To Be Quashed.

For Appellant: Sh. Jaideep Malik (Adv.)For Respondent: Smt Chanchal Meena (Addl. CIT)

Section 144Section 147Section 148

grossly erred in reopening the assessment in the case of assessee u/s 148 of the Income Tax Act, 1961 without there being any reason to believe that the income of the assessee had escaped assessment and the Assessing Officer has not applied his own mind before issuance of notice

Mes. Pallavi Mayur Gandhi, Mumbai vs. ITO - 33(2)(5), Mumbai

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

ITA 2251/MUM/2022[2011-12]Status: DisposedITAT Mumbai19 Apr 2023AY 2011-12

Bench: Shri B.R. Baskaran (Am) & Shri Pavan Kumar Gadale (Jm)

Section 148Section 68

generated through purchase and sale of penny stocks. Since the assessee has dealt in one of the penny stocks, the AO had reason to believe that there was escapement of income. Accordingly he submitted that the order passed by Ld CIT(A) on this legal issue does not call

Beyondkey Systems P Ltd, Indore vs. The Dy CIT 1(1), Indore

ITA 209/IND/2022[2011-12]Status: DisposedITAT Indore18 Apr 2023AY 2011-12

Bench: Ms. Suchitra Kamble & Shri B.M. Biyani(Conducted Through Virtual Court) Assessment Year: 2011-12 Beyondkey Systems Pvt. Dcit 1(1) Ltd. Indore 901A & B, बनाम/ Nrk Business Park, Block B1, Pu4, Vs. Scheme No.54, Vijay Nagar Square, Indore (Appellant / Assessee) (Respondent / Revenue) Pan: Aaccb 7622 G Assessee By Shri Manish Dafaria, Ca & Ar Revenue By Shri P.K. Mishra, Cit-Dr Date Of Hearing 08.12.2022 / 16.03.2023 Date Of Pronouncement 18.04.2023

Section 10ASection 139Section 142Section 143Section 143(3)Section 147Section 148

confirming the action of Ld. AO of reopening of the assessment u/s 147 based on audit objection which cannot be treated as reason to believe for income escaping assessment. 2. On the facts and in the circumstances of the case and in law and without prejudice to the above ground

DCIT, CC-06, New Delhi vs. Jaguar Buildcon Pvt. Ltd., New Delhi

In the result, this appeal filed by the Revenue stands dismissed

ITA 79/DEL/2022[2011-12]Status: DisposedITAT Delhi13 Apr 2023AY 2011-12

Bench: The Ld. Cit (A) & Put

For Appellant: Shri Rakesh Joshi, CAFor Respondent: Mohd. Gayasuddin Ansari, CIT DR

Section 147Section 148Section 68

after issuing a notice under section 148, he accepts contention of assessee and holds that income, for which he had initially formed a reason to believe that it had escaped assessment, has, as a matter of fact, not escaped assessment, it is not open to him to independently assess some ... notice under section 148, he accepted the contention of the assessee and holds that the income which he has initially formed a reason to believe had escaped assessment. has as a matter of fact not escaped assessment. it is not open to him independently to assess some other income

Joginder Pal Singh, New Delhi vs. ITO Ward 16(4), New Delhi

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

ITA 2876/DEL/2019[2010-11]Status: DisposedITAT Delhi12 Apr 2023AY 2010-11

Section 133ASection 143(2)Section 143(3)Section 147Section 251

income of the assessee comes to Rs.20,18,500/- on account of such client code modification. Accordingly, he concluded that he had reason to believe that income of the assessee to the extent of Rs.20,18,500/- had escaped assessment and hence, notice u/s 148 of the Act was issued ... Page 8 of 16 Joginder Pal Singh vs. ITO 6. From the above, there are three figures for which the Ld. AO had reason to believe that income of the assessee had escaped assessment, though pertaining to the same transaction of fictitious losses. First, vide letter dated 05/07/2017

Agroh Infrastructure Developers P Ltd, Mhow vs. Pr CIT Central Circle Bhopal, Bhopal

In the result, appeal of assessee is allowed

ITA 95/IND/2021[2008-09]Status: DisposedITAT Indore11 Apr 2023AY 2008-09

Bench: Shri Vijay Pal Rao & Shri B.M. Biyanim/S Agroh Infrastructure Pr. Cit (Central) Developers Pvt. Ltd. Bhopal Aqua Point, A.B.Road, Vs. Umaria, Mhow, Indore (Appellant / Assessee) (Respondent/ Revenue) Pan: Aaeca 2752 L Assessee By Shri Manish Mittal, Ar Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 10.04.2023 Date Of Pronouncement 11.04.2023

Section 143(1)Section 143(3)Section 147Section 148Section 263

what constitutes escape of assessment. In order to invoke jurisdiction under Section 147(a) of the Act, the ITO must have reason to believe that some income chargeable to tax of an assessee has escaped assessment by reason of the omission or failure on the part of the assessee either ... Under Section 147(b) the Income-tax Officer also has the jurisdiction to initiate proceedings for reassessment where he has reason to believe, on the basis of information in his possession, that income chargeable to tax has been either under- assessed or has been assessed at too low a rate

Vipin Kumar, Ghaziabad vs. ITO Ward - 2(5), Ghaziabad

In the result appeal of the assessee is partly allowed

ITA 8557/DEL/2019[2010-11]Status: DisposedITAT Delhi31 Mar 2023AY 2010-11

Bench: Shri Chandra Mohan Gargassessment Year: 2010-11

For Appellant: Shri Jitender Wadwa, CAFor Respondent: Shri Om Prakash, Sr DR

Section 147Section 148Section 151

required to collect all the relevant documentary evidence and to verify them. The Assessing Officer is only require to have prima facie reason to believe that income has escaped assessment as per mandate of Vipin Kumar Page 4 of 8 section 147 of the Act, and therefore the objections ... Bank during the F.Y. 2009-10 i.e. A.Y. 2010- 11. In this regard verification letter was issued on 19.07.2016 . As such, I have reason to believe that deposited cash was made by undisclosed sources and income of Rs. 15,50,200/- is escaped to tax. If, it is approved

Shri Shantilalyadav, Khargone vs. The ITO, Khatgone

ITA 399/IND/2022[2013-14]Status: DisposedITAT Indore31 Mar 2023AY 2013-14

Bench: Ms. Suchitra Kamble & Shri B.M. Biyani(Conducted Through Virtual Court) Assessment Year: 2013-14 Shri Shantilal Yadav Ito, Khargone Gram Nagziri, बनाम/ Tehsil Gogawa, Vs. Khargone (Appellant / Assessee) (Respondent / Revenue) Pan: Aiwpy 0915 C Assessee By Shri S. N. Agrawal & Pankaj Mogra, Ars Revenue By Shri Ashish Porwal, Sr. Dr Date Of Hearing 27.03.2023 Date Of Pronouncement 31.03.2023

Section 115BSection 143(3)Section 147Section 148Section 69A

capital belong to Shri G.P. Goyal and the assessment order was passed, then it cannot be said that the Assessing Officer was having reason to believe that income has escaped in the hands of the assessee-company. Reassessment cannot be made on mere suspicion. The Assessing Officer has to form ... basic requirement for reopening the assessment is that the Assessing Officer should Page 4 of 8 Shantilal Yadav Assessment year 2013-14 have reason to believe that income has escaped assessment, is not satisfied in this case. Hence, we are satisfied that the learned CIT(A) was justified in holding

Assistant Commissioner of Income Tax, Circle 2(1), Bhilai vs. Mesers Abis Poultry Private Limited, Rajnandgaon

In the result, both appeals of the revenue are dismissed

ITA 234/RPR/2019[2011-12]Status: DisposedITAT Raipur30 Mar 2023AY 2011-12

Bench: Shri Ravish Sood, Jm & Shri Arun Khodpia, Am आयकर अऩीऱ सं./Ita No.233 & 234/Rpr/2019 (ननधाारण वषा / Assessment Year :2009-2010 & 2011-2012) Acit-2(1), Bhilai Vs M/S Abis Poultry Private Limited, Baldeo Bag, Rajnandgaon Pan No. :Aaeca 87411 E (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) ..

For Appellant: Shri Amit M. Jain & Gagan Tiwari, Advs. &For Respondent: Shri Debashish Lahiri, CIT-DR

Section 132Section 153CSection 68

above provisions and various judicial pronouncement, if the powers u/s 143(2) has not been invoked in time because the A.O. had no reason to believe that any claim of loss, exemption, regular scrutiny cannot be conducted like u/s 143(3) merely because a search has been conducted. The post ... above provisions and various judicial pronouncement, if the powers u/s 143(2) has not been invoked in time because the A.O.had no reason to believe that any claim of loss, exemption, deductions, allowances or relief made in return is inadmissible, the regular scrutiny cannot be conducted like

Assistant Commissioner of Income Tax, Circle 2(1), Bhilai vs. Mesers Abis Poultry Private Limited, Rajnandgaon

In the result, both appeals of the revenue are dismissed

ITA 233/RPR/2019[2009-10]Status: DisposedITAT Raipur30 Mar 2023AY 2009-10

For Appellant: Shri Amit M. Jain & Gagan Tiwari, Advs. &For Respondent: Shri Debashish Lahiri, CIT-DR

Section 132Section 153CSection 68

M/S. Bajrangbali Steel Industries Pvt. Ltd, Rourkla vs. ACIT, Central Circle, Sambalpur

In the result, appeals of the assessee in IT(SS)A No

ITA 109/CTK/2022[2020-21]Status: DisposedITAT Cuttack28 Mar 2023AY 2020-21

Bench: Shri George Mathan & Shri Arun Khodpiaआयकर अऩीऱ (तऱाशियाां और अशिग्रहण)/It(Ss)A Nos.31 To 33/Ctk/2022 (ननधाारण वषा / Assessment Year : 2016-2017 To 2018-2019) M/S Bee Pee Rollers Pvt. Ltd., Vs Acit, Central Circle, Sambalpur Lal Building, Kachery Road, Rourkela, Sundergarh, Odisha-769012 Pan No. :Aabcb 3593 P & आयकर अऩीऱ (तऱाशियाां और अशिग्रहण)/It(Ss)A Nos.34 To 39/Ctk/2022 & आयकर अऩीऱ/Ita No.109/Ctk/2022 (ननधाारण वषा / Assessment Year : 2014-2017 To 2020-2021) M/S Bajrangbali Steel Industries Pvt. Vs Acit, Central Circle, Sambalpur Ltd., Lal Building, Kachery Road, Rourkela, Sundergarh, Odisha-769012 Pan No. :Aabcb 3594 L & आयकर अऩीऱ (तऱाशियाां और अशिग्रहण)/It(Ss)A Nos.40 To 44/Ctk/2022 (ननधाारण वषा / Assessment Year : 2014-2015 To 2018-2019) M/S Bajrangbali Re-Rollers Pvt. Ltd. Vs Acit, Central Circle, Sambalpur Lal Building, Kachery Road, Rourkela, Sundergarh, Odisha-769012 Pan No. :Aaccb 6678 A (अऩीऱाथी /Appellant) (प्रत्यथी / Respondent) .. ननधााररती की ओर से /Assessee By : Shri S.K.Tulsiyan, Advocate With Shri B.K. Tibrewal, Ca & Ms. Nisha Rachh, Ca Shri M.K.Gautam, Pr.Cit(Osd) राजस्व की ओर से /Revenue By : सुनवाई की तारीख / Date Of Hearing : 28/03/2023 घोषणा की तारीख/Date Of Pronouncement : 28/03/2023

For Appellant: Shri S.K.Tulsiyan, Advocate with Shri

Section 133ASection 153ASection 292CSection 69Section 69C

amount to duplication and will be needless exercise of power, overlooks the fact that such power actually exists and if there is any reason to believe, namely, 31 IT(SS)A No.31-44/CTK/2022 & ITA No.109/CTK/2022 the satisfaction of the assessing authority to examine the source of income, the court would

Dinesh Kumar Sharma, Jaipur vs. ITO, Ward 4(3), Jaipur

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

ITA 36/JPR/2022[2012-13]Status: DisposedITAT Jaipur28 Mar 2023AY 2012-13

Bench: Hon’ble SHRI SANDEEP GOSAIN (Judicial Member)

For Appellant: Shri H.M. Singhvi, CAFor Respondent: Smt. Monisha Choudhary, Addl. CIT-DR

Section 148Section 154Section 194J

justified in reopening the case of the appellant for the year under consideration under section 148 of the Act and was having reason to believe that income has escaped assessment. Hence, this ground i.e. ground no. 1 of appeal is hereby dismissed. ‘’11. It is seen from the records that

Sona Power Private Limited, Raipur vs. Assistant Commissioner of Income Tax, Central-2, Raipur

Appeal of the assessee is allowed for statistical purposes

ITA 15/RPR/2020[2011-12]Status: DisposedITAT Raipur27 Mar 2023AY 2011-12

Bench: Shri Ravish Sood & Shri Arun Khodpiaairet Aria &. / Ita No.15/Rpr/2020 Fauhur_ At / Assessment Year : 2011-12

For Appellant: S/sshri Salil Kapoor, Tarun ChananaFor Respondent: Shri Debashish Lahiri, CIT-DR

Section 143(3)Section 147Section 148Section 68

void ab initio. 2. Ground 2: That on the facts and in the circumstances of the case, the learned assessing officer had no reason to believe or had formed no belief regarding the escapement of income of the assessee and has issued notices u/s.147 merely on the basis of information ... assessee company after complying to the notice issued under Sec. 148 of the Act, dated 27.03.2018 applied for a copy of the “reasons to believe” on the basis of which proceedings under Sec. 147 of the Act were initiated in its case. Copy of the “reasons to believe” were made

Dinaben Dilipkumar Patel, Na vs. Arivs.Income Tax Officer, Ward-2, Navsari

In the result, ground related to the credit entry of Rs

ITA 69/SRT/2023[2012-13]Status: DisposedITAT Surat24 Mar 2023AY 2012-13

Bench: Shri Pawan Singh

Section 147Section 148Section 254(1)Section 271(1)(c)

response was made by the assessee. The Assessing Officer recorded the reasons of re-opening and formed his belief that he has reason to believe that income of assessee has escaped assessment within the meaning of Section 147 of the Act. Notice under Section 148 was issued to the assessee

Dinaben Dilipkumar Patel, Na vs. Asrivs.Income Tax Officer, Ward-2, Navsari

In the result, ground related to the credit entry of Rs

ITA 337/SRT/2022[2012-13]Status: DisposedITAT Surat24 Mar 2023AY 2012-13

Bench: Shri Pawan Singh

Section 147Section 148Section 254(1)Section 271(1)(c)

ITO, Ward-1(4), Faridabad vs. Keshav Medichem P.Ltd, Faridabad

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

ITA 154/DEL/2020[2011-12]Status: DisposedITAT Delhi23 Mar 2023AY 2011-12

Bench: Shri N.K. Billaiya & Shri Anubhav Sharma

For Appellant: Dr. Rakesh Gupta, AdvFor Respondent: Shri Anuj Garg, Sr. DR

Section 1Section 14Section 147Section 148Section 68

submissions made and details provided by the assessee to the Inv. Wing as well as to the Assessing Officer which fanned the reason to believe and has deal t with subsequently, that even upto the appellate stage, there is no sufficient material available to grant any benefit of doubt ... that M/s Keshav Medichem Pvt Ltd has taken accommodation entry of Rs.1,67,00,150/- from aforesaid two companies and I, therefore, have reason to believe that income to the extent of Rs.1,67,00,150j-chargeable to tax, has escaped assessment for the A. Y.2011-12 within the meaning

Deepak Jain, C-Scheme vs. ITO Ward 2(1), Bhagwan Das Road

In the result, appeal of the assessee is allowed

ITA 196/JPR/2021[2013-14]Status: DisposedITAT Jaipur23 Mar 2023AY 2013-14

Bench: DR. S. SEETHALAKSHMI (Judicial Member), SHRI RATHOD KAMLESH JAYANTBHAI (Accountant Member)

For Appellant: Shri Rohan Sogani (C.A.)For Respondent: Smt Monisha Chaudhary (Addl. CIT) a

Section 132Section 142(1)Section 143(2)Section 143(3)Section 148Section 44ASection 68

such aspects should have been discernible from the reasons recorded. 1.7. First part of Section 147(1) requires Assessing Officer to have "reasons to believe" that any income chargeable to tax has escaped assessment. It is thus, formation of reason to believe that is subject matter of examination. AO, being ... constitute part of the material to investigate further, however, the process of arriving at such satisfaction cannot merely be such information. Recording of reasons to believe and not reasons to suspect is the prerequisite to the assumption of jurisdiction under Section 147. 1.9. In Ganga Saran and Sons

Ajmer Development Authority, Ajmer vs. CIT(Exemption)/ ITO (Exemption), Jaipur / Jodhpur

In the result, the stay application filed by the assessee is dismissed

ITA 89/JODH/2022[2012-13]Status: DisposedITAT Jodhpur22 Mar 2023AY 2012-13

Bench: Shri Kul Bharatshri Manish Borad

Section 143(3)Section 147Section 263

therefore, the AO, in the reassessment proceedings can assess only those item of income which have escaped assessment and find place in the reasons to believe but the income not being a part of the reasons recorded cannot be considered in the reassessment proceedings and also therefore, cannot be subject ... revision u/s 263 by the Ld. CIT. A Notice u/s 148 was issued on 29.03.2019 for A.Y. 2012- 13 under consideration, and reasons to believe are recorded (PB 1) as communicated to the appellant by the AO vide his letter

Udaipur Sahakari Uphokta Thok Bhandar Ltd., Udaipur vs. ACIT, Circle-2, Udaipur

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

ITA 441/JODH/2018[2014-15]Status: DisposedITAT Jodhpur22 Mar 2023AY 2014-15

Bench: Shri Kul Bharat & Shri Manish Borad441/Jodh/2018 (Assessment Year- 2014-15) Udaipur Sahakari Upbhokta Vs The Acit Thok Bhandar Ltd. Circle-2 Ist Floor, Shastri Circle, Uddaipur Udaipur (Appellant) (Respondent) Pan No. Aaaau 0159 K

Section 143(2)Section 36(1)(iii)

business expenditure, the assessee has failed to establish with actual fund flow the utilization of loan sanctioned by ICDP. Therefore, there is no reason to believe the apparent, that loan was not utilized for the purpose for which it was sanctioned, as real. Particularly, considering that unless the assessee

The Deputy Commissioner of Income Tax, Circle-3(1), Rajkot vs. M/S. J. Y. Resources Pvt. Ltd., Rajkot

In the result, the appeal of the Revenue is dismissed

ITA 150/RJT/2018[2009-10]Status: DisposedITAT Rajkot22 Mar 2023AY 2009-10

Bench: Shri Waseem Ahmed & Shri T.R Senthil Kumar

For Appellant: Shri R.K. Doshi, A.RFor Respondent: Shri B.D Gupta, Sr. D.R

Section 132(4)Section 147

Additions made on the basis of possibilities cannot be sustained. In para 9.2 of the order, it is stated that there is every reason to believe that the evidences would have been removed from the appellant's premises. Reason to believe is good for reopening of the assessment proceedings ... make the additions, concrete evidences are required. Mere reason to believe is not sufficient. In para 9.3 of the order, it is stated that it is possible that Mr. Bagdai might have prepared the receipt to handover to the appellant but as search took place, it could not be handed