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“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

Balaji Bullions and Commodities India Private Limited, Mumbai vs. DCIT Central Circle 7(1), Mumbai

The appeal of the Revenue is allowed for statistical purposes

ITA 3755/MUM/2025[2017-18]Status: DisposedITAT Mumbai23 Feb 2026AY 2017-18

Bench: Shri Om Prakash Kant () & Ms. Kavitha Rajagopal () Assessment Year: 2017-18

For Appellant: Shri Sharwan Kumar Jha, Adv
Section 133ASection 143(1)

section 147 of the Act, what is required is the existence of a “re Act, what is required is the existence of a “reason to believe” based on ason to believe” based on prima-facie material, and not conclusive proof of escapement of material, and not conclusive proof of escapement ... escaped assessment. belief that income chargeable to tax had escaped assessment. belief that income chargeable to tax had escaped assessment. 7.2 The expression “reason to believe” postulates the existence of The expression “reason to believe” postulates the existence of The expression “reason to believe” postulates the existence of tangible material

Azad Multi-Purpose Sahakari Sangh U Niyamit, Yargatti vs. The Income Tax Officer, Ward - 1, Belagavi

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

ITA 7/PAN/2026[2015-16]Status: DisposedITAT Panaji20 Feb 2026AY 2015-16

Bench: Shri Pavan Kumar Gadalei T A. No.7/Pan/2026 (A.Y. 2015-16) Azad Multi Purpose Sahakari Vs I T O, Sangh U Niyamit, National E Assessment . Yaragatti ,Saundatti, Centre, Belgaum-591129, Delhi. Karnataka. Pan.No..Aabaa9991N (अपीलार्थी/Appellant) (प्रत्यर्थी/Respondent)

Section 144

F.Y.2014-15 and the assesse has not filed the return of income for the A.Y.2015-16. The Assessing officer (A.O) has reason to believe that the income has escaped the assessment and issued notice u/sec148 of the Act. Further notice u/sec143 (2) and u/sec 142(1) of the Act are issued calling

Mata Bala Sundri Rice Mill, Village Kanipla, District Yamuna Nagar vs. Income Tax Officer-Ward-3, Yamuna Nagar, Yamunagar

In the result, appeal of the assessee is allowed

ITA 906/CHANDI/2025[2013-14]Status: DisposedITAT Chandigarh20 Feb 2026AY 2013-14

Bench: Shri Rajpal Yadav & Shri Manoj Kumar Aggarwalआयकर अपील सं./ Ita No. 906/Chd/2025 "नधा"रण वष" / Assessment Year: 2013-14 Mata Bala Sundri Rice Mill, The Ito, C/O Jagdamba Rice & General Mills, Vs Ward-3, Village-Kanipla, Po-Sarawan, Yamuna Nagar. Yamuna Nagar. "थायी लेखा सं./Pan No: Aatfm9813G अपीलाथ"/Appellant ""यथ"/Respondent Assessee By : Shri Dhruv Goel, Ca Revenue By : Dr. Ranjit Kaur, Addl. Cit Sr.Dr Date Of Hearing : 12.02.2026 Date Of Pronouncement : 20.02.2026

For Appellant: Shri Dhruv Goel, CAFor Respondent: Dr. Ranjit Kaur, Addl. CIT Sr.DR
Section 143(3)Section 147Section 148

Further, letter has been issued on 30.08.2018 vide dispatch No. 6893. However, the assessee has not made any compliance. 4. 1 have, therefore, reason to believe that income to the extent of Rs.29,63,783/- during the financial year 2012-13 represents his/her unexplained income for the relevant financial year

Rohitkumar Chinubhai Modi, Ahmedabad vs. The ACIT, Cir. 5(2) Now DCIT, Circle-2(1)(1), Ahmedabad

The appeal of the assessee is hereby dismissed

ITA 1961/AHD/2025[2009-10]Status: DisposedITAT Ahmedabad20 Feb 2026AY 2009-10

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Satish Solanki, ARFor Respondent: Shri Yogesh Mishra, Sr. DR
Section 143(3)Section 147Section 148Section 263

assessment. He held that there was tangible material in the form of impounded documents and admission of the purchaser which constituted sufficient reason to believe that income had escaped assessment. Relying on judicial precedents, the CIT(Appeals) observed that at the stage of reopening, it is not necessary ... 1960/Ahd/2025 Rohitkumar Chinubhai Modi & Saurabhbhai Rohitbhai Modi vs. DCIT Asst. Years –2009-10 - 11– is shown that there are reasons to believe that the apparent is not the real. Applying these principles, the impounded documents in the present case are clearly “well-speaking documents” and not dumb documents as contended

Saurabhbhai Rohitbhai Modi, Ahmedabad vs. The ACIT, Cir. 5(2) Now DCIT, Circle-2(1)(1), Ahmedabad

The appeal of the assessee is hereby dismissed

ITA 1960/AHD/2025[2009-10]Status: DisposedITAT Ahmedabad20 Feb 2026AY 2009-10

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Satish Solanki, ARFor Respondent: Shri Yogesh Mishra, Sr. DR
Section 143(3)Section 147Section 148Section 263

assessment. He held that there was tangible material in the form of impounded documents and admission of the purchaser which constituted sufficient reason to believe that income had escaped assessment. Relying on judicial precedents, the CIT(Appeals) observed that at the stage of reopening, it is not necessary ... 1960/Ahd/2025 Rohitkumar Chinubhai Modi & Saurabhbhai Rohitbhai Modi vs. DCIT Asst. Years –2009-10 - 11– is shown that there are reasons to believe that the apparent is not the real. Applying these principles, the impounded documents in the present case are clearly “well-speaking documents” and not dumb documents as contended

Prafulla Kumar Malakar, Income Tax Officer, Ward-12(1), Kolkata vs. Kalawati Investments & Trading P Ltd., Kolkata

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

ITA 134/KOL/2025[2015-16]Status: DisposedITAT Kolkata20 Feb 2026AY 2015-16

Bench: Shri George Mathan & Shri Rakesh Mishra

Section 144Section 147Section 148Section 250Section 69

share brokers, under the platform of BSE & USE. The nature & source of such transactions remained unexplained and hence the AO had reason to believe that there was escapement of income. After recording reasons in writing & obtaining prior approval of the competent authority, the AO initiated action ... share brokers, under the platform of BSE & USE. The nature & source of such transactions remained unexplained and hence the AO had reason to believe that there was escapement of income. Accordingly, the case was re-opened u/s 147 of the Act and notice u/s 148 of the Act was issued

ACIT, CC 6(2), Mumbai vs. Overseas Infrastructure Alliance (India) Private Limited, Mumbai

In the result, appeal by the assessee is allowed

ITA 4321/MUM/2025[2016-17]Status: DisposedITAT Mumbai20 Feb 2026AY 2016-17

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Harsh Kothari and Shri Ronak Vasavada, CAsFor Respondent: Shri R. A. Dhyani, CIT DR and Shri Virabhadra S. Mahajan, Sr. DR
Section 1

Though the power to reopen under the amended s. 147 is much wider, one needs to give a schematic interpretation to the words “reason to believe” failing which s. 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion ... have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion” 3.6. Before the ld. CIT(A), assessee submitted that ld. Assessing Officer while passing the impugned reassessment

ACIT, CC 6(2), Mumbai vs. Overseas Infrastructure Alliance (India) Private Limited, Mumbai

In the result, appeal by the assessee is allowed

ITA 4320/MUM/2025[2020-21]Status: DisposedITAT Mumbai20 Feb 2026AY 2020-21

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Harsh Kothari and Shri Ronak Vasavada, CAsFor Respondent: Shri R. A. Dhyani, CIT DR and Shri Virabhadra S. Mahajan, Sr. DR
Section 1

Though the power to reopen under the amended s. 147 is much wider, one needs to give a schematic interpretation to the words “reason to believe” failing which s. 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion ... have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion” 3.6. Before the ld. CIT(A), assessee submitted that ld. Assessing Officer while passing the impugned reassessment

ACIT, CC 6(2), Mumbai vs. Overseas Infrastructure Alliance (India) Private Limited, Mumbai

In the result, appeal by the assessee is allowed

ITA 4319/MUM/2025[2019-20]Status: DisposedITAT Mumbai20 Feb 2026AY 2019-20

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Harsh Kothari and Shri Ronak Vasavada, CAsFor Respondent: Shri R. A. Dhyani, CIT DR and Shri Virabhadra S. Mahajan, Sr. DR
Section 1

Though the power to reopen under the amended s. 147 is much wider, one needs to give a schematic interpretation to the words “reason to believe” failing which s. 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion ... have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion” 3.6. Before the ld. CIT(A), assessee submitted that ld. Assessing Officer while passing the impugned reassessment

ACIT, CC-6(2), Mumbai vs. Overseas Infrastructure Alliance (India) Private Limited, Mumbai

In the result, appeal by the assessee is allowed

ITA 4318/MUM/2025[2022-23]Status: DisposedITAT Mumbai20 Feb 2026AY 2022-23

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Harsh Kothari and Shri Ronak Vasavada, CAsFor Respondent: Shri R. A. Dhyani, CIT DR and Shri Virabhadra S. Mahajan, Sr. DR
Section 1

Though the power to reopen under the amended s. 147 is much wider, one needs to give a schematic interpretation to the words “reason to believe” failing which s. 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion ... have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion” 3.6. Before the ld. CIT(A), assessee submitted that ld. Assessing Officer while passing the impugned reassessment

ACIT, CC 6(2), Mumbai vs. Overseas Infrastructure Alliance (India) Private Limited, Mumbai

In the result, appeal by the assessee is allowed

ITA 4090/MUM/2025[2016-17]Status: DisposedITAT Mumbai20 Feb 2026AY 2016-17

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Harsh Kothari andFor Respondent: Shri R. A. Dhyani, CIT DR and
Section 1

Though the power to reopen under the amended s. 147 is much wider, one needs to give a schematic interpretation to the words “reason to believe” failing which s. 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion ... have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion” 3.6. Before the ld. CIT(A), assessee submitted that ld. Assessing Officer while passing the impugned reassessment

Overseas Infrastructure Alliance(India) Private Limited, Mumbai vs. Assistant Commissioner of Income Tax Central Circle 6(2), Mumbai

In the result, appeal by the assessee is allowed

ITA 4064/MUM/2025[2022-23]Status: DisposedITAT Mumbai20 Feb 2026AY 2022-23

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Harsh Kothari andFor Respondent: Shri R. A. Dhyani, CIT DR and
Section 1

Though the power to reopen under the amended s. 147 is much wider, one needs to give a schematic interpretation to the words “reason to believe” failing which s. 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion ... have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion” 3.6. Before the ld. CIT(A), assessee submitted that ld. Assessing Officer while passing the impugned reassessment

Overseas Infrastructure Alliance(India) Private Limited, Mumbai vs. Assistant Commissioner of Income Tax, Central Circle -6, Mumbai

In the result, appeal by the assessee is allowed

ITA 4045/MUM/2025[2020-21]Status: DisposedITAT Mumbai20 Feb 2026AY 2020-21

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Harsh Kothari and Shri Ronak Vasavada, CAsFor Respondent: Shri R. A. Dhyani, CIT DR and Shri Virabhadra S. Mahajan, Sr. DR
Section 1

Though the power to reopen under the amended s. 147 is much wider, one needs to give a schematic interpretation to the words “reason to believe” failing which s. 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion ... have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion” 3.6. Before the ld. CIT(A), assessee submitted that ld. Assessing Officer while passing the impugned reassessment

Overseas Infrastructure Alliance (India) Private Limtied, Mumbai vs. Assistant Commissioner of Income Tax Central Circle 6(2), Mumbai

In the result, appeal by the assessee is allowed

ITA 4044/MUM/2025[2021-22]Status: DisposedITAT Mumbai20 Feb 2026AY 2021-22

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Harsh Kothari and Shri Ronak Vasavada, CAsFor Respondent: Shri R. A. Dhyani, CIT DR and Shri Virabhadra S. Mahajan, Sr. DR
Section 1

Though the power to reopen under the amended s. 147 is much wider, one needs to give a schematic interpretation to the words “reason to believe” failing which s. 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion ... have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion” 3.6. Before the ld. CIT(A), assessee submitted that ld. Assessing Officer while passing the impugned reassessment

Overseas Infrastructure Alliance (India) Private Limtied, Mumbai vs. Assistant Commissioner of Income Tax Central Circle 6(2), Mumbai

In the result, appeal by the assessee is allowed

ITA 4043/MUM/2025[2019-20]Status: DisposedITAT Mumbai20 Feb 2026AY 2019-20

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Harsh Kothari and Shri Ronak Vasavada, CAsFor Respondent: Shri R. A. Dhyani, CIT DR and Shri Virabhadra S. Mahajan, Sr. DR
Section 1

Though the power to reopen under the amended s. 147 is much wider, one needs to give a schematic interpretation to the words “reason to believe” failing which s. 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion ... have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion” 3.6. Before the ld. CIT(A), assessee submitted that ld. Assessing Officer while passing the impugned reassessment

ACIT CC 6(2), Mumbai vs. Overseas Infrastructure Alliance (India) Private Limited, Mumbai

In the result, appeal by the assessee is allowed

ITA 3998/MUM/2025[2017-18]Status: DisposedITAT Mumbai20 Feb 2026AY 2017-18

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Harsh Kothari and Shri Ronak Vasavada, CAsFor Respondent: Shri R. A. Dhyani, CIT DR and Shri Virabhadra S. Mahajan, Sr. DR
Section 1

Though the power to reopen under the amended s. 147 is much wider, one needs to give a schematic interpretation to the words “reason to believe” failing which s. 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion ... have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion” 3.6. Before the ld. CIT(A), assessee submitted that ld. Assessing Officer while passing the impugned reassessment

ACIT, CC-6(2), Mumbai vs. Overseas Infrastructure Alliance (India) Private Limited, Mumbai

In the result, appeal by the assessee is allowed

ITA 3995/MUM/2025[2011-12]Status: DisposedITAT Mumbai20 Feb 2026AY 2011-12

Bench: Shri Sandeep Gosain & Shri Girish Agrawal

For Appellant: Shri Harsh Kothari and Shri Ronak Vasavada, CAsFor Respondent: Shri R. A. Dhyani, CIT DR and Shri Virabhadra S. Mahajan, Sr. DR
Section 1

Though the power to reopen under the amended s. 147 is much wider, one needs to give a schematic interpretation to the words “reason to believe” failing which s. 147 would give arbitrary powers to the Assessing Officer to re-open assessments on the basis of “mere change of opinion ... have a live link with the formation of the belief. This is supported by Circular No.549 dated 31.10.1989 which clarified that the words “reason to believe” did not mean a change of opinion” 3.6. Before the ld. CIT(A), assessee submitted that ld. Assessing Officer while passing the impugned reassessment

Ravisum Creative Promotions Pvt. Ltd (Formerly Known As Agro Investment Pvt. Ltd, Mumbai vs. ACIT Cen Cir 8 (11(1), Mumbai

In the result, appeal is allowed

ITA 1616/MUM/2022[2010-11]Status: DisposedITAT Mumbai20 Feb 2026AY 2010-11

Bench: Shri Saktijit Dey & Shri Makarand Vasant Mahadeokarravisun Creative Promotions Pvt. Ltd., Acit, Formerly Known As Ravisun Agro 6Th Floor, Aaykar Bhavan, Investments Pvt. Ltd. New Marine Lines, Vs. 305, Surat Sadan, Surat Street, Churchgate, Masjit Bunder, Mumbai - 400020 Mumbai – 400049 (Appellant) : (Respondent) Pan No. Aabcr 9224M Appellant By : Ms. Radha Halbe Respondent By : Shri Annavaran Kosuri, Sr.- Dr (Appellant) (Respondent) Date Of Hearing : 17.02.2026 Date Of Pronouncement : 20.02.2026

For Appellant: Ms. Radha HalbeFor Respondent: Shri Annavaran Kosuri, Sr.- DR
Section 143(3)Section 147Section 148Section 14ASection 43B

disallowance u/s.14A of the Act r.w. Rule 8D while computing the total income. 3. In view of the above, I hav`1e reason to believe that income chargeable to tax amounting to Rs 3,00,339/- has escaped assessment for AY.2010- 11 by reason of the failure on part

DCIT 2(3)(1), Mumbai vs. Tata Steel Ltd, Mumbai

In the result, appeal of the Revenue is dismissed and that of the assessee is allowed

ITA 3555/MUM/2016[2008-09]Status: DisposedITAT Mumbai20 Feb 2026AY 2008-09
For Appellant: Shri J.D. Mistri, Sr. Advocate and Ms. Jasmin Amalsadvala, AdvocateFor Respondent: Shri Ajay Chandra, CIT DR
Section 143(3)Section 144Section 147Section 148Section 151Section 36(1)(iii)Section 57

Commissioner to the issue of the Notice under Section 148 had not been obtained. or (iii) The Ld AO did not have any "reason to believe" that any income chargeable to tax had escaped assessment, within the meaning of Section 147. (iv) The provisions of the first proviso to Section ... truly all material facts necessary for its assessment for the year under consideration. (v) In any event, the Ld AO's stated "reason to believe" that income chargeable to tax had escaped assessment did not constitute "reason to believe" within the meaning of that expression as employed in Section

Tata Steel Ltd, Mumbai vs. Asst CIT 2(3), Mumbai

In the result, appeal of the Revenue is dismissed and that of the assessee is allowed

ITA 3294/MUM/2016[2008-09]Status: DisposedITAT Mumbai20 Feb 2026AY 2008-09
For Appellant: Shri J.D. Mistri, Sr. Advocate and Ms. Jasmin Amalsadvala, AdvocateFor Respondent: Shri Ajay Chandra, CIT DR
Section 143(3)Section 144Section 147Section 148Section 151Section 36(1)(iii)Section 57

Commissioner to the issue of the Notice under Section 148 had not been obtained. or (iii) The Ld AO did not have any "reason to believe" that any income chargeable to tax had escaped assessment, within the meaning of Section 147. (iv) The provisions of the first proviso to Section ... truly all material facts necessary for its assessment for the year under consideration. (v) In any event, the Ld AO's stated "reason to believe" that income chargeable to tax had escaped assessment did not constitute "reason to believe" within the meaning of that expression as employed in Section