“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

Asstt. Commissioner of Income Tax (Exemptions), Circle, Pune vs. The Shetkari Shikshan Mandal, Pune

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

ITA 1182/PUN/2024[2016-2017]Status: DisposedITAT Pune14 Jan 2025AY 2016-2017

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

For Appellant: Shri B.C. MalakarFor Respondent: Shri Arvind Desai

Section 11Section 11(6)Section 12ASection 142(1)Section 143(3)Section 147Section 148

Subsequently, the case of the assessee was reopened u/s 147 of the Act for the following reasons which formed the basis and reason to believe for the 2 ITA No.1182/PUN/2024, AY 2016-17 Ld. Assessing Officer (“AO”) of such income being escaped assessment. The relevant extract of para ... section 147 is avoided. The relevant section as it stood in AY 2016-17 is reproduced below: 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

Shital Dhorda, Mumbai vs. ITO-22(3)(1), Mumbai

In the result the appeal filed by the assessee stands allowed

ITA 4625/MUM/2023[2012-13]Status: DisposedITAT Mumbai14 Jan 2025AY 2012-13

Bench: Shri Sandeep Gosainvs. Ito – 22(3)(3) Shital Dhorda 408, Piramal Chambers 1002, 10Th Floor, Lalbaug, Mumbai – Vibgyor, S.V. Road, 400012. Santacruz (W), Mumbai – 400054. Pan/Gir No. Ajvpd0456H (Applicant) (Respondent) Assessee By Shri Snehal Shah Revenue By Shir Vithal Machindra Bhosale, Sr. Dr सुनवाई क" तारीख/Date Of Hearing 16.12.2024 घोषणा क" तारीख/Date Of Pronouncement 14.01.2025 आदेश / Order Per Sandeep Gosain, Jm: The Present Appeal Has Been Filed By The Assessee Challenging The Impugned Order Dated 04.07.2023, Passed U/S 250 Of The Income Tax Act, 1961 (‘The Act’), By The Learned Commissioner Of Income Tax (Appeals) / National Faceless Appeal Centre, Delhi (‘Ld. Cit(A)’), For The Assessment Year 2012-13. The Assessee Has Raised The Following Grounds Of Appeal:

Section 131Section 132Section 143(3)Section 250

Learned AO only after issuance of notice u/s 148 on 27/02/2014. It is therefore concluded that the Learned AO did not have any "reason to believe" to reopen the case of the Appellant before issuing notice u/s 148 of the Act. Hence, the notice issued u/s 148 is illegal ... amply clear from the above that the Learned AO did not have any tangible material so as to form an opinion as regards "Reason to believe" that any income chargeable to tax has escaped assessment within the meaning of section 147 of the Act. While the Appellant has never been

Vitarag Export Industries, Junagadh Road vs. ITO, Ward - 2(1)(1), Rajkot, Aayakar Bhavan

In the result, ground No.5 raised by the assessee, is allowed

ITA 354/RJT/2023[2012-13]Status: DisposedITAT Rajkot13 Jan 2025AY 2012-13

Bench: Dr. Arjun Lal Saini & Shri Dinesh Mohan Sinhaआयकर अपील सं./Ita No.354/Rjt/2023 ("नधा"रणवष" / Assessment Year: (2012-13) (Physical Hearing) Vitrang Export Industries, Vs. The Ito, Junagadh Road, Near Railway Ward – 2(1)(1), Crossing, Dhoraji, Gujarat - 360140 Rajkot "थायीलेखासं./जीआइआरसं./Pan/Gir No.: Aahfv2407M (Appellant) (Respondent)

For Appellant: Shri D. M. Rindani, ARFor Respondent: Shri Dheeraj Kumar Gupta, Sr. DR

Section 142(1)Section 143(1)Section 143(2)Section 143(3)Section 145(3)

upon appreciation of evidence on record. The Tribunal having taken into account different factors emerging from the record, found that there was no reason to believe that the purchaser was bogus. We do not find any substantial question of law arising, in particular with respect to the contention

Anish Garg, Patiala vs. ITO Ward-4, Patiala

In the result, the appeal of the assessee is allowed

ITA 739/CHANDI/2024[2012-13]Status: DisposedITAT Chandigarh13 Jan 2025AY 2012-13

For Appellant: Shri Rajiv Saldi, C.AFor Respondent: Shri Vivek Vardhan, Addl.CIT

Section 133ASection 142(1)Section 143(3)Section 147Section 148Section 151Section 250(4)

from the start of the business in the year 2004 to the date of survey even on computer or otherwise. Therefore, I have reasons to believe that the income declared by the assessee has been understated to the extent of more than Rs.1,00,000/- which is based ... with certain value on the stock exchange cannot by itself be held as tangible material. Further, the AO has not just recorded a reason to believe rather recorded a conclusive finding that assessee is involved in manage trading of penny stock to convert his undisclosed income into exempt income

Mustasq Ahmad, Chennai vs. ITO, Intl Tax Ward 1(1), Chennai

In the result, appeal filed by the assessee is allowed

ITA 1351/CHNY/2023[2013-14]Status: DisposedITAT Chennai13 Jan 2025AY 2013-14

Bench: Hon’Ble Shri Manu Kumar Giri & Hon’Ble Shri S.R. Raghunathaआयकर अपील सं./Ita No.1351/Chny/2023 िनधा"रण वष"/Assessment Year: 2013-2014. Mustaq Ahmad, The Income Tax Officer, No.160, Mustafa Centre, Vs. International Taxation, Usman Road, Ward 1(1) T. Nagar, Chennai. Chennai 600 017. Pan: Adepa 1181B (अपीलाथ"/Appellant) (""यथ"/Respondent) अपीलाथ" क" ओर से/Appellant By : Ms. Lekha, C.A, ""यथ" क" ओर से/Respondent By : Mr. Nilay Baran Som, Cit. सुनवाई क" तारीख/Date Of Hearing : 30.10.2024 घोषणा क" तारीख/Date Of Pronouncement : 13.01.2025 आदेश /O R D E R Per Manu Kumar Giri () This Appeal Filed By The Assessee Is Directed Against The Order Of The Commissioner Of Income Tax (A), Chennai-16 [‘Cit(A)’ Short] Dated 27.09.2023 For Assessment Year 2013-14. 2. In This Appeal, The Assessee Has Raised Five (5) Grounds Of Appeal. However, The Counsel For The Assessee Has Vehemently Pressed A Ground No.2 That There Was No Fresh Material On Which The Ao Has Issued Notice Dated 31.03.2021 U/S 148 Of The Income Tax Act, 1961 (‘Act’ In Short). G.No.2 Is As Under: ‘’2. At The Outset, The Ao Has No Jurisdiction To Reopen The Assessment, As All The Material Facts Were With The Ao Even At The Time Of Completing The Original Assessment & There Was No Fresh Material On Which The Ao Has Issued Notice. The Notice Issued By The Ao U/S.148 Of The Act Is Ab Initio Void & On This Ground Alone The Reassessment Deserves To Be Cancelled’’.

For Appellant: Ms. Lekha, C.AFor Respondent: Mr. Nilay Baran Som, CIT

Section 143(3)Section 147Section 148Section 2(22)(e)

mention here that in this case an assessment as stipulated u/s.2(40) of the act was made. However, as discussed in the reason to believe in this case, the income chargeable to tax has been under- assessed." This goes to prove that according to S.2(40) a regular assessment ... Subsequently, a notice u/s 148 of the Act was issued on 31.3.21 with just the wordings that "I have reasons to believe that your Income chargeable to Tax for the AY.13-14 has escaped Assessment within the meaning of section 147". In the subsequent order passed u/s 147 r.w.s. 144C

Varsha Sanjay Raut, Mumbai vs. Income Tax Officer Ward 35(3)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 4053/MUM/2023[2015-2016]Status: DisposedITAT Mumbai13 Jan 2025AY 2015-2016

Bench: Shri Rahul Chaudhary & Shri Girish Agrawalassessment Year: 2015-16

For Appellant: Shri Madhur Agrawal, ARFor Respondent: Ms. Rajeshwari Menon, Sr.DR

Section 132Section 132(4)Section 143(3)Section 147Section 148Section 69C

business of real estate, who had accepted “on money” from the purchasers of residential and commercial premises. It was further noted in the reasons to believe recorded by the ld. Assessing Officer that assessee is one of the purchaser/owner who had purchased a unit no. G-06 in the project ... paid “on money” of Rs.54,95,000/- in respect of the said purchase not accounted in her books. Ld. Assessing Officer thus, had reason to believe that income chargeable to tax in respect of “on money” paid in 3 Varsha Sanjay Raut, AY 2015-16 cash of Rs.54

Railroad Logistics India Pvt. Ltd., Mumbai vs. Pr Commissioner of Income Tax-3, Mumbai

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

ITA 2564/MUM/2023[2012-2013]Status: DisposedITAT Mumbai13 Jan 2025AY 2012-2013

Bench: Ms. Kavitha Rajagopal, Jm & Shri. Girish Agarwal, Am Railroad Logistics India Pvt. Ltd. The Principal Commissioner Of C/O Metal Trim, Gala No.1, Tankiwala Income Tax Pcit, Mumbai-3 Room No. 612, 6Th Floor, Aayakar Indl. Estate, Steel Made Compound, Marol Vs. Maroshi Road, Marol, Andheri (E) , Bhavan, Maharishi Karve Road, Mumbai – 400 059. Mumbai-400020 Pan/Gir No. Aaccr3484J (Assessee) : (Respondent) Assessee By : Shri. Satish R. Mody Respondent By : Shri. Tushar Mohite Sr. Ar Date Of Hearing : 18.10.2024 Date Of Pronouncement : 13.01.2025 O R D E R Per Kavitha Rajagopal, J M:

For Appellant: Shri. Satish R. ModyFor Respondent: Shri. Tushar Mohite Sr. AR

Section 143(1)Section 143(2)Section 143(3)Section 144Section 147Section 148Section 263

facts. The relevant extract of Section 147 is cited hereinunder for ease of reference: “147. Income escaping assessment-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

Subhashchandra Keshavlal Barot, Ahmedabad vs. The ITO, Intl. Taxn. -1, Ahmedabad

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

ITA 550/AHD/2022[2010-11]Status: DisposedITAT Ahmedabad10 Jan 2025AY 2010-11

Bench: Smt. Annapurna Gupta & Ms. Suchitra Kambleassessment Year: 2010-11

Section 142(1)Section 144Section 148Section 250

assessee for compliance. However, no response was filed by the assessee and, therefore, in the absence of any explanation from assessee, there was reason to believe by the Assessing Officer that the said transaction was unaccounted. Notice under Section 148 of the Income Tax Act,1961 was issued

Minal Shroff, Rs Puram Tamilnadu vs. ITO, Non Corp Ward -2(3), Coimbatore

ITA 2424/CHNY/2024[2014-15]Status: DisposedITAT Chennai10 Jan 2025AY 2014-15

For Appellant: Mr.S.K.Tulsiyan, AdvocateFor Respondent: Ms.T.M.Suganthamala

Section 143(2)Section 143(3)Section 147Section 148Section 2(40)

received accommodation entry for bogus capital gain from penny stocks and the same has been claimed as exempt income. 6. Basis of forming reason to believe and details of escapement of Income: On basis of the above facts as established in Paragraph-5, I have reason to believe that income ... scrutiny assessment u/s.143(3) of the Act was made. Accordingly, in this case, the only requirement to initiate proceeding u/s.147 is reason to believe which has been recorded above. It is pertinent to mention here that in this case the assessee has filed return of income for the year under

Virendra Singh Parihar, Bilaspur vs. Income Tax Officer Ward-2(1), Bilaspur

In the result, appeal of the assessee is allowed for statistical purposes in terms of the aforesaid observations

ITA 530/RPR/2024[2012-13]Status: DisposedITAT Raipur09 Jan 2025AY 2012-13

Bench: Shri Ravish Soodआयकर अपील सं. / Ita No.530/Rpr/2024 यििाारण वर्ा / Assessment Year : 2012-13 Virendra Singh Parihar Yamuna Nagar, Behind Bhatia Residence, Mangla, Bilaspur (C.G.)-495 001 Pan: Bcspp0907Q .......अपीलार्थी / Appellant बिाम / V/S. The Income Tax Officer, Ward-2(1), Bilaspur (C.G.) ……प्रत्यर्थी / Respondent

For Appellant: S/shri Sunil Kumar AgrawalFor Respondent: Smt. Anubhaa Tah Goel, Sr. DR

Section 144Section 147Section 148Section 250Section 44A

invalid as there is no live link between the information received and reasons recorded so as to enable the AO to form a reason to believe for escaped income of Rs.39,83,578; ROI filed on 31-3-13 declaring income of Rs.1,79,180 which includes business income ... grossly erred in law and facts of the case in assuming jurisdiction and initiating proceedings u/s.147 of the Act de-hors any valid “reasons to believe”. The Ld. AR in order to buttress his aforesaid claim had drawn my attention to the copy of “reasons to believe” as were culled

Hewlett-Packard (India) Software Operation Private Limited, Bangalore vs. Deputy Commissioner of Income Tax, Circle-(1)(1), Bangalore

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

ITA 405/BANG/2024[2014-15]Status: DisposedITAT Bangalore09 Jan 2025AY 2014-15

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year: 2014-15

For Appellant: Sri P.C. Kincha, A.RFor Respondent: Sri A. Sreenivasa Rao, D.R

Section 115JSection 143(1)Section 143(3)Section 147Section 148Section 250Section 92C

assessment after 4 years is bad in law. The assessee’s main contention was the satisfaction of the AO and is reason to believe was based on change of opinion and hence not valid. The ld. CIT(A) held that because the assessee had filed the audit report ... opinion that there is no new/fresh tangible material in the possession of the AO on the basis of which AO could have reason to believe that the income chargeable to tax had escaped assessment or had been not assessed. In our opinion, the AO has also not demonstrated what

DCIT CC 8.2 Mumbai, Mumbai vs. Dhirubhai Hirachand Ambani, Mumbai

ITA 4348/MUM/2024[2003 04]Status: DisposedITAT Mumbai09 Jan 2025

Bench: Shri Amarjit Singh & Sunil Kumar Singh, Juducial Member Ita Nos. 4324, 4331 & 4345 To 4348/Mum/2024 Assessment Years: 2001-02 To 2006-07

For Appellant: Shri NimeshVoraFor Respondent: Smt. SanyogitaNagpal, (CIT, DR)

Section 143(1)(a)Section 147Section 148Section 250

provisions of clause (d) of Explanation 2 to Sec.147 of the Income Tax Act, 1961. In view of the above, I have reason to believe that income chargeable to tax has escaped assessment in this case for AY 2001-02. Therefore, the assessment needs to be reopened in order

DCIT CC 8.2 Mumbai, Mumbai vs. Dhirubhai Hirachand Ambani, Mumbai

ITA 4347/MUM/2024[2004 05]Status: DisposedITAT Mumbai09 Jan 2025

Bench: Shri Amarjit Singh & Sunil Kumar Singh, Juducial Member Ita Nos. 4324, 4331 & 4345 To 4348/Mum/2024 Assessment Years: 2001-02 To 2006-07

For Appellant: Shri NimeshVoraFor Respondent: Smt. SanyogitaNagpal, (CIT, DR)

Section 143(1)(a)Section 147Section 148Section 250

DCIT CC 8.2 Mumbai, Mumbai vs. Dhirubhai Hirachand Ambani, Mumbai

ITA 4346/MUM/2024[2005]Status: DisposedITAT Mumbai09 Jan 2025

Bench: Shri Amarjit Singh & Sunil Kumar Singh, Juducial Member Ita Nos. 4324, 4331 & 4345 To 4348/Mum/2024 Assessment Years: 2001-02 To 2006-07

For Appellant: Shri NimeshVoraFor Respondent: Smt. SanyogitaNagpal, (CIT, DR)

Section 143(1)(a)Section 147Section 148Section 250

DCIT CC 8.2 Mumbai, Mumbai vs. Dhirubhai Hirachand Ambani, Mumbai

ITA 4345/MUM/2024[2006 07]Status: DisposedITAT Mumbai09 Jan 2025

Bench: Shri Amarjit Singh & Sunil Kumar Singh, Juducial Member Ita Nos. 4324, 4331 & 4345 To 4348/Mum/2024 Assessment Years: 2001-02 To 2006-07

For Appellant: Shri NimeshVoraFor Respondent: Smt. SanyogitaNagpal, (CIT, DR)

Section 143(1)(a)Section 147Section 148Section 250

DCIT CC 8.2 Mumbai, Mumbai vs. Dhirubhai Hirachand Ambani, Mumbai

In the result all the appeals of the revenue are dismissed

ITA 4331/MUM/2024[2001-02]Status: DisposedITAT Mumbai09 Jan 2025AY 2001-02

Bench: Shri Amarjit Singh & Sunil Kumar Singh

For Appellant: Shri NimeshVoraFor Respondent: Smt. SanyogitaNagpal, (CIT, DR)

Section 143(1)(a)Section 147Section 148Section 250

DCIT CC 8.2 Mumbai, Mumbai vs. Dhirubhai Hirachand Ambani, Mumbai

ITA 4324/MUM/2024[2002 03]Status: DisposedITAT Mumbai09 Jan 2025

Bench: Shri Amarjit Singh & Sunil Kumar Singh, Juducial Member Ita Nos. 4324, 4331 & 4345 To 4348/Mum/2024 Assessment Years: 2001-02 To 2006-07

For Appellant: Shri NimeshVoraFor Respondent: Smt. SanyogitaNagpal, (CIT, DR)

Section 143(1)(a)Section 147Section 148Section 250

Assistant Commissioner of Income Tax Circle- 3(4) Mumbai, Mumbai vs. The Shipping Corporation of India Limited, Mumbai

In the result, appeal of the assesse is allowed and that of the

ITA 1970/MUM/2024[2016-2017]Status: DisposedITAT Mumbai09 Jan 2025AY 2016-2017

Bench: Sunil Kumar Singh, Hon'Ble

For Appellant: Shri Nitesh Joshi & Neha Vikam, A/RsFor Respondent: Shri Dr. Kishor Dhule, CIT D/R

Section 115JSection 139(1)Section 143(3)Section 148

below: "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 AO to re-open assessments on the basis of "mere change of opinion", which cannot ... 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." In the case of Sabh Infrastructure Ltd. -vs.- ACIT [W.P.(C) 1357/2016](order

The Shipping Corporation of India, Mumbai vs. DCIT-3(4), Mumbai

In the result, appeal of the assesse is allowed and that of the

ITA 1752/MUM/2024[2016-17]Status: DisposedITAT Mumbai09 Jan 2025AY 2016-17

Bench: Sunil Kumar Singh, Hon'Ble

For Appellant: Shri Nitesh Joshi & Neha Vikam, A/RsFor Respondent: Shri Dr. Kishor Dhule, CIT D/R

Section 115JSection 139(1)Section 143(3)Section 148

below: "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 AO to re-open assessments on the basis of "mere change of opinion", which cannot ... 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." 1 In the case of Sabh Infrastructure Ltd. -vs.- ACIT [W.P.(C) 1357/2016](order

Radha Mishra, Bilaspur vs. Income Tax Officer, Ward-2(1), Bilaspur

ITA 509/RPR/2024[2013-14]Status: DisposedITAT Raipur08 Jan 2025AY 2013-14

Bench: Shri Ravish Soodआयकर अपील सं. / Ita No.509/Rpr/2024 "नधा"रण वष" / Assessment Year : 2013-14 Radha Mishra C/O. Kunj Bihari Mishra, Opp. D.P. Vipra Law College, Ashok Nagar, Sarkanda, Bilaspur-495 001 (C.G.) Pan: Bzspm0698G .......अपीलाथ" / Appellant बनाम / V/S. The Income Tax Officer, Ward-2(1), Bilaspur (C.G.) ……""यथ" / Respondent

For Appellant: Shri Sunil Kumar Agrawal, CAFor Respondent: Dr. Priyanka Patel, Sr. DR

Section 147Section 148Section 151Section 151(1)

investment. The appellant had not filed written submissions in response to the above letter. In this circumstance, the AO has a valid reason to believe that the investment on the above property is totally unexplained. This particular fact which is vital for the reopening of the assessment is not disputed