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TMI Blog1981 (4) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... al relating to the asst. yr. 1972-73. The AAC gave a office note in the proceedings relating to the asst. yr. 1972-73 as follows: "It naturally flows format he decision given by me that the ITO should immediately examine the possibility of initiating reassessment proceeding for asst. yr. 1971-72 because if the opening and closing stock of asst. yr. 1971-72 and earlier years are also revealed having regard to correct cost price to the apt and if the rate of opening stock is found lower than the e rate of closing stock, naturally the additions are to beamed to the assessable income of those years also". 2. On the basis of the said office, note the ITO initiated reassessment proceedings under s. 147 without disclosing clause either (a) or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely correct. There is no dearth of the authorities that a condition precedent for initiating re-assessment proceedings is there asonabel belief of the ITO that income had escaped assessment. Even the plain language of s. 147 clearly set out such precedent condition. The question is whether such condition has been satisfied in the instant case. We have already reproduced reason to believe as recorded by the ITO. He simply issued notice under s. 148 as per AAC's office note order dt. 23rd Oct., 1975, which has also been reproduced by us above. The argument of Shri Chaudhary, the ld. Deptl. Rep. Is that an order of superior authorities constitutes "information" within the meaning of s. 147(B) of the IT Act, 1961. One of the objections raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nitiating reassessment proceedings. After receiving the office note of the AAC, the ITO should have investigated the matter himself and should have satisfied that there was under statement of closing stock, relating to the year under appeal and that on account of that a precise amount escapement assessment in the original assessment of the assessee. No such satisfaction was gathered by the ITO. We, therefore, agree with the AAC that without having such satisfaction which is precedent condition for invoking proceedings under s. 147, the ITO was not justified in taking action under s. 147 r/w s 148. The ITO having initiated reassessment proceedings with out having reasons to believe, we hold that the reassessment was rightly annulled by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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