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TMI Blog2014 (8) TMI 644X X X X Extracts X X X X X X X X Extracts X X X X ..... or issuing a notice under Section 148 for reopening the assessment has not been fulfilled since the Assessing Officer must have reason to believe that income has escaped assessment. The following questions of law have been formulated by the revenue: "1. Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was justified in quashing the re-opening of assessment by ignoring the fact that the Assessing Officer had sufficient reasons for re-opening the case and accordingly assessing the long term capital gains at Rs. 72,99,290/-, against the returned long term capital gains of Rs. 1,72,075/-, which has also been confirmed by the CIT (Appeals)-II, Kanpur vide his order dated 13.03.2013. 2. Whether on the facts an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing of the Tribunal is that though the sale consideration was Rs. 31 lacs, the value for stamp duty purposes as per the circle rate applicable was Rs. 82.54 lacs. In the computation of income, while computing the capital gains, the assessee had taken into account the higher value of Rs. 82.54 lacs. This factual finding of the Tribunal has not been disputed by the revenue. Under Section 147, the Assessing Officer before proceeding to reopen an assessment must have reason to believe that there is an escapement of income from assessment. Now, it is well settled in view of the decision of the Supreme Court in the case of CIT v. Kelvinator of India Ltd.1 that under Section 147, an assessment cannot be reopened merely on the basis of mere change ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he can issue notice under Section 147(a). If there is no rational and intelligible nexus between the reasons and the belief, so that, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the Income Tax Officer could not have reason to believe that any part of the income of the assessee had escaped assessment and such escapement was by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts and the notice issued by him would be liable to be struck down as invalid." This decision was, of course, rendered in the context of the provisions of Section 147 as they then stood but the fundamental principle is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he basis on which the assessment was reopened under Section 148. The validity of the reopening of the assessment has to be determined on the basis of reasons which are disclosed by the Assessing Officer. The legality of the notice reopening the assessment has to be determined, when it is questioned, on the basis of the reasons which are recorded by the Assessing Officer. Those reasons cannot be allowed to be supplemented subsequently. This was also so observed in a judgement of a Division Bench of the Bombay High Court in Balkrishna Hiralal Wani vs. Income-Tax Officer and others3 where it was held as follows: "...For the purpose of determining the validity of the challenge to the notice under section 148, the court would have to refer to t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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