Formation of belief by the Assessing Officer that income has escaped assessment is the crux of the...

Formation of belief by the Assessing Officer that income has escaped assessment is the crux of the reopening provision. The reasons recorded must be based on tangible material, evident from the reading of the reasons, constituting the mandatory requirement of Section 147. Assessments cannot be reopened merely on suspicion; the Assessing Officer must have "reason to believe" that income has escaped assessment, different from merely having a reason to suspect. In this case, there is no "close nexus" or "live link" between tangible material and the reason to believe income has escaped assessment. Information received from the Investigating Unit cannot be the sole basis; the Assessing Officer must take further steps, make inquiries, and gather ..... .....

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