M/S Ankit Agrochem Pvt. Ltd., A-21, Iiird Floor, Room v. The Joint Commissioner Of Income Tax, Range-1, Income Tax Department, Bikaner

HIGH COURT OF JUDICATURE FOR RAJASTHAN ATJODHPUR D.B. Spl. Appl. Writ No. 1101 / 2017 M/s Ankit Agrochem Pvt. Ltd., A-21, IIIrd Floor, Room No. 5, Sadulganj, Bikaner Through Its Director Shri AvinashModi S/o ShriArun Kumar Modi, Aged 37 Years, Resident of A-21, Sadulganj, Bikaner. ----Appellant Versus 1. The Joint Commissioner of Income Tax, Range-1, Income Tax Department, Bikaner. 2. The Assistant Commissioner of Income Tax, Circle-1, Room No. 52, Income Tax Office, Rani Bazar, Bikaner. ----Respondents _____________________________________________________ For Appellant(s) : Mr. Niraj Kumar JainFor Respondent(s) : Mr. K.K.Bissa _____________________________________________________ HON'BLE MR. JUSTICE SANGEET LODHA HON'BLE MR. JUSTICE VINIT KUMAR MATHUR Judgment Per Hon’ble Mr. Sangeet Lodha, J. 18th December, 2017 1.This special appeal is directed against order dated 13.9.17 ofthe learned Single Judge of this court, whereby a writ petitionpreferred by the appellant questioning the legality of notice dated20.2.17 issued by the Assessing Officer, the AssistantCommissioner of Income Tax, Circle I, Bikaner (hereinafterreferred as “AO”), under Section 148 of Income Tax Act, 1961 (forshort “the Act”) for the assessment year (A.Y.) 2013-14 and theorder dated 2.6.17 rejecting the objections raised by theappellant, stands dismissed. 2.The facts relevant are that the appellant filed its return ofincome for A.Y. 2013-14 on 28.9.13, disclosing total income atRs.7,66,540/-. The return was processed under Section 143(1) ofthe Act. On 20.2.17, AO issued a notice under Section 148 of theAct proposing to assess/re-assess the income of the appellant forthe said A.Y. and required him to deliver return in the prescribedform before the expiry of 30 days from the date of service of thenotice. The appellant vide letter dated 2.3.17 requested the AO tosupply the reasons recorded for issuing notice under Section 148of the Act. The AO vide letter dated 10.3.17 supplied the reasonsrecorded for issuing notice under Section 148 of the Act to theappellant. The appellant vide communication dated 14.3.17requested to treat the return filed on his behalf for the A.Y.2013-14 on 28.9.13 as filed in compliance of notice issued underSection 148 of the Act. On 19.5.17, the appellant submitted itsobjections questioning the legality of the notice and re-assessment proceeding initiated pursuant thereto. The appellantalso demanded certified copies of the relevant documents on thebasis of which the reasons for initiating re-assessmentproceedings were recorded. The objections raised by the assesseequestioning the validity of re-assessment proceedings stoodrejected by the AO vide order dated 2.6.17. Aggrieved thereby,the writ petition preferred by the appellant has been dismissed bythe learned Single Judge with the observations that the objectionsraised by the assessee being totally factual, no fault can be foundin the order observing that such objections can only beadjudicated at the time of dealing with the assessment order. Hence, this intra court appeal. Hence, this intra court appeal. 3.Learned counsel appearing for the appellant while relyingupon the decision of the Hon’ble Supreme Court in case of “ GKNDriveshafts (India) Ltd. vs. ITO & Ors.”, 259 ITR 19(SC),contended that it was bounden duty of the AO to dispose of theobjections filed by the appellant in response to the notice underSection 148 of the Act before proceeding with the assessment, bya speaking order. Learned counsel submitted that a bare perusalof order makes it clear that none of the objections raised havebeen dealt with by the AO. Learned counsel submitted that thedocuments forming basis for initiating re-assessment proceedingswere not even supplied to the appellant and thus, no effectiveopportunity to file objections to the notice issued was extended bythe AO to the appellant. It is submitted that by way of objectionsraised, the appellant had questioned assumption of jurisdiction bythe AO under Section 147 read with Section 148 of the Act andtherefore, the same were required to be dealt with at this stageand the decision thereon cannot be deferred till time assessmentorder is passed and thus, the learned Single Judge has seriouslyerred in observing that the objection raised being totally factualcan only be adjudicated at the time of dealing with theassessment order. Learned counsel submitted that a perusal of thereasons recorded reveal that the AO has not spelled out as to howon the basis of the information/material available he has formedthe opinion that the income has escaped assessment. Learnedcounsel submitted that in the instant case, there exists no live linkor close nexus between material before the AO and the belief formed and thus, the mandatory pre-conditions for exercise ofthe jurisdiction under Section 147 of the Act cannot be said tohave been satisfied. In support of the contentions, learned counselhas relied upon a decisions of the Supreme Court in the matters of“Income Tax Officer vs. Lakhmani Mewal Das”, (1976)103 ITR437 (SC), “Chhugamal Rajpal vs. S.P. Chaliha & Ors.”, (1971) 79ITR603 (SC) and Bench decisions of this court in the matters of“Commissioner of Income Tax vs. Shiv Ratan Soni”, (2005) 279ITR 261 and “Smt. Kiran Kanwar vs. Union of India”, (D.B.CivilSpecial Appeal (Writ) No.246/16, decided on 4.8.16). Learnedcounsel submitted that the appellant had disclosed fully and trulyall material particulars while filing the return and therefore, thereassessment proceedings initiated on mere change of opinion isex facie without jurisdiction. 4.On the other hand, learned counsel appearing for therespondent submitted that during the assessment proceedings forthe year 2014-15, it was revealed that assessee has receivedshare application money to the tune of Rs.2.2 crore from thevarious entities in the financial year 2012-13 which was utilisedduring the year and subsequently returned in the financial year2013-14. Learned counsel submitted that all the 9 entities fromwhich the assessee has received share application money wereonly engaged in the business of providing accommodation entriesof bogus nature which was further confirmed by the directors,dummy directors/key persons of the above entities in theirrespective statements. Drawing the attention of the court to thereasons recorded by the AO before issuing the notice under Section 148 of the Act, learned counsel submitted that theinformation received from Directorate of Investigation, Kolkatawas further examined by the AO and it was noticed that theappellant company had received and utilised the money alleged tohave been received from bogus sources lacking genuineness,creditworthiness and genuine identity, which fall within thepurview of Section 68 of the Act. Learned counsel would submitthat there exists rational nexus between reasons and the beliefformed by the AO that income had escaped assessment and thus,the reassessment proceeding initiated cannot be faulted with.Learned counsel submitted that the sufficiency of the reasons forthe formation of the belief cannot be challenged by the assessee.As a matter of fact, while filing the objections, the appellant hasinvoked the merits of the material on record, which shall beobviously decided the AO during the course of assessmentproceedings and thus, the order impugned passed by the learnedSingle Judge dismissing the writ petition does not warrant anyinterference in intra court appeal jurisdiction. 5.We have considered the rival submissions and perused thematerial on record. 6.Indisputably, Section 147 of the Act, an AO is empowered toinitiate reassessment proceedings if he has reason to believe thatany income of the assessee chargeable to tax has escapedassessment. As per mandate of Section 148, before makingassessment, reassessment or recomputation of income chargeableto tax under Section 147, the AO is under an obligation to issuenotice to the assessee, after recording the reasons for initiating the reassessment proceedings in terms of sub-section (2) ofSection 148, forming basis for the belief that any income of theassessee chargeable to tax for the relevant assessment year hasescaped assessment. It is well settled that the belief entertainedby the AO must not be arbitrary or irrational, it must bereasonable and based on material on record. The assumption ofthe jurisdiction by the AO under the Act pre-supposes dueapplication of mind on the material on record and formation of thebelief by the AO that the income has escaped assessment cannotbe based on whims and fancy, there must exist rational andintelligible nexus between the reasons and the belief. 7.In the matter of “Calcutta Discount Co. Ltd. vs. Income-taxOfficer, Companies District I, Calcutta”, (1961)41 I.T.R.191 (SC),the Hon'ble Supreme Court while dealing with the ambit and scopeof the provisions of Section 34 of the Indian Income Tax, 1922,which were similar to the provisions of Section 147 of the Act of1961 explained the purports of Section 34, as under:- “To confer jurisdiction under this section to issue noticein respect of assessments beyond the period of fouryears, but within a period of eight years, from the end ofthe relevant year two conditions have therefore to besatisfied. The first is that the Income-tax Officer musthave reason to believe that income, profits or gainschargeable to income-tax have been under-assessed.The second is that he must have also reason to believethat such “under-assessment”, has occurred by reason ofeither (i) omission or failure on the part of an assesseeto make a return of his income under section 22, or (ii)omission or failure on the part of an assessee to disclosefully and truly all material facts necessary for hisassessment for that year. Both these conditions areconditions precedent to be satisfied before the Income-tax Officer could have jurisdiction to issue a notice forthe assessment or reassessment beyond the period offour years, but within the period of eight years, from theend of the year in question.” The Hon'ble Supreme court further observed that it is duty ofevery assessee to disclose fully and truly all material factsnecessary for his assessment. But, his duty does not extendbeyond this. The Hon'ble Supreme Court opined that once allprimary facts are before the Assessing Authority, he requires nofurther assistance by way of disclosure . It is for him to decidewhat inferences of facts can be reasonably drawn and what legalinferences have ultimately to be drawn. 8.In Lakhmani Mewal Das’s case (supra), relied upon by thelearned counsel for the appellant, the Hon'ble Supreme Courtobserved: “Production before the Income-tax Officer of theaccount books or other evidence from which materialevidence could with due diligence amount to disclosurecontemplated by law. The duty of the assessee in anycase does not extend beyond making a true and fulldisclosure of primary facts. Once he has done that hisduty ends. It is for the Income-tax Officer to draw thecorrect inference from the primary facts. It is noresponsibility of the assessee to advice the Income-taxOfficer with regard to the inference which he shoulddraw from the primary facts. If an Income-tax Officerdraws an inference which appears subsequently to beerroneous, mere change of opinion with regard to thatinference would not justify initiation of action forreopening assessment. The grounds or reasons which lead to the formationof the belief contemplated by section 147(a) of the Actmust have a material bearing on the question ofescapement of income of the assessee from assessmentbecause of his failure or omission to disclose fully andtruly all material facts. Once there exist reasonable-grounds for the Incometax Officer to form the abovebelief, that would be sufficient to clothe him withjurisdiction to issue notice. Whether the grounds areadequate or not is not a matter for the court toinvestigate. The sufficiency of the grounds which induce-the Incometax Officer to act is, therefore, not ajusticiable issue.It is, of course, open to the assessee to contend that the Income-tax Officer did not hold thebelief that there had been such non-disclosure. Theexistence of the belief can be challenged by theassessee but not the sufficiency of the reasons for thebelief. The expression “reason to believe” does notmean a purely subjective satisfaction on the part of the-Incometax Officer. The reason must be held in goodfaith. It cannot be merely a pretense. It is open to thecourt to examine whether the reasons for the formationof the belief have a rational connection with or arelevant bearing on the formation of the belief and arenot extraneous or irrelevant for the purpose of thesection. To this limited extent, the action of the Income-tax Officer in starting proceedings in respect of incomeescaping assessment is open to challenge in a court oflaw.” The Hon'ble Supreme Court further observed :- “As stated earlier, the reasons for the formation of thebelief must have a rational connection with or relevantbearing on the formation of the belief. Rationalconnection postulates that there must be a direct nexusor live link between the material coming to the notice ofthe Income -tax Officer and the formation of his beliefthat there has been escapement of the income of theassessee from assessment in the particular yearbecause of his failure to disclose fully and truly allmaterial facts.” (emphasis supplied) 9.In the matter of 'M/s. S.Ganga Saran & Sons (Pvt.) Ltd., Calcutta vs. Income Tax Officer & Ors.', (1981) 3 SCC, 143, theHon'ble Supreme Court held as under:- The Hon'ble Supreme Court further observed :- “As stated earlier, the reasons for the formation of thebelief must have a rational connection with or relevantbearing on the formation of the belief. Rationalconnection postulates that there must be a direct nexusor live link between the material coming to the notice ofthe Income -tax Officer and the formation of his beliefthat there has been escapement of the income of theassessee from assessment in the particular yearbecause of his failure to disclose fully and truly allmaterial facts.” (emphasis supplied) 9.In the matter of 'M/s. S.Ganga Saran & Sons (Pvt.) Ltd., Calcutta vs. Income Tax Officer & Ors.', (1981) 3 SCC, 143, theHon'ble Supreme Court held as under:- “6. It is well settled as a result of several decisions ofthis Court that two distinct conditions must be satisfiedbefore the Income Tax Officer can assume jurisdiction toissue notice under Section 147(a). First, he must havereason to believe that the income of the assessee hasescaped assessment and secondly, he must have reasonto believe that such escapement is by reason of theomission or failure on the part of the assessee todisclose fully and truly all material facts necessary forhis assessment. If either of these conditions is notfulfilled, the notice issued by the Income Tax Officerwould be without jurisdiction. The important wordsunder Section 147(a) are “has reason to believe” and these words are stronger than the words “ is satisfied”.The belief entertained by the Income Tax Officer mustnot be arbitrary or irrational. It must be reasonable orin other words it must be based on reasons which arerelevant and material.The court, of course, cannotinvestigate into the adequacy or sufficiency of thereasons which have weighed with the Income TaxOfficer in coming to the belief, but the court cancertainly examine whether the reasons are relevant andhave a bearing on the matters in regard to which he isrequired to entertain the belief before he can issuenotice under Section 147(a). If there is no rational andintelligible nexus between the reasons and the belief, sothat, on such reasons, no one properly instructed onfacts and law could reasonably entertain the belief, theconclusion would be inescapable that the Income TaxOfficer could not have reason to believe that any suchescapement was by reason of the assessee had escapedassessment and such escapement was by reason of theomission or failure on the part of the assessee todisclose fully and truly all material facts and the noticeissued by him would be liable to be struck down asinvalid.”(emphasis supplied) 10.Similar view is taken by the Supreme Court in ChhugamalRajpal’s case (supra). 11.In “ACIT VS. Rajesh Jhaveri Stock Brockers Private Limited”,(2008) 14 SCC 208, the Supreme Court while dealing with thescope of initiating reassessment proceedings in case where thereturn is processed under Section 143(1) of the Act, observed: 10.Similar view is taken by the Supreme Court in ChhugamalRajpal’s case (supra). 11.In “ACIT VS. Rajesh Jhaveri Stock Brockers Private Limited”,(2008) 14 SCC 208, the Supreme Court while dealing with thescope of initiating reassessment proceedings in case where thereturn is processed under Section 143(1) of the Act, observed: “11. What were permissible under the first proviso to section143(1)(a) to be adjusted were, (i) only apparentarithmetical errors in the return, accounts or documentsaccompanying the return, (ii) loss carried forward,deduction allowance or relief, which was prima facieadmissible on the basis of information available in thereturn but not claimed in the return and similarly (iii) thoseclaims which were on the basis of the information availablein the return, prima facie inadmissible, were to berectified/allowed/disallowed. What was permissible wascorrection of errors apparent on the basis of the documentsaccompanying the return. The Assessing Officer had noauthority to make adjustments or adjudicate upon anydebatable issues. In other words, the Assessing Officer hadno power to go behind the return, accounts or documents,143(1)(a) to be adjusted were, (i) only apparentarithmetical errors in the return, accounts or documentsaccompanying the return, (ii) loss carried forward,deduction allowance or relief, which was prima facieadmissible on the basis of information available in thereturn but not claimed in the return and similarly (iii) thoseclaims which were on the basis of the information availablein the return, prima facie inadmissible, were to berectified/allowed/disallowed. What was permissible wascorrection of errors apparent on the basis of the documentsaccompanying the return. The Assessing Officer had noauthority to make adjustments or adjudicate upon anydebatable issues. In other words, the Assessing Officer hadno power to go behind the return, accounts or documents, either in allowing or in disallowing deductions, allowance orrelief. 12. One thing further to be noticed is that intimation undersection 143(1)(a) is given without prejudice to theprovisions of section 143(2). Though technically theintimation issued was deemed to be a demand notice issuedunder section 156, that did not per se preclude the right ofthe Assessing Officer to proceed under section 143(2). Thatright is preserved and is not taken away. Between theperiod from 1-4-1989 to 31-3-1998, the second proviso tosection 143(1)(a), required that where adjustments weremade under first proviso to Section 143(1)(a), an intimationhad to be sent to the assessee notwithstanding that no taxor refund was due from him after making such adjustments.With effect from 1-4-1998, the second proviso to section143(1)(a) was substituted by the Finance Act, 1997, whichwas operative till 1-6-1999. The requirement was that anintimation was to be sent to the assessee whether or notany adjustment had been made under the first proviso tosection 143(1) and notwithstanding that no tax or interestwas found due from the assessee concerned. Between 1-4-1998 and 31-5-1999, sending of an intimation under section143(1)(a) was mandatory. Thus, the legislative intent isvery clear from the use of the word “intimation” assubstituted for “assessment” that two different conceptsemerged. 13. While making an assessment, the Assessing Officer isfree to make any addition after grant of opportunity to theassessee. By making adjustments under the first proviso tosection 143(1)(a), no addition which is impermissible by theinformation given in the return could be made by theAssessing Officer. The reason is that under section 143(1)(a) no opportunity is granted to the assessee and theAssessing Officer proceeds on his opinion on the basis of thereturn filed by the assessee. The very fact that noopportunity of being heard is given under section 143(1)(a)indicates that the Assessing Officer has to proceed acceptingthe return and making the permissible adjustments only. Asa result of insertion of the Explanation to section 143 by theFinance (No.2) Act of 1991 with effect from 1-10-1991, andsubsequently with effect from 1-6-1994, by the Finance Act1994, and ultimately omitted with effect from 1-6-1999, bythe Explanation as introduced by the Finance (No.2) Act of1991 an intimation sent to the assessee under section143(1)(a) was deemed to be an order for the purposes ofsection 246 between 1-6-1994, to 31-5-1999, and undersection 264 between 1-10-1991 and 31-5-1999. 14. It is to be noticed that the expressions “intimation”and “assessment order” have been used at different places.The contextual difference between the two expressions hasto be understood in the context the expressions has to beunderstood in the context the expressions are used. Assessment is used as meaning sometimes “thecomputation of income” sometimes “the determination ofthe amount of tax payable” and sometimes “the wholeprocedure laid down in the Act for imposing liability underthe tax payer”. 15. In the scheme of things, as noted above, the intimationunder section 143(1)(a) cannot be treated to be an order ofassessment. The distinction is also well brought out by thestatutory provisions as they stood at different points of--time. Under section 143(1)(a) as it stood prior to 141989,the Assessing Officer had to pass an assessment order if hedecided to accept the return, but under the amendedprovision, the requirement of passing or an assessmentorder has been dispensed with and instead an intimation isrequired to be sent. Various circulars sent by the CentralBoard of Direct Taxes spell out the intent of the Legislaturei.e. to minimize the departmental work to scrutinize eachand every return and to concentrate on selective scrutiny ofreturns. These aspects were highlighted by one of us (D.K.Jain, J) in Apogee International Limited vs. Union of India. 16. It may be noted above that under the first proviso tothe newly substituted section 143(1) with effect from 1-6-1999, except as provided in the provision itself, theacknowledgment of the return shall be deemed to be anintimation under section 143(1) where (a) either no sum ispayable by the assessee, or (b) no refund is due to him. Itis significant that the acknowledgment is not done by anyAssessing Officer but mostly by ministerial staff. Can it besaid that any “assessment” is done by them? The reply is anemphatic “no”. The intimation under section 143(1)(a) wasdeemed to be a notice of demand under section 156, for theapparent purpose of making machinery provisions relatingto recovery of tax applicable. By such application onlyrecovery indicated to be payable in the intimation becamepermissible. And nothing more can be inferred from thedeeming provision. Therefore, there being no assessmentunder section 143(1)(a) , the question of change of opinion,as contended, does not arise. ...xxxxx…….xxxxxx ...xxxxx…….xxxxxx 19. Section 147 authorises and permits the AssessingOfficer to assess or reassess income chargeable to tax if hehas reason to believe that income for any assessment yearhas escaped assessment. The word “reason” in the phrase“reason to believe” would mean cause or justification. If theAssessing Officer has cause or justification to know orsuppose that income had escaped assessment, it can besaid to have reason to believe that an income had escapedassessment. The expression cannot be read to mean thatthe Assessing Officer should have finally ascertained the factof legal evidence or conclusion. The function of theAssessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness totaxpayers. 20. As observed by the Delhi High Court in Central ProvincesManganese Ore. Co. Ltd. vs. ITO [1991 (191) ITR 662] forinitiation of action under section 147(a) (as the provisionstood at the relevant time) fulfillment of the two requisiteconditions in that regard is essential. At that stage, the finaloutcome of the proceeding is not relevant. In other words,at the initiation stage, what is required is “reason tobelieve”, but not the established fact of escapement ofincome. At the stage of issue of notice, the only question iswhether there was relevant material on which a reasonableperson could have formed a requisite belief. Whether thematerials would conclusively prove the escapement is notthe concern at that stage. This is so because the formationof belief by the Assessing Officer is within the realm ofsubjective satisfaction (see ITO vs. Selected Dalurband CoalPvt. Ltd., [1996 (217) ITR 597 SC]; Raymond Woolen MillsLtd. vs. ITO (1999 (236) ITR 34 (SC)]. 21. The scope and effect of section 147 as substituted witheffect from 1-4-1989, as also sections 148 to 152 aresubstantially different from the provisions as they stoodprior to such substitution. Under the old provisions ofsection 147, separate clauses (a) and (b) laid down thecircumstances under which income escaping assessment forthe past assessment years could be assessed or reassessed.To confer jurisdiction under section 147(a) two conditionswere required to be satisfied firstly, the Assessing Officermust have reason to believe that income, profits or gainschargeable to income tax have escaped assessment, andsecondly, he must also have reason to believe that suchescapement has occurred by reason of either omission orfailure on the part of the assessee to disclose fully or trulyall materials facts necessary for his assessment of that year.Both these conditions were conditions precedent to besatisfied before the Assessing Officer could have jurisdictionto issue notice under section 148 read with section 147(a).But under the substituted section 147 existence of only thefirst condition suffices.In other words if the AssessingOfficer for whatever reason has reason to believe thatincome has escaped assessment it confers jurisdiction toreopen the assessment. It is however to be noted that boththe conditions must be fulfilled if the case falls within theambit of the proviso to section 147. The case at hand iscovered by the main provision and not the proviso.”(emphasis added) 12.In the backdrop of settled position of law as noticedhereinabove, adverting to the facts of the present case, it is to be 12.In the backdrop of settled position of law as noticedhereinabove, adverting to the facts of the present case, it is to be noticed that the return filed by the assessee for the A.Y. 2013-14disclosing the total income at Rs.7,66,540/- was processed underSection 143(1) of the Act whereunder the total income or loss iscomputed after making the permissible adjustments and thereturn filed by the assessee is not subjected to scrutinyassessment. As laid down by the Supreme Court in Rajesh JhaveriBrockers Pvt. Limited’s case (supra), there being no assessmentunder Section 143 (1), the question of change of opinion does notarise and therefore, the contention sought to be raised on behalfof the appellant that the re-assessment proceedings are initiatedby the AO on mere change of opinion is absolutely devoid of anymerit. 13.As per Explanation 2(b) to Section 147, where a return ofincome has been furnished by the assessee but no assessmenthas been made and it is noticed by the AO that the assessee hasunderstated the income or has claimed the excessive loss,deduction, allowance or relief in the return, the same is deemed tobe case where income chargeable to tax has escaped assessment. 14.In the instant case, a perusal of the reasons recorded by theAO for issuing notice under Section 148 of the Act reveals thatduring the assessment proceedings for A.Y. 2014-15 it was noticedthat the appellant assessee has received share application moneyto the tune of Rs. 2.2 crore from 9 entities which was utilisedduring the year and subsequently returned in Financial Year 2013-14. That apart, on further examination of certain informationreceived from the Directorate of Investigation, Kolkata which hadcarried the investigation in the case of the 9 entities, details whereof has been set out in the reasons recorded, it wasascertained that those 9 entities are the companies with no realbusiness and are only engaged in business of providingaccommodation entries of bogus nature to beneficiary concernswhich was further confirmed by the directors/dummydirectors/key persons of the said entities in their respectivestatements. Thus, on the basis of the material on record, AOopined that the appellant company has received and utilised theshare application money received from bogus sources lackinggenuineness, creditworthiness, genuine identity, which fall withinthe purview of Section 68 of the Act. 15.In our considered opinion, in the instant case where thereturn filed by the assessee was not subjected to scrutinyassessment, the belief formed by the AO after due examination ofthe material on record that the income of the assessee chargeableto tax during the relevant assessment year has escapedassessment cannot be said to be arbitrary or irrational or thereexists no rational and intelligible nexus between the reasons andthe belief. 16.It is true that the reasons recorded or the material availableon record must have nexus to the subjective opinion formed bythe AO regarding the escapement of the income but then, whilerecording the reasons for belief formed, the AO is not required tofinally ascertain the factum of escapement of the tax and it issufficient that the AO had cause or justification to know orsuppose that income had escaped assessment [vide RajeshJhaveri Stock Brockers Pvt. Limited’s case (supra)]. It is also well Aditya/ settled the sufficiency and adequacy of the reasons which have ledto formation of a belief by the Assessing Officer that the incomehas escaped the assessment cannot be examined by the court. 17.In view of the discussion above, the order impugned passedby the learned Single Judge does not warrant any interference byus in exercise of intra court appeal jurisdiction. 18.In the result, the special appeal fails, it is hereby dismissed. (VINIT KUMAR MATHUR),J. (SANGEET LODHA),J.