Shree Om Builders And Colonizers v. Assistant Commissioner Of Income Tax And Others

// 1 // IN THE HIGH COURT OF JUDICATURE FOR RAJASTHANBENCH AT JAIPUR ORDERINS.B. Civil Writ Petition No.858/2013InStay Application No.739/2013 Shree Om Builders and Colonizers Vs.Assistant Commissioner of Income Taxand Others Date of Order ::: 28.02.2013 PresentHon'ble Mr. Justice Mohammad Rafiq Shri Prakul Khurana withShri Anurag Kalavatiya for Shri Sanjay Jhanwar, counsel for petitionersShri R.B. Mathur withShri Nikhil Simlote, counsel for respondent(s) //Reportable// By the Court:- This writ petition has been filed bypetitioner, Shree Om Builders and Colonizers,challenging; notice issued by respondent no.2 – theDeputy Commissioner of Income Tax, Central Circle-1,Jaipur, dated 12.12.2011, under Section 148 of theIncome Tax Act, 1961 (for short, 'the Act of 1961');reasons supplied for reopening of the case underSection 147 of the Act of 1961 for assessment year2009-10 and the order dated 28.03.2012 rejectingobjections submitted by the petitioner. Shri Prakul Khurana, learned counsel for theassessee, has argued that notice for initiatingreassessment proceedings are based on mere surmisesand conjectures that sale consideration mentioned inthe registered sale-deed is less than the actualsale consideration and there has been exchange of CW858/2013 money over and above the recorded saleconsideration. Alleged basis for such suspicion isthat the Income Tax Department during the course ofsearch in the case of M/s Kamakshi Hospitality, hasfound that there was exchange of money over andabove the recorded sale consideration in relation tosome property situated in Bani Park, Jaipur andtherefore the sale consideration disclosed by thepetitioner for that property also cannot be reliedas the market value of petitioner's properties onmere basis of the alleged vicinity. It is furthercontended that the department has not found anymaterial/evidence/proof during the course of searchproceedings or post search assessment proceedingswhich could have led to the requisite formation ofthe belief that the transaction between thepetitioner herein and Kamakshi International hasbeen entered on a higher amount than shown in theregistered sale deed. Even in the survey that wasconducted by the department at the premise of thepetitioner pursuant to search at the premise of M/sKamakshi International, no contrary evidence/material was found which could have led to suchbelief that the petitioner has also sold the land ona higher value than shown in the registered saledeed. Issuance of notice under Section 148 of theAct of 1961 for reassessing the income of petitionerfor the assessment year 2009-10, on a mere suspicionthat the petitioner must have also sold the land ona higher value, is totally devoid of any basis andis wholly illegal. The impugned reassessment proceedings have been initiated on 'mere suspicion'and not on the basis of 'reasons to believe', whichis a mandatory requirement for the purpose ofissuing notice under Section 148 of the Act of 1961.It is argued that locality of Bani Park is spreadover a very big area and is one of the biggestcolonies/localities of the city of Jaipur. It hasboth commercial as well as residential spaces andthe differences in the prices of such commercial andresidential spaces vary to a great extent based onthe actual location of the plot. Price of aparticular land/plot also depends upon the actuallocation and the commercial viability of of thearea where it is situated. Petitioner's plot No.D-81 is a residential property and is located on aninner road of Ghiya Marg in Bani park, whereascomparable Plot No.D-112-A is a commercial propertylocated on Station Road, which is a commercial roadof Bani Park and located barely 300 meters from themain Railway Station of Jaipur towards ChinkaraCanteen. Moreover, the plot of the petitioner islocated on a 40' wide road whereas plot with whichcomparison is sought to be made is situated on a100' wide road. Plot of the petitioner is situatedat T point which, according to Vastu, is notconsidered good/auspicious and such property fetchesless market value. Besides there being a transformerof the R.S.E.B. installed just in front of the plotof the petitioner, which occupies 10' front of theplot. Both the properties are not in close vicinity.There is distance between them of about 2.5 kilometers. The rate of the plot of the petitionerpresumed by respondents no.1 and 2 is whollyunrealistic and unfounded and is not based on sale-deed of any plot in the close vicinity of the plotof the petitioner. Shri Prakul Khurana, learned counsel arguedthat petitioner in response to the notice, filed tworeplies respectively on 19.12.2011 and 27.03.2012objecting against the issuance of the impugnednotice describing the reasons for it to be illegaland without authority of law as the same has beenissued on the basis of mere suspicion and not on thebasis of reasons to believe. Respondents howeverrejected those objections vide order dated28.03.2012. Learned counsel argued that reasonsrecorded by respondent no.1 for issuing notice underSection 148 of the Act of 1961 are not in consonancewith the statutory provisions contained in Section50C of the Act of 1961. Allegation of showing saleconsideration of the plot of the petitioner towardslower side in the sale-deed cannot be justifiedbecause the position of law is very much clear andthere is specific provision in the Act itself, whichcovers such nature of cases of understatement ofsale consideration. As per Section 50C, it is thestamp valuation adopted by the Stamp RegisteringAuthority, which has to be taken into considerationfor the purpose of assuming the correctconsideration liable to be taxed for the purpose oftax. Learned counsel for the petitioner argued that respondents have rejected the objections of thepetitioner on the premise that sufficiency ofreasons cannot be a question at the preliminarystage, whereas once the competent authority hasformed a requisite opinion as to his belief forissuance of notice for reassessment, what remains ismere computation of the tax, satisfaction as to theescapement of tax having become fait-accompli. Therespondents in rejecting the objections have wronglymaintained that he has recorded proper reasons basedon substantial material in the form of evidencewhereas no evidence has been disclosed either in thereasons supplied to the petitioner or the order ofrejecting the objections. Further the competentauthority in rejecting the objections of thepetitioner has wrongly maintained that informationreceived during the course of assessment proceedingsof the third party can form the basis for belief ofescapement of income. Learned counsel for the petitioner lastlyargued that the service of notice on the petitioneris mere formality because Assessing Officer hasdetermined to revise the assessment. The writpetition is only effective remedy. Requiring thepetitioner to go back to the assessing officer andwait for the passing of the final assessment orderwould be a mere formality because the assessingofficer has already formed an opinion as toescapement of the income. He may, therefore,possibly not now change that opinion. Learned counsel in support of his arguments relied on the judgments of the Supreme Court inIncome Tax officer & Others Vs. Lakhmani Mewal Das– (1976) 103 ITR 437 (SC), K.P. Varghese Vs. ITO &Another– (1981) 131 ITR 597 (SC), CIT Vs.Gillanders Arbuthnot & Co.- (1973) 87 ITR 407(SC),CIT Vs. George Henderson & Co. Ltd., - (1967)66 ITR 622 (SC), and that of Bombay High Court in-Ajanta Pharma Ltd. Vs. ACIT & Ors. (2004) 267 ITR200 (Bom), and that of Gujarat High Court inGardenFinance Ltd. Vs. ACIT– (2004) 268 ITR 48 (Guj.)and that of Madras High Court inP.G. Foils Ltd. Vs.ITSC & Another – (2008) 302 IR 331 (Mad). Shri R.B. Mathur, learned counsel for theRevenue, opposed the writ petition and submittedthat this writ petition has been filed merelyagainst show cause notice at a preliminary stage,which should not be entertained. Whether or not theassessing officer in the assessment order records afinding as to escapement of income would be dependedon material and evidence. While such facts are beingasserted by the respondents and the petitioner isdisputing them. A detailed enquiry cannot beundertaken by this court on this question. Thosedisputed questions of facts cannot be appropriatelygone into in the writ jurisdiction under Article 226of the Constitution of India. Learned counsel forthe respondent submitted that notice under Section147/148 of the Act of 1961 was issued only becausethe assessing officer had reasons to believe thatthe income of the petitioner has escaped assessment.The petitioner is free to file his reply and justify CW858/2013 the sale consideration disclosed. Shri R.B. Mathur, learned counsel for therespondents cited judgment of the Supreme Court in-GKN Drivershafts (India) Ltd. Vs. I.T.O. 2003(259) ITR 19, to argue that it was held in that caseby the supreme Court that proper course of actionfor noticee, who has been served with notice underSection 148 of the Act, is to file return and if heso desires to seek reasons of notices, which theRevenue would be bound to furnish, on receipt ofreasons filed objections which will be decided by aspeaking order, which course has been adopted by thedepartment. Petitioner was supplied reasons. Hefiled objections, which have been considered andrejected by the respondents. It cannot be thereforesaid that the assessing officer has wrongly assumedjurisdiction under Section 147 of the Act. Theassumption of jurisdiction is based on propersatisfaction of the assessing officer after dulyrecording reasons for satisfaction or proof inwriting. It was argued that “reasons to believe” wouldmean cause or justification of assessing officer tobelieve that income has escaped assessment and thatthe assessing officer should have finallyascertained the facts by legal evidence or reached aconclusion as this is determined and decided in theassessment order, which is the final stage beforethe assessing officer and which is always open tochallenge before the appellate authority. In thepresent case the assessing officer had sufficient It was argued that “reasons to believe” wouldmean cause or justification of assessing officer tobelieve that income has escaped assessment and thatthe assessing officer should have finallyascertained the facts by legal evidence or reached aconclusion as this is determined and decided in theassessment order, which is the final stage beforethe assessing officer and which is always open tochallenge before the appellate authority. In thepresent case the assessing officer had sufficient evidence in support of his belief that apparentsales tax is not real one and the underhand moneytransaction has taken place in this deal. Suchevidence is available in the form of similar natureof transaction made between other parties in thesame area. The department has in its possessionsufficient proof/evidence in the form of identicaltransaction of land in the same locality givingclear idea of actual market price of land. It iswell settled principle of law that informationcreates form of belief of the widest amplitude andcomprehends authority of facts. Such information maycome from external sources or even from the materialalready on record or may be derived from thediscovery of new and important material or freshfacts. Learned counsel, in support of his arguments,has relied on judgment of the Supreme Court in-Kalyan Mavji and Company Vs. C.I.T. 102 ITR 287(SC). It is argued that the petitioner assessee hassold its property to M/s Kamakshi Internationalwhereas other sister concern of this party namelyM/s Kamakshi Hospitality Private Limited haspurchased property from other person at Plot No.D-112, Bani Park, in the same locality having almostthe same size and under similar circumstances, inwhich case amount of Rs.2 crores was declared assale consideration. After a survey conducted of thebusiness premise of M/s. Kamakshi HospitalityPrivate Limited, it transpired that actual saleconsideration was Rs.7 crores. The assessing officer also came in possession of a letter dated 23.12.2011of I.C.I.C.I. Bank with copy of valuation of marketvalue of Plot No.D-81, Ghiya Marg, got done by theBank while dispersing/sanctioning loan of Rs.1.25crores to the petitioner. Market value of thisproperty has been valued by the Valuer atRs.3,53,29,230/- as against Rs.1.20 crores claimedby petitioner in the sale deed. Contention of the petitioner that Plot No.D-81 is residential property and plot No.D-112-A iscommercial property is not only incorrect butpatently false. Learned counsel for the respondenthas in this connection referred to the sale-deeds ofboth the plots which are Annexure R-2 and R-3, andargued that therein both the plots have beendescribed to be residential. The relevant deedsalso nowhere indicates that the road size in frontof the plot is 40' or 100' respectively. The deedsonly indicate that the Plot No.D-81 is situated atGhiya Marg whereas Plot No.D-112-A is situated onPower House Road, Bani Park, Jaipur. Learned counselalso sought to submit that a plea has been set up bythe petitioner before this court that the plot ofthe petitioner is situated at T point whereas map ofthe locality furnished by the petitioner before theassessing officer during reassessment proceedings,the Plot No.D-81 is shown just opposite Plot No.F-34and F-35 and actual T point plot is at D-83 and notD-81. Reference in this connection is made to themap of Bani Park so produced by the petitioner,which is filed at Annexure R-4. It is not verified from the record as to any transformer of electricityconnection is situated in front of the plot of thepetitioner. Moreover, the front of plot of thepetitioner is of 75.3' and mere occupancy of 10' bytransformer does not much diminish its market valueas still it has 65' front opening on Ghiya Marg. Nocomments can be made on the distance between twoplots and it is a matter of evidence which can beconsidered only during assessment proceedings. Infact, the plot of zero mark is situated close tomain circle of Bani Park i.e. Collectorate Circle,which is center of the Bani Park locality ascompared to Plot No.D-112 which is far away fromcenter point of Bani Park and situated on PowerHouse Road. Learned counsel submitted that thepetitioner has not at all denied the facts that boththe plots are situated in Bani Park. Reference toprovisions of Section 50C of the Act of 1961 isquite irrelevant because the petitioner did notdisclose the transaction of sale/purchase of theland under the head of capital gain but clearly thistransaction is business transaction and for suchbusiness transaction of land, provisions of Section50C would not be applicable. Relying on thejudgments of the Supreme Court in Raymond WoolenMill Vs. I.T.O.- 236 ITR 34 (SC), Phool Chand-Bajrang Lal Vs. I.T.O. 203 ITR 456 (SC)and S.Narayanappa and Others Vs. C.I.T.- 63 ITR 219(SC), learned counsel for the respondents arguedthat it is well settled proposition of law thatsufficiency of reasons cannot be judged at the time of issue of notice. I have given my thoughtful consideration torival submissions and perused the material onrecord. The assessing officer in order to acquire thejurisdiction to make reassessment of the income ofthe assessee with reference to Section 148 of theAct of 1961 has to arrive at twin satisfactionsviz., that (i) it has to have a reason to believethat income chargeable to tax has escaped assessmentand further that (ii) such income has escapedassessment by reason of omission or failure on thepart of the assessee to disclose fully and trulymaterial facts before assessment of his income inthe relevant assessment year. It is only when thesetwo conditions are fulfilled that the assessingofficer acquires jurisdiction to make reassessment.It is therefore imperative for the assessing officerto record reasons for such belief before initiatingproceedings for reassessment. The question thatarises for consideration is whether the reasons,which led to formation of belief by the assessingofficer contained in Section 147(a) that income ofthe petitioner escaped assessment on account of hisomission or failure to disclose fully or trulymaterial facts necessary for assessment, can be saidto exist on the grounds referred to in the reasonssupplied to the petitioner or otherwise disclosed inthe order by which objections raised by them havebeen rejected. Reasons as supplied for reopening of the case of the petitioner for reassessment, following wasmentioned as the basis for arriving at the requisitesatisfaction in terms of Section 147 of the Act:- “A search and seizure operation u/S 132 Income Tax Act, 1961was carried out of 23.07.2009 in the case of Shri MahaveerSingh Sankhla the then Zonal Chief Engineer (Civil),RRVPNL, Jaipur, his family members and other connectedcases. Consequent upon the search, the Mahaveer SinghSankhla Group of cases were centralized with Center Circle-1,Jaipur. Reasons as supplied for reopening of the case of the petitioner for reassessment, following wasmentioned as the basis for arriving at the requisitesatisfaction in terms of Section 147 of the Act:- “A search and seizure operation u/S 132 Income Tax Act, 1961was carried out of 23.07.2009 in the case of Shri MahaveerSingh Sankhla the then Zonal Chief Engineer (Civil),RRVPNL, Jaipur, his family members and other connectedcases. Consequent upon the search, the Mahaveer SinghSankhla Group of cases were centralized with Center Circle-1,Jaipur. M/s Kamakshi Hospitality Pvt. Ltd. and M/s KamakshiInternational were two concerns which belong to the familymembers of Shri Mahaveer Singh Sankhla. The documentsseized during the course of search from the residence of ShriMahaveer Singh Sankhla at A-3, Moti Lal Atal Road, Jaipur,reveal that the family members of Shri Mahaveer SinghSankhla routed huge amount through their concerns viz. M/sKamakshi Hospitality Pvt. Ltd. and M/s KamakshiInternational in purchase of various immovable properties atJaipur. Ms/ Kamakshi Hospitality Pvt. Ltd. purchased plot No.D-112-A, Bani Park Jaipur measuring to 1000 Sq Yards from ShriBimal Jain & Shri Nirmal Kumar Jain vide Sale Deed dated17-4-2009 for the registered sales consideration of Rs.2 Crores.Search u/s 132 was also conducted at the premises of Sh.Bimal Jain & Sh. Nirmal Kumar Jain on 23-7-2009. During thesearch it was established that the actual sales consideration forPlot No.D-112-A, Bani Park, Jaipur was of Rs.7 Crores.Hence, the actual cost of the Plot was suppressed by Rs.5Crores. Sh. Bimal Jain & Sh. Nirmal Kumar Jain admitted theabove fact and accordingly offered the difference amount fortaxation. Another property at D-81, Ghiya Marg, Bani Park, Jaipur waspurchased by Kamakshi International Form M/s Om Buildersand Colonizers vide Sale Deed dated 25-2-2009. This plot ofland measures 1058 Sq. Yards and registered saleconsideration for this plot of land was at Rs.1.20 Crores. Boththe plots i.e. D-112-A and D-81 are in same locality and thelater is in close vicinity of the former. As such the market valueof both the plots should be almost same. It is learnt that the plotNo.D-81, Ghiya Marg was free from any dispute. Therefore, noapparent reasons are evident for difference in market value ofthe both properties. It is pertinent to mention here that the plotD-112-A, Bani Park was registered at sales consideration ofRs.2 Crores. However the actual sales consideration was atRs.7 Crores. Hence, there is sufficient reason to believe that theactual sale consideration for plot No.D-81 is actually muchhigher than the registered sales consideration. In view of above facts and circumstances I have got sufficientreasons to believe that M/s Om Builders & Colonizers has suppressed the actual sales consideration of plot No.D-81,Ghiya Marg, Bani Park, Jaipur and the same amount hasescaped assessment. Therefore, I propose to reassess theincome of M/s Om Builders & Colonizers for the assessmentyear 2009-10. Accordingly, action u/S 147/148 of the IncomeTax Act 1961 is hereby initiated. Issue notice u/S 148.” Before proceeding to examine the merits ofthe case, it would be apposite to take stock of therelevant case law of the subject. In this connection following observations ofthe Supreme Court in Income Tax Officer and OthersVs. Lakhmani Mewal Das, are apt to quote:- In view of above facts and circumstances I have got sufficientreasons to believe that M/s Om Builders & Colonizers has suppressed the actual sales consideration of plot No.D-81,Ghiya Marg, Bani Park, Jaipur and the same amount hasescaped assessment. Therefore, I propose to reassess theincome of M/s Om Builders & Colonizers for the assessmentyear 2009-10. Accordingly, action u/S 147/148 of the IncomeTax Act 1961 is hereby initiated. Issue notice u/S 148.” Before proceeding to examine the merits ofthe case, it would be apposite to take stock of therelevant case law of the subject. In this connection following observations ofthe Supreme Court in Income Tax Officer and OthersVs. Lakhmani Mewal Das, are apt to quote:- “8. The grounds or reasons which lead to the formation of thebelief contemplated by section 147(a) of the Act must have amaterial bearing on the question of escapement of income ofthe assessee from assessment because of his failure or omissionto disclose fully and truly all material facts. Once there existreasonable grounds for the Income-tax Officer to form theabove belief, that would be sufficient to clothe him withjurisdiction to issue notice. Whether the grounds are adequateor not is not a matter for the court to investigate. Thesufficiency of the grounds which induce the Income-taxOfficer to act is, therefore, not a justiciable issue. It is, ofcourse, open to the assessee to contend that the Income-taxOfficer did not hold the belief that there had been such non-disclosure. The existence of the belief can be challenged by theassessee but not the sufficiency of the reasons for the belief.The expression "reason to believe" does not mean a purelysubjective satisfaction on the part of the Income-tax Officer.The reason must be held in good faith. It cannot be merely apretence. It is open to the court to examine whether the reasonsfor the formation of the belief have a rational connection withor a relevant bearing on the formation of the belief and are notextraneous or irrelevant for the purpose of the section. To thislimited extent, the action of the Income-tax Officer in startingproceedings in respect of income escaping assessment is opento challenge in a court of law. (See observations of this court inthe cases of Calcutta Discount Co. Ltd. v. Income-tax Officerand S. Narayanappa v. Commissioner of Income-tax, Whiledealing with the corresponding provisions of the IndianIncome-tax Act, 1922).” In Phool Chand Bajrang Lal, supra, theSupreme Court has after considering previous caselaw on the subject on the scope of power of the Income Tax Officer to reopen assessment underSection 147 read with Section 148 of the Act of 1961observed as under:- In Phool Chand Bajrang Lal, supra, theSupreme Court has after considering previous caselaw on the subject on the scope of power of the Income Tax Officer to reopen assessment underSection 147 read with Section 148 of the Act of 1961observed as under:- From a combined review of the judgments of this Court, itfollows that an Income-tax Officer acquires jurisdiction toreopen assessment under Section 147(a) read with Section 148of the Income Tax 1961 only if on the basis of specific, reliableand relevant information coming to his possessionsubsequently, he has reasons which he must record, to believethat by reason of omission or failure on the part of the assesseeto make a true and full disclosure of all material factsnecessary for his assessment during the concluded assessmentproceedings, any part of his income, profit or gains chargeableto income tax has escaped assessment. He may startreassessment proceedings either because some fresh facts cometo light which where not previously disclosed or someinformation with regard to the facts previously disclosedcomes into his possession which tends to expose theuntruthfulness of those facts. In such situations, it is not a caseof mere change of opinion or the drawing of a differentinference from the same facts as were earlier available butacting on fresh information. Since, the belief is that of theIncome-tax Officer, the sufficiency of reasons for forming thebelief, is not for the Court to judge but it is open to an assesseeto establish that there in fact existed no belief or that the beliefwas not at all a bona fide one or was based on vague, irrelevantand non-specific information. To that limited extent, the Courtmay look into the conclusion arrived at by the Income-taxOfficer and examine whether there was any material availableon the record from which the requisite belief could be formedby the Income-tax Officer and further whether that materialhad any rational connection or a live link for the formation ofthe requisite belief. It would be immaterial whether theIncome-tax Officer at the time of making the originalassessment could or, could not have found by further enquiryor investigation, whether the transaction was genuine or not, ifone the basis of subsequent information, the Income-taxOfficer arrives at a conclusion, after satisfying the twinconditions prescribed in Section 147(a) of the Act, that theassessee had not made a full and true disclosure of the materialfacts at the time of original assessment and therefore incomechargeable to tax had escaped assessment. The High Courtswhich have interpreted Burlop Dealer's case (Supra) as layingdown law to the contrary fell in error and did not appreciate theimport of that judgment correctly. We are not persuaded to accept the argument of Mr. Sharmathat the question regarding truthfulness or falsehood of thetransactions reflected in the return can only be examinedduring the original assessment proceedings and not at any stage subsequent thereto. The argument is too broad and general innature and does violence to the plain phraseology of Sections147(a) and 148 of the Act and is against the settled law by thisCourt. We have to look to the purpose and intent of theprovisions. One of the purposes of Section 147, appears to usto be, to ensure that a party cannot get away by wilfullymaking a false or untrue statement at the time of originalassessment and when that falsity comes to notice, to turnaround and say "you accepted my lie, now your hands are tiedand you can do nothing". It would be travesty of justice toallow the assessee that latitude. In Assistant Commissioner of Income-Tax Vs.Rajesh Jhaveri Stock Brokers P. Ltd. 2007 (291)ITR 500, the Supreme Court while considering theimport of phraseology “reason to believe” in Section147 of the Act of 1961, held as under:- In Assistant Commissioner of Income-Tax Vs.Rajesh Jhaveri Stock Brokers P. Ltd. 2007 (291)ITR 500, the Supreme Court while considering theimport of phraseology “reason to believe” in Section147 of the Act of 1961, held as under:- Section 147 authorises and permits the Assessing Officer toassess or reassess income chargeable to tax if he has reason tobelieve that income for any assessment year has escapedassessment. The word 'reason' in the phrase 'reason to believe'would mean cause or justification. If the Assessing Officer hascause or justification to know or suppose that income hadescaped assessment, it can be said to have reason to believethat an income had escaped assessment. The expression cannotbe read to mean that the Assessing Officer should have finallyascertained the fact by legal evidence or conclusion. Thefunction of the Assessing Officer is to administer the statutewith solicitude for the public exchequer with an inbuilt idea offairness to taxpayers. As observed by the Delhi High Court inCentral Provinces Manganese Ore Co. Ltd. v. ITO [1991 (191)ITR 662], for initiation of action under section 147(a) (as theprovision stood at the relevant time) fulfillment of the tworequisite conditions in that regard is essential. At that stage, thefinal outcome of the proceeding is not relevant. In other words,at the initiation stage, what is required is 'reason to believe',but not the established fact of escapement of income. At thestage of issue of notice, the only question is whether there wasrelevant material on which a reasonable person could haveformed a requisite belief. Whether the materials wouldconclusively prove the escapement is not the concern at thatstage. This is so because the formation of belief by theAssessing Officer is within the realm of subjective satisfaction(see ITO v. Selected Dalurband Coal Co. Pvt. Ltd. [1996 (217)ITR 597 (SC)] ; Raymond Woollen Mills Ltd. v. ITO [ 1999(236) ITR 34 (SC)]. The scope and effect of section 147 as substituted with effectfrom April 1, 1989, as also sections 148 to 152 are substantially different from the provisions as they stood priorto such substitution. Under the old provisions of section 147,separate clauses (a) and (b) laid down the circumstances underwhich income escaping assessment for the past assessmentyears could be assessed or reassessed. To confer jurisdictionunder section 147(a) two conditions were required to besatisfied firstly the Assessing Officer must have reason tobelieve that income profits or gains chargeable to income taxhave escaped assessment, and secondly he must also havereason to believe that such escapement has occurred by reasonof either (i) omission or failure on the part of the assessee todisclose fully or truly all material facts necessary for hisassessment of that year. Both these conditions were conditionsprecedent to be satisfied before the Assessing Officer couldhave jurisdiction to issue notice under section 148 read withsection 147(a) But under the substituted section 147 existenceof only the first condition suffices. In other words if theAssessing Officer for whatever reason has reason to believethat income has escaped assessment it confers jurisdiction toreopen the assessment. It is however to be noted that both theconditions must be fulfilled if the case falls within the ambit ofthe proviso to section 147. The case at hand is covered by themain provision and not the proviso. In Raymond Woollen Mills Ltd. Vs. Income-Tax–Officer and Others 1999 (236) ITR 34, the SupremeCourt held that sufficiency or correctness of thematerial is not a thing to be considered at thestage of issuance of notice under Section 147 readwith Section 148 of the Act of 1961. It was heldthat the court cannot strike down the reopening ofthe case in the facts of the case. It will be opento the assessee to prove that the facts mentioned inthe notice are incorrect. The assessee can alsoprove that no new facts came to the knowledge of theIncome-tax Officer after completion of theassessment proceeding. While the petitioner has contended that theplot which the petitioner sold to M/s. KamakshiInternational vide sale-deed dated 25.02.2009 issituated at D-81, Ghiya Marg, another plot with which comparison is sought to be made is situated atD-112-A, though also in Bani Park but is notsituated in close vicinity and there is a distanceof about 2.5 kilometers between these two propertieswhereas this fact is disputed by the respondents intheir counter, but the petitioner in rejoinder hasreasserted this fact that distance between these twoplots is at-least more than two kilometers.Respondents in their counter have rather assertedthat Plot No.D-81 at Bhragu Marg is very close tomain Collectorate Circle of Bani Park, whereas PlotNo.D-112 is far away from that Circle situated onPower House Road. Petitioner asserts that his plotis located on 40' wide road whereas the Plot ofwhich comparison is sought to be made is located at100' wide road, whereas the respondents have deniedthis fact by producing sale-deeds of twotransactions asserting that neither of them mentionsthe width of the road that these two plots aresituated at 40' or 100' wide roads, respectively.The assertion of the petitioner that Plot No.D-81 issituated at T point is refuted by the respondents byproducing the map of Bani Park submitted by noneother than the petitioner themselves before theassessing officer during reassessment proceedingswherein Plot No.D-81 is shown just opposite PlotsNo.F-34 and F-35 and actual T point is in front ofPlot No.D-83 and not D-81. Yet another minus pointenumerated by the petitioner to run down the valueof their Plot D-81 at Bhragu Marg is that theirexisted 10' wide transformer of Rajasthan State Electricity Board just in front of this Plot butthis is also contested by the respondents statingthat the width of the plot is 75.3' and mereoccupancy of 10' by transformer does not diminishthe market value of the land as it still has 60'front opening on main Ghiya Marg. All these arematters of enquiry and investigation in thereassessment proceedings but for the present what isrelevant for this court is to find out whether thereexists some reasonable ground for assessing officerto form the requisite belief about escapement of theincome of the assessee on account of his failure oromission to disclose fully or truly material factsin the return filed by him. This court finds thatthere does exist such reasonable ground to form suchbelief. Whether or not those grounds are adequate isnot for this court to examine. At this stage, it is not for this court toexamine whether or not those reasons were sufficientor adequate for forming the requisite belief. It isalso not for this court to examine those reasonsfrom the stand point whether the material on whichthey are found conclusively proved the escapement ofincome as formation of such belief by the assessingofficer is in the realm of the subjectivesatisfaction. Moreover, in this case, the assessingofficer has not proceeded merely on the basis ofreport of the Valuer but also considered that suchvaluation was got done by a third party i.e. theICICI Bank, which has advanced loan of Rs.1.25 croreto the petitioner on the land being valued by their At this stage, it is not for this court toexamine whether or not those reasons were sufficientor adequate for forming the requisite belief. It isalso not for this court to examine those reasonsfrom the stand point whether the material on whichthey are found conclusively proved the escapement ofincome as formation of such belief by the assessingofficer is in the realm of the subjectivesatisfaction. Moreover, in this case, the assessingofficer has not proceeded merely on the basis ofreport of the Valuer but also considered that suchvaluation was got done by a third party i.e. theICICI Bank, which has advanced loan of Rs.1.25 croreto the petitioner on the land being valued by their valuer at Rs.3,53,29,230/- as against Rs.1.20crores. On critical examination of the reasonssupplied to the petitioner after show cause notice,the objections raised by the petitioner and theorder rejecting such objections passed by theassessing officer, this court is satisfied that thereasons were such which would impel an ordinaryperson of reasonable prudence to hold that theincome escaped assessment. Those reasons do not fallmerely within the realm of 'mere suspicion' so tosay. There does exist some material with theassessing officer for issuance of notice underSection 147 read with Section 148 of the Act of 1961for formation of requisite belief as to theescapement of income. Judgments cited by learnedcounsel for petitioner in this behalf are thereforedistinguishable and do not afford any help to him. In view of above discussion, I do not findany merit in this writ petition. The writ petitionis therefore dismissed. No order as to costs. (Mohammad Rafiq) J. //Jaiman//All corrections made in the judgment/order have been incorporated in thejudgment/order being emailed.All corrections made in the judgment/order have been incorporated in thejudgment/order being emailed.