Court which indicates that they disagreed with the view of the Trial Court that the conditions did exist.

27. In Central Provinces Manganese Ore Co. Ltd. Vs. I.T.O. Nagpur, 1991 (4) SCC 166, the Supreme Court held as under :-

11. So far as the first condition is concerned, the Income-tax Officer, in his recorded reasons,

21 of 43 CWP No. 27068 of 2016 -22- has relied upon the fact as found by the Custom Authorities that the appellant under-invoiced the goods he exported. It is no doubt correct that the said finding may not be binding upon the Income- tax authorities but it can be a valid reason to believe that the chargeable income has been under-assessed. The final outcome of the proceedings is not relevant. What is relevant is the existence of reasons to make the Income-tax Officer believe that there has been under- assessment of the assessee's income for a particular year. We are satisfied that the first condition to invoke the jurisdiction of the Income-tax Officer under Section 147 (a) of the Act was satisfied.

28. In Raymond Woollen Mills Ltd. Vs. Income-Tax Officer and others, (1999) 236 ITR 34 (SC), relied upon by Mr. Putney, the Supreme Court held :-

In this case, we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee

22 of 43 CWP No. 27068 of 2016 -23- may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. The appellant will be entitled to take all the points before the assessing authority. The appeals are dismissed. There will be no order as to costs.

29. In Assistant Commissioner of Income-Tax Vs. Rajesh Jhaveri Stock Brokers P. Ltd., (2007) 291 ITR 500 (SC), relied upon by Mr. Putney, the Supreme Court held :-

16 Section 147 authorises and permits the Assessing Officer to assess or reassess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word reason in the phrase reason to believe would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained the fact by legal evidence or conclusion. The function of the Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v.

23 of 43 CWP No. 27068 of 2016 -24- ITO [1991] 191 ITR 662, for initiation of action under section 147 (a) (as the provision stood at the relevant time) fulfilment of the two requisite conditions in that regard is essential. At that stage, the final 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 the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief. Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction (see ITO v. Selected Dalurband Coal Co. P. Ltd. [1996] 217 ITR 597 (SC) ; Raymond Woollen Mills Ltd. v. ITO [1999]

236 ITR 34 (SC).

30. Mrs. Suri's reliance upon an interim order passed by the Bombay High Court in Coronation Agro Industries Ltd. Vs. Deputy Commissioner of Income Tax, reported as (2017) 390 ITR 464 (Bombay), wherein it was recorded that the reason mentioned prima facie appeared to be a reason to suspect and not to believe is not well founded. It is only an interim order. No final order has been produced.

31. Mrs. Suri's reliance upon the decision of this Court in Commissioner of Income Tax Vs. Smt. Paramjit Kaur, (2009) 311 ITR 38 (P&H) is not well founded. In that case, the Court found that there was no reason to believe and that re-opening was merely on suspicion.

24 of 43 CWP No. 27068 of 2016 -25-

32. Mrs. Suri relied upon a decision of the Delhi High Court in Commissioner of Income-Tax Vs. Gupta Abhushan P. Ltd., (2009) 312 ITR 166 (Delhi). In that case, the re-opening of an assessment was set aside as the material found in the survey conducted for the assessment year 2002-

03 was being used in the assessment year 1999-2000 without there being any basis that the material pertained to the relevant assessment years. It was observed that the reason recorded was that the AO had a mere suspicion that there was a likelihood of there being a discrepancy in the stocks in the earlier years also based on the fact that there was a discrepancy in the stock when the survey was conducted on 07.03.2002. There Court, therefore, held that this was merely a reason to suspect and not a reason to believe. In the case before us, the material pertained to the assessment year in question itself.

33. Decision of the Allahabad High Court in Dass Friends Builders P. Ltd. Vs. Deputy Commissioner of Income-Tax, (2006) 280 ITR

77 (Allahabad) does not support the petitioner's case. The Allahabad High Court set aside the re-opening as rejection of the account books for the assessment year 1996-97 was being made a basis to determine the profit percentage for the assessment year 1995-96 without there being any material for the relevant assessment year.

34. Mrs. Suri relied upon the following observations of the Supreme Court in Income Tax Officer, Calcutta and Ors. Vs. Lakhmani Mewal Das, (1976) 3 SCC 757 = (1976) 103 ITR 437 (SC) :

25 of 43 CWP No. 27068 of 2016 -26-

11

. As stated earlier, the reasons for the formation of the belief must have a rational connection with or relevant bearing on the formation of the belief. Rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the Income-tax Officer and the formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. It is no doubt true that the Court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the Income-tax Officer on the point as to whether action should be initiated for reopening assessment. At the same time we have to bear in mind that it is not any and every material, howsoever vague and indefinite or distant, remote and far-fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. The fact that the words definite information which were there in Section 34 of the Act of 1922 at one time before its amendment in 1948 are there in Section 147 of the Act of 1961 would not lead to the conclusion that action can now be taken for reopening assessment even if the information is wholly vague, indefinite, far-fetched and remote. The reason for the formation of the belief must be held in good faith and should not be a mere pretence.

26 of 43 CWP No. 27068 of 2016 -27-

12. The powers of the Income-tax Officer to reopen assessment though wide are not plenary. The words of the statute are reason to believe and not reason to suspect. The reopening of the assessment after the lapse of many years is a serious matter. The Act, no doubt, contemplates the reopening of the assessment if grounds exist for believing that income of the assessee has escaped assessment. The underlying reason for that is that instances of concealed income or other income escaping assessment in a large number of cases come to the notice of the income-tax authorities after the assessment has been completed. The provisions of the Act in this respect depart from the normal rule that there should be, subject to right of appeal and revision, finality about Orders made in judicial and quasi indicial proceedings. It is, therefore, essential that before such action is taken the requirements of the law should be satisfied. The live link or close nexus which should be there between the material before the Income-tax Officer in the present case and the belief which he was to form regarding the escapement of the income of the assessee from assessment because of the latter's failure or omission to disclose fully and truly all material facts was missing in the case. In any event, the link was too tenuous to provide a legally sound basis for reopening the assessment. The majority of the learned Judges in the High Court, in our opinion, were not in error in holding that the said material could not have led

27 of 43 CWP No. 27068 of 2016 -28- to the formation of the belief that the income of the assessee respondent had escaped assessment because of his failure or omission to disclose fully and truly all material facts. We would, therefore, uphold the view of the majority and dismiss the appeal with costs. Mr. Putney did not and indeed could not dispute any of the observations. He however rightly contended that they do not apply to the present case. In the case before us, there is a direct nexus or live link between the material coming to the notice of the AO, namely the said material submitted by the Investigation Wing, and the formation of the AO's belief that there has been escapement of income. We have already referred to this aspect of the matter. Suffice it to recollect that details of the CCM were furnished in the information. The information was in respect of several brokers. The information pertaining to the petitioner's broker was culled out and tabulated. There were 74 cases of the petitioner's broker having modified the petitioner's transactions. The information was directly on the issue of the transactions. It cannot by any stretch of imagination be said to be vague, indefinite or distant. For the reasons we have already stated, this was not a case where the AO merely had reason to support that income had escaped assessment.

35. The judgment of the Delhi High Court in CIT Vs. SFIL Stock Broking Ltd., (2010) 325 ITR 285 (Delhi) is clearly distinguishable. In that case, the reasons themselves recorded that the AO had been directed to get notices issued under Section 148 by the Deputy Director (Investigation) and

28 of 43 CWP No. 27068 of 2016 -29- subsequently by the Additional CIT. The judgment was based on the finding that the proceedings had been initiated only on the basis of these directions and without any independent application of mind by the AO.

36. In CIT Vs. Atul Jain, (2008) 299 ITR 383 (Delhi), the Delhi High Court upheld the decision of the Tribunal setting aside the proceedings under Sections 147 and 148. The Delhi High Court, however, found that the information did not include the source of the capital gains; the court was not told which shares had been transacted and with whom the transaction had taken place; there were absolutely no details available and the information supplied was scanty and vague and even the basis for the reasons was absent. It was further observed that the AO had not recorded his satisfaction about the correctness or otherwise of the information or his satisfaction that a case had been made out for issuing a notice under Section 148. This is not the case before us. The AO has not recorded such satisfaction.

37. The judgment of the Delhi High Court in Principal Commissioner of Income Tax-6 Vs. Meenakshi Overseas Pvt. Ltd., (2017)

395 ITR 677 (Delhi) does not support the petitioner's case either. The judgment turned on the finding that there were only conclusions and no reasons to believe those conclusions were recorded by the AO and that the crucial link between the information made available to the AO and the formation of belief was absent. That is not so in the case before us. There is a clear link between the information analysed by the AO and the relevant transactions. For the same reasons, the decision of the Delhi High Court in

29 of 43 CWP No. 27068 of 2016 -30- Principal Commissioner of Income Tax Vs. RMG Polyvinyl (I) Ltd., (2017) 396 ITR 5 (Delhi) does not carry the petitioner's case further.

38. In Chhugamal Rajpal Vs. S.P. Chaliha and Ors., (1971) 79 ITR 603 (SC), the Supreme Court allowed the assessee's appeal on the finding that the ITO had not set out any reasons for coming to the conclusion that it was a fit case to issue notice under section 148. The material on the basis of which the proceedings had been initiated was not mentioned in the record. The reasons only referred to certain communications without adverting to the facts contained therein. The ITO had not even come to a prima facie conclusion that the transactions were not genuine. It was also observed that the ITO had only a vague feeling that the transactions may be bogus. It is in these circumstances that the Supreme Court held that the ITO could not have reason to believe that by reason of the omission to disclose fully and truly all the material facts necessary for assessment for the year in question, income chargeable to tax had escaped assessment. This decision, therefore, is distinguishable and does not support the petitioner's case.

39. Mrs. Suri's contention that information from the broker was sought after issuance of the notice shows that there was no enquiry prior to the issuance of the notice and hence, the proceedings are bad is not well founded. Once it is held that the proceedings under Sections 147 and 148 have been validly initiated, the AO is not prevented from looking into the matter further, including by gathering further information. He in fact is bound to do so.

30 of 43 CWP No. 27068 of 2016 -31-

40. Mrs. Suri placed strong reliance upon the judgment of a Division Bench of the Gujarat High Court in Harikishan Sunderlal Virmani Vs. Deputy Commissioner of Income Tax, (2017) 394 ITR 146 (Guj). Firstly, in that case, the assessment was under Section 143 (3) whereas in the case before us, it was under Section 143 (1). The reasons furnished in that case and the finding of the court were referred to and relied upon by Mrs. Suri in extenso. It is only fair, therefore, that we set out both :- 3.1 At the outset, it is required to be noted that the impugned notice under section 148 of the Act to reopen the assessment in exercise of the power under section 147 of the Act, has been issued beyond the period of four years. Therefore, considering the proviso to section 147 of the act, unless and until it is found that there was a failure on the part of the assessee in not disclosing truly and fully relevant material for assessment, reopening beyond four years is not permissible. It also cannot be disputed that even to reopen the proceedings, there must be satisfaction of the Assessing Officer and the Assessing Officer himself, on the basis of the material before him is required to form an opinion that the income has escaped assessment due to failure on the part of the assessee in not disclosing truly and fully material necessary for the assessment. 3.2. The reasons recorded to reopen the assessment are as under :-

31 of 43 CWP No. 27068 of 2016 -32-

2. Reasons for reopening of the assessment Assessment year 2009 reg. The assessee had e-filed his return of income for the assessment year 2009-10 on September 30, 2010 declaring therein total income of Rs.2,09,39,600/-. Subsequently, the case was selected in CASS within the meaning of section 143(3) of the Act. The assessment proceedings was completed under section 143(3) of the Act on November 30, 2010 determining the assessed income at Rs.2,09,60,910/-.

2. Thereafter, information has been received from the Principal Director of Income Tax (Investigation), Ahmedabad vide confidential letter No. PDIT (Inv)/ AHD/CCM/Dissemination/15-16 dated March 8, 2016. On perusal of the data supplied by the office of the Principal Director of Income- tax (Investigation), Ahmedabad it is noticed that assessee carried out share trading through the broker, Guinness Securities Limited. And as per the guidelines of the SEBI the client code of the assessee with the aforesaid broker was WW/2647. In order to verify the genuineness of the modification of client code in the case of the assessee, by applying Levenshtein distance analysis or digit edit analysis utility, in those cases where the assessee is original client and

32 of 43 CWP No. 27068 of 2016 -33- transactions were carried out from assessees client code then subsequently client code was modified to other client the details of such case are as under :- OC OCC MC MCC Distance as per Levenshte distanced analysis reduction in income due to CCM Harikishan Sunderlal Virmani WW/2647 Nomau R. Chaturvedi WW/2108 3 Rs. 1,19,848 In order to verify the genuineness of the error, the Levenshtein distance analysis or digit edit analysis utility is also provided by the investigation Wing. This utility gives a clear indication as to whether the code is wrongly typed or is completely replaced. If the number of digits changed from original code to modified code is 1, then it can be reasonably argued that the OCC (Original Client Code) may have been typed wrongly by mistake. Similarly, if the number of digits changed is more say 4 or 5, it cannot be genuine mistake but a deliberate change. To this extent, Levenshtein distance analysis or digit edit analysis act as a clear indicator for genuineness in client code modification. In short, the longer the distance (i.e. number of digits changed), the lesser the chance of genuineness.

33 of 43 CWP No. 27068 of 2016 -34-

3. Hence, the editing of client code above it is termed as deliberate change and establishes the non-genuineness and contrived nature of the code change.

4. In view of the above facts, I have reason to believe that the income to the extent of Rs.1,19,848/- has escaped assessment, which required to brought under tax. Therefore, this case is a fit case for initiating the proceeding under section 147 of the Act. 3.3. Thus from the reasons recorded, the reopening of the assessment is on the information/data supplied by the office of the Principal Director of Income-tax (Investigation), Ahmedabad and the information received from the Principal Director of Income-tax (Investigation), Ahmedabad vide his confidential letter dated March 8, 2016. From the information received, it appears that though the client code of the assessee with the broker-Guinness Securities Limited was WW/2647, modified client code was found to be WW/2108 and therefore, to verify the genuineness of the modification of the client code, by applying Levenshtein distance analysis or digit edit analysis utility, distance was found to be 3 and therefore, it is believed that the code is not wrongly typed and it is termed as deliberate change and establishing non- genuineness and contrived nature of the code change. From the reasons recorded, it does not appear that verification of the material on record

34 of 43 CWP No. 27068 of 2016 -35- there is independent formation of opinion by the Assessing Officer and that any income has escaped assessment due to any failure on the part of the assessee in not disclosing truly and correct facts/material necessary for assessment. From the reasons recorded, it appears that the impugned reopening proceedings are on the borrowed satisfaction. No independent opinion is formed. On the plain reading of the reasons recorded what emerges is that the Assessing Officer on considering the information received from the Principal Director of Income-tax (Investigation), Ahmedabad, reassessment proceedings have been initiated on the ground that the income escaped assessment. However, there is no assertion regarding the basis on which material on record, he has come to such conclusion. Therefore, the material on the basis of which the Assessing Officer seeks to assume the jurisdiction under section 147 of the Act is the information received from the external source viz. the Principal Director of Income-tax (Investigation), Ahmedabad. It cannot be disputed that on the basis of the information received from another agency, there cannot be any reassessment proceedings. However, after considering the information/material received from other source, the Assessing Officer is required to consider the material on record in case of the assessee and thereafter is required to form an independent opinion on the basis of the material on record that the income has escaped

35 of 43 CWP No. 27068 of 2016 -36- assessment. Without forming such an opinion, solely and mechanically relying upon the information received from other source, there cannot be any reassessment for the verification. 3.4. At this stage it is required to be noted that even in the reasons recorded, there is no allegation that there was any failure on the part of the assessee in not disclosing truly and fully material facts necessary for assessment. Under the circumstances, the assumption of the jurisdiction to reopen the assessment beyond the period of four years in exercise of powers under section 147 of the Act is bad in law and contrary to the provisions of section 147 of the Act. Under the circumstances, on the aforesaid ground alone, the impugned reassessment proceedings deserve to be quashed and set aside.

41. Firstly, there is a significant difference between that case which involved only one CCM and the case before us which involves 74 CMMs. Further, in our view, the reasons furnished in that case were sufficient to justify proceedings under Sections 147 and 148. The Assessing Officer had received information from the Principal Director of Income-tax (Investigation), Ahmedabad. As is evident from the reasons itself, the Assessing Officer perused the data and noticed the nature of the transactions carried out through his brokers. He also noted that the Levenshtein distance analysis had been provided by the Investigation Wing. What is important is that he considered the Levenshtein method as giving a clear indication as to whether the code is wrongly typed or is completely replaced. In other words, he accepted the method as an appropriate aid for determining

36 of 43 CWP No. 27068 of 2016 -37- whether there were inadvertent errors or deliberate shifts of the transactions. Having done so he applied this method and came to the prima-facie conclusion that it was not a case of an inadvertent error but was a deliberate change. The reasons clearly indicate an application of mind by the AO to the material received by him. They do not by any stretch of imagination constitute borrowed satisfaction. It is his personal satisfaction on an analysis of information received, which with respect is perfectly in accordance with law. In our view, the AO in that case had reason to believe that the income had escaped assessment. Whether this prima-facie view would have been finally endorsed or not, especially in view of the fact that the matter involved only one CMM, is irrelevant. We are, with respect, unable to agree with the finding of the Gujarat High Court that the reopening was on borrowed satisfaction and that no independent opinion had been formed. Nor do we subscribe to the view that there was no assessment regarding the material on record on the basis of which the AO had come to the conclusion. The material, the information received was analysed and the decision was based thereon pursuant to an independent application of mind. The AO had considered the material on record and formed an independent opinion on the basis thereof. In the circumstances, we are, with respect, unable to agree with the decision of the Gujarat High Court.

42. Even if in the case before us, the AO had to establish that the income had escaped assessment on account of the failure on the part of the assessee in disclosing truly and fully the material facts necessary for

37 of 43 CWP No. 27068 of 2016 -38- assessment, the test would be met. Admittedly, there was no analysis or application of mind in respect thereof. The assessment was under Section

143 (1) in any event. Thus, in any view of the matter, the decision to reopen the assessment is valid and well founded.

43. This brings us to Mrs. Suri's contention that the satisfaction recorded by the Principal Commissioner of Income Tax, Panchkula, under Section 151 of the Act was mechanical. We do not agree. From a perusal of the record, it is evident that the section has been duly complied with and he has not signed on the dotted line. If he approves the reasons he is not bound to reiterate the same. That would be an empty formality. Mr. Putney's reliance upon the following observations of the Calcutta High Court in Income-Tax Officer and others Vs. Mahadeo Lal Tulsian and others, (1977) 110 ITR 786 (Calcutta) is well founded :-

... He has contended that there had been no due compliance with the provisions of section 151 (2) of the said Act since the Commissioner of Income-tax had failed to arrive at a bona fide satisfaction or record the same. Here again, the issue has to be considered from the point of view of what the facts establish in substance. Now, facts indicate that the proposal for reopening the assessment with reasons indicated hereinbefore was placed before the Commissioner of Income- tax. Obviously he applied his mind as is indicated by his endorsement : Yes, I am satisfied. If the Commissioner records his satisfaction in a positive manner, as aforesaid, and there being no

38 of 43 CWP No. 27068 of 2016 -39- other material before us to show that notwithstanding such a record the Commissioner never applied his mind but merely signed on a dotted line without application of his mind, we are unable to accept the contention that the Commissioner never arrived at a bona fide satisfaction in recording the same. This objection raised by Mr. Banarjee, therefore, must fail and is overruled.

We are in respectful agreement with the judgment.

44. Mrs. Suri relied upon judgment of the Supreme Court in Chhugamal Rajpal's case (supra) and in particular paragraph 9 thereof which reads as under :-

9. In his report the Income-tax Officer does not set out any reason for coming to the conclusion that this is a fit case to issue notice under Section 148. The material that he had before him for issuing notice under Section 148 is not mentioned in the report. In his report he vaguely refers to certain communications received by him from the C.I.T., Bihar and Orissa. He does not mention the facts contained in those communications. All that he says is that from "those communications it appears that these persons (alleged creditors) are name lenders and "the transactions are bogus . He has not even come to a prima facie conclusion that the transactions to which he referred are not genuine transactions. He appears to have had only a vague feeling that they may be bogus

39 of 43 CWP No. 27068 of 2016 -40- transactions. Such a conclusion does not fulfil the requirements of Section 151 (2). What that provision requires is that he must give reasonsfor issuing a notice under Section 148. In other words he must have some prima facie grounds before him for taking action under Section 148. "Further his report mentions : Hence proper investigation regarding these loans is necessary. In other words his conclusion is that there is a case for investigating as to the truth of the alleged transactions. That is not the same thing as saying that there are reasons to issue notice under Section 148. Before issuing a notice under Section 148, the Income-tax Officer must have either reasons to believe that by reason of the omission or failure on the part of these assessee to make a return under Secton 139 for any assessment year to the Income-tax Officer or to disclose fully and truly all material facts necessary for his assessment for that year,income chargeable to tax has escaped assessment forthat year or alternatively notwithstanding that there has been no omission or failure as mentioned above on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year. Unless the requirements of clause (a) or (b) of section 147 are satisfied, the Income-tax Officer has no jurisdiction to issue a notice under Section 148. From the report submitted by the Income-tax Officer to the

40 of 43 CWP No. 27068 of 2016 -41- Commissioner, it is clear that he could not have had reasons to believe that by reason of the assessee's omission to disclose fully and truly all material' facts necessary for his assessment for the accounting year in question,income chargeable to tax has escaped assessment for that year; nor could it be said that he as a consequence of information in his possession, had reasons to believe that the income chargeable to tax has escaped assessment for that year. We are not satisfied that the Income-tax Officer had any material before him which could satisfy the requirements of either clause (a) or clause (b) of section 147. Therefore he could not have issued a notice under Section 148. Further the report submitted by him under Section 151 (2) does not mention any reason for coming to the conclusion that it is a fit case for the issue of a notice under Section 148. We are also of the opinion that the Commissioner has mechanically accorded permission. He did not himself record that he was satisfied that this was a fit case for the issue of a notice under Section 148. To Question No. 8 in "the report which reads Whether the, Commissioner is satisfied that it is a case for the I "issue of notice under Section 148 , he just noted " "the word yes and affixed his signatures thereunder. We are of the opinion that if only he had read the report carefully, he could never have come to the conclusion on the material before him that this is a fit case to issue notice under Section

148. The important safeguards provided in

41 of 43 CWP No. 27068 of 2016 -42- Sections 147 and 151 were lightly treated by the Income-tax Officer as well as by the Commissioner. Both of them, appear to have taken the duty imposed on them under those provisions as of little importance. They have substituted the form for the substance.

(emphasis supplied) This judgment does not support the petitioner's case. It is clearly distinguishable. As noted in the earlier part of paragraph 9, the Supreme Court held that the reasons recorded by the ITO for initiating proceedings under Sections 147 and 148 were not in accordance with law. As in that case, the Commissioner merely accorded permission under Section 151 without stating any reason himself it is axiomatic that his order would also not be in accordance with Section 151. The case before us is entirely different. We have found that the reasons recorded by the AO justify the initiation of proceedings under Sections 147 and 148. As the Principal Commissioner agreed with these reasons, it was not necessary for him in his order according sanction to reiterate the reasons furnished by the AO. There is nothing that indicates that he did not apply his mind to the reasons furnished by the AO.

45. Reasons to believe are there. The reasons are based on tangible material. The return and account books of assessee had not undergone scrutiny at the time of assessment. The information is specific and not vague. A reasonable person can form an opinion on the basis of the material. The information received could form the basis of reason to believe that

42 of 43 CWP No. 27068 of 2016 -43- income has escaped assessment and the re-opening is not on mere suspicion. Hence, the assumption of jurisdiction is in accordance with law.

46. In this view of the matter it is not necessary to consider Mr.Putney's other submissions on behalf of the Revenue.

47. The writ petition is dismissed. ( S.J. VAZIFDAR ) CHIEF JUSTICE April 27, 2018 ( AVNEESH JHINGAN ) ndj JUDGE Whether speaking/reasoned Yes Whether Reportable Yes

43 of 43