GOVIND MATHUR,J. - (1.) These appeals are before us to examine correctness of the judgment dated 11.4.2014, passed by learned Single Bench in batch of writ petitions led by SB Civil Writ Petition No.1140/2014, Mukesh Modi v. Dy. Commissioner of Income Tax, Jodhpur. By the judgment impugned learned Single Bench, while accepting the petitions for writ, quashed the notices issued under Section 147/148 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act of 1961') to the petitioner assessees. As per learned Single Bench the expression 'reason to believe' as referred under Section 148 of the Act of 1961 means the existence of rational and intelligible nexus between the reasons and the belief, so that on such reason no one properly instructed on facts and the law could reasonably entertain the belief. On basis of this ratio learned Single Bench held that while issuing the notices under Section 147/148 of the Act of 1961 the Assessing Officer had no reason to believe that any income chargeable to tax has escaped assessment for the assessment year and the Assessing Officer simply for his own verification and to clear his doubts and suspicion initiated the proceedings impugned.
(2.) We are in complete agreement with the interpretation accepted by learned Single Bench pertaining to the expression 'reason to believe' and on basis of that only we too have examined validity of the notices in question. Before coming to that, it would be appropriate to mention certain necessary facts in brief.
(3.) A search as per Section 132 of the Act of 1961 and survey under Section 133-A were simultaneously conducted by the investigation wing of the Income Tax Department at the business/residential premises of Modi @ Adarsh Group of Sirohi. Petitioners Mukesh Modi, Daksha Kumari Jain and Bharat Das Vaishnav were eventually covered under the search action and the survey was conducted relating to Prakash Beverages, Nakoda Land Developers and Sambhav Energy. During the course of search and survey certain documents/loose papers were seized and impounded. The entire process of search and survey was carried out on 10.2.2010 and on 6.1.2011 a notice under Section 153-A of the Act of 1961 was issued to petitioners Mukesh Modi, Daksha Kumari Jain and Bharat Das Vaishnav. A notice under Section 153 of the Act of 1961 was issued to Krishna Dairy by placing reliance upon certain documents found during the course of search. While undertaking proceedings under Section 153-A of the Act of 1961 the Assessing Officer scrutinised the material seized during the course of search and survey and after consideration of the same issued a consolidated questionnaire to the assessees concerned. On 23.12.2011 the assessment under Section 153-A read with Section 143(3) of the Act of 1961 came to be completed by making certain additions of income tax in the hands of Mukesh Modi, Daksha Kumari Jain and Bharat Das Vaishnav. The assessments made by the Assessing Officer as above are admittedly subject matter of appeals said to be pending before the Commissioner of Income Tax (Appeals). The Assessing Officer on 22.3.2013, while recording reasons to reopen the assessment under Section 147 of the Act of 1961, issued notices under Section 148 of the Act of 1961. While giving challenge to the notices aforesaid the petitioners contended that no cogent reasons were recorded by the Assessing Officer and whatever reasons recorded suggest that the Assessing Officer has assumed jurisdiction to initiate reassessment proceedings on its mere ipse dixit to clear suspicions and for verification. It is also important to mention that the respondent petitioners responded the notice dated 22.3.2013 on 31.5.2013 with following preliminary objections:- "a. The condition precedent for Section 147 is that there must be a "reason to believe that income chargeable to tax has escaped assessment" and the belief entertained by ITO must not be arbitrary or irrational. b. It must be based on objective reasons which are relevant and material. The belief must be in good faith and not merely be pretence. c. The act of ITO must be based on evidence and not on mere suspicion, imagination and speculation. d. In addition to above requirements there should be some direct nexus between the information in possession and conclusion drawn by the authority concerned and any conclusion based on any irrelevant and extraneous material would vitiate its effect. , e. There has to be fresh material/information in possession of assessing authorities for the purpose of formation of belief that income of any particular assessment year has escaped assessment. f. The burden is on the revenue to establish that there was income chargeable to tax, which has escaped assessment." ;