SHREE OM BUILDERS AND COLOIZ V. ASS COMMI OF INCOME TAX ORS

CW/858/2013

AI Insights

The case involves Shree Om Builders and Colonizers challenging a notice issued by the Assistant Commissioner of Income Tax under Section 148 of the Income Tax Act, 1961, which initiated reassessment proceedings for the assessment year 2009-10. The notice was based on the suspicion that the sale consideration disclosed in the registered sale deed was less than the actual sale consideration, influenced by findings from a related search operation on another entity, M/s Kamakshi Hospitality. The petitioner argued that the reassessment was based on mere conjectures and lacked concrete evidence, while the respondent defended the notice citing substantial material and evidence indicating a discrepancy in the declared and actual sale considerations. The court, after examining the arguments and evidence, concluded that there were reasonable grounds for the belief that income had escaped assessment, thus dismissing the petition.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 771278 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 28-02-2013
• Assessment Year: misc
• Other Referred Cases: Income Tax officer & Others Vs. Lakhmani Mewal Das, K.P. Varghese Vs. ITO & Another, CIT Vs. Gillanders Arbuthnot & Co., CIT Vs. George Henderson & Co. Ltd., Ajanta Pharma Ltd. Vs. ACIT & Ors., Garden Finance Ltd. Vs. ACIT, P.G. Foils Ltd. Vs. ITSC & Another, GKN Drivershafts (India) Ltd. Vs. I.T.O., Kalyan Mavji and Company Vs. C.I.T., Assistant Commissioner of Income-Tax Vs. Rajesh Jhaveri Stock Brokers P. Ltd., Raymond Woolen Mill Vs. I.T.O., Phool Chand Bajrang Lal Vs. I.T.O., S. Narayanappa and Others Vs. C.I.T.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: R B MATHUR; NIKHIL SIMLOTE
• Assessee Lawyers: PRAKUL KHURANA; ANURAG KALAVATIYA
• Keywords: Income Tax; Jurisdiction; Notice under section 148; Property valuation; Reassessment; Sale Consideration
• Section: 147; 148; 132; 50C

Judgement Text

"CW858/2013 // 1 // IN THE HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR ORDER IN S.B. Civil Writ Petition No.858/2013 In Stay Application No.739/2013 Shree Om Builders and Colonizers Vs. Assistant Commissioner of Income Tax and Others Date of Order ::: 28.02.2013 Present Hon'ble Mr. Justice Mohammad Rafiq Shri Prakul Khurana with Shri Anurag Kalavatiya for Shri Sanjay Jhanwar, counsel for petitioners Shri R.B. Mathur with Shri Nikhil Simlote, counsel for respondent(s) #### //Reportable// By the Court:- This writ petition has been filed by petitioner, Shree Om Builders and Colonizers, challenging; notice issued by respondent no.2 – the Deputy Commissioner of Income Tax, Central Circle-1, Jaipur, dated 12.12.2011, under Section 148 of the Income Tax Act, 1961 (for short, 'the Act of 1961'); reasons supplied for reopening of the case under Section 147 of the Act of 1961 for assessment year 2009-10 and the order dated 28.03.2012 rejecting objections submitted by the petitioner. Shri Prakul Khurana, learned counsel for the assessee, has argued that notice for initiating reassessment proceedings are based on mere surmises and conjectures that sale consideration mentioned in the registered sale-deed is less than the actual sale consideration and there has been exchange of CW858/2013 // 2 // money over and above the recorded sale consideration. Alleged basis for such suspicion is that the Income Tax Department during the course of search in the case of M/s Kamakshi Hospitality, has found that there was exchange of money over and above the recorded sale consideration in relation to some property situated in Bani Park, Jaipur and therefore the sale consideration disclosed by the petitioner for that property also cannot be relied as the market value of petitioner's properties on mere basis of the alleged vicinity. It is further contended that the department has not found any material/evidence/proof during the course of search proceedings or post search assessment proceedings which could have led to the requisite formation of the belief that the transaction between the petitioner herein and Kamakshi International has been entered on a higher amount than shown in the registered sale deed. Even in the survey that was conducted by the department at the premise of the petitioner pursuant to search at the premise of M/s Kamakshi International, no contrary evidence/ material was found which could have led to such belief that the petitioner has also sold the land on a higher value than shown in the registered sale deed. Issuance of notice under Section 148 of the Act of 1961 for reassessing the income of petitioner for the assessment year 2009-10, on a mere suspicion that the petitioner must have also sold the land on a higher value, is totally devoid of any basis and is wholly illegal. The impugned reassessment CW858/2013 // 3 // proceedings have been initiated on 'mere suspicion' and not on the basis of 'reasons to believe', which is a mandatory requirement for the purpose of issuing notice under Section 148 of the Act of 1961. It is argued that locality of Bani Park is spread over a very big area and is one of the biggest colonies/localities of the city of Jaipur. It has both commercial as well as residential spaces and the differences in the prices of such commercial and residential spaces vary to a great extent based on the actual location of the plot. Price of a particular land/plot also depends upon the actual location and the commercial viability of of the area where it is situated. Petitioner's plot No.D- 81 is a residential property and is located on an inner road of Ghiya Marg in Bani park, whereas comparable Plot No.D-112-A is a commercial property located on Station Road, which is a commercial road of Bani Park and located barely 300 meters from the main Railway Station of Jaipur towards Chinkara Canteen. Moreover, the plot of the petitioner is located on a 40' wide road whereas plot with which comparison is sought to be made is situated on a 100' wide road. Plot of the petitioner is situated at T point which, according to Vastu, is not considered good/auspicious and such property fetches less market value. Besides there being a transformer of the R.S.E.B. installed just in front of the plot of the petitioner, which occupies 10' front of the plot. Both the properties are not in close vicinity. There is distance between them of about 2.5 CW858/2013 // 4 // kilometers. The rate of the plot of the petitioner presumed by respondents no.1 and 2 is wholly unrealistic and unfounded and is not based on sale- deed of any plot in the close vicinity of the plot of the petitioner. Shri Prakul Khurana, learned counsel argued that petitioner in response to the notice, filed two replies respectively on 19.12.2011 and 27.03.2012 objecting against the issuance of the impugned notice describing the reasons for it to be illegal and without authority of law as the same has been issued on the basis of mere suspicion and not on the basis of reasons to believe. Respondents however rejected those objections vide order dated 28.03.2012. Learned counsel argued that reasons recorded by respondent no.1 for issuing notice under Section 148 of the Act of 1961 are not in consonance with the statutory provisions contained in Section 50C of the Act of 1961. Allegation of showing sale consideration of the plot of the petitioner towards lower side in the sale-deed cannot be justified because the position of law is very much clear and there is specific provision in the Act itself, which covers such nature of cases of understatement of sale consideration. As per Section 50C, it is the stamp valuation adopted by the Stamp Registering Authority, which has to be taken into consideration for the purpose of assuming the correct consideration liable to be taxed for the purpose of tax. Learned counsel for the petitioner argued CW858/2013 // 5 // that respondents have rejected the objections of the petitioner on the premise that sufficiency of reasons cannot be a question at the preliminary stage, whereas once the competent authority has formed a requisite opinion as to his belief for issuance of notice for reassessment, what remains is mere computation of the tax, satisfaction as to the escapement of tax having become fait-accompli. The respondents in rejecting the objections have wrongly maintained that he has recorded proper reasons based on substantial material in the form of evidence whereas no evidence has been disclosed either in the reasons supplied to the petitioner or the order of rejecting the objections. Further the competent authority in rejecting the objections of the petitioner has wrongly maintained that information received during the course of assessment proceedings of the third party can form the basis for belief of escapement of income. Learned counsel for the petitioner lastly argued that the service of notice on the petitioner is mere formality because Assessing Officer has determined to revise the assessment. The writ petition is only effective remedy. Requiring the petitioner to go back to the assessing officer and wait for the passing of the final assessment order would be a mere formality because the assessing officer has already formed an opinion as to escapement of the income. He may, therefore, possibly not now change that opinion. Learned counsel in support of his arguments CW858/2013 // 6 // relied on the judgments of the Supreme Court in Income 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 ITR 200 (Bom), and that of Gujarat High Court in Garden Finance Ltd. Vs. ACIT – (2004) 268 ITR 48 (Guj.) and that of Madras High Court in P.G. Foils Ltd. Vs. ITSC & Another – (2008) 302 IR 331 (Mad). Shri R.B. Mathur, learned counsel for the Revenue, opposed the writ petition and submitted that this writ petition has been filed merely against show cause notice at a preliminary stage, which should not be entertained. Whether or not the assessing officer in the assessment order records a finding as to escapement of income would be depended on material and evidence. While such facts are being asserted by the respondents and the petitioner is disputing them. A detailed enquiry cannot be undertaken by this court on this question. Those disputed questions of facts cannot be appropriately gone into in the writ jurisdiction under Article 226 of the Constitution of India. Learned counsel for the respondent submitted that notice under Section 147/148 of the Act of 1961 was issued only because the assessing officer had reasons to believe that the income of the petitioner has escaped assessment. The petitioner is free to file his reply and justify CW858/2013 // 7 // the sale consideration disclosed. Shri R.B. Mathur, learned counsel for the respondents 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 case by the supreme Court that proper course of action for noticee, who has been served with notice under Section 148 of the Act, is to file return and if he so desires to seek reasons of notices, which the Revenue would be bound to furnish, on receipt of reasons filed objections which will be decided by a speaking order, which course has been adopted by the department. Petitioner was supplied reasons. He filed objections, which have been considered and rejected by the respondents. It cannot be therefore said that the assessing officer has wrongly assumed jurisdiction under Section 147 of the Act. The assumption of jurisdiction is based on proper satisfaction of the assessing officer after duly recording reasons for satisfaction or proof in writing. It was argued that “reasons to believe” would mean cause or justification of assessing officer to believe that income has escaped assessment and that the assessing officer should have finally ascertained the facts by legal evidence or reached a conclusion as this is determined and decided in the assessment order, which is the final stage before the assessing officer and which is always open to challenge before the appellate authority. In the present case the assessing officer had sufficient CW858/2013 // 8 // evidence in support of his belief that apparent sales tax is not real one and the underhand money transaction has taken place in this deal. Such evidence is available in the form of similar nature of transaction made between other parties in the same area. The department has in its possession sufficient proof/evidence in the form of identical transaction of land in the same locality giving clear idea of actual market price of land. It is well settled principle of law that information creates form of belief of the widest amplitude and comprehends authority of facts. Such information may come from external sources or even from the material already on record or may be derived from the discovery of new and important material or fresh facts. 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 has sold its property to M/s Kamakshi International whereas other sister concern of this party namely M/s Kamakshi Hospitality Private Limited has purchased property from other person at Plot No.D- 112, Bani Park, in the same locality having almost the same size and under similar circumstances, in which case amount of Rs.2 crores was declared as sale consideration. After a survey conducted of the business premise of M/s. Kamakshi Hospitality Private Limited, it transpired that actual sale consideration was Rs.7 crores. The assessing officer CW858/2013 // 9 // also came in possession of a letter dated 23.12.2011 of I.C.I.C.I. Bank with copy of valuation of market value of Plot No.D-81, Ghiya Marg, got done by the Bank while dispersing/sanctioning loan of Rs.1.25 crores to the petitioner. Market value of this property has been valued by the Valuer at Rs.3,53,29,230/- as against Rs.1.20 crores claimed by petitioner in the sale deed. Contention of the petitioner that Plot No.D- 81 is residential property and plot No.D-112-A is commercial property is not only incorrect but patently false. Learned counsel for the respondent has in this connection referred to the sale-deeds of both the plots which are Annexure R-2 and R-3, and argued that therein both the plots have been described to be residential. The relevant deeds also nowhere indicates that the road size in front of the plot is 40' or 100' respectively. The deeds only indicate that the Plot No.D-81 is situated at Ghiya Marg whereas Plot No.D-112-A is situated on Power House Road, Bani Park, Jaipur. Learned counsel also sought to submit that a plea has been set up by the petitioner before this court that the plot of the petitioner is situated at T point whereas map of the locality furnished by the petitioner before the assessing officer during reassessment proceedings, the Plot No.D-81 is shown just opposite Plot No.F-34 and F-35 and actual T point plot is at D-83 and not D-81. Reference in this connection is made to the map of Bani Park so produced by the petitioner, which is filed at Annexure R-4. It is not verified CW858/2013 // 10 // from the record as to any transformer of electricity connection is situated in front of the plot of the petitioner. Moreover, the front of plot of the petitioner is of 75.3' and mere occupancy of 10' by transformer does not much diminish its market value as still it has 65' front opening on Ghiya Marg. No comments can be made on the distance between two plots and it is a matter of evidence which can be considered only during assessment proceedings. In fact, the plot of zero mark is situated close to main circle of Bani Park i.e. Collectorate Circle, which is center of the Bani Park locality as compared to Plot No.D-112 which is far away from center point of Bani Park and situated on Power House Road. Learned counsel submitted that the petitioner has not at all denied the facts that both the plots are situated in Bani Park. Reference to provisions of Section 50C of the Act of 1961 is quite irrelevant because the petitioner did not disclose the transaction of sale/purchase of the land under the head of capital gain but clearly this transaction is business transaction and for such business transaction of land, provisions of Section 50C would not be applicable. Relying on the judgments of the Supreme Court in Raymond Woolen Mill 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 argued that it is well settled proposition of law that sufficiency of reasons cannot be judged at the time CW858/2013 // 11 // of issue of notice. I have given my thoughtful consideration to rival submissions and perused the material on record. The assessing officer in order to acquire the jurisdiction to make reassessment of the income of the assessee with reference to Section 148 of the Act of 1961 has to arrive at twin satisfactions viz., that (i) it has to have a reason to believe that income chargeable to tax has escaped assessment and further that (ii) such income has escaped assessment by reason of omission or failure on the part of the assessee to disclose fully and truly material facts before assessment of his income in the relevant assessment year. It is only when these two conditions are fulfilled that the assessing officer acquires jurisdiction to make reassessment. It is therefore imperative for the assessing officer to record reasons for such belief before initiating proceedings for reassessment. The question that arises for consideration is whether the reasons, which led to formation of belief by the assessing officer contained in Section 147(a) that income of the petitioner escaped assessment on account of his omission or failure to disclose fully or truly material facts necessary for assessment, can be said to exist on the grounds referred to in the reasons supplied to the petitioner or otherwise disclosed in the order by which objections raised by them have been rejected. Reasons as supplied for reopening of the case CW858/2013 // 12 // of the petitioner for reassessment, following was mentioned as the basis for arriving at the requisite satisfaction in terms of Section 147 of the Act:- “A search and seizure operation u/S 132 Income Tax Act, 1961 was carried out of 23.07.2009 in the case of Shri Mahaveer Singh Sankhla the then Zonal Chief Engineer (Civil), RRVPNL, Jaipur, his family members and other connected cases. Consequent upon the search, the Mahaveer Singh Sankhla Group of cases were centralized with Center Circle-1, Jaipur. M/s Kamakshi Hospitality Pvt. Ltd. and M/s Kamakshi International were two concerns which belong to the family members of Shri Mahaveer Singh Sankhla. The documents seized during the course of search from the residence of Shri Mahaveer Singh Sankhla at A-3, Moti Lal Atal Road, Jaipur, reveal that the family members of Shri Mahaveer Singh Sankhla routed huge amount through their concerns viz. M/s Kamakshi Hospitality Pvt. Ltd. and M/s Kamakshi International in purchase of various immovable properties at Jaipur. Ms/ Kamakshi Hospitality Pvt. Ltd. purchased plot No.D-112- A, Bani Park Jaipur measuring to 1000 Sq Yards from Shri Bimal Jain & Shri Nirmal Kumar Jain vide Sale Deed dated 17-4-2009 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 the search it was established that the actual sales consideration for Plot No.D-112-A, Bani Park, Jaipur was of Rs.7 Crores. Hence, the actual cost of the Plot was suppressed by Rs.5 Crores. Sh. Bimal Jain & Sh. Nirmal Kumar Jain admitted the above fact and accordingly offered the difference amount for taxation. Another property at D-81, Ghiya Marg, Bani Park, Jaipur was purchased by Kamakshi International Form M/s Om Builders and Colonizers vide Sale Deed dated 25-2-2009. This plot of land measures 1058 Sq. Yards and registered sale consideration for this plot of land was at Rs.1.20 Crores. Both the plots i.e. D-112-A and D-81 are in same locality and the later is in close vicinity of the former. As such the market value of both the plots should be almost same. It is learnt that the plot No.D-81, Ghiya Marg was free from any dispute. Therefore, no apparent reasons are evident for difference in market value of the both properties. It is pertinent to mention here that the plot D-112-A, Bani Park was registered at sales consideration of Rs.2 Crores. However the actual sales consideration was at Rs.7 Crores. Hence, there is sufficient reason to believe that the actual sale consideration for plot No.D-81 is actually much higher than the registered sales consideration. In view of above facts and circumstances I have got sufficient reasons to believe that M/s Om Builders & Colonizers has CW858/2013 // 13 // suppressed the actual sales consideration of plot No.D-81, Ghiya Marg, Bani Park, Jaipur and the same amount has escaped assessment. Therefore, I propose to reassess the income of M/s Om Builders & Colonizers for the assessment year 2009-10. Accordingly, action u/S 147/148 of the Income Tax Act 1961 is hereby initiated. Issue notice u/S 148.” Before proceeding to examine the merits of the case, it would be apposite to take stock of the relevant case law of the subject. In this connection following observations of the Supreme Court in Income Tax Officer and Others Vs. Lakhmani Mewal Das, are apt to quote:- “8. The grounds or reasons which lead to the formation of the belief contemplated by section 147(a) of the Act must have a material bearing on the question of escapement of income of the assessee from assessment because of his failure or omission to disclose fully and truly all material facts. Once there exist reasonable grounds for the Income-tax Officer to form the above belief, that would be sufficient to clothe him with jurisdiction to issue notice. Whether the grounds are adequate or not is not a matter for the court to investigate. The sufficiency of the grounds which induce the Income-tax Officer to act is, therefore, not a justiciable issue. It is, of course, open to the assessee to contend that the Income-tax Officer did not hold the belief that there had been such non- disclosure. The existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the belief. The expression \"reason to believe\" does not mean a purely subjective satisfaction on the part of the Income-tax Officer. The reason must be held in good faith. It cannot be merely a pretence. It is open to the court to examine whether the reasons for the formation of the belief have a rational connection with or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the purpose of the section. To this limited extent, the action of the Income-tax Officer in starting proceedings in respect of income escaping assessment is open to challenge in a court of law. (See observations of this court in the cases of Calcutta Discount Co. Ltd. v. Income-tax Officer and S. Narayanappa v. Commissioner of Income-tax, While dealing with the corresponding provisions of the Indian Income-tax Act, 1922).” In Phool Chand Bajrang Lal, supra, the Supreme Court has after considering previous case law on the subject on the scope of power of the CW858/2013 // 14 // Income Tax Officer to reopen assessment under Section 147 read with Section 148 of the Act of 1961 observed as under:- From a combined review of the judgments of this Court, it follows that an Income-tax Officer acquires jurisdiction to reopen assessment under Section 147(a) read with Section 148 of the Income Tax 1961 only if on the basis of specific, reliable and relevant information coming to his possession subsequently, he has reasons which he must record, to believe that by reason of omission or failure on the part of the assessee to make a true and full disclosure of all material facts necessary for his assessment during the concluded assessment proceedings, any part of his income, profit or gains chargeable to income tax has escaped assessment. He may start reassessment proceedings either because some fresh facts come to light which where not previously disclosed or some information with regard to the facts previously disclosed comes into his possession which tends to expose the untruthfulness of those facts. In such situations, it is not a case of mere change of opinion or the drawing of a different inference from the same facts as were earlier available but acting on fresh information. Since, the belief is that of the Income-tax Officer, the sufficiency of reasons for forming the belief, is not for the Court to judge but it is open to an assessee to establish that there in fact existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. To that limited extent, the Court may look into the conclusion arrived at by the Income-tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income-tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief. It would be immaterial whether the Income-tax Officer at the time of making the original assessment could or, could not have found by further enquiry or investigation, whether the transaction was genuine or not, if one the basis of subsequent information, the Income-tax Officer arrives at a conclusion, after satisfying the twin conditions prescribed in Section 147(a) of the Act, that the assessee had not made a full and true disclosure of the material facts at the time of original assessment and therefore income chargeable to tax had escaped assessment. The High Courts which have interpreted Burlop Dealer's case (Supra) as laying down law to the contrary fell in error and did not appreciate the import of that judgment correctly. We are not persuaded to accept the argument of Mr. Sharma that the question regarding truthfulness or falsehood of the transactions reflected in the return can only be examined during the original assessment proceedings and not at any stage CW858/2013 // 15 // subsequent thereto. The argument is too broad and general in nature and does violence to the plain phraseology of Sections 147(a) and 148 of the Act and is against the settled law by this Court. We have to look to the purpose and intent of the provisions. One of the purposes of Section 147, appears to us to be, to ensure that a party cannot get away by wilfully making a false or untrue statement at the time of original assessment and when that falsity comes to notice, to turn around and say \"you accepted my lie, now your hands are tied and you can do nothing\". It would be travesty of justice to allow 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 the import of phraseology “reason to believe” in Section 147 of the Act of 1961, held as under:- 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 Delhi High Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991 (191) ITR 662], for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfillment 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. 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 effect from April 1, 1989, as also sections 148 to 152 are CW858/2013 // 16 // substantially different from the provisions as they stood prior to such substitution. Under the old provisions of section 147, separate clauses (a) and (b) laid down the circumstances under which income escaping assessment for the past assessment years could be assessed or reassessed. To confer jurisdiction under section 147(a) two conditions were required to be satisfied firstly the Assessing Officer must have reason to believe that income profits or gains chargeable to income tax have escaped assessment, and secondly he must also have reason to believe that such escapement has occurred by reason of either (i) omission or failure on the part of the assessee to disclose fully or truly all material facts necessary for his assessment of that year. Both these conditions were conditions precedent to be satisfied before the Assessing Officer could have jurisdiction to issue notice under section 148 read with section 147(a) But under the substituted section 147 existence of only the first condition suffices. In other words if the Assessing Officer for whatever reason has reason to believe that income has escaped assessment it confers jurisdiction to reopen the assessment. It is however to be noted that both the conditions must be fulfilled if the case falls within the ambit of the proviso to section 147. The case at hand is covered by the main provision and not the proviso. In Raymond Woollen Mills Ltd. Vs. Income-Tax Officer and Others – 1999 (236) ITR 34, the Supreme Court held that sufficiency or correctness of the material is not a thing to be considered at the stage of issuance of notice under Section 147 read with Section 148 of the Act of 1961. It was held that the court cannot strike down the reopening of the case in the facts of the case. It will be open to the assessee to prove that the facts mentioned in the notice are incorrect. The assessee can also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. While the petitioner has contended that the plot which the petitioner sold to M/s. Kamakshi International vide sale-deed dated 25.02.2009 is situated at D-81, Ghiya Marg, another plot with CW858/2013 // 17 // which comparison is sought to be made is situated at D-112-A, though also in Bani Park but is not situated in close vicinity and there is a distance of about 2.5 kilometers between these two properties whereas this fact is disputed by the respondents in their counter, but the petitioner in rejoinder has reasserted this fact that distance between these two plots is at-least more than two kilometers. Respondents in their counter have rather asserted that Plot No.D-81 at Bhragu Marg is very close to main Collectorate Circle of Bani Park, whereas Plot No.D-112 is far away from that Circle situated on Power House Road. Petitioner asserts that his plot is located on 40' wide road whereas the Plot of which comparison is sought to be made is located at 100' wide road, whereas the respondents have denied this fact by producing sale-deeds of two transactions asserting that neither of them mentions the width of the road that these two plots are situated at 40' or 100' wide roads, respectively. The assertion of the petitioner that Plot No.D-81 is situated at T point is refuted by the respondents by producing the map of Bani Park submitted by none other than the petitioner themselves before the assessing officer during reassessment proceedings wherein Plot No.D-81 is shown just opposite Plots No.F-34 and F-35 and actual T point is in front of Plot No.D-83 and not D-81. Yet another minus point enumerated by the petitioner to run down the value of their Plot D-81 at Bhragu Marg is that their existed 10' wide transformer of Rajasthan State CW858/2013 // 18 // Electricity Board just in front of this Plot but this is also contested by the respondents stating that the width of the plot is 75.3' and mere occupancy of 10' by transformer does not diminish the market value of the land as it still has 60' front opening on main Ghiya Marg. All these are matters of enquiry and investigation in the reassessment proceedings but for the present what is relevant for this court is to find out whether there exists some reasonable ground for assessing officer to form the requisite belief about escapement of the income of the assessee on account of his failure or omission to disclose fully or truly material facts in the return filed by him. This court finds that there does exist such reasonable ground to form such belief. Whether or not those grounds are adequate is not for this court to examine. At this stage, it is not for this court to examine whether or not those reasons were sufficient or adequate for forming the requisite belief. It is also not for this court to examine those reasons from the stand point whether the material on which they are found conclusively proved the escapement of income as formation of such belief by the assessing officer is in the realm of the subjective satisfaction. Moreover, in this case, the assessing officer has not proceeded merely on the basis of report of the Valuer but also considered that such valuation was got done by a third party i.e. the ICICI Bank, which has advanced loan of Rs.1.25 crore to the petitioner on the land being valued by their CW858/2013 // 19 // valuer at Rs.3,53,29,230/- as against Rs.1.20 crores. On critical examination of the reasons supplied to the petitioner after show cause notice, the objections raised by the petitioner and the order rejecting such objections passed by the assessing officer, this court is satisfied that the reasons were such which would impel an ordinary person of reasonable prudence to hold that the income escaped assessment. Those reasons do not fall merely within the realm of 'mere suspicion' so to say. There does exist some material with the assessing officer for issuance of notice under Section 147 read with Section 148 of the Act of 1961 for formation of requisite belief as to the escapement of income. Judgments cited by learned counsel for petitioner in this behalf are therefore distinguishable and do not afford any help to him. In view of above discussion, I do not find any merit in this writ petition. The writ petition is therefore dismissed. No order as to costs. (Mohammad Rafiq) J. //Jaiman// All corrections made in the judgment/order have been incorporated in the judgment/order being emailed. Giriraj Prasad Jaiman PS-cum-JW "