Case Law Details
Synfonia Tradelinks Pvt Ltd Vs ITO (Delhi High Court)
1. The reasons which lead to the formation of opinion or belief that the assessee’s income chargeable to tax has escaped assessment should be inextricably connected. In other words, the reasons for the formation of opinion should have a rational connection with the formation of the belief that there has been an escapement of income chargeable to tax.
2. The expression “reason to believe” is stronger than the word ‘satisfied‘. The belief should be based on material that is relevant and cogent.
3. The process of reassessment cannot be triggered based on a mere suspicion. The expression ‘reason to believe’ which is found in Section 147 of the Act does not have the same connotation as “reason to suspect”
4. The order recording reasons should fill this chasm. The material brought to the knowledge of the assessing officer should have nexus with the formation of belief that the taxable income of the assessee escaped assessment; the link being the reasons recorded, in that behalf, by the assessing officer.
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