In the present case, the submission of the assessee before the Tribunal, as recorded in paragraph 3 of the impugned order, is that the only reason which was given by the Assessing Officer for initiating reassessment proceedings was that the property was sold by the assessee for Rs.31 lacs but its value for the purpose of stamp duty as per the circle rate was Rs.82.54 lacs, resulting in an escapement of income of Rs.51.54 lacs. The notice under Section 148 was available on the record of the Tribunal. The Tribunal also had the benefit of perusing the income tax return filed by the assessee. It is on that basis that the Tribunal, after duly perusing the computation of income submitted by the assessee, found that as a matter of fact, the assessee had shown a sale consideration of Rs.82.54 lacs in the computation of income. Once this is the position, the only basis on which the Assessing Officer issued notice under Section 148 would not possibly give rise to a reason to believe.
It has been urged on behalf of the revenue that the Tribunal has not given due regard to the submission of the revenue that the assessee had reduced the capital gain by increasing the cost of acquisition and the cost of improvement of the property. The difficulty in accepting the submission is that, in fact, this was not the basis on which the assessment was reopened under Section 148. The validity of the reopening of the assessment has to be determined on the basis of reasons which are disclosed by the Assessing Officer. The legality of the notice reopening the assessment has to be determined, when it is questioned, on the basis of the reasons which are recorded by the Assessing Officer. Those reasons cannot be allowed to be supplemented subsequently. This was also so observed in a judgement of a Division Bench of the Bombay High Court in Balkrishna Hiralal Wani vs. Income-Tax Officer and others3 where it was held as follows:
“…For the purpose of determining the validity of the challenge to the notice under section 148, the court would have to refer to the reasons recorded by the Assessing Officer and to those reasons alone.”
Hence, in our view, the Tribunal was justified in assessing the correctness of the notice for reopening the assessment under Section 148 on the basis of the reasons which were disclosed by the Assessing Officer. Those reasons, as the Tribunal noted, could not give rise to a reason to believe that income had escaped assessment for the simple reason that in the computation of income, the assessee had adopted the circle rate which is higher than the sale consideration. Hence, the appeal will not give rise to any substantial question of law.