Reason to believe for reassessment cannot rest on mere verification of information; reopening notice was quashed.

A reopening notice under section 148 was held unsustainable where the recorded reasons showed only a request to verify information received from external sources. The Court held that such material reflected mere suspicion and a desire for inquiry, not the statutory "reason to believe" that income chargeable to tax had escaped assessment. Verification or examination of details cannot replace the jurisdictional threshold for reopening. The notice was therefore quashed in favour of the assessee.

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Issues: Whether the notice issued under section 148 of the Income-tax Act, 1961 for reopening the assessment was sustainable when the recorded reasons showed only a need to verify information and not a belief that income chargeable to tax had escaped assessment.

Analysis: The recorded reasons and the order disposing of objections showed that the Assessing Officer was proceeding on information received from sources and sought verification of its genuineness. The Court found that such material disclosed only a suspicion and a desire for inquiry, not the statutory foundation of a reason to believe that income chargeable to tax had escaped assessment. Verification or examination of details cannot substitute the jurisdictional requirement for reopening.

Conclusion: The reopening notice was unsustainable and was quashed, in favour of the assessee.

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