Reason to believe in reassessment depends on some material, not sufficiency of evidence, so the notice was upheld.

In reassessment proceedings, judicial review is confined to whether some material existed to support the Income-tax Officer's belief that income had escaped assessment; the adequacy or sufficiency of that material is not examined. Here, the affidavit furnished a basis for doubting the genuineness of cash credits and interest entries, and a partner's disclosure of advances made in fictitious names provided additional support for the formation of belief. On that footing, the notice under section 148 was upheld and the challenge to reassessment failed.

---

---

Issues: Whether the notice under section 148 of the Income-tax Act, 1961 was liable to be quashed on the ground that the Income-tax Officer had no reason to believe that income chargeable to tax had escaped assessment.

Analysis: The Court held that in proceedings challenging reassessment, it is not concerned with the sufficiency of the reasons; it must only see whether some material existed to support the belief that income had escaped assessment. The affidavit disclosed a basis for the belief that the cash credits and interest entries in the books were not genuine, and the disclosure by one of the partners that advances had been made in fictitious names furnished an additional foundation for the formation of such belief.

Conclusion: The notice under section 148 was upheld and the challenge failed.

Ratio Decidendi: In reassessment matters, judicial review extends only to the existence of some material giving rise to a reason to believe that income has escaped assessment, and not to the adequacy or sufficiency of that material.

---