TaxTMI 
TaxTMI 
1997 (12) TMI 92
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....itioner/firm. According to the petitioner, some unattended and loose and rough papers were found in the premises and the same were taken possession of by the officials of the Department. The survey party wanted to take possession of those papers which was objected to by the petitioner in view of the provisions contained in sub-s. (4) of s. 133A of the IT Act. The officers undertaking survey thereafter then and there at the shop premises prepared a notice under s. 131 of the IT Act, dt. 27th Feb., 1985, directed the petitioner to attend personally or through an authorised representative on 27th Feb., 1985, at 4.30 pm at the office of the ITO, "A" Ward at Dibrugarh requiring to produce books of account or other documents specified overleaf of the notice. The petitioner wrote a letter narrating the full facts to the concerned ITO of "A" Ward about the whole incident which took place at the shop premises of the petitioner on 27th Feb., 1985, in the course of the survey and the manner under which the rough and loose papers were taken away by the survey party. The ITO after taking possession of the loose and rough papers passed an order on 27th Feb., 1985, in exercise of the powers veste....
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....) 129 : (1973) 88 ITR 200 (SC) : TC 51R.728, Sheo Nath Singh vs. AAC 1973 CTR (SC) 484 :(1971) 82 ITR 147 (SC) : TC 51R.631, Biju Patnaik vs. ITO (1976) 102 ITR 96 (Cal) : TC 51R.1079, Morarjee Spinning & Weaving Co. Ltd. vs. M.M. Das, IAC (1989) 78 CTR (Bom) 133 : (1991) 189 ITR 406 (Bom) : TC 51R.1560 and 157 ITR 637 (sic). Dr. Saraf, learned counsel for the petitioner, further submitted that in the instant case the notice of the ITO was silent as to whether assessment was sought to be opened under s. 147(a) or s. 147(b). Admittedly, in the instant case, the impugned proceeding could not have been initiated under s. 147(b) after the expiry of the period of limitation, as regards s. 147(a) of the Act. Dr. Saraf further submitted that it is not a case of non-submission of return nor is it a case where the petitioner failed to disclose fully or truly all material facts necessary for his assessment and, therefore, the notice under s. 147(a) was void, illegal and unwarranted too. Dr. Saraf particularly cited the instances of submission of P&L a/c, balance sheet and other detailed particulars, that in fact there was no omission or failure on the part of the petitioner as contemplated u....
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.... to the following decisions of the Supreme Court: Calcutta Discount Co. Ltd. vs. CIT (1961) 41 ITR 191 (SC) : TC 51R.779, S. Narayanappa vs. CIT , ITO vs. Lakhmani Mewal Das 1976 CTR (SC) 220 : (1976) 103 ITR 437 (SC) : TC 51R.598, Ganga Saran & Sons (P) Ltd. (1981) 22 CTR (SC) 112 : (1981) 130 ITR 1 (SC) : TC 51R.639, Jameson & Magrudar Co. (P) Ltd. vs. CIT (1987) 65 CTR (Cal) 81 : (1987) 167 ITR 77 (Cal) : TC 51R.758, Abdul Rab Abdul Salam vs. CIT (1988) 73 CTR (Gau) 108 : (1988) 174 ITR 424 (Gau) : TC 51R.1168, Dr. Pratap Singh vs. Director of Enforcement (1985) 46 CTR (SC) 319 : (1985) 155 ITR 166 (SC) : TC 51R.94 and Union Carbide (India) Ltd. vs. ITO (1973) 87 ITR 529 (Cal) : TC 51R.891. Mr. Joshi also submitted that though under normal circumstances an affidavit ought to have been filed by the Department, when the records are produced and the materials are disclosed the Court may not insist on the technicalities and address its mind to the facts made available on record. The existence of the belief is duly disclosed in the records. The entire materials are placed on record for consideration of the matter. In support of his contention, learned counsel, Mr. Joshi, brought to m....
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.... shown Ramdeo Ranglal as a debtor for Rs. 45,268.26. Since the papers impounded are original, I am relying on the original papers and I find that Ramdeo Ranglal is a creditor to you for Rs. 1,12,028. Since you have shown Ramdeo Ranglal as your debtor, a sum of Rs. 1,56,296.26 (Rs. 1,12,028 + 45,268.26) represents your income from undisclosed sources for the asst. yr. 1982-83. 3. I also find that debtors and creditors appearing in the return of income submitted by you does not tally with those appearing in the original Talpat impounded. However, before reopening the case under s. 147 of the IT Act, 1961, I allow you an opportunity to explain the circumstances and also to explain why assessment for the asst. yr. 1982-83 should not be reopened under s. 147 of the Act. Your reply should reach me on or before 17th March, 1986, failure of which it will be presumed that you have nothing to submit and proceedings will be started without any further communication. Yours faithfully, (Sd.) (A.R. Chakraborty) ITO, D -Ward, Dibrugarh..." 6. From the order sheet it thus emerges that the ITO after verifying the original papers and documents found that the assessee had not sub....
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....e ' and these words are stronger than the words 'is satisfied'. The belief entertained by the ITO must not be arbitrary or irrational. It be reasonable or in other words it must be based on reasons which are relevant and material. The Court, of course, cannot investigate into the adequacy or sufficiency of the reasons which have weighed with the ITO in coming to the belief, but the Court can certainly examine whether the reasons are relevant and have a bearing on the matters in regard to which he is required to entertain the belief before he can issue notice under s. 147(a). If there is no rational and nexus between the reasons and the belief, so that, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the ITO could not have reason to believe that any part of the income of the assessee had escaped assessment and such escapement was by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts and the notice issued by him would be liable to be struck down as invalid......". 8. In the case in hand, the ITO considered the circumstances and the ....