‘Reason To Believe’ Sufficient To Issue Notice U/S 148 Income Tax Act, Sufficiency/Correctness Of Material Not Considered At This Stage: Delhi HC

Case: SAIF II MAURITIUS COMPANY LIMITED versus ASSISTANT COMMISSIONER OF INCOME
TAX CIRCLE INT TAX 3(1)(2) DELHI & ANR. & other connected matters
Coram: Justice Manmohan and Justice Dinesh Kumar Sharma
Case No.: W.P.(C) 4650/2022 & CM APPLs.13966-13967/2022; W.P.(C) 4669/2022 & CM APPLs.13994- 13995/2022; W.P.(C) 4671/2022 & CM APPLs.13998-13999/2022
Court Observation:
The Delhi High Court has observed that the sufficiency or correctness of the material is not a thing to be considered at the stage of issue of notice for reassessment under Section 148 of the Income Tax Act.
“Consequently, the test to be applied for re-assessment in the present cases is whether there is ‘reason to believe that income chargeable to tax has escaped assessment,” the court said. Court held, “Consequently, this Court is of the view that the aforesaid test stipulated in Raymond Woollen Mills Ltd. (supra) is satisfied in the present case. However, the contentions and submissions raised by the petitioner are relevant and must be examined by the Assessing Officer while passing the reassessment order. It will also be open to the assessee to show in the re-assessment proceedings that the assumption of facts made in the notice is erroneous.”

‘Reason To Believe’ Sufficient To Issue Notice U/S 148 Income Tax Act, Sufficiency/ Correctness Of Material Not Considered At This Stage: Delhi HC