The main legal point established in the judgment is the significance of 'reasons to believe' and the conditions required to confer jurisdiction on the Assessing Officer to reopen assessments under Section 147 and 148 of the Income-tax Act, 1961.

( 1 ) CHALLENGE in this writ petition is to the notice dated 30. 3. 1999 issued under Section 148 of the Income-tax Act, 1961 and served on the assessee on 1. 4. 1999 and to the notices issued under Sections 143 (2) and 142 (1) of the act dated 24. 1. 2001. Incidentally, challenge is also made to the order passed by the district Valuation Officer (in short, DVO), dated 19. 2. 1999 under Section 55a of the act read with Section 16f of the Wealth-tax Act (inshort the WT Act ). It is to be noted that earlier the petitioner had filed a writ petition (No. 1021 /2000) questioning the notice issued on the purported ground that what "constitute reasons to believe" for initiation of the proceedings was not communicated. By order dated 10. 2. 2000 direction was given to the respondent to furnish a copy of the reasons recorded under Section 148 of the Act. After the same have been furnished the present writ petition has been filed questioning legality of the action taken.

( 2 ) FACTUAL position in a nutshell is as follows: on 25. 3. 1997, assessee filed its return of income for 1995-96. Long term capital loss of Rs. 36,28,313. 00 in respect of properties situated at Delhi and Mumbai were claimed; The total income declared was Rs. 3. 89. 040. 00. Certain reports of registered valuer indicating valuation of property were filed along with the return of income. Certain documents were filed and finally, an order of assessment under Section 143 (3) was passed on 1. 4. 1981, accepting the values of the properties as disclosed in the return. Before completion of assessment, reference was made by the Assessing officer to DVO to value the properties situated at Mulund in Mumbai. On 16. 3. 1998, dvo called upon the petitioner to produce certain documents and details. On 17. 5. 1998, petitioner wrote to Valuation Officer that as assessment has already been completed, reference was irrelevant. Nevertheless, report was submitted on 19. 2. 1999. On 30. 3. 1999, notice under Section 148 was issued by the Assessing Officer seeking to reopen the assessment. As indicated above, petitioner had moved this Court to know the reasons which weighed with the Assessing Officer to reopen the proceedings. Reasons have been supplied.

( 3 ) MAIN stand of the petitioner is that reopening of assessment has been done solely on the basis of I DVO s report which is nothing but an opinion and that cannot constitute the foundation or an information to invest jurisdiction on the Assessing officer to reopen the proceedings. That cannot form a foundation of a belief or cannot constitute a reason for reopening the assessment. It is further submitted that after completion of assessment, report of Valuation Officer and reference under section 55a is of no relevance or consequence and therefore, have to be completely ignored and treated as non est. Since the Assessing Officer has solely relied on the said elicit information of the Valuation Officer, the entire proceedings reopening the assessment for reassessment have no legal foundation. Reliance is placed in support of the plea on several decisions, i. e. Brig B. Lall v. Wealth-tax Officer, 1981 127 ITR 308; Reliance Jute and Industries Ltd. v. ITO, 1984 150 ITR 643; S. Kehar Singh v. CIT, 1992 195 ITR 769, and Smt. Amla Das v. CIT, 146 ITR 216. It is stated that though there are some decisions, for example, M. S. Vasudev v. CWT, 1991 191 ITR 181, inter alia, holding that valuation report received after completion of assessment constitutes information but the same are distinguishable on facts, because they related to a proceeding under Wealth-tax Act where opinion of the Valuation Officer is binding but the same is not the position under the Act.

( 4 ) LEARNED Counsel for Revenue, on the other hand, submitted that power for reopening the assessment under Section 148 in the background of Section 147 of the act is much wider. According to him, the ITO can act on material which comes into his possession and prima facie