( 51 ) BOTH these conditions must co-exist in order to confer jurisdiction on the income-tax officer. It is also imperative for the incometax officer to record his reasons before initiating proceedings as required by s. 148 (2 ).

( 52 ) THE grounds or reasons which led to the formation of the belief contemplated by s. 147 (a) of the Act must have a material bearing on the question of escapement of income of the assessee from assessment because of his failure or omission to disclose fully and truly all material facts. As H. R. Khanna J. said :"the expression "reason to believe" does not mean a purely subjective satisfaction on the part of the income-tax officer. The reason must be held in good faith. It cannot be merely a pretence. It is open to the court to examine whether the reasons for the formation of the belief have a rational connection with or a relevant bearing on the formation of the belief and are not extraneous or irrelevant for the purpose of the section. To this limited extent, the action of the income tax officer in starting proceedings in respect of income escaping assessment is open to challenge in a court of law. "

( 53 ) KHANNA J. went on to say :"rational connection postulates that there must be a direct nexus or live link between the material coming to the notice of the income tax officer and formation of his belief that there has been escapement of the income of the assessee from assessment in the particular year because of his failure to disclose fully and truly all material facts. It is no doubt true that the court cannot go into the sufficiency or adequacy of the material and substitute its own opinion for that of the income tax officer on the point as to whether action should be initiated for reopening assessment. At the same time we have to bear in mind that it is not any and every material, however, vague and indefinite or distant, remote and far-fetched, which would warrant the formation of the belief relating to escapement of the income of the assessee from assessment. The fact that the words "definite information" which were there in section 34 of the Act of 1922, at one time before its amendment in 1948, are not there in section 147 of the Act of 1961, would not lead to the conclusion that action can now be taken for reopening assessment even if the information is wholly vague, indefinite, far-fetched and remote. The reason for the formation of the belief must be held in good faith and should not be a mere pretence. "

( 54 ) IN my opinion the live link or close nexus which should be there between the material before the income tax officer and the belief which he was to form regarding the escapement of the income of the assessee from assessment because of the latter's failure or omission to disclose fully and truly all material facts was missing in 'this case. The income tax officer could not have had reasons to believe that by reason of the assessee's omission to disclose fully and truly all material facts necessary for his assessment for the accounting years in question income chargeable to tax has escaped assessment for these years.

( 55 ) THE reasons and the material on which they are based are vague, indefinite, far-fetched, remote and fanciful. It is nowhere stated what are those primary facts of which the assessee was guilty in not making a true and full disclosure one would ask ? As Khanna J. said:"the duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts. Once he has done that his duty ends. "

( 56 ) TO me it seems to ire a case of surmises and suspicions. The prologue is indicative of it. Counsel for the Revenue said that I should turn a blind eye to what happened in the objections before the Board and what transpired subsequently in assessment proceedings. It is true that assessment orders passed subsequently cannot be taken into account to judge the reasonableness of 'the grounds of the income tax officer. But the background and surroun

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