The main legal point established in the judgment is that the Assessing Officer can form a belief that income chargeable to tax has escaped assessment based on tangible material received from relevant authorities, and the re-assessment based on such information is valid.

Akil Abdul Hamid Kureshi, J.

1. This group of appeals involve identical question of law and arise in substantially similar factual background. For the purpose of all appeals, we adopt following substantial question of law:-

"Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was justified in setting aside the re-assessment orders on the ground that the reopening of assessment under section 147 of the Income Tax Act, 1961 was bad in law?"

2. Facts may be noted from Tax Appeal No. 542 of 2015. The appeal is filed by the Revenue challenging the judgment of the Income Tax Appellate Tribunal dated 27.02.2015. The respondent-assessee is engaged in the business of manufacturing ceramic tiles. For the assessment year 2004-05, the assessee had filed the return of income. The regular assessment of such return was completed at the relevant time. Later on, the Director General of Central Excise Intelligence ['DGCEI' for short], Ahmedabad, searched the assessee's premises on 17.01.2008. During such search, several incriminating documents were recovered. The investigation led to a prima facie revelation that the assessee was engaged in large scale financial irregularities which were unearthed by DGCEI. The findings of the said authority were that there was a suppression of sale of Rs. 5.90 crores (rounded off) by the assessee. On the basis of such materials collected by the DGEI, the show-cause notice was issued by the Excise Department. The show cause notice and the accompanying materials were forwarded by the Excise Department to the Income Tax Department. On the basis of such materials, the Assessing Officer re-opened the assessment of the assessee for the assessment year 2004-05 by issuing notice under Section 148 of the Income Tax Act, 1961 ['the Act' for short] on 22.03.2011. The assessee was supplied the reasons recorded by the Assessing Officer for issuing such notice. During the reassessment proceedings, the assessee contested the validity of the notice for reopening as also the quantum additions proposed by the Assessing Officer. Ignoring such objections, the Assessing Officer passed order of assessment on 15.12.2011 and held that there was a suppressed sale of Rs. 98.18 lacs in case of the assessee. Applying the gross profit rate of 25%, he made addition of Rs. 24.54 lacs in the assessee's total income.

3. This order of assessment was challenged by the assessee before the CIT(Appeals). The assessee questioned both, the validity of the re-opening of assessment as well as the additions made by the Assessing Officer in the said order. The CIT(Appeals) in a detailed order dated 07.02.2013 rejected the assessee's ground of invalidity of the re-assessment but granted partial relief in the additions made by the Assessing Officer by adopting gross profit rate of 9% on the suppressed sales instead of 25% as was adopted by the Assessing Officer.

4. This decision of the CIT(Appeals) gave rise to two cross appeals. The assessee approached the Tribunal on the grounds of validity of re-assessment as well as on the additions confirmed by the CIT (Appeals). The department approached the Tribunal insofar as the order of CIT(Appeals) granted partial relief to the assessee. The Tribunal, by the impugned judgment dated 27.02.2015, limited its focus on the question of validity of the reopening of the assessment. The Tribunal declared that the Assessing Officer could not have re-opened the assessment. For coming to such a conclusion, the Tribunal made following observations:

"16. We find on an analysis of the reasons as recorded, that the AO has firstly recorded the nature of the business of the assessee and the background under which the AO recorded that Director General of Central Excise Intelligence, Ahmedabad (DGCEI) in the case of the assessee found that there was a suppression of sale for the purpose of levy of excise duty and accordingly issued show cause notice, a copy of which was received by him