When it is said that reason to believe is not open to scrutiny what is meant is that the satisfaction arrived at by the officer concerned is immune from challenge but where the satisfaction is not based on any material or it cannot withstand the test of reason, which is an integral part of it, then it falls through and the court is empowered to strike it down. But, the reason due to which the decision is reached can always be examined. The belief may not be open to scrutiny as it is the final conclusion arrived at by the officer concerned, as a result of mental exercise made by him on the information received. Before the officer has faith or accepts a fact to exist there must be a justification for it. The word “reason” means cause or justification and the word “believe” means to accept as true or to have faith in it. It is made of two words “reason” and “to believe”. It has been considered to be the most salutary safeguard on the exercise of power by the officer concerned. “Reason to believe” is a common feature in taxing statutes. –īelief may be subjective but reason is objective To this limited extent, the action of the Assessing Officer in starting proceeding under section 147 is open to challenge in a court of law. It is open to the court to examine whether the reason for the belief and are not extraneous or irrelevant to the purpose of the section. The belief must be held in good faith, it cannot be merely a pretence. The expression ‘reason to believe’ in section 147 does not mean purely subjective satisfaction on the part of the Assessing Officer. Reason to believe does not mean a purely subjective satisfaction on the part of the ITO Section 147 of the Income tax Act, 1961 and explanation of the text ‘Reason to Believe’
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