Amiya Kumar Mookerjee, J.
1. This rule is directed against a notice under Section 148 of the Income-tax Act, 1961, dated March 30, 1970, for reassessment in respect of assessment year 1961-62, issued by the respondent No. 1.
2. The petitioner is a partner of the firm, M/s. Calcutta Hardware Stores, which carries on business as a dealer in black sheet, sheet cutting and tinkers. On the 1st of April 1970, the petitioner received a notice dated March 30, 1970, issued by the respondent No. 1 under Section 148 of the Income-tax Act, 1961, to reopen the assessment for the year 1961-62, on the reasonable belief that the income of the assessee-firm has escaped assessment. It alleged that the notice under Section 148 was served by affixation in the office of the petitioner. The petitioner being aggrieved against the said notice moved this court in an application under Article 226 of the Constitution and obtained the present rule.
3. Mr. Mullick, appearing on behalf of the petitioner contended that the Income-tax Officer had no jurisdiction to issue a notice under Section 148 of the Income-tax Act, 1961, as there was no reasonable belief nor any material on record that the income had escaped assessment.
4. In the affidavit-in-opposition filed on behalf of the respondents Nos. 1 and 2 affirmed by Birendra Nath Sarkar, the respondent No. 1, it is stated in paragraph 6 that the original assessment was made by Sri H. C. Sharma as Income-tax Officer, ' A ' Ward, District 1(2), Calcutta, on a total income of Rs. 87,227 as against the returned income of Rs. 84,759 on February 22, 1962. At the time of the original assessment the assessee-firm filed copies of accounts including profit and loss account, balance-sheet and loan account but the said loan account did not include the list of hundi loans. Subsequently, during the course of assessment for 1964-65, completed on August 28, 1968, and also for the assessment year 1965-66, it was found by the Income-tax Officer that the assessee introduced cash credits in its books of accounts in the form of hundi loans which were not genuine as there was neither any confirmation of the parties advancing the loans nor any other evidence about loan transaction was produced before the assessing Income-tax Officer. After completion of the assessment for the year 1961-62, it came to light in the course of assessment for 1964-65 and 1965-66 that the hundi loans were not genuine.
5. It appears that escapement, if there has been any, was not due to omission or failure on the part of the assessee to disclose truly or fully the material facts relevant for the assessment year. The Income-tax Officer having knowledge of these facts in the previous accounting year had accepted the hundi loans as genuine. In the course of assessment for subsequent years the Income-tax Officer formed the belief that those hundi loans were not genuine and even then the said formation of opinion was not by the same Income-tax Officer who made the original assessment. It is well-settled that the Income-tax Officer cannot take any action under this sectionmerely because he happens to change his opinion or to hold an opinion different from that of his predecessor on the same set of facts. In the instant case also cyclostyled reasons were produced before me. I have held in C.R. No. 3456(W) of 1969 that the Income-tax Officer is required to form his own belief. It is not enough to have the materials in his possession, but he must perform the necessary mental act of accepting such materials and information as reliable in forming the belief which could be acted upon.
6. Considering the facts and circumstances of this case, in my view the condition precedent for exercising jurisdiction under Section 148 of the Income-tax Act, 1961, has not been fulfilled in the instant case and, accordingly, the said impugned notice which is annexure ' C ' to the petition dated March 30, 1970, must be set aside and all assessment proceedings initiated in terms of the said impugned notice must also be quashed.
7. In the result this rule is made absolute. There will be no order as to costs.
8. Let the operation of the order remain stayed for a fortnight from date.