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(underlining is ours) In Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500 (SC), it has been ruled out(page 511) :

"Section 147 authorises and permits the Assessing Officer to assess or, re- assess income chargeable to tax if he has reason to believe that income for any assessment year has escaped assessment. The word 'reason' in the phrase 'reason to believe' would mean cause or justification. If the Assessing Officer has cause or justification to know or suppose that income had escaped assessment, it can be said to have reason to believe that an income had escaped assessment. The expression cannot be read to mean that the Assessing Officer should have finally ascertained- the fact by legal evidence or conclusion. The function of the "Assessing Officer is to administer the statute with solicitude for the public exchequer with an inbuilt idea of fairness to taxpayers. As observed by the Supreme Court in Central Provinces Manganese Ore Co. Ltd. v. ITO [1991] 191 ITR 662, for initiation of action under section 147(a) (as the provision stood at the relevant time) fulfillment of the two requisite conditions in that regard is essential. At that stage, the final outcome of the proceeding is not relevant. In other words, at the initiation stage, what is required is 'reason to believe', but not the established fact of escapement of income. At the stage of issue of notice, the only question is whether there was relevant material on which a reasonable person could have formed a requisite belief Whether the materials would conclusively prove the escapement is not the concern at that stage. This is so because the formation of belief by the Assessing Officer is within the realm of subjective satisfaction. (emphasis supplied) In this context, we may refer with profit to a Division Bench decision of this court in SFIL Stock Broking Ltd. [2010] 325 ITR 285, wherein the Bench was dealing with the validity of the proceedings under section 147 of the Act. The Bench reproduced the initial issuance of notice and thereafter referred to the reasons for issue of notice under section 148 which was provided to the assessee. Thereafter, the Bench referred to the decisions in CIT v. Atul Jain [2008] 299 ITR 383 (Delhi), Asst. CIT v. Rajesh Jhaveri Stock Brokers P. Ltd. [2007] 291 ITR 500 (SC), Jay Bharat Maruti Ltd. vs. CIT [2010] 324 ITR 289; 223 CTR 269 (Del) and CIT v. Batra Bhatta Co. [2010] 321 ITR 526; 174 Taxman 444(Delhi) and eventually held thus (page 290):