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Chhugamal Rajpal vs S. P. Chaliha & Ors on 21 January, 1971

" In our judgment, the law laid down by this court in the above case [Chhugamal Rajpal v. S. P. Chaliha [1971] 79 ITR 603 (SC)], is fully applicable to the facts of the present case. There can be no manner of doubt that the words ' reason to believe ' suggest that the belief must be that of an honest and reasonable person based upon reasonable grounds and that the Income-tax Officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. The Income-tax Officer would be acting without jurisdiction if the reason for his belief that the conditions are satisfied does not exist or is not material or relevant to the belief required by the section. The court can always examine this aspect though the declaration or sufficiency of the reasons for the belief cannot be investigated by the court. "
Supreme Court of India Cites 6 - Cited by 350 - K S Hegde - Full Document
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