CHHUGAMAL RAJPAL vs S. P. CHALIHA & ORS.

The Supreme Court held that under Section 148 and Section 151(2) of the Income-tax Act, 1961, the Income-tax Officer must record specific reasons for issuing a notice under Section 148, and there must be prima facie grounds for such action. The Court found that the Income-tax Officer's vague suspicion regarding the legitimacy of transactions did not constitute valid reasons under Section 147(a) and (b). Consequently, the notice issued was invalid, and the appeal was allowed, overturning the High Court's dismissal of the writ petition.