UNION OF INDIA AND OTHERS vs M/S. RAI SINGH DEB SINGH BIST & ANR.

The Supreme Court held that under Section 34(1)(a) of the Indian Income Tax Act, 1922, an Income Tax Officer (I.T.O.) must have reason to believe that income has escaped assessment due to the assessee's omission to disclose material facts. The Court emphasized that the I.T.O. must record reasons for this belief and obtain satisfaction from the Central Board of Revenue before issuing notices. The Court upheld the High Court's decision to quash the notices issued by the I.T.O. as they lacked the necessary jurisdictional basis, given the absence of relevant material and the failure to produce required documents.