INCOME TAX OFFICER, I WARD, DIST, VI, CALCUTTA & ORS. vs LAKHMANI MEWAL DAS

The Supreme Court upheld the High Court's decision that the Income Tax Officer (ITO) lacked jurisdiction to reopen the assessment under Section 148 of the Income Tax Act, 1961, as the conditions for issuing a notice were not met. The Court clarified that the ITO must have 'reason to believe' that income had escaped assessment due to the assessee's failure to disclose material facts, and that mere change of opinion does not justify reopening. The Court emphasized that the grounds for belief must have a rational nexus to the issue of escapement of income, thus affirming the High Court's ruling.