D. A. MEHTA, J. ( 1 ) CONSIDERING the scope of controversy the petition is taken up for final hearing and disposal today. Rule. Learned counsel for the respondent authority is directed to waive service. The petitioner is a Public Limited Company with which, another Public Limited Company named Narmada Chematur Petrochemicals Limited amalgamated with effect from 01. 04. 2005. Narmada Chematur Petrochemicals Limited shall hereinafter be referred to as 'the assessee'. The respondent Assessing Officer issued notice under Section 148 of the Income Tax Act, 1961 ('the Act') for Assessment Year 2002-2003. It is the said notice which is under challenge in the present petition. The assessee furnished return of income under Section 139 of the Act on 30. 10. 2002. The assessment came to be framed on 21. 03. 2005 under Section 143 (3) of the Act. Subsequently, the impugned notice dated 29. 03. 2007 has been issued. The reasons recorded for issuing the said notice read as under : "name and address of : Narmada Chematur the assessee Petrochemicals Limited gnfc Corporate Office, p. O. Narmadanagar, bharuch. Permanent Account No. : AAACN6804e status : Company assessment Year : 2002-03 "reasons RECORDED U/s. 148 (2) OF THE INCOME TAX ACT, 1961 FOR REOPENING THE ASSESSMENTS U/s. 147 OF THE INCOME TAX ACT, 1961: in this case, the assessment was completed u/s. 143 (3) of the Act determining total income at Rs. Nil after setting off unabsorbed business loss of Rs. 2,51,18,551/- and book profit u/s. 115jb of the Act at Rs. 19,27,24,446/- on 31. 03. 2005. ( 2 ) IN the assessment order for A. Y. 2004-05 it was noticed that the assessee has given huge discount of Rs. 11,462/- per MT amounting to Rs. 1,98,64,939/- to Jay Jee Enterprise, who has given job work to the assessee, which was not passed through Pandl account but deducted from the amount receivable from Jay Jee Enterprise. As such it was held that the discount given was without any base and there was no necessity or business expediency for giving such a huge discount. ( 3 ) DURING the year also the assessee has shown job work receipts of Rs. 15,20,08,115/- from Jay Jee Enterprises which are net of discount. As the assessee has not passed respective entries of discount through Pandl account it is not verifiable how much discount was given to Jay Jee Enterprise and which requires verification. ( 3 ) DURING the year also the assessee has shown job work receipts of Rs. 15,20,08,115/- from Jay Jee Enterprises which are net of discount. As the assessee has not passed respective entries of discount through Pandl account it is not verifiable how much discount was given to Jay Jee Enterprise and which requires verification. Considering this, I have reason to believe that the assessment is escaped assessment to the extent of amount of discount given. ( 4 ) ISSUE notice u/s. 148 of the Act. Sd/- (G. R. KOKANI)Deputy Commissioner of Income Tax, bharuch Circle, Bharuch. " ( 5 ) ON behalf of the petitioner, two fold contentions have been raised challenging the issuance of the impugned notice. The first being: the assessee is no longer in existence as on the date of the impugned notice, the assessee having merged with the petitioner Company; the second being : that on merits, no income has escaped assessment so as to vest the respondent authority with jurisdiction to reopen the assessments by resorting to the provisions of Section 147 of the Act. Elaborating on the same, it was submitted that as could be seen from the reasons recorded the respondent authority was not sure as to which income has escaped assessment and what was the quantum thereof. The learned counsel for the petitioner therefore submitted that in absence of valid assumption of jurisdiction the proposed reopening is bad in law and notice issued under Section 148 of the Act is required to be quashed. ( 6 ) LEARNED counsel appearing for respondent submitted that for Assessment Year 2004-2005, namely subsequent assessment year, respondent had come to the conclusion that the discount offered by the assessee to one Jay Jee Enterprise was without any base, there was no necessity or business expediency for giving such a huge discount and hence this furnished the basis for initiating reassessment proceedings for the assessment year under consideration. It was further submitted that the assessment having been reopened within a period of four years from the end of the relevant assessment year, the Assessing Officer was not required to establish any omission or failure on the part of the assessee. That all that was necessary for the Assessing Officer, was to show that income liable to tax had escaped assessment. That all that was necessary for the Assessing Officer, was to show that income liable to tax had escaped assessment. That as could be seen from the reasons recorded the assessee having not made relevant entries in relation to the discount given to Jay Jee Enterprise it was not verifiable how much discount was given and said aspect was required to be verified. Hence the Assessing Officer had reason to believe that income had escaped assessment to the extent of amount of discount given. Responding to the first objection regarding amalgamation of the assessee with petitioner Company, it was submitted that at the relevant point of time, namely during the relevant accounting period, relatable to assessment year under consideration, the assessee Company was in existence and therefore this objection could not be treated as a valid objection. ( 7 ) IT may be noted that after the reasons recorded were furnished by the assessing authority, objections were filed by the assessee and the same have been disposed of by the respondent. During the course of hearing both the sides have invited attention to certain extracts from the objections raised and the order disposing of the objections. However, in the view that the Court is inclined to adopt, it is not necessary to refer to the said submissions. ( 8 ) ON a plain reading of Section 147 of the Act, it becomes apparent that the Assessing Officer is vested with jurisdiction to reopen a completed assessment if he has reason to believe that any income chargeable to tax has escaped assessment for any assessment year. The basic requirement therefore is that there has to be material before the Assessing Officer at the point of time when reasons are recorded to show that income chargeable to tax has escaped assessment. In the present case, when one goes through the reasons recorded it become apparent that there is no material with the Assessing Officer to hold a belief that any income chargeable to tax has escaped assessment. The Assessing Officer states that income to the extent of amount of discount given has escaped assessment. In other words, the respondent is of the opinion that the discount given is income of the assessee which is chargeable to tax. The Assessing Officer states that income to the extent of amount of discount given has escaped assessment. In other words, the respondent is of the opinion that the discount given is income of the assessee which is chargeable to tax. ( 9 ) LEARNED counsel for the respondent was not in a position to point out any provision from the Act or any requirement of law or by way of accounting standard, as prescribed and adopted for the purpose of the Act, which obliges the assessee (i) to treat the discount given on sales in a particular manner and (ii) to treat such discount as income and claim corresponding deduction. Whether any discount should be offered or not, and if offered, at what rate, is not an issue in the present context, because admittedly discount was offered by the assessee. Therefore, even reasonableness of the discount offered is not an issue. The stand of the respondent as stated in the reasons recorded is clear that income to the extent of amount of discount given has escaped assessment. In other words, the discount given is equated with income of the assessee. It is not possible to accept this equating of discount with income. The learned counsel for the respondent also could not point out any provision of law whereunder discount is equated with income. ( 10 ) IN aforesaid fact situation, it is not possible to state that any income has escaped assessment, which is chargeable to tax for the relevant assessment year. In absence of any income which has escaped assessment, which was chargeable to tax during the relevant assessment year, the impugned notice seeking to reopen the completed assessment for the Assessment Year 2002-2003 cannot be sustained and is hereby quashed. ( 11 ) IN light of what is stated hereinbefore it is not necessary to enter into any discussion on the contention relating to effect of amalgamation. ( 12 ) THE petition is accordingly allowed. Rule made absolute. There shall be no order as to costs.