JUDGMENT Harsha Devani, J. 1. Rule. Mr. Nitin Mehta, learned senior standing counsel waives service of notice of rule on behalf of the respondent. Having regard to the facts of the case and the controversy involved in the present case, which lies in a very narrow compass, with the consent of the learned counsel for the respective parties, the matter was taken up for final hearing. 2. The petitioner is an export house engaged in the business of import/export of agro-commodities and is also engaged in the generation of power. The petitioner filed its return of income on 8.11.2007 for the assessment year 2007-08 declaring total loss at Rs. 39,76,56,625/-. Subsequently, a revised return of income came to be filed on 11.8.2008 declaring total loss of Rs. 92,92,03,429/-. The return was selected for scrutiny and subsequently, the Assessing Officer framed assessment under sub-section (3) of section 143 of the Income tax Act, 1961 (hereinafter referred to as "the Act"), on 16.12.2009 whereby he assessed the total income of the petitioner at Rs. 1,75,39,35,864/- as against the total loss of Rs. 92,92,03,429/- as per the return income. Accordingly, the assessee was held liable to pay tax of Rs. 78,38,78,939/-. Subsequently, by the impugned notice dated 24.3.2014 issued under section 148 of the Act the Assessing Officer sought to reopen the assessment for the year under consideration. In response to the notice under section 148 of the Act, the assessee by a letter dated 9.6.2014, requested the respondent to provide a copy of the reasons which came to be furnished by a letter dated 8.7.2014. Upon receipt of the reasons for reopening, the assessee raised its objections vide letter dated 21.1.2015 and requested the respondent to drop the reassessment proceedings. By an order dated 16.2.2015, the respondent rejected the said objections. Being aggrieved, the petitioner has filed the present petition. 3. Mr. S.N. Soparkar, Senior Advocate, learned counsel for the petitioner invited the attention of the court to the reasons recorded for reopening the assessment to submit that the same do not meet with the requirements of section 147 of the Act, inasmuch as, on a plain reading of the reasons, it is evident that no income has escaped assessment. Therefore, the very basis for reopening of the assessment is bad in law. Therefore, the very basis for reopening of the assessment is bad in law. It was further submitted that reopening is beyond a period of four years from the end of the relevant assessment year and that there is nothing to indicate that there was any failure on the part of the petitioner to disclose truly and fully all material facts relevant for its assessment. It was submitted that under the circumstances, the assumption of jurisdiction under section 147 of the Act by issuing notice under section 148 thereof on the part of the Assessing Officer is without any authority of law and as such, the impugned notice is required to be set aside. 4. On the other hand, Mr. Nitin Mehta, learned senior standing counsel for the respondent opposed the petition by submitting that on the basis of the information received from the office of the Deputy Director of Income Tax (Investigation), based upon a report of suspicious transaction attempted to be made by Mehta Group of individual entities, it was found that the petitioner assessee was involved in dubious transactions warranting exercise of powers under section 147 of the Act. Referring to the reasons recorded, it was pointed out that the petitioner is an associate of M/s. IPOG International and M/s. Benmos Commodities and has entered into substantial cash transactions, as depicted in the reasons recorded. It was submitted that while the petitioner has made cash withdrawals to the extent of Rs. 2,54,00,000/-, the petitioner has not been able to justify the reason for such cash withdrawals and utilisation to the Deputy Director of Income Tax (Investigation) during the course of investigation. It was submitted that it is for this reason that the Assessing Officer has formed a belief that income to the extent of Rs. 2,54,00,000/- has escaped assessment within the meaning of the said expression, as envisaged under section 147 of the Act. The attention of the court was invited to the letter dated 10.2.2014 from the original record of the Department to submit that the petitioner has suppressed material facts and that the Assessing Officer was, therefore, justified in invoking the provisions of section 147of the Act. 5. In rejoinder, Mr. The attention of the court was invited to the letter dated 10.2.2014 from the original record of the Department to submit that the petitioner has suppressed material facts and that the Assessing Officer was, therefore, justified in invoking the provisions of section 147of the Act. 5. In rejoinder, Mr. Soparkar, learned counsel for the petitioner made reference to the decision of this court in the case of Ashwin Khimchand Jhakaria v. Deputy Director of Income Tax, International Taxation-II, (2014) 49 taxmannn.com 105(Gujarat), wherein the court has reiterated that it has been held by various courts, including the Supreme Court time and again that notice for reopening must be judged on the basis of the reasons recorded by the Assessing Officer. Through an affidavit-in-reply, he cannot improve upon such reasons. On facts, the court held that in that view of the matter, the attempt on the part of the Assessing Officer to contend through an order disposing of objections of the petitioner and his affidavit-in-reply that the assessee having failed to supply full details of the sale and purchase of shares, reopening beyond the period of four years would be permissible, must fail. Reference was also made to the decision of the Delhi High Court in the case of Krown Agro Foods (P.) Ltd. v. Assistant Commissioner of Income-tax, (2015) 57 taxmann.com 355 (Delhi), wherein the court has held thus:-- "13. The reason to believe recorded by the Assessing officer is not based on any material that had come to the knowledge of the Assessing Officer. There is a mere suspicion in the mind of the assessing officer and the notice under section 147/148 has been issued for the purpose of verification and for clearing the cloud of suspicion. The reasons to believe recorded do not show as to on what basis the Assessing Officer has formed a reasonable belief that the said amount of Rs. 2,00,000/- had escaped assessment. It is apparent the Assessing Officer suspects that the income has escaped assessment. However, mere suspicion is not enough. The reasons to believe must be such, which upon a plain reading, should demonstrate that such a reasonable belief could be formed on some basis/foundation and had in fact been formed by the Assessing Officer that income has escaped assessment. No such reasonable belief can be inferred from the purported reasons to believe recorded. 14. The reasons to believe must be such, which upon a plain reading, should demonstrate that such a reasonable belief could be formed on some basis/foundation and had in fact been formed by the Assessing Officer that income has escaped assessment. No such reasonable belief can be inferred from the purported reasons to believe recorded. 14. The words "reason to believe" indicate that the belief must be that of a reasonable person based on reasonable grounds emerging from direct or circumstantial evidence and not on mere suspicion, gossip or rumour. The "reason to believe" recorded in the case do not refer to any material that came to the knowledge of the Assessing Officer whereby it can be inferred that the Assessing Officer could have formed a reasonable belief that the said amount had escaped assessment. The purported belief that income has escaped assessment is not based on any direct or circumstantial evidence and is in the realm of mere suspicion. The requirement of law is "reason to believe" and not "reason to suspect". In the present case, since the purported reasons to believe recorded indicate that the Assessing Officer has acted on mere surmise, without any rational basis, the action of reopening of the Assessment is thus clearly contrary to law and is unsustainable." 5.1. It was submitted that, therefore, any attempt on the part of the respondent to substantiate reopening on the basis of the original file of the Department is not permissible. It was contended that the reasons must ex facie show that income has escaped assessment and that in the present case, the reasons do not disclose any escapement of income. 6. Before adverting to the merits of the case, reference may be made to the reasons recorded by the Assessing Officer for reopening the assessment for assessment year 2007-08, which read thus:-- "In this case, information has been received from the office of the DDIT (Inv.) Unit-II (2), Ahmedabad vide the letter No. DDIT (Inv.) Unit-II (2)/FIU-IND/1/2013-14 dated 10.02.2014 wherein report on suspicious transaction attempted to be made by Mehta Group of individual entities - (FIU-NID U.P. No. 1000002025 to 2029 (1) dated 19.12.2007 is mentioned. It has been noticed that the during the period April 2006 to November 2006 there was large cash turn over in the five bank accounts with Standard Chartered Bank, Santa Cruz branch, Mumbai of the five parties I.e. (i) M/s. Benmos Commodities (I) Pvt. Ltd. (ii) M/s. IPOG International Limited (iii) M/s. Krishna Trading (iv) M/s. Sai Enterprise and (v) M/s. Laxmi Enterprise. Credits to the tune of Rs. 101.05 Crore were received through RTGS and by way of clearing cheques deposited in the accounts which was followed by cash withdrawals to the tune of approximately 90% of the total credits in the accounts aggregating Rs. 94.75 Crore took place in the same period. M/s. Vishal Exports Overseas Limited, Ahmedabad is an associate of M/s. IPOG International and M/s. Benmos Commodities. M/s. Vishal Exports Overseas Limited, Ahmedabad has entered into substantial cash transactions in the following accounts during the period from April 2006 to November 2006: Sr. No. Name of the Bank Account Number 1. Indus Ind Bank 009350214050 2. HDFC Bank 0692320000997 3. ICICI Bank 002405006294 4. Axis Bank 00301020000069 5. Bank of Baroda 00202020175 The DDIT (Inv.) has stated that during the year under consideration (A.Y. 2007-08) the made cash withdrawals to the extent of Rs. 2.54 crores. However, the A.R. of the assessee company could not justify the reason for cash withdrawal and its utilization to the DDIT (Inv.) during the course of investigation. In view of the above, the assessee has suppressed material fact about its income. In view of the above I have reason to believe that income to the extent of Rs. 2.54 Cr. has escaped assessment within the meaning of section 147 of the Act. I am satisfied that this is a fit case for issuing notice u/s. 148 of the Act." 7. The notice under section 148 of the Act has been issued on 24.3.2014 in relation to assessment year 2007-08 and hence, the same has clearly been issued beyond a period of four years from the end of the relevant assessment year. Under the circumstances, it is only if there is any failure on the part of the assessee to disclose fully and truly all material facts, that the Assessing Officer can assume jurisdiction under section 147 of the Act provided the other requirements of the section are satisfied. 8. Under the circumstances, it is only if there is any failure on the part of the assessee to disclose fully and truly all material facts, that the Assessing Officer can assume jurisdiction under section 147 of the Act provided the other requirements of the section are satisfied. 8. Section 147 of the Act provides that if the Assessing Officer, has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceeding under that section, or recompute the loss or the depreciation allowance or any other allowance, as the case may be, for the assessment year concerned. 9. On a plain reading of the above provision, it is evident that the primary requirement for invoking section 147 of the Act is that the Assessing Officer should have reason to believe that income chargeable to tax has escaped assessment. The reasons recorded by the Assessing Officer are required to be viewed in the light of the above statutory provision. From the reasons recorded, it is evident that what has been stated therein is that certain information has been received from the Deputy Director of Income Tax (Investigation) regarding suspicious transactions attempted to be made by Mehta Group of individual entities. It is further recorded that during the period between April 2006 and November, 2006 there were large cash turnovers in five bank accounts of the five parties named therein and that credit to the tune of Rs. 101.05 crores were received through RTGS and by way of clearing cheques deposited in the account, which was followed by cash withdrawals etc. It is further alleged that the petitioner is an associate of two of the five parties and that the petitioner has entered into substantial cash transactions whereby withdrawals to the tune of Rs. 2,54,00,000/- have been made from the bank accounts maintained by the petitioner. According to the Assessing Officer, the assessee company has not given any proper justification for such large cash withdrawals and its utilisation to the Deputy Director of Income Tax (Investigation) during the course of investigation. 2,54,00,000/- have been made from the bank accounts maintained by the petitioner. According to the Assessing Officer, the assessee company has not given any proper justification for such large cash withdrawals and its utilisation to the Deputy Director of Income Tax (Investigation) during the course of investigation. On the basis of the aforesaid reasons recorded by her, the Assessing Officer has come to the conclusion that the assessee has suppressed material facts and that she has reason to believe that income to the tune of Rs. 2,54,00,000/- has escaped assessment within the meaning of such expression, as envisaged under section 147 of the Act. 10. Thus, from the reasons recorded it is manifest that according to the Assessing Officer, the petitioner has withdrawn Rs. 2,54,00,000/- from the bank accounts maintained by it in cash and has not explained the utilisation thereof. However, for the purpose of invoking section 147 of the Act, as noticed earlier, the primary requirement is that there should be escapement of income chargeable to tax for the relevant assessment year. Mere withdrawal of cash from the bank accounts maintained by the assessee, can, by no stretch of imagination be termed as escapement of income, as envisaged under section 147 of the Act. Thus, from the reasons recorded, there is nothing to indicate that any income chargeable to tax in the case of the assessee has escaped assessment. The sole basis for reopening the assessment is that the petitioner assessee has withdrawn an amount of Rs. 2,54,00,000/- in cash and has not explained the utilisation. Thus, cash withdrawals from bank accounts maintained by the assessee have been termed as escapement of income by the Assessing Officer. One fails to comprehend as to how the cash withdrawals from accounts maintained by the assessee can be said to amount to escapement of income within the meaning of section 147 of the Act, as stated by the Assessing Officer, when it is not the case of the Assessing Officer that the amount deposited by the assessee in its bank accounts is undisclosed income. 11. The learned counsel for the respondent has emphatically argued that investigations have revealed suspicious transactions into which the assessee has entered into. If that be so, nothing prevents the respondent from investigating further and taking due action in respect thereof. 11. The learned counsel for the respondent has emphatically argued that investigations have revealed suspicious transactions into which the assessee has entered into. If that be so, nothing prevents the respondent from investigating further and taking due action in respect thereof. However, mere cash withdrawals from the accounts maintained by the assessee can by no stretch of imagination be said to be escapement of income chargeable to tax as envisaged under section 147 of the Act thereby vesting the Assessing Officer with the jurisdiction to reopen the assessment. In the aforesaid premises, this court is of the view that in the absence of any income chargeable to tax having escaped assessment for the relevant assessment year, the invocation of jurisdiction under section 147 of the Act on the part of the Assessing Officer is without any authority of law. 12. The petition, therefore, succeeds and is, accordingly, allowed. The impugned notice dated 24.3.2014 issued by the respondent under section 148 of the Act is hereby quashed and set aside. Rule is made absolute accordingly with no order as to costs.