JUDGMENT judgment of court was delivered by Tarun Agarwala J.-In this group of petitions, petitioner has challenged notice issued under section 148 of Income-tax Act, 1961 (hereinafter referred to as "the Act"). For facility, facts of Writ Petition No. 2062 of 2008, Arun Gupta v. Union of India is being taken into consideration. petitioner is individual assessee and derives his income from salary, house property, capital gains, interest, etc. petitioner is partner in various registered partnership firms such as Commercial Instalments, Chandra Brothers, Commercial Body Builders, Kailash Traders and Kailash Auto Centres. In partnership deed there is specific clause for payment of interest at 12 per cent. per annum whether firm is earning profit or loss in that year. That is to say, in event, there was profit, partners were entitled to receive interest on that capital at 12 per cent. per annum and, in case of negative capital balance, partners were to pay interest to firm at 12 per cent. on such negative balance. For assessment year 2000-01, petitioner filed his return of income showing loss of Rs. 28,20,280. According to petitioner, loss was on account of fact that capital balance in various partnership firms became negative and petitioner was obliged to pay interest at 12 per cent. per annum on such negative capital balance. above return for assessment year 2001-02 was taken up for scrutiny and notice under section 143(2) and under section 142 of Act was issued along with questionnaire and petitioner was required to reply to show-cause notice as well as to questionnaire. One of questions raised was that petitioner had paid more interest than earned during relevant year. petitioner submitted his reply and explained reasons for making payment of interest to various partnership firms owing to fact that his various partnership firms were reflecting negative balance and that under partnership deed there was contractual obligation to pay interest to respective partnership firm. explanation was found to be satisfactory and return was accepted and completed without any addition by income-tax authorities for assessment year 2001-02. Similar losses was reflected in assessment years 2002-03 to 2005-06 which were completed under section 143(1) of Act wherein similar payment of interest was made by petitioner to partnership firm. For assessment year 2006-07, petitioner filed his return declaring loss at Rs. 84,807. petitioner, in computation of income, disclosed net business loss of Rs. 11,84,807 indicating that petitioner had paid interest amounting to Rs. 31,68,547 whereas he had earned interest amounting to Rs. 2,53,913 resulting in net loss at Rs. 29,14,634. petitioner, in computation of income, accordingly, declared net business loss at Rs. 11,84,807 after setting off loss against income earned under other heads. This assessment was computed under section 143(1) of Act by assessment order dated July 31, 2006. Thereafter, reassessment proceedings were initiated, under section 147 of Act for assessment year 2006-07, by issuance of notice dated December 17, 2007, under section 148 of Act. Upon receipt of notice, petitioner filed his reply informing assessing authority that original return may be treated as return in response to notice dated December 17, 2007. petitioner also prayed that copy of reasons to believe may also be supplied, which was duly communicated to petitioner. Upon receipt of reasons to believe petitioner filed his objection praying that reassessment proceeding should be dropped. assessing authority, by his order dated October 20, 2008, rejected petitioner's objection and proceeded to reassess petitioner for assessment year 2006-07. petitioner, being aggrieved, has filed present writ petition praying for quashing of reassessment proceedings initiated by assessing authority for assessment year 2006-07 pursuant to notice dated December 17, 2007. relevant portion of reasons recorded by Assessing Officer is as under: "Since interest received is much less than interest paid resulting substantial business loss, it transpires that it is case of diversion of business funds for non-business purpose." Assessing Officer rejected objections of petitioner, on ground, that interest paid to partnership firm are controlled and run by family members/relatives of petitioner and that such business entities are covered by provisions of section 40A(2)(b) of Act and, therefore, it is essential that detailed investigation is to be made to ascertain justifiability and reasonableness of such transaction, specially where exorbitant amount of interest was paid to family concerned. In counter-affidavit, similar plea has been raised by Income-tax Department, namely, that partnership entity are controlled and run by family members/relatives of petitioner and that such partnership firms are covered by provisions contained under section 40A(2)(b) of Act. It was also submitted that paying exorbitant amount of interest to partnership firm, which was running continuously in losses requires thorough investigation as no prudent businessman would like to be loss sharing partner of such firm continuously for long period of time. In light of these facts, we have heard Sri S. D. Singh, learned senior counsel assisted by Sri A. P. Singh, for petitioner and Sri Bharatji Agarwal, learned senior counsel assisted by Sri Ashok Kumar, learned counsel for Income-tax Department. learned senior counsel for petitioner submitted that even though original assessment has been made under section 143(1) of Act in order to initiate reassessment proceedings, it is necessary for Assessing Officer to have received some tangible material or information subsequent to completion of original assessment proceedings in order to claim jurisdiction to reassess petitioner. learned senior counsel contended that, in instant case, no information or tangible material had been received by Assessing Officer after completion of original assessment under section 143(1) of Act and, consequently, entire exercise of initiating proceedings under section 148 of Act was wholly illegal and without jurisdiction. learned senior counsel contended that reasons to believe recorded by Assessing Officer only refers to facts which were already existing on original assessment record and which was brought on record by petitioner himself by filing his return and, consequently, on same information and evidence which has already been brought on record no reassessment proceedings could be initiated. learned counsel submitted that in absence of any material, which has live nexus, entire exercise of initiating reassessment proceeding was wholly illegal and was liable to be quashed. On other hand, Sri Bharatji Agarwal, learned senior counsel for Department, submitted that Assessing Officer has wide powers to reassess if it has reason to believe that income had escaped assessment. learned senior counsel submitted that Assessing Officer had reasonable ground to believe that exorbitant amount of interest was being paid to family concern and that interest paid was far more than interest earned by petitioner and that this ground was, by itself, sufficient to reopen assessment proceedings. learned senior counsel submitted that reasons disclosed by Assessing Officer justified his action in issuing notice under section 148 of Act. learned senior counsel further contended that payment of exorbitant amount of interest to firms which were being run and managed by family members and relatives of petitioner was hit by section 40A(2)(b) of Act which required investigation to ascertain justifiability and reasonableness of such transaction and, consequently, on this ground also notice to reassess income was justified. learned senior counsel further contended that petitioner has alternative remedy to contest matter before Assessing Officer and, if aggrieved, by assessment order had right to file appeal and, thereafter, second appeal and, consequently, remedy to file writ petition under article 226 was not efficacious remedy. In support of his submission, learned senior counsel relied upon decision of Supreme Court in CIT v. Chhabil Dass Agarwal [2013] 357 ITR 357 (SC) wherein Supreme Court held that writ petition should not have been entertained questioning correctness of reassessment order and notice issued under section 148 of Act. Taking plea of alternative remedy, we find that reliance by Department in case of Chhabil Dass Agarwal (supra) is distinguishable and not applicable to present case. In said case, against reassessment not applicable to present case. In said case, against reassessment order, writ petition was filed for its quashing. In that scenario, Supreme Court held that writ court should not ordinarily entertain writ petition questioning veracity of reassessment order passed under section 148 of Act especially when equal, efficacious, alternative remedy was available to assessee under Act. In instant case, petitioner has challenged validity of notice issued under section 148 of Act. No reassessment order has been passed as yet. question whether assessing authority had jurisdiction to issue reassessment notice is jurisdictional issue which can be entertained and tested in writ jurisdiction. We also found that writ petition was entertained in year 2008 and affidavits have been exchanged and, consequently, at this belated stage, it would not be appropriate to relegate petitioner to avail of alternative remedy. We are of opinion that writ petition is to be decided on merits. preliminary objection raised by Sri Bharatji Agarwal is rejected. perusal of provisions of sections 147 and 148 of Act indicates that Assessing Officer has wide powers to reopen assessment if he has reasons to believe that income chargeable to tax has escaped assessment. However, this wide power is circumscribed and does not give jurisdiction to Assessing Officer to reopen completed assessment on mere change of opinion. reasons to believe is not based nor can it be outcome of change of opinion. Further, proviso indicates that if more than four years have elapsed from end of relevant assessment year, in addition to satisfaction of Assessing Officer that he has reasons to believe, must also indicate that assessee had failed to disclose fully and truly all material facts necessary for his assessment for that assessment year. words "reasons to believe", "change of opinion", "failure to disclose fully and truly material facts" and "material facts" have been subject of interpretation by various High Courts and also by Supreme Court of India. In Ganga Saran and Sons P. Ltd. v. ITO [1981] 130 ITR 1 (SC), Supreme Court held (page 11): "It is well settled as result of several decisions of this court that two distinct conditions must be satisfied before Income-tax Officer can assume jurisdiction to issue notice under section 147(a). First, he must have reason to believe that income of assessee has escaped assessment and, secondly, he must have reason to believe that such escapement is by reason of omission or failure on part of assessee to disclose fully and truly all material facts necessary for his assessment. If either of these conditions is not fulfilled, notice issued by Income-tax Officer would be without jurisdiction. important words under section 147(a) are'has reason to believe' and these words are stronger than words'is satisfied'. belief entertained by Income-tax Officer must not be arbitrary or irrational. It must be reasonable or in other words it must be based on reasons which are relevant and material. court, of course, cannot investigate into adequacy or sufficiency of reasons which have weighed with Income-tax Officer in coming to belief, but court can certainly examine whether reasons are relevant and have bearing on matters in regard to which he is required to entertain belief before he can issue notice under section 147(a). It there is no rational and intelligible nexus between reasons and belief, so that, on such reasons, no one properly instructed on facts and law could reasonably entertain belief, conclusion would be inescapable that Income-tax Officer could not have reason to believe that any part of income of assessee had escaped assessment and such escapement was by reason of omission or failure on part of assessee to disclose fully and truly all material facts and notice issued by him would be liable to he struck down as invalid." In Sheo Nath Singh v. AAC of I. T. [1971] 82 ITR 147 (SC), Supreme Court held (page 153): "In our judgment, law laid down by this court in above case is fully applicable to facts of present case. There can be no manner of doubt that words'reason to believe' suggest that belief must be that of honest and reasonable person based upon reasonable grounds and that Income-tax Officer may act on direct or circumstantial evidence but not on mere suspicion, gossip or rumour. Income-tax Officer would be acting without jurisdiction if reason for his belief that conditions are satisfied does not exist or is not material or relevant to belief required by section. court can always examine this aspect though declaration or sufficiency of reasons for belief cannot be investigated by court." In Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC), Supreme Court held (page 201): "The position, therefore, is that if there were in fact some reasonable grounds for thinking that there had been any non-disclosure as regards any primary fact, which could have material bearing on question of'underassessment', that would be sufficient to give jurisdiction to Income- tax Officer to issue notices under section 34. Whether these grounds were adequate or not for arriving at conclusion that there was non-disclosure of material facts would not be open for court's investigation. In other words, all that is necessary to give this special jurisdiction is that Income-tax Officer had when he assumed jurisdiction some prima facie grounds for thinking that there had been some non-disclosure of material facts." From perusal of aforesaid, it is clear that where notice is issued within four years from end of relevant assessment year, jurisdiction of Assessing Officer is conferred where he has reasons to believe that income chargeable to income-tax on escaped assessment. It is settled law that Assessing Officer having reasons to believe that there had been some omission or failure to disclose fully or truly all material facts necessary for assessment must be based on some material facts which according to Assessing Officer is based on some reasonable belief and which would have material bearing on question of under assessment. If there is no material for formation of any belief or where purported belief was nothing but mere change of opinion, in that case, Assessing Officer would have no jurisdiction to initiate proceedings under section 147 and section 148 of Act. Assessing Officer has power to reopen assessment where he has reasons to believe that income chargeable to tax has escaped assessment but such reassessment cannot be initiated on mere change of opinion to merely re-examine issue on basis of information or material which was already available to Assessing Officer at time of completion of original assessment. Consequently, before taking any action, Assessing Officer is required to substantiate his satisfaction in reasons recorded by him. On question of relevancy of material facts which is concomitant for issuance of notice under section 147 and section 148 of Act, Supreme Court in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191 (SC), held that duty of disclosing primary facts relevant to decision of question before assessing authority lies on assessee and it is onerous duty of assessee to disclose truly and fully all primary facts. Supreme Court held that once all primary facts have been disclosed, assessee was not required to provide any further assistance by way of disclosure to Assessing Officer. Supreme Court held (page 201): "Does duty, however, extend beyond full and truthful disclosure of all primary facts? In our opinion, answer to this question must be in negative. Once all primary facts are before assessing authority, he requires no further assistance by way of disclosure. It is for him to decide what inferences of facts can be reasonably drawn and what legal inferences have ultimately to be drawn. It is not for somebody else-far less assessee-to tell assessing authority what inferences, whether of facts or law, should be drawn. Indeed, when it is remembered that people often differ as regards what inferences should be drawn from given facts, it will be meaningless to demand that assessee must disclose what inferences-whether of facts or law-he would draw from primary facts." In CIT v. Kelvinator of India Ltd. [2002] 256 ITR 1 (Delhi) [FB], Full Bench of Delhi High Court held that section 147 of Act did not confer any power upon Assessing Officer to initiate reassessment proceedings on mere change of opinion. In said case, assessee in his revised return of income had withdrawn disallowance in respect of expenses on rent and depreciation of guest house on ground that since rent and depreciation were allowable under section 30 and section 32 of Act same cannot be disallowed under section 37(4) of Act. Assessing Officer accepted contention of assessee in original assessment order and accepted withdrawal of disallowance of guest house expenditure as submitted by assessee in his revised return of income. Subsequently, notice under section 148 of Act was issued on ground that tax audit report was not noticed by Assessing Officer while passing original assessment order. Full Bench of Delhi High Court held (page 19): "We are unable to agree with submission of Mr. Jolly to effect that impugned order of reassessment cannot be faulted as same was based on information derived from tax audit report. tax audit report had already been submitted by assessee. It is one thing to say that Assessing Officer had received information from audit report which was not before Income- tax Officer but it is another thing to say that such information can be derived by material which had been supplied by assessed himself. We also cannot accept submission of Mr. Jolly to effect that only because in assessment order, detailed reasons have not been recorded on analysis of materials on record by itself may justify Assessing Officer to initiate proceeding under section 147 of Act. said submission is fallacious. order of assessment can be passed either in terms of sub-section (1) of section 143 or sub-section (3) of section 143. When regular order of assessment is passed in terms of said sub-section (3) of section 143 presumption can be raised that such order has been passed on application of mind. It is well known that presumption can also be raised to effect that in terms of clause (e) of section 114 of Indian Evidence Act, 1872, judicial and official acts have been regularly performed. If it be held that order which has been passed purportedly without application of mind would itself confer jurisdiction upon Assessing Officer to reopen proceeding without anything further, same would amount to giving premium to authority exercising quasi-judicial function to take benefit of its own wrong." aforesaid decision was affirmed by Supreme Court in CIT v. Kelvinator of India Ltd. [2010] 320 ITR 561 (SC), wherein Supreme Court held that "reason to believe" indicated in notice under section 148 that there was no tangible material to come to conclusion that there was escapement of income from assessment. In light of aforesaid, it is well settled that if notice under section 148 of Act has been issued without jurisdictional foundation under section 147 of Act being available to Assessing Officer, notice and subsequent proceedings would be without jurisdiction and would be liable to be quashed in writ jurisdiction. If reason to belief is available writ court will not exercise its power of judicial review to go into sufficiency or adequacy of material available. Division Bench of this court in Rathi Industries Ltd. v. State of U. P. [2014] 76 VST 80 (All); [2014] 7 ADJ 602 (DB) has held (page 83 of 76 VST) : "The question, whether Assessing Officer had reasons to believe is question of jurisdiction, which can be considered and investigated by court under article 226 of Constitution of India. words'has reasons to believe' must not be arbitrary or irrational but must be based on reasons which are relevant and germane to issue. expression'reasons to believe' is not subjective satisfaction on part of Assessing Officer. belief has to be in good faith and must have rational connection with issue involved and should not be based on extraneous or irrelevant consideration. formation of required opinion and belief by Assessing Officer is condition precedent. Without such formation, Assessing Officer will have no jurisdiction to initiate proceedings under section 21 of Act. aforesaid view was also held by Division Bench of this court after considering various judgments of Supreme Court in S. K. Traders v. Addl. Commissioner [2009] 26 VST 601 (All); [2008] UPTC 392." and again held (page 86 of 76 VST): "There is no quarrel with aforesaid proposition. reason to belief must be based on some rational basis for Assessing Officer to form belief that whole or part of turnover of dealer has for any reasons escaped assessment to tax. Such reason or belief must be germane to formation of belief regarding fact that some turnover had escaped assessment of tax. reasons or grounds to come to such conclusion must have nexus with formation to such belief, which must be based on certain material." In light of aforesaid decision, we find that in instant case reasons recorded by Assessing Officer justifying initiation of reassessment proceeding is that petitioner has received less amount of interest and had paid more amount of interest resulting in substantial business loss and, therefore, it transpires that it is case of diversion of business fund for non- business purpose. In our opinion, there is no sufficiency or adequacy of material available with Assessing Officer. This information or material was already available in computation of income filed by petitioner in his return. Nothing new has been received by way of information or otherwise by Assessing Officer. present case is not case of testing sufficiency of material available, but is case of absence of material, as held by Supreme Court in Ganga Saran's case (supra). There is no direct nexus or live link between material coming to notice of Assessing Officer and formation of his belief that there had been escapement of income of assessee from assessment in particular year in question. In our view, there is no rational and tangible nexus between reason and belief and conclusion is inescapable, namely, that in absence of material Assessing Officer had no jurisdiction to initiate proceedings under section 147/148 of Act. reasons to believe recorded by Assessing Officer refers to facts which were already on file. In Vikrant Tyres Ltd. v. State of U. P. [2006] 148 STC 122 (All); [2005] UPTC 501, Division Bench of this court held (page 128 of 148 STC): "Reassessment on same material by same authority, if permitted, for no valid reason, will open flood gate for arbitrary action exposing one to unending process, permitting uncertainty, reopening of closed chapters without assigning good reason, depending upon whims of individuals and in end precipitating anomalous situations. It, therefore, naturally follows that there has to be some valid ground, viz., some relevant document or material having escaped notice or there has been wrong calculation due to human error bona fide committed, or ignorance of correct and complete facts due to mistake or ignorance of fraud/misrepresentation (but not mere change of opinion on same material)." contention of Department that partners' entities are controlled and run by family members/relatives of petitioner and that such partnership firms are covered by provisions contained under section 40A(2)(b) of Act and, therefore, reassessment proceedings are justified, is patently erroneous. We are of opinion, that such ground is not existing in reasons to believe. This ground was taken by Department while rejecting objection of petitioner. Such fresh ground which was not part of reasons to believe cannot form basis to initiate reassessment proceedings under sections 147/148 of Act. Further, there is no material on record to indicate that partnership entities are controlled and run by family members or relatives of petitioner. In absence of cogent evidence being brought on record, such ground cannot be taken as reason to reinitiate reassessment proceedings. In view of aforesaid, we are of opinion that there was no fresh material before Assessing Officer to form belief that income had escaped assessment. In absence of material, we are of opinion that Assessing Officer had no jurisdiction to initiate proceeding for reassessment. Consequently, impugned notice dated December 17, 2007, issued under section 148 of Income-tax Act, for assessment year 2006-07, is quashed. writ petition is allowed. *** Arun Gupta v. Union of India