JUDGMENT judgment of court was delivered by Sanjeev Sachdeva J.-The petitioner, by way of present writ petition, has challenged order dated June 23, 2014, passed by Assistant Commissioner of Income-tax disposing of objections filed by petitioner against issuance of notice under section 148 of Income-tax Act, 1961 (hereinafter referred to as "the Act") and very issuance of notice dated March 18, 2014. assessment year in issue is 2012-13. petitioner is company registered under Companies Act. As per petitioner, on January 5, 2012, Shri A. K. Dhir, one of directors of petitioner who is also director of M/s. Krown Bakers India Pvt. Ltd. was carrying Rs. 5 lakhs from Delhi to Ghaziabad for both companies which have got separate factories at Ghaziabad and head office in Delhi for payment of wages and other normal expenses on factories. This amount allegedly consisted of withdrawals made on January 3/4, 2012, of Rs. 4 lakhs, i.e., Rs. 2 lakhs from each of bank accounts of company in Delhi and Rs. 1 lakh from cash balance from books of M/s. Krown Bakers India Pvt. Ltd. As per petitioner, in beginning of February, 2012, elections were to be held for U. P. State Assembly, Election Commission had issued instructions that if cash of more than Rs. 2,50,000 was found with any person, same may be seized and enquiry made whether this cash was for distribution amongst voters. Shri A. K. Dhir was stopped by U. P. Police on border of Delhi and U. P. and as cash of Rs. 5 lakhs was found, this amount was seized. His statement was recorded by DDI (Investigation-1), Ghaziabad, before whom relevant copies of bank accounts and extract of cash books were produced. petitioner on September 27, 2012, filed its return of income declaring loss of Rs. 49,88,706 for relevant assessment year and filed return under section 115JC of Act declaring income of Rs. 2,725. respondent initiated proceedings under section 153C of Act for assessment years 2006-07, 2007-08, 2008-09, 2009-10, 2010-11, 201112 and 2012-13. However, during assessment proceedings, it was noticed that company was incorporated on July 18, 2008, and, therefore, proceedings under section 153C for assessment years 2006-07, 2007-08, and 2008-09 were dropped. proceedings were also dropped for assessment years 2009- 10, 2010-11, and 2011-12 as no incriminating information was received for proceeding under section 153C. On March 18, 2014, notice under section 148 of Act for reopening of assessment was issued on ground of escapement of income. petitioner was also supplied reasons for issuance of notice under section 148 along with notice. reasons for reopening of assessment as communicated to petitioner are as under: "Reasons recorded under section 148(2) of Income-tax Act, 1961 M/s. Krown Agro Foods Pvt. Ltd. H-78, Shivaji Park, Road No-45, Punjabi Bagh, New Delhi-110 017 Assessment year 2012-13. Information has been received from ADIT (Inv.), Ghaziabad, that amount of Rs. 5,00,000 has been found under section 132A of Income-tax Act dated May 25, 2012, in case of Sh. Anil Kumar Dhir, who is director of M/s. Krown Agro Foods Pvt. Ltd. In consequence of this information, summons dated January 5, 2012 under section 131(1A) was issued and he was examined on oath. When asked about source of cash of Rs. 5,00,000 he stated that Rs. 2,00,000 was withdrawn from Andhra Bank, Lawrence Road, New Delhi-35 from account of M/s. Krown Agro Foods Pvt. Ltd. on February 4, 2012. assessee filed its return of income for assessment year 2012-13, vide Ack. No. 4977819612770912 on September 27, 2012, declaring total income of Rs. 2,725. Appraisal report in case of Anil Kumar Dhir, who is director of M/s. Krown Agro Foods Pvt. Ltd., has been received from Income-tax Officer, Ward 5(3), New Delhi, on November 25, 2013. information has been received after expiry of twelve months specified in proviso to sub-section (2) of section 143 of Income-tax Act. I, therefore, have reason to believe that income of Rs. 2,00,000 has escaped assessment within meaning of section 147 of Income-tax Act, 1961. I, therefore, issue of notice 148 in case of M/s. Krown Agro Foods Pvt. Ltd. for assessment year 2012-13. Adita Singh, Assistant Commissioner of Income-tax, Circle 5(1), New Delhi." petitioner by letter dated March 31, 2014, raised following objections to notice issued under section 148 of Act and reasons recorded by respondent for issuance of same: "1. Preliminary objection Rs. 5 lakhs were found on January 5, 2012, with Shri Anil Kumar Dhir, director of companies. He was carrying amount from Delhi offices to Ghaziabad offices of two companies M/s. Krown Agro Food P. Ltd. and M/s. Krown Bakers P. Ltd. Income-tax Department (DD Investigation-I Ghaziabad) had started action on January 5, 2012, and intimation for this was also sent to you before October 26, 2012, also confirmed by your CIT-II New Delhi, vide his letter F. No. CIT/Delhi- II/Hq.-II/Grievance Misc./2013- 14/448, dated June 3, 2013, stating that as per concerned Assessing Officer, seized material has been received. This shows that all material was in Delhi before October 26, 2012. Copy attached and if it did not reach you within time, it is not fault of assessee. So far as assessee is concerned, Department is one and Department cannot take advantage of its fault of delay, specially where time barring is involved, when hon'ble High Courts and Tribunal have been stressing timely action in these matters. Limitation is right of assessee and cannot be dispensed with. Still you did not take any action even though you knew it that limitation for sending notice under section 143(2) was September 30, 2013. This shows there is clear lapse on part of Department and no one can be allowed to take advantage of one's own wrong is settled law. reason that because you did not take timely action, assessee should suffer is wrong and against settled law. On this account alone, action is arbitrary and bad in law. 2. There is no concealment, which is primary requirement for issue of notice under section 148. amount of aforesaid Rs. 5 lakhs was from withdrawal of Rs. 2 lakhs each from banks of these companies 1-2 days before this date and Rs. 1 lakhs was cash available in books. amount was taken by police not because assessee had no explanation but because of instructions of Election Commission that no one is permitted to carry cash over Rs. 2.5 lakhs. explanation which is supported by documentary evidence like copy of bank statements and also cash book, does not in any way, lead to proposition that this amount is unexplained especially because amount was carried from office in Delhi to branch in Ghaziabad by director of two companies and for use of their companies in Ghaziabad. Even otherwise, it is settled law that mere possession of money does not lead to presumption of concealment which is especially true in this case because assessee has documentary evidence in support of source of amount. On this account, there is no material leading to belief of concealment. As shown above, it is also incorrect that information was received about this after September 30, 2013. Your assertion that Rs. 2 lakhs have escaped assessment can by no stretch of imagination be treated as escaped assessment because this amount is from withdrawal of cash from companies bank account on January 4, 2012, i.e., one day before this amount was found with Shri Dhir." objections have been disposed of by impugned order and reasoning given is as under: "I have considered various submissions made by assessee in his letter dated March 31, 2014, and found no force in them. assessee has filed return showing loss of Rs. (49,88,706) for assessment year 2012-13. date of receipt of information in office of Assessing Officer is not affecting interest of assessee adversely. assessee is clearly accepting that based on information in this case, it was to be assessed under section 143(3) by issuing of notice under section 143(2) prior to September 30, 2013. If Assessing Officer due to internal communication received information after September 30, 2013, and, thereafter, it was considered that information could only be verified by initiating assessment proceedings under section 147/148 for assessment year 2012-13. interest of assessee is not been adversely affected if information received from office of DDIT (Inv) is being verified and assessed under section 143(3) or section 147/143(3). issue raised by assessee for limitation is not legally tenable or valid as per provisions of Income-tax Act, 1961. raising of this objection by assessee is attempt to escape assessment, so that it does not have to prove genuineness of cash seized during election time in hands of its director, Mr. Anil K. Dhir. In case of Krown Bakers (India) P. Ltd. for assessment year 2012- 13, it was assessed under section 143(3) by Income-tax Officer, Ward 5(3). details of assessment order dated March 31, 2014, was sought from Income-tax Officer, Ward 5(3) by letter dated June 26, 2014. In response to letter copy of assessment order under section 143(3) was received by letter dated June 27, 2014, in office of undersigned. It was noted from reading of assessment order, that director, Mr. Anil Kumar Dhir was carrying cash of Rs. 3,00,000 which was claimed to have been withdrawn from M/s. Krown Bakers (India) P. Ltd. account for business purposes only. There is another addition of Rs. 9,43,279 on account of discrepancy noted in manufacturing results. Hence, it is evident that information received in case of M/s. Krown Agro Foods P. Ltd. also needs to be examined and creditworthiness of assessee has to be proved beyond doubt to accept claim of Mr. Anil K. Dhir. Therefore, proceedings under section 147/148 have been initiated to safeguard interests of Revenue and in consideration of assessment completed in case of M/s. Krown Bakers (India) P. Ltd for assessment year 2012-13 as well. assessee has not submitted anything other than return to be able to verify its claim against amount seized. assessee-company has capital of only Rs. 1,00,000 and has filed return showing loss of Rs. 49,88,706. In view of these facts, it becomes essential to verify source of Rs. 2,00,000 and purpose for which it was brought to Ghaziabad during election time. assessee has also submitted that initiation of proceedings under section 147 and issuance of notice under section 148 on basis of information received from DDIT (Investigation), Ghaziabad is, without application of mind to information and forming opinion. This submission of assessee is again not well founded and is untenable. In case of ITO v. Selected Dalurband Coal Co. P. Ltd. [1996] 217 ITR 597 (SC). It was held that as under: 'A letter was written by Chief Mining Officer to Incometax Officer informing him that inspection of assessee's colliery showed, that there was under-reporting of raising figures to extent indicated in letter, Held: Income-tax Officer could form belief on basis of letter that income had been underassessed or had escaped assessment. Hence notice issued under section 148 read with section 147(a) on basis of letter was valid.' In case of Midland Fruit and Vegetable Products (India) P. Ltd. v. CIT [1994] 208 ITR 266 (Delhi), it has been held that there was adequate material for holding belief that income had escaped assessment even when assessee had given confirmatory letters of creditors in whose names loans were shown in assessee's books of account but however, later on when one of creditors was examined he admitted that loans shown to have been advanced were bogus. In view of above, assessee's submissions for dropping of reassessment proceedings under section 147 are rejected as devoid of merits. assessee is now, therefore, requested to comply with further proceedings to follow in their case for year under consideration. (underlining supplied) law in respect of reopening of assessment under section 143(3) of Act is no longer res integra and has been subject matter of various judicial pronouncements. Full Bench of this High Court in CIT v. Usha International Ltd. [2012] 348 ITR 485 (Delhi) [FB], held as under (page 491): "For reopening assessment made under section 143(3) of Act, following conditions are required to be satisfied: (i) Assessing Officer must form tentative or prima facie opinion on basis of material that there is underassessment or escapement of income; (ii) he must record prima facie opinion into writing; (iii) opinion formed is subjective but reasons recorded or information available on record must show that opinion is not mere suspicion. (iv) reasons recorded and/or documents available on record must show nexus or that in fact they are germane and relevant to subjective opinion formed by Assessing Officer regarding escapement of income. (v) in cases where first proviso applies, there is additional requirement that there should be failure or omission on part of assessee in disclosing full and true material facts. Explanation to section stipulates that mere production of books of accounts or other documents from which Assessing Officer could have, with due diligence, inferred material facts, does not amount to'full and true disclosure of material facts' (The proviso is not applicable where reasons to believe for issue of notice are recorded and notice is issued within four years from end of assessment year)." It would be proximity of reasons with belief of escapement of income, which would be determinative factor for reopening of assessment. remoteness of reasons would obviate possibility of belief and would bring case in realm of mere suspicion, which cannot be ground for reopening of assessment. reasons only record that amount of Rs. 5,00,000 has been found with director and assessee and when examined on oath and asked about source of cash of Rs. 5,00,000 he stated that Rs. 2,00,000 was withdrawn from Andhra Bank, Lawrence Road, New Delhi-35 from account of M/s. Krown Agro Foods Pvt. Ltd. on February 4, 2012. In order, disposing of objections it has been held that, information was received after September 30, 2013, and information could only be verified by initiating assessment proceedings under section 147/148 for assessment year 2012-13. It is recorded that interest of assessee will not be adversely affected if information received from office of DDIT (Inv) is verified. It is further recorded that information received needs to be examined and creditworthiness of assessee has to be proved beyond doubt to accept claim of its director. reason to believe recorded by Assessing Officer is not based on any material that had come to knowledge of Assessing Officer. There is mere suspicion in mind of Assessing Officer and notice under section 147/148 has been issued for purpose of verification and for clearing cloud of suspicion. reasons to believe recorded do not show as to on what basis Assessing Officer has formed reasonable belief that said amount of Rs. 2,00,000 had escaped assessment. It is apparent Assessing Officer suspects that income has escaped assessment. However, mere suspicion is not enough. reasons to believe must be such, which upon plain reading, should demonstrate that such reasonable belief could be formed on some basis/foundation and had in fact been formed by Assessing Officer that income has escaped assessment. No such reasonable belief can be inferred from purported reasons to believe recorded. words "reason to believe" indicate that belief must be that of reasonable person based on reasonable grounds emerging from direct or circumstantial evidence and not on mere suspicion, gossip or rumour. "reason to believe" recorded in case do not refer to any material that came to knowledge of Assessing Officer whereby it can be inferred that Assessing Officer could have formed reasonable belief that said amount had escaped assessment. purported belief that income has escaped assessment is not based on any direct or circumstantial evidence and is in realm of mere suspicion. requirement of law is "reason to believe" and not "reason to suspect". In present case, since purported reasons to believe recorded indicate that Assessing Officer has acted on mere surmise, without any rational basis, action of reopening of assessment is thus clearly any rational basis, action of reopening of assessment is thus clearly contrary to law and is unsustainable. In view of above, impugned order dated June 23, 2014, is set aside and proceedings initiated pursuant to notice dated March 18, 2014, are hereby quashed. *** Krown Agro Foods Pvt. Ltd. v. Assistant Commissioner of Income-tax