Has Reason To Believe

Has reason to believe, the expression 'reason to believe' in s. 34 does not mean purely subjective satisfaction on the part of the Income Tax Officer. The belief must be held in good faith: it cannot be merely a pretence. It is open to the Court to examine whether the reasons for the belief have a rational connection or a relevant bearing to the formation of the belief and are not extraneous or irrelevant to the purpose of the section, M.P. Industries Ltd. v. ITO, (1970) 2 SCC 32 (37): AIR 1970 SC 1011. (Indian Income-tax Act, 1922, s. 34)