Allowing the petition the Court held that , the Assessing Officer had initiated the reassessment proceedings on the basis of the self-same material that he had examined during the regular assessment proceedings under section 143(3) and had merely recorded his belief that income had escaped assessment solely on the basis of his observation that the assessee had an outstanding business loan with the bank. There did not exist any tangible material which the assessing authority might have treated as a “direct or circumstantial” evidence to form a bona fide “reason” relevant to the “belief” of any income having escaped assessment. The nature of the audit objection, which was raised regarding the procedure followed in the assessment proceedings, had not been mentioned by the Department either in the “reason to believe” recorded or in the counter-affidavit filed. The audit objection could not substitute the statutory requirement that the Assessing Officer must record his “reason to believe” that any income had escaped assessment. Therefore, the jurisdictional requirement of section 147 had not been shown to have existed or established. The reassessment proceedings initiated were quashed.( AY.2009-10)