The high court had said, "After going through the reasons, we are satisfied that the 'reasons to believe' show and establish a live link and connect with the inference drawn that income had escaped assessment, which is required for issuance of notice."
In the high court, the firm had challenged the I-T department's notice, contending that the "reasons to believe" were mere reasons to suspect and do not establish that income had escaped assessment.
Disagreeing with the firm's contention, the high court had said that "absolute certainty is not required at the time of issue of notice and at the same time, 'reasons to believe' must not be based on mere suspicion, gossip or rumour. The said test and criteria, we have no hesitation in holding, is satisfied in the present case".
"There is evidence and material on record to justify issue of notice," it said.
The high court also said that as long as there was a "honest and reasonable opinion" formed by the assessing officer and the "reasons to believe" are not mere "reasons to suspect", courts should not interject to stop the adjudication process and scrutiny on merits.