1975 (9) TMI 9 - HC - Income Tax

Court quashes notice under s. 148 I.T. Act for failure to disclose material facts

The court quashed the notice issued under s. 148 of the I.T. Act, 1961 for the assessment year 1956-57, as there was no failure by the assessee to ... Act Of 1961, High Court, Tax Recovery Officer Issues:Challenge to notice under s. 148 of the I.T. Act, 1961 for assessment year 1956-57 based on alleged failure to disclose material facts.Analysis:The petitioner challenged a notice issued under s. 148 of the I.T. Act, 1961, for the assessment year 1956-57, alleging failure to disclose material facts. The reasons for reopening the assessment included discrepancies in the current account maintained by the assessee with a bank. The petitioner's husband had produced bank accounts during the original assessment proceedings, and the assessing officer had not filed any affidavit contradicting this fact. The court noted that the bank pass books were produced by the assessee's husband, indicating no failure to disclose material facts. Referring to the principles established by the Supreme Court in Gemini Leather Stores v. ITO [1975] 100 ITR 1 (SC), the court held that there was no failure on the part of the assessee to disclose all material facts, rendering the notice without jurisdiction.The court emphasized that the condition precedent for issuing the notice had not been fulfilled due to the absence of any failure to disclose material facts by the assessee. Consequently, the court quashed the impugned notice dated 26th March 1973 and restrained the respondents from acting on it. Any assessment made in pursuance of the notice was also quashed and set aside. The court made the rule absolute, with no order as to costs, in favor of the petitioner challenging the notice under s. 148 of the I.T. Act, 1961 for the assessment year 1956-57 based on alleged failure to disclose material facts.