Prima facie satisfaction for section 273 notice can rest on assessment material showing an estimate may be untrue.

Section 273 permits a notice where, during assessment proceedings, the Income-tax Officer has prima facie material to believe that an advance-tax estimate was untrue. The satisfaction required at the notice stage is tentative and does not amount to a final finding of concealment or guilt. On the stated facts, the disputed receipts had been treated as revenue receipts by the appellate authority and by the assessee's auditors, which provided sufficient material to justify an enquiry into whether the omitted receipts were wrongly excluded from the estimate. The notice was therefore upheld.

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Issues: Whether a notice under section 273 of the Income-tax Act, 1961 could be issued on the basis of the materials available in assessment proceedings when the assessee contended that the receipts omitted from the advance-tax estimate were capital receipts and not taxable income.

Analysis: Section 273 requires the Income-tax Officer to be satisfied, in the course of assessment proceedings, that the assessee furnished an estimate which was known, or had reason to be believed, to be untrue. The satisfaction needed at the stage of issuing notice is only prima facie and tentative, not a final adjudication of guilt. On the facts, the assessment materials showed that the disputed receipts had earlier been treated as revenue receipts by the Appellate Assistant Commissioner and the assessee's auditors had also advised that they were revenue receipts. In that background, the Court held that there were sufficient materials to justify an enquiry into whether the assessee had furnished an untrue estimate.

Conclusion: The notice under section 273 was validly issued and the challenge failed.

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