1978 (9) TMI 160

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....have issued a notice under section 21 based on an anonymous complaint which arises in the following circumstances.   The assessee's assessment under rule 41(5) was completed. At that time, the Sales Tax Officer had received information from an informer that the assessee had imported kerosene oil. He, however, did not act on this information and accepted the affidavit filed by the assessee'....

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....notice under section 21 was issued. The taxing authority has held that the information contained in the letter can form the basis for a valid notice under section 21. The relevant part of section 21 runs: "If the assessing authority has reason to believe that the whole or any part of the turnover of a dealer...... has escaped assessment to tax..........." It is settled that before an asse....

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....R. 492., the decision of the Supreme Court in the case of Commissioner of Income-tax, West Bengal v. Dinesh Chandra[1971] 82 I.T.R. 367 (S.C.)., and that of the Calcutta High Court in the case of Diamond Sugar Mills Ltd. v. Income-tax Officer, West Bengal[1973] 89 I.T.R. 171. These cases decided under the Income-tax Act undoubtedly lay down that the information on the basis of which an Income-tax ....

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....ue a notice under section 21 only in case he has reason to believe that the turnover has escaped assessment. This means that the belief must be of a reasonable and a prudent man. It must be based on some relevant material, and not based on suspicion, gossip or rumour. See Sheo Nath Singh v. Appellate Assistant Commissioner of Income-tax, Calcutta[1971] 82 I.T.R. 147 (S.C.). and Chhugamal Rajpal v.....