TaxTMI 
TaxTMI 
2012 (3) TMI 192
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....aim was disallowed by the Income Tax Officer. On appeal by the petitioner in the assessment year 1983-84, the Appellate Assistant Commissioner allowed the claim of the petitioner for investment allowance under section 32A of the Act. On appeal by the department to the Tribunal, the finding of the Appellate Assistant Commissioner was reversed and investment allowance was disallowed, vide order dated 28.1.1988, Annexure P-5. On September 26, 1986, a raid was conducted at the house and hospital of the petitioner for investigating the alleged concealment of income. According to the petitioner, this raid was conducted with malafide intention at the instance of respondent No.2. Thereafter, the said respondent got started scrutiny proceedings for the assessment year 1986-87 against the petitioner. Vide order dated March 17, 1989, the Assistant Commissioner of Income Tax assessed the return of the petitioner for the assessment year 1986-87 after clubbing the income of the petitioner with that of Bawa Nursing Home, the lessee firm. The petitioner filed an appeal against the said order which was dismissed vide order dated 28.2.1990. Thereafter, respondent No.2 issued notice under Section 148....
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....th due diligence have been discovered by the Assessing officer will not necessarily amount to disclosure within the meaning of this section." However, by Direct Tax Laws (Amendment) Act, 1987 which was effective from 1.4.1989, Explanation 2 was transposed as Explanation I without any material change. 6. Further, it would be advantageous to refer to Section 149 (1) (a) and (b) of the Act, which reads thus:- "149. Time limit for notice - (1) No notice under Section 148 shall be issued, a) in cases falling under clause (a) of section 147 - i) for the relevant assessment year, if eight years have elapsed from the end of that year, unless the case falls under sub-clause (ii); ii) for the relevant assessment year, where eight years but not more than sixteen years, have elapsed from the end of that year, unless the income chargeable to tax which has escaped assessment amounts to or is likely to amount to rupees fifty thousand or more for that year. b) in cases falling under clause (b) of Section 147, at any time after the expiry of four years from the end of the relevant assessment year." 7. A bare reading of the aforesaid provisions clearly spells out that mere production of boo....
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....elevant assessment year, unless any income chargeable to tax has escaped assessment for such assessment year by reason of the failure on the part of the assessee to make a return under s.139 or in response to a notice issued under sub-s. (1) of s. 142 or s. 148 or to disclose fully and truly all material facts necessary for his assessment, for that assessment year. Explanation 1- Production before the AO of account books or other evidence from which material evidence could with due diligence have been discovered by the AO will not necessarily amount to disclosure within the meaning of the foregoing proviso". 11. Section 147 of the Act empowers the Assessing Officer to assess or reassess income chargeable to tax where he has reason to believe that income for any assessment year has escaped assessment. However, the said provision does not authorize the Assessing Officer to take recourse to reassessment proceedings where after having adopted a particular opinion during original assessment proceedings, on second thought, he wishes to conclude otherwise. In other words, change of opinion is no ground for initiating reassessment proceedings. According to the explanation, the duty cast ....
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....ing a careful scrutiny and delving deep into it to notice the necessary material, it is quite possible that having regard to the nature of the documents, material evidence cannot be discovered from such records despite due diligence and the case would attract application of the said Expln. 1 to hold that mere production of the books of account or the documents, etc. without pointing out the relevant entries therein, does not amount to disclosure within the meaning of s. 147(a) of the Act [See, Rakesh Aggarwal vs. Asstt. CIT (1997) 137 CTR (Del) 65: (1996) 221 ITR 492 (Del) 499]. 3.5 The assessee does not discharge his duty by merely producing the books of account or other evidence. He has to further bring to the notice of the AO particular items in the books of account or portions of document which are relevant. Even if it is assumed that, from the books produced, the AO could have found out the truth, he is not on that account precluded from exercising the power to reassess the escaped income [see, Kantamani Venkata Narayana & Sons vs. Addl. ITO (1967) 63 ITR 638 (SC); Sowdagar Ahmed Khan vs. ITO (1968) 70 ITR 79 (SC); ITO & Ors. vs. Lakhmani Mewal Das 1976 CTR (SC) 220: (1976) 1....