TaxTMI 
TaxTMI 
1969 (2) TMI 16
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....usiness income". " Kindly ascertain his (assessee's) share of profit and remittances from the Income-tax Officer, Second Additional Circle-I, Karaikudi, in F. 6098-m/1952-53 ". In Part III of the return Muthiah supplied the following information about his partners : Name and address of the firm Name of each partner including assessee Share Messrs. R. RM. S. Firm Seramban, F. M. S. 1. Assessee (Muthiah Chettiar) 60/303 2. VD. M. RM. M. RM. M. Ramanathan Chettiar (minor) 40/303 3. VD. M. RM. M. RM. M. Alagappan Chettiar (minor) 40/303 4. VD. M. RM. M. RM. M. Annamalai Chettiar(minor) 40/303 5. C.P.R. 60/303 6. M.S.S. &n....
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.... for the year 1954-55. Muthiah filed returns under protest declaring the same income as originally assessed. In the view of the Income-tax Officer Muthiah had not furnished in Part III, clause (c), of the return full facts regarding the other parties and in column 2 he had merely disclosed that Ramanathan, Alagappan and Annamalai were minors : that "information was not full in the sense that he had not stated that they were minor sons" of Muthiah. Accordingly the Income-tax Officer held that the income of the sons of Muthiah which should have been included under section 16(3)(a)(ii) of the Income-tax Act had escaped assessment in Muthiah's hands and he brought that income to tax. The Appellate Assistant Commissioner confirmed the order made by the Income-tax Officer. In appeal to the Tribunal it was contended by Muthiah that he had fully and truly disclosed all the particulars he was required to disclose in the returns of his income for the three years in question, and "section 34(1)(a) had no application to the assessment years 1952-53 and 1953-54 and for 1954-55 the re-opening was based only on a change of opinion." Muthiah also contended that section 40 of the Income-tax Act ....
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.... source derived which-- (a) are received or are deemed to be received in the taxable territories in such year by or on behalf of such person, or (b) if such person is resident in the taxable territories during such year, (i) accrue or arise or are deemed to accrue or arise to him in the taxable territories during such year, or. . . " Section 22 by sub-section (1) required the Income-tax Officer to give notice by publication in the press in the prescribed manner, requiring every person whose total income during the previous year exceeds the maximum exempt from tax, to furnish a return in the prescribed form setting forth his total income. Sub-section (2) authorised the Income-tax Officer to serve a notice upon a person whose income in the opinion of the Income-tax Officer exceeded the minimum free from tax. Section 23 dealt with the assessment. It conferred power upon the Income-tax Officer to assess the total income of the assessee and to determine the sum payable by him on the basis of such return submitted by him. Rule 19 framed under section 59 of the Income-tax Act, 1922, required the assessee to make a return in the form prescribed thereunder, and in Form A applica....
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....sections 41D, 44E and 44F. This instruction was repeated in the Manual, Parts II and III at pages 344 and 345 in the 10th edition published in 1950. But in the 11th edition of the Manual published in 1954 no such instructions were printed. About the date on which the instructions were deleted counsel for the Commissioner was unable to give any information. Assuming that there were instructions printed in the Forms of return in the relevant years, in the absence of any head under which the income of the wife or minor child of a partner whose wife or a minor child was a partner in the same firm, could be shown, by not showing that income the taxpayer cannot be deemed to have failed or omitted to disclose fully and truly all material facts necessary for his assess ment. Section 16(3) imposes an obligation upon the Income-tax Officer to compute the total income of any individual for the purpose of assessment by including the items of income set out in clauses (a)(i) to (iv) and (b), but thereby no obligation is imposed upon the taxpayer to disclose the income liable to be included in his assessment under section 16(3). For failing or omitting to disclose that income proceedings for rea....