TaxTMI 
TaxTMI 
TaxTMI 
1986 (3) TMI 5
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....sheet and the profit and loss account was filed by the appellant. In the profit and loss account, the profit from the construction work was indicated. The Income-tax Officer made an assessment on November 27, 1963, and it appears from the assessment order that the profit from the construction work was taken into account in making the assessment. The assessee/appellant, however, filed a revised return showing a general profit of Rs. 2,092 as also profit from the construction work aggregating to Rs. 12,797. It is important in this connection to bear in mind that the return was filed by the assessee/appellant on November 29, 1962. This was received in the receiving section of the Department and a stamp had been duly put thereon in token of the receipt. It further appears that a revised return dated August 2, 1963, was received, as shown in the endorsement, on December 3, 1963. The original assessment was made on November 27, 1963. In the revised return, the assessee/appellant had shown a general profit of Rs. 2,092 as also the profit from the construction work aggregating to Rs. 12,797,65. After having made the assessment order on the basis of the first return, the Income-tax Office....
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....sary to bear in mind the factual position emerging from the documents. On behalf of the assessee/appellant, it was urged before us as it was urged before the Division Bench of the High Court that there was in this case no question of any escapement of income or underassessment of income because the profit from the construction work which was the item alleged to have been left out from the first return and included in the revised return was, in fact, taken into consideration by the Income-tax Officer in making the first assessment order. It was argued that this item of profit was not only before the Income-tax Officer as it was included in the profit and loss account but, in fact, it was taken into consideration by the said Income-tax Officer in making the order. The specific amount which provided the ground for the issue of a notice under section 147 having been taken into consideration by the Income-tax Officer while making the assessment, it was urged that it could not be said that there was any escapement of income or underassessment of income. The Division Bench after analysing the record has come to the conclusion that the Income-tax Officer while making the first assessment....
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.... the latter provided grounds for reason to believe that income chargeable to tax had escaped assessment. This reopening was under section 147 of the Act. Reopening under section 147 can only be made after completed assessment if the Income-tax Officer has reason to believe under clause (a) that by reason of omission or failure on the part of an assessee to make a return or to disclose fully and truly all relevant facts, income chargeable to tax has escaped assessment for that year and under clause (b), notwithstanding that there was no omission or failure on the part of the assessee, if the Income-tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment, then he is, subject to the provisions of limitation in respect of certain income, which does not apply in the instant case, jurisdiction to issue notice. At this stage, the jurisdiction to issue the notice is under consideration. We are not concerned in this appeal whether on a properly made assessment, any higher income would be taxed or not. The position in law is well-settled. A completed assessment can only be reopened either if there was omission ....
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....n if the information which was obtained could have been gathered by the Income-tax Officer at the time of the original assessment, would not disentitle the Income-tax Officer to reopen the assessment if he has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment. That information must come to the possession of the Income tax Officer after the previous assessment but if the information be of such a nature that it could have been obtained during the previous assessment or investigation of the materials but was not obtained, the Income-tax Officer was not precluded from reopening. In this case, it was contended that profit and loss account was there at the time of the original assessment and, therefore, the fresh information now relied upon could have been gathered. That is not the correct position. The facts which came to the knowledge of the Income-tax Officer were undoubtedly such as noted before from which a reasonable belief could have been formed that there was escapement of income or underassessment of income and that belief could be formed on the basis of the revised return where the figures were different from ....