TaxTMI 
TaxTMI 
1971 (1) TMI 9
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....ntracts under the Railways as well as the Government. It is a partnership firm. For the assessment year 1960-61, relevant to the accounting year 1959-60, after the assessee submitted its income-tax return, it was asked by the Income-tax Officer during the income-tax assessment proceedings to produce before him its books of account and the other relevant papers. The assessee also produced before him a statement showing various creditors from whom it had borrowed on hundis during the accounting year in question. In that statement it gave the full names and addresses of the alleged creditors. After enquiry, the assessee's total income was assessed at Rs. 69,886. On June 3, 1966, the first respondent (Income-tax Officer, Ward " A ", Muzaffa....
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.... section 151(2) of the Act, we have not thought it necessary to examine the other contentions advanced on behalf of the assessee. In this case the notice was issued after four years but before eight years of the date of the original assessment. 4. Section 151(2) of the Act reads : "No notice shall be issued under section 148 after the expiry of four years from the end of the relevant assessment year, unless the Commissioner is satisfied on the reasons recorded by the Income-tax Officer that it is a fit case for the issue of such notice." 5. Section 148 prescribes : "(1) Before making the assessment, reassessment or recomputation under section 147, the Income-tax Officer shall serve on the assessee a notice containing....
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....ficer had complied with the requirements of section 148 and section 151(2)of the Act. When the appeal was taken up for hearing on the 18th January, 1971, only the report submitted by the Income-tax Officer to the Commissioner and the order of the Commissioner was produced. The order sheet recording the reasons of the Income-tax Officer as required by section 148(2) was not produced. Hereinbelow, we have set out the report of the Income-tax Officer as well as the order of the Commissioner : "Report in connection with the starting of proceedings under section 147 of the Income-tax Act, 1951. Name of district Ward or Circle ............ A-Ward, Muzaffarpur G. I. R. No ................ 303-C. 1. Name....
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....ce, proper investigation regarding these loans is necessary. The names of some of the persons from whom money is alleged to have been taken on loan on hundis are : 1. Seth Bhagwan Singh Sricharan. 2. Lakha Singh Lal Singh. 3. Radhakissen Shyam Sunder. The amount of escapement involved amounts to Rs. 1,00,000. Sd. S. P. Chaliha, 30-4-66. Income-tax Officer, A-Ward, Muzaffarpur." 9. In his report the Income-tax Officer does not set out any reason for coming to the conclusion that this is a fit case to issue notice under section 148. The material that he had before him for issuing notice under section 148 is not mentioned in the report. In his report he vaguely refers to certain....
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.... alternatively notwithstanding that there has been no omission or failure as mentioned above on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income chargeable to tax has escaped assessment for any assessment year. Unless the requirements of clause (a) or clause (b) of section 147 are satisfied, the Income-tax Officer has no jurisdiction to issue a notice under section 148. From the report submitted by the Income-tax Officer to the Commissioner, it is clear that he could not have had reasons to believe that by reason of the assessee's omission to disclose fully and truly all material facts necessary for his assessment for the accounting year in question, incom....