TaxTMI 
TaxTMI 
1971 (8) TMI 79
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....sessment was validly made because the ultimate assessed income was Rs. 34,504 ? 3. Whether, on the facts and in the circumstances of the case, the reopening of the assessment was permissible under section 34 of the old Act of 1922, in view of the finding that the estimate of total escaped income was more than Rs. 1 lakh? " The status of the assessee is of a Hindu undivided family. At the relevant time it consisted of Jairam Dass and his sons, Madan Lal, Sri. Kishan, Rattan lal, Mohan Lal and Om Parkash, along with the sons of Banwari Lal, brother of Jairam Dass, namely, Ram Sarup, Ram Bhagat and Ram Kumar. In the present reference we are only concerned with the, assessment for the year 1947-48. In this year the assessee was assessed t....
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....the provisions of the new Act of 1961 authorising reopening of the assessments within the extended period of sixteen years, if the income which had escaped assessment was Rs. 50,000 or more, could not have been invoked in this case because there is no indication in section 297(2)(d)(ii) to show that it has retrospective effect. Section 297 is a saving provision which does not confer a new right on the Income-tax Officer to reopen the assessment in a case where the right had been lost before the new Act came into force, For this view Shri Ganesan relies on the ruling of the Gujarat High Court in the case of Induprasad Devshanker Bhatt v. J., P. Jani, Income-tax Officer, Ahmedabad and the ruling of the Punjab High Court in the case of S. Dars....
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....ion. This rule of interpretation is equally applicable whether the occasion which calls for its application is an amendment of an existing statute or the repeal of an existing statute by enactment of a new Act. There is no indication in section 297(2)(d)(ii) either in its express words or by way of necessary implication to indicate that it has retrospective effect. Section 297 is a saving provision and it would not be right to say that the legislature in the guise of a saving provision enacted a provision conferring a new right on the Income-tax Officer to reopen an assessment where the right had been lost before the new Act came into force. The same view of law has been laid down by the Circuit Bench of the Punjab High Court at New Delhi i....
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....trarily or capriciously according (sic) that certain amount which were in all reasonable probability of the nature of income belonged to the assessee, his competence to reopen the assessment on the basis of estimate of such income cannot be subsequently challenged. Now, in the present case, no doubt the Income-tax Officer in the first instance believed that income which escaped assessment for the year 1947-48 was Rs. 1,87,545. The Appellate Assistant Commissioner of Income-tax thoroughly scrutinized the items included in this estimate and found that an amount of Rs. 83,675 could reasonably be treated by the Income-tax Officer as items of the assessee's income at the time of initiation of the proceedings. This included Rs. 62,000 on account ....
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.... it was referable to an earlier period could be verified only after further scrutiny. At the time when he made the estimate, the Income-tax Officer could not possibly conceive the origin of the amount which was clearly not recorded in the books produced before him earlier. Similarly, in regard to the expenditure of Rs. 15,000 on the marriage of Smt. Bimla Devi, the information was culled out only from the statement of Ram Bhagat. The fact that the District judge accepted the explanation of the family that a certain withdrawal of Rs. 50,000 was for expenditure on the marriage did not in any way finally settle the source of the funds with which the marriage expenses were met. No expenditure was recorded in the books of the family for the marr....
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....orm some kind of belief or even a suspicion before the notice under section 34 is issued that the amount of escaped income for the year or any other year may amount to rupees one lakh or more in the aggregate. The satisfaction or belief or suspicion must necessarily be tentative because after the final adjudication it may be found that no income had escaped assessment at all. This is the context and background in which tile expression ' likely to amount to ' is to be construed. Mr. Sen did not contest the position that unless the factual basis, viz., that the amount of actual income was likely to exceed rupees one lakh, could be established, the revenue could not possibly get out of the mischief of the decision of the Supreme Court which I ....