TaxTMI 
TaxTMI 
1971 (10) TMI 25
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....C.W. No. 1399 of 1971 to decide the matter in dispute. The petitioner-firm filed its return for the assessment year 1963-64 on September 30, 1963, as required under section 139 of the Income-tax Act, 1961 (hereinafter called " the Act "). Along with the return of income, the balance-sheet was filed in which credit entries in the names of the following firms were shown : Rs. 25,000 against M/s. Tola Singh Sohan Singh Rs. 20,000 against M/s. Amir Chand Moti Ram. Rs. 23,000 against M/s. Mool Chand Chander Bhan. Rs. 10,000 against M/s. Gurdit Singh Kataria. Rs. 30,000 against M/s. Didar Singh Charan Singh. The taxable income was shown as Rs. 43,170. On March 3, 1964, the Income-tax Officer issued a notice under section 1....
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....s, confirmatory letters and certificates of these three firms which were placed on the file. The case was further discussed on July 25, 1964, and July 27, 1964, when the accountant appeared and the account books were examined. Thereafter, the Income-tax Officer passed the assessment order on July 27, 1964. In that order he definitely stated: "The balance-sheet was examined and loans were satisfactorily proved by the assessee." Thereafter, he worked out the net profit of the firm for the purposes of assessment. On December 23, 1970, the Income-tax Officer issued a notice to the petitioner-firm under section 148 of the Act stating that he had reason to believe that the firm's income chargeable to tax for the assessment year 1963-64 h....
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....after the expiry of the relevant assessment year. The learned counsel for the petitioner-firm has submitted that the petitioner-firm had disclosed fully and truly all material facts necessary for its assessment in each year of assessment and, therefore, it could not be said that there was an omission or failure on its part to do that. He has relied on the judgment of their Lordships of the Supreme Court in Calcutta Discount Company Ltd. v. Income-tax Officer, Calcutta, where Das Gupta J., speaking on behalf of the majority said : " ........ it is necessary to examine the precise scope of disclosure which the section demands. The words used are 'omission or failure to disclose fully and truly all material facts necessary for his assess....
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.... for somebody else--far less the assessee--to tell the assessing authority what inferences, whether of facts or law, should be drawn...... We have, therefore, come to the conclusion that while the duty of the assessee is to disclose fully and truly all primary relevant facts, it does not extend beyond this. " From this observation it follows that the " material facts " which the assessee is required to disclose at the time of assessment are the primary facts material and necessary for the purpose of his assessment. The assessee is under no obligation of further informing the Income-tax Officer that some of the entries in his account books or in the balance-sheet are false. It is for the Income-tax Officer to scrutinise the accounts of th....
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....pt of this information, the Income-tax Officer made enquiries with regard to the various cash credits appearing in the balance-sheet of the assessee for the year under consideration. He was satisfied that the cash credits mentioned in the names of the above-mentioned five parties were bogus and that the amounts shown against their names were really the assessee's income from undisclosed sources which he had successfully concealed from the revenue at the original assessment proceedings. There is ample material in the possession of the respondents which shows that these amounts are in fact the concealed income of the petitioner-firm. Hence, the impugned action against it. It is thus apparent that the Income-tax Officer has changed his opin....
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....hat he did not do any other business in British India. On that basis, the sale proceeds received by the assessee and deposited in his bank account with the Bank of India Ltd. or the deposits with M/s. Shamji Kalidas & Company were not subject to tax on the ground that they included the profit of the assessee which constituted his income earned in British India. Later on, the notices under section 34(1)(a) of the Indian Income-tax Act, 1922, for reassessment were issued to the assessee on March 28, 1957, and March 8, 1958, with respect to the assessment years 1947-48 and 1948-49. It was held by the learned judges of the Gujarat High. Court that the notices issued more than four years after the expiry of the assessment years were not valid an....