TaxTMI 
TaxTMI 
2002 (11) TMI 71
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....ted to the same claiming that the share income belonged to the minors individually and should not be included in the hands of the estate. The Appellate Tribunal, in the appeal preferred by the estate, upheld the objection raised by the executor and held that the share income could not be considered as income of the estate. The order of the Appellate Tribunal was the subject matter of consideration before this court in CIT v. A. Savudappan [2000] 244 ITR 620 (in which one of us was a party), and this court, by judgment dated April 30, 1998, agreed with the views expressed by the Appellate Tribunal and held that the Income-tax Officer was not justified in clubbing the minors' share income from the firm with the income of the estate. The court also held that the provisions of section 168 of the Income-tax Act were not applicable. The Income-tax Officer found that the assessee, mother of the two children, did not file her return of income including the share income of the minors. It is stated that the assessee has not, in fact, filed returns for the assessment years 1976-77 to 1984-85. The Income-tax Officer was of the view that the share income of the minors from the firm in which ....
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....and the reopening of assessments under section 147(a) was without jurisdiction. The Appellate Tribunal did not go into the merits of the case, but allowed the appeals preferred by the assessee. The Appellate Tribunal, on the basis of the directions of this court, has stated a case and referred the following common question of law for all the assessment years in question: "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal is correct in law in annulling the assessment on the ground that the Assessing Officer has no jurisdiction to make the assessment under section 147(a)?" We heard Mrs. Pushya Sitharaman, learned senior standing counsel for the Revenue, and Mr. R. Janakiraman, learned counsel for the assessee. It is well settled now by several decisions of the Supreme Court that for the Income-tax Officer to assume jurisdiction to issue notice under section 147(a) of the Income-tax Act, two conditions must be complied with; firstly he must have reason to believe that the income of the assessee had escaped assessment; and secondly, he must have reason to believe that such escapement is by reason of omission or failure on the part of the assess....
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.... counsel for the assessee. There is no finding by the Appellate Tribunal that all primary facts necessary for the completion of assessment were present before the Income-tax Officer as the assessee did not file returns at all in her individual capacity. Therefore, the fact that the share income was considered in the assessment of the estate or was assessed in the hands of the minors under section 143(1)(a) of the Income-tax Act is not of much relevance in considering the question whether the primary facts were before the Income-tax Officer at the time of completion of assessment of the assessee. As a matter of fact, there was no assessment at all of the assessee prior to the issue of notice under section 148 of the Income-tax Act and the first assessment itself was made after the issue of notice under section 148 read with section 143(1)(a) of the Income-tax Act. Therefore, the submission of learned counsel for the assessee that the Income-tax Officer had all necessary facts at the time of completion of assessment of the assessee is erroneous and no assessment was completed in the hands of the assessee prior to the issue of reassessment notice. The second submission of learned c....
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....ir individual assessments. Thereafter another notice was issued by the Income-tax Officer within a few days to reopen the assessment of the family to include the amount of high denomination notes encashed separately by the members. It was also found as a matter of fact by the Appellate Assistant Commissioner that the five members merely acted as name lenders of the Hindu undivided family and in spite of knowledge about the existence of the fact that the five members acted on behalf of the Hindu undivided family, the Income-tax Officer earlier completed the assessment. The Supreme Court held that when the Income-tax Officer was in possession of all the facts and he proceeded to make the reassessment of the individual members by including the amounts in question in their individual accounts, he could not, a few days later merely change his opinion and issue notices under section 34 to the Hindu undivided family. It is relevant to mention here that in the case before the Supreme Court the Hindu undivided family filed the return and the individual members filed separate returns and the Income-tax Officer had knowledge of the fact that the amount really belonged to the Hindu undivided f....
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....n Gordon Woodroffe and Co. Ltd. v. ITO [1964] 51 ITR 12. The decision hardly helps the assessee as in Gordon Woodroffe and Co. Ltd.'s case [1964] 51 ITR 12 (Mad), there was a return of income of a foreign company represented by its Indian agent and after considering all the materials placed before him, the Income-tax Officer completed the assessment and after the order of assessment, the Income-tax Officer initiated reassessment proceedings for inclusion of amounts on the ground that the London company was really a resident company and there was a delay in submitting the return. This court held that there was a valid return filed in the status of non-resident and since there was no default in submitting the return, the department could not assume that the real status of the assessee was that of a resident and deduce therefrom the position that the return submitted was not proper. The decision is distinguishable as in the present case the assessee has not filed any return of income for the relevant assessment years in question. We hold that it would be humanly impossible for the Income-tax Officer dealing with hundreds of cases to remember that the income offered and assessed in ....
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....ruly the material facts for the purpose of assessment of her income. The Appellate Tribunal proceeded only on the basis that the minors' share income was assessed under section 143(1)(a) of the Income-tax Act and therefore there was no failure on the part of the assessee in disclosing the income. We are unable to subscribe to the view of the Appellate Tribunal. The assessment of the minors under section 143(1)(a) is different and the question that arises is whether the assessee has disclosed in her return of income the share income of minors which is includible in her assessment. The mere fact that the minors were assessed is not a ground to hold that the Income-tax Officer had no jurisdiction to invoke the provisions of section 147(a) of the Income-tax Act as against the assessee when he had reason to believe that the income had escaped assessment in the hands of the assessee. Further, it is also relevant to mention here that the assessment under section 143(1)(a) of the Income-tax Act is a summary assessment and in a summary assessment, the return submitted by the assessee is accepted without any enquiry and without any evidence in support of the return. In other words, the as....