TaxTMI 
TaxTMI 
2002 (3) TMI 34
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....ddy. The assessment for the year 1986-87 ending with March 31, 1986 is on a total income of Rs.5,51,700. In the course of assessment, the Assessing Officer had noticed that the following shortages were discovered by the sales tax authorities on the basis of a raid conducted by them on November 6, 1985. (1) shortage of 2,068.600 litres of arrack; (2) difference of 1,223 litres in the stock of vinegar; (3) unaccounted purchases of 60,230 litres of arrack from April 1, 1985, to October 30, 1985, from slips recovered. The Sales Tax Department had proceeded to add a sum of Rs.42,71,520 on account of suppressed sales being the sale value of the above 1,06,760 litres of arrack at Rs.40 per litre. This issue was agitated by the assessee. This was disputed and was pending at the time of income-tax assessment proceedings before the Agricultural Income-tax and the Sales Tax Appellate Tribunal. The Tribunal set aside the above addition of Rs.41,30,060 being the value of the abovesaid liquor made on the ground of suppression. The Income-tax Assessing Officer was aware in the course of the original assessment proceedings itself the claim with respect to the suppressed income. But nev....
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.... 19-6-1989 Revised order by the Sales Tax Tribunal calling upon the inclusion of the alleged suppressed turnover 27-3-1990 The period of four years with respect to the assessment year 1986-87 would end with 31-3-1991 Notice under section 148 was issued on 3-8-1992 ------------------------------------------------------------------------ The material part of section 147 reads as under: "147. Income escaping assessment.--If the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 15....
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....dmittedly compounded by the assessee by paying Rs.30,000. Therefore, plainly the factum of raid was known to the Assessing Officer at the time of proceedings before him, and the factum of the assessee's admission of the undisclosed quantity of arrack by compounding the offence is also known to the Assessing Officer. The question in such circumstances is what could be the course open to the Income-tax Officer. The Income-tax Act, is a self contained code. The statute confers on the Income-tax Officer to take all the steps necessary to complete the assessment on a person who is assessable to income-tax. The officer has power to summon a person to appear, to call upon him to produce evidence, to discover documents, to summon a person to appear in connection with income-tax assessment, to hear a person and complete an adjudicating process. He is exercising the power of an adjudicating body. An assessee has a right to be heard and the decision of the officer affects the right to property of the assessee. It means, in the decision making process there is an element of weighing and sifting of evidence tendered before him or collected by him and coming to his own conclusion. By providin....
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....be an incorrect stand. But from the set of facts within the knowledge of the Assessing Officer as to what should be the inference to be drawn by the authority concerned is his decision, any inference drawn by the Assessing Officer on the basis of the set of facts available is the realm of his decision making power and cannot attract the proviso to section 143. The real facts discovered at the time of the raid were not withheld from the knowledge of the Income-tax Officer. These may be material circumstances which may entitle the officer to conclude that there has been a suppression of income. In this case it was open to the Assessing Officer concerned not to accept the verdict of the Sales Tax Appellate Tribunal and proceed as if there is suppression. His failure to act legally cannot be a shield for him to invoke the proviso to section 143 of the Act. Therefore, we cannot say that the proviso to section 143 has any application to the present case. Similar is the view taken by the Supreme Court in Gemini Leather Stores v. ITO [1975] 100 ITR 1, wherein it is held that if the Income-tax Officer had all the material facts before him when he made the original assessment and if he drew ....
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....hich tends to expose the untruthfulness of those facts. In such situations, it is not a case of mere change of opinion or the drawing of a different inference from the same facts as were earlier available but acting on fresh information. Since, the belief is that of the Income-tax Officer, the sufficiency of reasons for forming the belief is not for the court to judge but it is open to an assessee to establish that there in fact existed no belief or that the belief was not at all a bona fide one or was based on vague, irrelevant and non-specific information. To that limited extent, the court may look into the conclusion arrived at by the Income-tax Officer and examine whether there was any material available on the record from which the requisite belief could be formed by the Income-tax Officer and further whether that material had any rational connection or a live link for the formation of the requisite belief. It would be immaterial whether the Income-tax Officer, at the time of making the original assessment, could or could not have found by further enquiry or investigation, whether the transaction was genuine or not if, on the basis of subsequent information, the Income-tax Off....