TaxTMI 
TaxTMI 
2001 (7) TMI 40
X X X X Extracts X X X X
X X X X Extracts X X X X
....d Industries and Commercial Corporation of Calcutta. According to the petitioner, the same were allowed in the assessment made on February 28, 1972, as well as in the subsequent assessment made on March 28, 1973. It is further pertinent to mention here that the appeals and other proceedings were not in respect of the said deduction allowed in the assessment by the said authorities. It is further contended that the notice under section 148 of the said Act was issued on March 22, 1978, after the expiry of four years from the date of assessment made in the year 1969-70. It is further contended that the Income-tax Officer was required to satisfy two conditions-- (i) he must have reason to believe that there was omission or failure on the part of the petitioner to disclose fully and truly all material facts necessary for its assessment; (ii) he must have reason to believe that by reason of such omission or failure income chargeable to tax escaped assessment. The learned advocate appearing on behalf of the petitioner relied upon a judgment reported in Phool Chand Bajrang Lal v. ITO [1993] 203 ITR 456 (SC) and contended that the hon'ble Supreme Court has held that the Income-t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....etitioner. He further contended that it is also well-settled that reason to believe is not the same thing as reason to suspect and that belief cannot be based on suspicion. In support of such submission, he relied upon a judgment reported in Indian Oil Corporation v. ITO [1986] 159 ITR 956 (SC). He further contended that the case of the Income-tax Officer in the reasons recorded by him is as follows: (i) In the assessment proceedings of the petitioner for the subsequent years it appeared that the petitioner never paid grinding charges save and except in the calendar year 1968, relevant to the assessment year 1969-70. (ii) At the time of tour at Renukoot during February/March, 1978, he wanted to see the original bills of Allied Industries and Commercial Corporation but was told that the original bills were not traceable. Transporter's bills, however, were produced but no evidence could be produced that the goods were unloaded at Calcutta or any grinding operation was done at Calcutta or that the goods were again loaded at Calcutta after grinding. The truck which loaded C.P. Coke from Gauhati reached Renukoot with the same C.P. Coke. No document or paper was produced in supp....
X X X X Extracts X X X X
X X X X Extracts X X X X
....annot be based on suspicion. The recorded reasons do not show that any fresh facts came to light which were not previously disclosed or some information with regard to the facts previously disclosed came into the possession of the Income-tax Officer which affected the veracity of such facts. The learned advocate appearing on behalf of the respondent authorities has submitted before this court that the Income-tax Officer has recorded his reasons which are disclosed in the affidavit-in-opposition and he also drew my attention to paragraph 5 of the affidavit-in-opposition to show such reasons. He further submitted that whether the grounds are adequate or not, is not a matter for the court to investigate. In other words, the existence of the belief can be challenged by the assessee but not the sufficiency of the reasons for the belief. Moreover, the satisfaction of the Income-tax Officer must not be passed subjective but the same should be objective one. In support of such contention, he relied upon the judgments reported in S. Narayanappa v. CIT [1967] 63 ITR 219 (SC); Kantamani Venkata Narayana and Sons v. First Additional ITO [1967] 63 ITR 638 (SC); CIT v. A. Raman and Company....
X X X X Extracts X X X X
X X X X Extracts X X X X
....a false or untrue statement at the time of original assessment and when that falsity comes to notice, to turn around and say: "You accepted my lie, now your hands are tied and you can do nothing". It would be a travesty of justice to allow the assessee that latitude. It is a fact that the petitioner was given an allowance in respect of the grinding charges which has been claimed by the petitioner in the original return filed by them for the assessment year 1969-70. After taking into account the facts cited before me it appears that the Income-tax Officer subsequently found that the income chargeable to tax had escaped assessment and the assessee had not made full and true disclosure of the material facts. Accordingly, he issued the notice on such belief under section 148 in the instant case. It is also a fact that the Income-tax Officer acquires jurisdiction to reopen an assessment under section 147(a) when he has reasons to believe that by reason of omission or failure on the part of the assessee to make full and true disclosure necessary for its assessment during the concluded assessment proceedings, any part of his income, profits or gains chargeable to income-tax has escaped as....