TaxTMI 
TaxTMI 
1998 (8) TMI 64
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....uld be subject to the result of the writ petition. It was stated at the Bar that not only assessment order pursuant to the impugned notice was passed subject to the result of this case but the appeal preferred by the petitioner against the said order has also since been dismissed whereafter it has filed second appeal before the Income-tax Appellate Tribunal, Patna Bench, which is pending disposal. Counsel for the petitioner has rightly, if I may say so, pressed this writ petition even though the assessment order has been passed and the appeal has also been dismissed in the meantime, because those orders have been passed subject to the result of this case, and in the event of the impugned notices being struck down by this court, the assessment order will automatically fall to the ground. However, in view of the pendency of the appeal before the Appellate Tribunal I propose to confine myself to the validity of the impugned notice under section 148 of the Act, which indeed is the scope of this writ petition, although counsel for the petitioner endeavoured to go into the facts of the case and assail the documents on the basis of which the assessment has been reopened and notice has ....
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....552 had been realised by the CPWD through adjustment of the bills on March 31, 1986. The amount of Rs. 1,40,552 therefore could not have been shown as secured advance in the balance-sheets for the assessment years in question. The petitioner appeared before the Assessing Officer through lawyer on November 30, 1992, and made a prayer to furnish copy of the reasons for the initiation of the impugned proceeding. The Assessing Officer furnished copy of the letter of the Executive Engineer, CPWD, Ranchi Central Division, Ranchi, dated October 29, 1992. The petitioner objected to the correctness of the statements made by the executive engineer in the aforesaid letter dated October 29, 1992, pointing out that the contents of the said letter were contradictory to the certificate granted by the same authority, i.e., Executive Engineer, CPWD, Ranchi Central Division, on October 8, 1986, which had been filed along with the return for the assessment year 1986-87 and on the basis of which the aforesaid assessment order dated November 28, 1986, had been passed. The petitioner also filed xerox copies of some of the bills to substantiate its point. The Assessing Officer, however, issued the imp....
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....) as follows : "With reference to your letter No. above, it is intimated that P. K. Halder and Co., had taken secured advance of Rs. 1,40,552 in two running bills as per details given below and these advances of Rs. 1,40,552 had already been recovered from the firm in next R/A bills. No secured advance are outstanding against P. K. Halder and Co. It is further intimated that there is no provision of 'unsecured loan' to the contractor as shown by the assessee except secured advance in this Department." From the counter affidavit it appears that on receipt of the said letter dated October 29, 1992, the Income tax Department made further queries from the Executive Engineer, CPWD, Ranchi Central Division, pursuant to which the executive engineer furnished details of payment and recoveries along with his letter dated November 2, 1993, copy whereof has been marked annexure-A to the counter affidavit. It was only thereafter that the show-cause notice dated November 3, 1992, was issued to the petitioner, vide annexure-4 to the petition. It would thus appear that the contents of the certificate dated October 8, 1986, on the one hand, and the two letters dated October 29, 1992 and N....
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....accept the plea of full and true disclosure of material facts. If the contents of the said letters of the executive engineer dated October 29, 1992, and November 2, 1992, are correct it would follow that the amount of Rs. 57,638 and Rs. 82,914 (apart from another sum of Rs. 54,190) had been adjusted against the second running account bill and the sixth running account bill on March 31, 1986, in full and final satisfaction of the bills. In the return which the petitioner filed on August 27, 1986, however, he showed the aforesaid amounts as secured advance. Merely because, as alleged the petitioner produced its books of account before the Assessing Officer, it does not necessarily follow that there was full and true disclosure of all material facts within the meaning of section 147(a) of the Act. This is what Explanation 2 to section 147 provides. The notice can also be justified under section 147(b) of the Act. Clause (b), as noticed above, empowers the Assessing Officer to reassess the income which he reasonably believes to have escaped assessment for the particular assessment year even in cases where there has been no omission on the part of the assessee to either file a return....
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....ave asserted in paragraph 20 of the counter affidavit that the Commissioner of Income-tax, Ranchi, had given his sanction after due application of mind. The submission of Mr. Moitra in this regard also is accordingly rejected. Before I conclude I must notice the decisions which were relied upon by Mr. Moitra in support of his contentions, He firstly placed reliance on CIT v. Burlop Dealers Ltd. [1971] 79 ITR 609(SC).In that case the Supreme Court following its earlier decision in Calcutta Discount Co. Ltd. v. ITO [1961] 41 ITR 191, held that the assessee was under no obligation to disclose his own inferences arising from certain facts ; his obligation was merely to disclose primary facts relevant to the assessment. However, in the same paragraph the court further observed that mere production of the books of account or other evidence from which material facts could with due diligence have been discovered does not necessarily amount to disclosure within the meaning of section 34(1) of the Indian Income-tax Act, 1922, corresponding to section 147(a) of the Income-tax Act, 1961, as it stood at the relevant time. To the same effect is the decision of this court in Durga Sharan Ud....