1992 (1) TMI 18

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....years at the end of the relevant assessment year if the escapement of income from tax takes place by reason of the failure on the part of the assessee to disclose truly or fully all material facts necessary for that assessment year. There is no dispute that the notice has been issued after the end of four years from the end of the relevant assessment year. The question is whether there was any omission or failure of the assessee in this case. In the recorded reason, the Income-tax Officer has stated that the reopening was for excessive grant of investment allowance which was not admissible in accordance with law. It appears from the facts noted in the recorded reasons that the reopening was being done on the basis of the facts disclosed ....

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.... equipment. Luminarie factory : The abovementioned new plant and machinery were used during 1979 for the purpose of that part of the business of Peico Electronics and Electricals Limited which was engaged in the production of electric lighting fittings." Therefore, the reopening was not because of any omission on the part of the assessee to disclose any material fact but because of the failure of the Income-tax Officer to study the notes given by the assessee which were filed along with the return of income. The Income-tax Officer has also mentioned that the provisions of section 150 were applicable in this case. The Income-tax Officer has recorded as follows : "The provisions of section 150(1) are also applicable in this case. ....

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....spect of these two factories in the documents accompanying the return for both these assessment years, viz., assessment years 1978-79 and 1980-81, are identical, the provisions of section 150(1) are applicable." The scope of section 150(1) has been examined by various courts from time to time under the Income-tax Act, 1961, and also the corresponding section under the repealed Indian Income-tax Act, 1922. The Supreme Court held in the case of ITO v. Murlidhar Bhagwan Das [1964] 52 ITR 335 that the "finding and direction that can be given by the Tribunal must be a finding or direction necessary for giving relief in respect of the assessment of the year in question". This judgment was recently followed by the Karnataka High Court in Consol....