TaxTMI 
TaxTMI 
1990 (4) TMI 35
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....urns of income were filed on July 24, 1977, and June 19, 1978, respectively. The assessments were completed under section 143(3) on June 22, 1978, and February 20, 1981, respectively. On receipt of an appraisal report dated October 24, 1983, from the Assistant Director of Inspection (Investigation), Unit-III(3), the Income tax Officer had reason to believe that the income of the petitioner charge able to tax had escaped assessment for the two years by reason of non disclosure of necessary material fully and truly at the time of the original assessment. Accordingly, he issued the impugned notice. The reasons recorded by the Income-tax Officer for reopening the assessments were furnished to the court as well as to counsel for the petiti....
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....al and relevant facts which the assessee knew and the assessing authority might or might not know. According to Shri Dalvi, the later decision of the Supreme Court was not applicable to the facts of the case. Explanation 2, it was pointed out, was considered by the Supreme Court in one of its earlier decisions in CIT v. Burlop Dealers Ltd. [1971] 79 ITR 609 and the said decision was followed (sic) by the Supreme Court in ITO v. Lakhmani Mewal Das [1976] 103 ITR 437. For a proper appreciation of the rival contentions, it is desirable to reproduce the reasons recorded by the Income-tax Officer for reopening the assessment for the year 1978-79 hereunder : "Action against this firm, its partners and other sister concerns was taken on Febr....
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....further that these and other loans need scrupulous scrutiny. In addition, some commission payments have also been found to be of doubtful nature by him" can by no stretch of imagination be treated even as information. This piece of observation may, at best, be considered as an advice by a brother officer to the Income-tax Officer to make an investigation into certain aspects. Therefore, the only worthwhile information/material that requires consideration is "a number of persons who are stated to have advanced loans are mere name-lenders/havala loan givers and such loans amount to Rs. 1,95,000". It is evident that even the Assistant Director of Inspection, in his appraisal report, does not indicate as to who are the name-lenders and whether ....
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....v. Madnani Engineering Works Ltd. [1979] 118 ITR 1. It was held that, after an assessee had given the particulars of loans with confirmation letters, it was for the Income-tax Officer to investigate and determine whether those documents were genuine or not. The assessee could not be said to have failed to make a true and full disclosure of the material facts by not confessing before the Income-tax Officer that those documents were bogus. Under the circumstances, even if it is assumed that formation of the belief that income chargeable to tax had escaped assessment had some basis the second condition that the escapement should be by reason of failure on the part of the assessee to disclose truly and fully the material facts is certainly abse....