TaxTMI 
TaxTMI 
1961 (9) TMI 104
X X X X Extracts X X X X
X X X X Extracts X X X X
....so given the figures of his income from the shares he held in these firms on the basis of the books of these firms. It is not mentioned in the statement of the case what these figures were, but it has been stated before us without contradiction that the net balance of the assessees income from these sources showed a small loss. The Income-tax Officer dealt with this matter in the following words : "During the year of account, the assessee had shares in (1) Dhanpatmal Jawaladas, Bombay, (2) Shri Mahabir Ingar Pattra Colliery Co., Katras Garh, (3) Ram Narain Satya Paul, Jullunder, only. The other partnership concerns mentioned in the last years assessment order did not exist in the year of account. Assessed profit or loss from the partnership concerns in the year of account is not available, though according to the assessee the net result has been a loss. For the present, I ignore these shares and necessary rectification will be made or receipt of intimation about the assessed shares of profit or loss." It seems that after the final assessments had been made of these partnerships for the years in question the Income-tax Officer issued a notice to the assessee under s....
X X X X Extracts X X X X
X X X X Extracts X X X X
....earned counsel for the assessee has, however, relied on two cases which appear to be more directly in point. The first of these is a decision of a division bench of this court in Chuni Lal Nayyar v. Commissioner of Income-tax. In that case the assessee firm in its return for the year 1943-44 stated that it had a consideration share in a business carried on by a firm at Ahmedabad, but the exact figure of his share in that firm was not available and should be obtained from the Income-tax Officer, Ahmedabad. Although, however, the Income-tax Officer Amritsar, apparently sent a letter to the Income-tax Officer, Ahmedabad, enquiring about the matter this did not elicit a prompt reply and when completing the assessment of the firm he either deliberately omitted or forgot to take into consideration the income form the Ahmedabad firm. Later, after the reply had been received from the Income-tax Officer at Ahmedabad, he issued a notice under section 34 and revised the original assessment by adding the Ahmedabad income. The question referred on these facts was whether, in the circumstances of the case, the intimation as to figures received from the Income-tax Officer, Ahmedaba....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... income on a later date, he cannot rely on the provisions of section 34 for the purpose of reopening the assessment. This is not a case where the Income-tax Officer had believed that there was no other income and the total income was as declared by the assessee on which he proceeded to assess the income-tax. From the order of assessment mentioned above, as also from several other orders, it appears that it was well known that the assess was being under-assessed. It cannot, therefore, be said that the fact was discovered later that the assessee had been underassessed. In this view of the matter notice under section 34 was clearly wrong and the Income-tax Officer had no authority to reopen the assessment already made by him." The relevant portion of section 34(1) reads : If -.... (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year, or have been under-assessed, or assessed at too low a r....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed, though the point was also raised that it was the duty of the Income-tax Officer to complete an assessment under section 23 of the Act on the total income of the assessee. There appears, however, to be some distinction between the facts of that case and those in the present case, since it was admitted there that the Income-tax Officer at the time of making the assessment knew that there were some profits from the assessees share in two other companies, whereas in the present case according to the available data at the time of assessment the net income from the assessees share in the three firms in question showed a loss, if only a small one. As far as I can see there is nothing in the present words of section 34(1)(b) which would rule out a reassessment under these provisions in a case like the present one. Of course, the matter would have been simple, and much trouble would have been saved, if the Income-tax Officer had accepted the assessees figures from the books of the partnerships at their face value and had incurred the small loss in his computation of the assessees income. In such a case I do not consider that when the true figures were received aft....