1989 (8) TMI 6 - HC - Income Tax

Summary

Issues Involved:

1. Obligation of the assessee to disclose the income of her minor daughter in her return of income.
2. Justification of the Income-tax Officer in reopening the assessment under section 147(a) of the Income-tax Act, 1961.

Detailed Analysis:

1. Obligation of the Assessee to Disclose Income of Minor Daughter:

The primary issue was whether the assessee was under an obligation to disclose the income of her minor daughter in her own return. The Tribunal held that the assessee was not obligated to disclose this income. The court examined the relevant legal provisions and precedents, particularly focusing on the form of the income-tax return at the material time. It was noted that the form did not have a separate column for such disclosure.

The Supreme Court's decision in CIT v. Smt. P. K. Kochammu Amma [1980] 125 ITR 624 (SC) was pivotal. The court held that although the assessee must disclose all income includible in her total income, the form at the time did not specifically require the disclosure of the minor's income. The court referenced the amendment to the form effective from July 1, 1972, which added a specific column for such disclosures, indicating that prior to this amendment, there was no explicit requirement for the assessee to disclose the minor's income.

2. Justification for Reopening the Assessment under Section 147(a):

The second issue was whether the Income-tax Officer was justified in reopening the assessment under section 147(a) due to the alleged omission by the assessee to disclose the income of her minor daughter. The Appellate Assistant Commissioner and the Tribunal both held that the Income-tax Officer did not have the jurisdiction to reopen the assessment.

The court analyzed the relevant legal framework and precedents, including the Supreme Court's decisions in V.D.M.RM.M.RM. Muthiah Chettiar v. CIT [1969] 74 ITR 183 (SC) and ITO v. Radheshyam Ladia [1987] 166 ITR 134 (SC). These decisions established that in the absence of a specific column in the return form for disclosing such income, the assessee could not be deemed to have failed to disclose fully and truly all material facts necessary for assessment.

The court noted that the form of return in force at the time of the original filing in 1962 did not provide for any separate column to disclose income under section 64. Even the 1967 Rules, which came into force on April 1, 1967, did not rectify this. The new form with a separate column came into effect only from July 1, 1972. Therefore, the court concluded that there was no omission or failure on the part of the assessee to disclose all her income.

Conclusion:

The court answered the first question in the affirmative, confirming that the assessee was under no obligation to disclose the income of her minor daughter in her return. The second question was answered in the negative, indicating that the Income-tax Officer was not justified in reopening the assessment under section 147(a). Both answers were in favor of the assessee, and no order as to costs was made.