9911796707
|
Home
Issues:
1. Validity of notice under section 148 of the Income-tax Act, 1961. 2. Disclosure of income under the Finance Acts of 1965. 3. Competency of the affidavit-in-opposition in the legal proceedings. Analysis: 1. Validity of notice under section 148: The case involved a challenge to a notice issued under section 148 of the Income-tax Act, 1961, by a partnership firm for the assessment year 1960-61. The petitioner contended that the notice was invalid as it was based on disclosures made by one of the partners under the Finance Acts of 1965. The court held that the Income-tax Officer had disclosed reasons for believing that income had escaped assessment, specifically citing discrepancies in hundi loans and interest payments. Despite arguments regarding the vagueness of the reasons, the court emphasized that it was not within its purview to assess the sufficiency of the reasons but only to determine if cause had been shown for the belief. Ultimately, the court ruled in favor of the respondent-Income-tax Officer, holding that there was a valid reason for issuing the notice under section 148. 2. Disclosure of income under the Finance Acts of 1965: The judgment highlighted the provisions of the Finance Acts of 1965, which allowed for the disclosure of escaped income by assessees. Under section 68 of the Finance Act, 1965, and section 24 of the Finance (No. 2) Act, 1965, provisions were made for declaring undisclosed income and paying taxes on such amounts. The case involved a partner of the petitioner firm making disclosures under these Acts for certain assessment years, which were accepted by the Commissioner of Income-tax. The petitioner argued that the reassessment proceedings were initiated based on these disclosures, which they contended should have been confidential and not used against them. However, the court did not find this argument compelling in the context of the legal provisions and upheld the validity of the reassessment notice. 3. Competency of the affidavit-in-opposition: A significant aspect of the judgment involved the competency of the affidavit-in-opposition filed by the department in response to the legal challenge. The petitioner raised objections regarding the lack of personal knowledge of the affiant, who was not directly involved in the original assessment or notice issuance. The court acknowledged the usual practice of requiring affidavits from individuals with personal knowledge but noted that in income-tax matters, this had not been strictly followed. Despite the petitioner's contentions, the court did not find the competency of the affidavit to be a sufficient ground to quash the notice under section 148. The judgment emphasized the importance of showing cause for the belief of escaped income rather than focusing on technicalities related to the affidavits. In conclusion, the High Court of Calcutta, in the judgment delivered by K. L. Roy J., upheld the validity of the notice issued under section 148 of the Income-tax Act, 1961, against the petitioner partnership firm. The court emphasized the legal provisions allowing for income disclosure under the Finance Acts of 1965 and the necessity for demonstrating cause for believing income had escaped assessment. Despite objections regarding the competency of the affidavit-in-opposition, the court ruled in favor of the respondent-Income-tax Officer, holding that there was a valid reason for initiating reassessment proceedings, and dismissed the petition with no order as to costs.
|
