1970 (4) TMI 46 - HC - Income Tax

Validity of a notice issued under section 148 of the Income-tax Act 1961 for reassessment of the income of the petitioner

Summary

Issues:
Validity of notice under section 148 of the Income-tax Act, 1961 for reassessment of income for the assessment year 1952-53.

Analysis:
The petitioner challenged the validity of a notice issued under section 148 of the Income-tax Act, 1961, for reassessment of income for the assessment year 1952-53. The petitioner contended that all material facts necessary for the assessment were disclosed during the original assessment and there was no omission or failure on their part. The notice was issued more than eight years after the relevant assessment year, and the satisfaction of the Central Board of Revenue was obtained and recorded as required by section 151 of the Income-tax Act, 1961.

Verification Objections:
Objections were raised regarding the verification of the petition and the reliability of the affidavit-in-opposition. The petitioner's accountant verified the petition, affirming his knowledge of the case. The respondent, Income-tax Officer, provided detailed reasons for the reassessment nearly a year before initiating action under section 147, which was considered satisfactory by the court. The court found no material defect in the petition's verification and no grievance regarding the statements in the affidavit-in-opposition.

Contention and Conclusion:
The petitioner argued that as the relevant accounting year ended before the alleged cash credits, there was no obligation to disclose them during the assessment year in question. However, if the credits were found to be undisclosed income, they should be considered for assessment in the relevant financial year. The court held that the failure to disclose these credits during the original assessment justified the Income-tax Officer's jurisdiction under section 147. Consequently, the rule challenging the notice under section 148 was discharged, with no order as to costs and the operation of the order stayed for four weeks.