1971 (4) TMI 6 - HC - Income Tax

Income of undisclosed sources- Tribunal s decision that the income is assessable has been questioned in appeal before the High Court - Whether writ of prohibition can be issued against the notice of reassessment u/s 148 -

Summary

Issues:
1. Jurisdiction of the Income-tax Officer to initiate reassessment proceedings for the assessment year 1961-62.
2. Whether the undisclosed income of Rs. 10,000 each can be assessed in the assessment year 1961-62 or 1962-63.

Analysis:

1. Jurisdiction of the Income-tax Officer to initiate reassessment proceedings for the assessment year 1961-62:
The petitioners challenged the jurisdiction of the Income-tax Officer to bring to charge a sum of Rs. 10,000 in the assessment year 1961-62. The petitioners argued that since the borrowal was made after March 31, 1961, it could not be considered for the assessment year 1961-62. However, the court held that the Income-tax Officer had jurisdiction to consider whether the sum could be charged to tax in the assessment year 1961-62. The court emphasized that the Income-tax Officer had material before him to believe there was non-disclosure of material facts, giving him the authority to issue a notice under section 148. The court ruled that the Income-tax Officer had the jurisdiction to proceed with reassessment proceedings for the assessment year 1961-62.

2. Assessment of undisclosed income in the assessment year 1961-62 or 1962-63:
The petitioners admitted that the undisclosed income of Rs. 10,000 each was their taxable income. However, they contested whether this income should be assessed in the assessment year 1961-62 or 1962-63. The court noted that the petitioners did not specify when the income was earned. The court held that once the taxability of the income was not in dispute, the assessing officer had the jurisdiction to determine in which year it should be brought to tax. The court emphasized that the question of which year the income should be related and taxed was within the Income-tax Officer's province, and the petitioners could raise objections regarding the assessability of the income in a particular year. The court dismissed the writ petitions, stating that the Income-tax Officer had the authority to decide the year in which the undisclosed income should be assessed.

In conclusion, the court upheld the jurisdiction of the Income-tax Officer to initiate reassessment proceedings for the assessment year 1961-62 and ruled that the assessing officer had the authority to determine in which year the undisclosed income of Rs. 10,000 each should be assessed. The court emphasized that the petitioners' objections regarding the assessability of the income in a particular year should be raised before the Income-tax Officer.