1978 (5) TMI 46

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... and that the monies which are to be accumulated have to be invested in approved securities and no statement has been filed showing compliance of the same. On these two grounds he held that he had reason to believe that by reasonable of the assessee's omission or failure to disclose fully and truly all materials, income chargeable to tax has escaped assessment. The AAC held that the reopening in all these three years was not valid. 2. Since the ITO has used the very words found in the statute in s. 147(a) to seems fairly clearly that he has reopened the assessment only under s. 147(a). The reopening was within four years of the assessment year and so he was not obliged to take the Commissioner's sanction under s. 151(2). At the time of he .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... a failure by the assessee to comply with the statements, made by them in Form No. 10. So the ITO on a perusal of the records cannot be sure whether the as has complied with the requirements of s. 11(2) and had in fact invested the amounts required to be accumulated as per the section. To this extent there is a failure on the part of the assessee. So the reopening under s. 147(a) can be held to be valid. We may in this connection refer to the decision of the Supreme Court in CIT vs. Gillanders Arbuthnot Co (1). It has been laid down there that if there are in fact some reasonable grounds for the ITO to believe that there had been any non-disclosure as regards primary facts which could have a material bearing on the question of under-assess .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... ssment as well as in the re-assessment. The main feature in the re-assessments are the disturbance of the annual letting value of one of the properties and by disallowing the claim for collection charges. We agree with the assessee that on both points the ITO was not correct. Rs. 1,200 represents the annual letting value of a property situated in a 97 acres of agricultural farm of the assessee. It is obviously used for the purpose of agriculture and the income would be exempt under s. 2(1)(c). So Rs. 1,200 will be deleted from the income computed for the three assessment years. We also agree with the disallowance of the collection charges was not correct. It is true that the assessee has only one office for looking into the collection work .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X