9911796707
TMI Blog1964 (6) TMI 1X X X X Extracts X X X X X X X X Extracts X X X X ..... eady been assessed in the other file, no further action was necessary. Returns have been filed up to the assessment year 1961-62. Some complaint has been made in the petition regarding the strange procedure adopted in mixing up the files, but in this application the learned standing counsel appearing on behalf of the petitioner has not pressed that point. The only point pressed by learned counsel is the illegality of certain notices served under section 34(1)(a) of the Indian Income-tax Act, 1922. In order to appreciate the point, it will be necessary to state certain facts. It appears from the materials placed before me that the assessee had been connected with racing for a large number of years. In fact, during the assessment for past years, a controversy arose as to whether he should be allowed the loss in his racing account. The following extract from the assessment order of the petitioner for the assessment year 1949-50 shows this clearly : " In the return filed and P/L account and balance-sheet furnished, the loss in respect of the race account has not been claimed and only the balance amount has been shown in the balance-sheet treating it as usual as an asset. But, subsequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Bhicomchand Bagree although the account was in the petitioner's name, and this was disclosed and the profit and loss of the "racing hobby " had been decided long ago. An extract from the 1949-50 assessment order noted above was set out. On or about 22nd March, 1962, notices were issued under section 34(1A) for the assessment years 1943-44, 1944-45 and 1945-46. It is now stated that there was a typing mistake and that they were notices under section 34(1)(a). The reasons for issuing notices under section 34 were not, of course, communicated to the petitioner but they have now been set out in an affidavit filed by Pyaray Lal Kanojia, Income-tax Officer, " B " Ward, District II, Calcutta, affirmed on 6th July, 1962. The reasons have been stated as follows: " On receipt of certain information it was found that the assessee and/or the petitioners had deposited in the Eastern Bank Rs. 4,98,045 during the period 4th January, 1943, to 29th August, 1944. It was also found from the petitioner's file for the assessment years 1944-45 to 1945-46 that the petitioner did not disclose this bank account for the assessment years. In view of the same, proceedings were taken for reopening the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... answer given in paragraph 11 by Shri Kanojia is that he did not admit any of the allegations in paragraph 14. By the rule nisi the respondents were commanded to produce in court or cause to be forwarded to the Registrar of this court for being so produced, all the records of the proceedings of the income-tax case in respect of the said notice issued under section 34 of the Indian Income-tax Act, 1922. In spite of this, neither the order-sheets nor the other records were produced. I might mention that this matter came up for hearing and was adjourned from time to time. In fact, on one occasion it was discovered that the affidavits were wholly inadequate and opportunity was given for filing a fresh set of affidavits. In spite of this, the respondents have not placed before the court the relevant records. At the last hearing, when I asked for the record in the morning, it was stated that they would be produced in the afternoon, and in the afternoon a file was produced which did not contain the order-sheets. It contained fresh carbon copies of the assessment orders for several years, I enquired as to why fresh carbon copies were produced of orders which were nearly 20 years old. The le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is no ground for reopening an assessment under section 34(1)(a). Because the assessing authority previously held another opinion as to the legal effect of certain primary facts, and the assessing authority later on took a different view, there does not exist any ground for such reopening. In this background of the law, let us examine the facts of the present case. From the affidavit of Sri Kanojia we now know the reason for attempting to reopen the assessments for the assessment years 1943-44, 1944-45 and 1945-46. The only reason is that the assessee did not disclose the Eastern Bank account for these years, wherein there was a deposit of Rs. 4,98,045 during the period January 4, 1943, to August 29, 1944. The only reason for saying that the assessee had not disclosed this bank account is stated to be that in the petitioner's file for the relevant assessment years, it is not shown that he has disclosed that account. The Income-tax Officer who issued the notice under section 34(1)(a) was Mr. M. S. Mann. He, however, has not filed any affidavit. Another Income-tax Officer files an affidavit. Naturally, his knowledge is confined to the record. He has made vag ue statements in his af ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tatement is concerned, the order-sheets have not been produced. I can only come to the conclusion that the Income-tax Officer concerned had no reason whatsoever to be of the opinion that the assessee had failed to disclose the Eastern Bank account for the relevant years. This, in my opinion, must be the inevitable conclusion based on the materials placed before the court, together with the curious conduct of the respondents. It does not appear that the assessing authorities kept a careful note of the documents produced before them. They did not care to answer letters in time. It would be strange if an Income-tax Officer could be permitted, after nearly 20 years to say that the assessment should be reopened because a certain document is not to be found on the record. It may be that the document had been produced and not noted. It may again be that the document was on the record and has either been lost or deliberately removed. The fact that a statement made by the assessee was not contradicted for four years may give rise to very adverse inferences unfavourable to the respondents. The fact that the order-sheets have not been produced raises a presumption that, if they had been produ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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