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TMI Blog1966 (10) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 66(2) of the said Act : " (1) Is not the finding of fact by the Tribunal as to the applicability of clause (a) of sub-section (1) of section 34 vitiated by relying on the affidavit of Manohar Lal which affidavit was inadmissible in evidence? (2) Whether, on the facts and circumstances of the case, clause (a) of sub-section (1) of section 34 would rightly apply ? " The dispute relates to the assessment year 1946-47, the corresponding accounting year being the year ended on 16th October, 1945. The assessee is a Hindu undivided family carrying on business in the name and style of Hukam Chand Ulfatrai. On 12th January, 1946, the Central Government promulgated the Bank Notes (Declaration of Holdings) Ordinance, 1946, and the High Deno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,000 each which the assessee paid to one constituent on January 12, 1946. It is unnecessary to go into the truth of the explanations tendered by the assessee in this behalf, because if this sum of Rs. 73,000 was his income, it was income received in January, 1946, or earlier and not later. There can be no previous year in respect of income from an undisclosed source other than the financial year next preceding the assessment year. On this ground the addition of Rs. 73,000 in the assessment for 1947-48 must be deleted." As a consequence of the order of the Income-tax Appellate Tribunal mentioned above, the Income-tax Officer reopened the assessment for the assessment year 1946-47 and issued a notice to the assessee under section 34 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this transaction. These entries show that the dalali was credited on the 13th of January." By the second order dated 1st May, 1959, the Tribunal held that action under section 34(1)(a) was legal and proper. The assessee made two reference applications under section 66(1) of the said Act and question No. 3 as stated in one of the reference applications was : " Has not the Tribunal misdirected themselves in law in relying upon the affidavit of Manohar Lal, which was given in another case and which was not brought on the record of the applicant who had not been afforded any opportunity to cross-examine the said deponent ? " While disposing of an application under section 66(2) of the said Act, this court discussed the question of admissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal observed : " From the above three letters written by Shri S. S. Kapur, copies of which are now produced by the revenue before us, it appears that some affidavit of Manohar Lal must have been referred to during the course of the hearing of the said appeal before the Tribunal. It may be pointed out in this connection that from the following passage from the copy of the decision of the Appellate Assistant Commissioner, B-Range, New Delhi, dated December 3, 1956, in Income-tax Appeal No. 51 filed by Messrs. Mamraj Chuni Lal, in respect of its assessment for the assessment year 1946-47, filed on April 27, 1955, it appears that there were two affidavits of Manohar Lal, besides Manohar Lal's statement recorded by him, when he heard the said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h respect to the alleged income of Rs. 58,000. The reference to Manohar Lal's affidavit then becomes immaterial, because admittedly the assessee had not disclosed this income in the assessment year with which we are concerned. This would clearly constitute an omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for their assessment for the assessment year 1946-47, thus attracting section 34(1)(a) of the Act. Faced with this difficulty, Mr. Deva Singh asked us to reframe the question by deleting the words " as to the applicability of clause (a of sub-section (1) of section 34 ". If these words are deleted, question No. (1) would read as under : " Is not the finding of fact by the Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with the suggestion by the learned counsel for the assessee, it would really be answering entirely a different question than the one referred, and I do not think I am competent to do so. The question as framed, however, is restricted only to the applicability of clause (a) of sub-section (1) of section 34, and, as I have already stated, on the facts found and/or admitted, the only answer to the question must be that reliance on the affidavit of Manohar Lal does not vitiate the finding of the Tribunal as to the applicability of seetion 34(1)(a). The first question, therefore, must be answered in the negative and in favour of the revenue. So far as the second question is concerned, the narration of facts given above clearly shows that sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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