9911796707
TMI Blog1968 (2) TMI 25X X X X Extracts X X X X X X X X Extracts X X X X ..... acts necessary for his assessments for those years is correct ? 2. Whether, on the facts and circumstances of the case, the finding of the Tribunal that the income had escaped assessment is correct ? 3. Whether, on the facts and in the circumstances of the case, notices under section 34(1) were validly issued ? 4. Whether the assessments in question are invalid at law ? The assessee, Niranjan Lal Potdar, is a member of a Hindu undivided family carrying on business under the name, Messrs. Shiv Charan Lal Bankey Lal. The family has been assessed since the assessment year 1918-19 on income from a number of sources. In May, 1926, a partnership firm, Messrs. Niranjanlal Ram Chander, was constituted for the purpose of carrying on business in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same is not included here. " The return for the assessment year 1947-48 was " filed " on March 27, 1952, by the Income-tax Officer on the ground that it was incompetent. Proceedings were taken on the remaining four returns, and notices under section 23(2) were issued on July 11, 1952. On the date of hearing all the four cases were adjourned sine die. For the assessment years 1949-50 and 1950-51, with which we are concerned here, the Income-tax Officer assessed the share of income from Messrs. Niranjanlal Ram Chander in the hands of the Hindu undivided family. The family proceeded in appeal against both the assessment orders to the Appellate Assistant Commissioner. Meanwhile in the assessment proceedings relating to the family for the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and truly all material facts necessary for his assessment for the relevant assessment years and that, inasmuch as no assessment orders could be made upon the returns filed by the assessee by virtue of the period of limitation of four years having expired, the income must be said to have escaped assessment. The case of the petitioner is that by noting in the returns filed by him that he was the owner of the share of profits in the firm, Messrs. Niranjanlal Ram Chander, he had disclosed all material facts necessary for his assessment and the Tribunal has erred in law in holding that the case was covered by the terms of section 34(1)(a). It is now settled law that an assessee is bound to disclose all primary facts necessary for the assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that statement the assessee did not disclaim that he held the share. Nor did he state that he was not liable to tax on the share income. He said that he was the holder of the share and that he was not including the share income in his return merely because it was being treated by the department as taxable in the hands of the family. Regard must be had to the history of the case. The assessee had as long ago as in the assessment proceedings for the assessment year 1943-44 asserted clearly that he was the owner of the share in the firm and that the share of profits received therefrom should be treated as his individual income and should not be included in the total income of the Hindu undivided family, and thereafter a claim was made under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hare income in its assessment. Again, that the Hindu undivided family was challenging the inclusion of that share income or it was not doing so was not a fact determinative of the question whether the share income was liable to be assessed in the hands of the assessee. The Tribunal has relied upon the following circumstances in respect of its finding that the assessee did not disclose fully and truly all the material facts necessary for his assessment. It points out that the assessee did not disclose his actual income in the partnership, that he did not state that he disputed the assessment of the income in the hands of the Hindu undivided family, nor did he state that he had evidence to prove that the income belonged to him personally, no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee quite positively asserted that he held the share in the firm and the only reason for not including it in the return was that it was taxed in the hands of the family. The assessee, it may be repeated, did not say that the share income was not liable to be taxed in his hands. It is true that he did not enter the specific figure of income in the return, but that was not the reason for the failure of the Income-tax Officer to assess it. The income escaped assessment because apparently the Income-tax Officer was relying on past practice and had decided to assess it in the hands of the family. He issued notice under section 23(2) upon the returns filed by the assessee, and then adjourned them sine die. The Tribunal considered the question ..... X X X X Extracts X X X X X X X X Extracts X X X X
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