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TMI Blog1971 (5) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee submitted his return for the assessment year 1954-55 on 27th January, 1959. Notices under section 23(2) were served and complied with by the assessee who produced his accounts for the year 2010 R. N. ending 10th of April, 1954, and the assessment order was duly passed under section 23(3) on an income of Rs. 28,840 inclusive of income from the house property determined at Rs. 7,892. On appeal, the Appellate Assistant Commissioner reduced the total income by Rs. 7,898 by his order dated 28th July, 1960. On 18th March, 1963, the assessee received a notice (annexure "B") under section 148 of the Income-tax Act, 1961, from the Income-tax Officer (respondent No. 1) in respect of the assessment year 1954-55 along with similar notices for the assessment years 1955-56, 1956-57 and 1957-58, the last three notices being the subject-matters of three other civil rules. The assessee submitted a return under protest showing the same income as was shown in his original return and submitted an application on 24th January, 1967 (annexure "C"), to the Income-tax Officer to furnish the basis or material under section 142(3) before the same is utilised against him. The assessee submitted to the of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e books of accounts produced. I have therefore reasons to believe that the assessee has concealed particulars resulting in under-assessment. I, therefore, propose to initiate proceedings under section 147 of the Income-tax Act, 1961." The Commissioner of Income-tax sanctioned the issue of this notice as will appear from the recording of his assent to the order of the Income-tax Officer on 14th March, 1963. The assessee contends that the impugned notice is beyond the jurisdiction of the Income-tax Officer under section 147. He further contends that the reasons disclosed may make out a case under section 147(b) and is, therefore, clearly barred under section 149(b) as the notice has been given after the expiry of more than four years from the end of the assessment year. The learned Senior Government Advocate for the department submits that this case is clearly covered by section 147(a) and is, therefore, not barred under section 149 of the Act. We will, therefore, turn to section 147 of the Act: "IF- (a) the Income-tax Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any assessment year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... here the assessee has submitted his return as well as his accounts and complied with the terms of the notice under section 23(2). The reasons do not disclose that the assessee has not shown in his account books the investment on a particular house completely. When we pointed out this feature to the learned counsel for the department, he drew our attention to paragraph 4 of the counter-affidavit to the effect that "the petitioner deliberately did not show certain house properties (including extensions and renovation) and he did not furnish the particulars of those in his return". The affidavit, has not been filed by the Income-tax Officer who had recorded the reasons but by the successor-in-office, who has sworn to averments in paragraphs 2 to 7 as true to his "information received from record". The learned counsel for the department could not show from the records before us that the assessee did not show in his accounts the investment of any particular house. The dispute is with regard to the quantum spent on the house in question. While the assessee gives in his accounts a certain sum, the Income-tax Officer after subsequent enquiry came to the conclusion that the amount shown in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence which the Income-tax Officer may raise from those facts. The terms of the Explanation to section 34(1) also do not impose a more onerous obligation. Mere production of the books of account or other evidence from which material facts could with due diligence have been discovered does not necessarily amount to disclosure within the meaning of section 34(1), but where on the evidence and the materials produced the Income-tax Officer could have reached a conclusion other than the one which he has reached, a proceeding under section 34(1)(a) will not lie merely on the ground that the Income-tax Officer has raised an inference which he may later regard as erroneous. The assessee had disclosed his books-of account and evidence from which material facts could be discovered: it was under no obligation to inform the Income-tax Officer about the possible inferences which may be raised against him. It was for the Income-tax Officer to raise such an inference and if he did not do so the income which has escaped assessment cannot be brought to tax under section 34(1)(a)." In the instant case, the return was submitted by the assessee accompanied by balance-sheet supported by his books of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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