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TMI Blog1972 (1) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of the case referred to is as follows : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the reassessment proceedings under section 34(1)(a) of the Indian Income-tax Act, 1922, were not validly initiated ? " The facts of the case may be stated briefly at the outset. It relates to the assessment year 1955-56 and the corresponding previous year ended on the 30th June, 1954. The only question before the Tribunal relates to the validity of reassessment under section 34(1)(a) of the Income-tax Act of 1922 for the assessment year 1955-56. The original assessment was made by the Income-tax Officer on a total income of Rs. 83,606. This was reduced in appeal to Rs. 67,092. Subsequentlv the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es in consequence of the decision of the Government of India to devalue its currency and it was, therefore, not a receipt of revenue nature assessable to tax. The Income-tax Officer rejected both the contentions of the assessee. The Appellate Assistant Commissioner confirmed the reassessment. The Tribunal, however, accepted the contention of the assessee. The Tribunal held that the assessee cannot be said to have failed in its discharge of duty to disclose fully and truly primary facts and in doing so appears to have followed the case of Calcutta Discount Co. Ltd. v. Income-tax Officer of the Supreme Court. The Tribunal's reasoning on the point may be stated in their own words : " In the present case, when the assessee had specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted, ....he may proceed to assess or reassess such income, profits or gains or recompute the loss or depreciation allowance ; and the provisions of this Act shall, so far as may be, apply accordingly as if the notice were a notice issued under that sub-section. " The basic requirements under that sub-section are that the income, profits or gains chargeable to income-tax should have : (a) escaped assessment for the relevant year, (b) been under-assessed, (c) been assessed at too low a rate, (d) been made the subject of excessive relief, or (e) excessive loss or depreciation allowance have been computed. The condition is satisfied that this income or profit escaped assessment. The other requisites which must be satisfied befo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax Officer made enquiry regarding this item, he would have found for himself the real nature of the receipt. But, it is precisely this that the Explanation to section 34 is intended to cover where it says that mere production of account books and other evidence from which materials could, with due diligence, have been discovered by the Income-tax Officer will not necessarily amount to disclosure within the meaning of that section. Disclosure within the meaning of that section is quite clear. He has to disclose fully and truly all material facts necessary for assessment for that year. Full and true disclosure requirement has not been made, in our opinion, by the facts of this case. We do not think that the Tribunal read Calcutta Discount C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nkata Narayana and Sons v. First Addl. Income-tax Officer, Rajahmundry, the Supreme Court says that the assessee does not discharge his duty to disclose fully and truly material facts necessary for the assessment of the relevant year by merely producing the books of account and other evidence. He has to bring to the notice of the Income-tax Officer particular items in the books of account or portions of documents which are relevant. Even if it be assumed that from the books produced the Income-tax Officer, if he had been circumspect, could have found out the truth, he is not on that a account precluded from exercising the power to assess income which had escaped assessment. It is necessary for the assessee to make a return or the statemen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exceptional nature". If it was the case that it was an exceptional item of exceptional nature and casual in character, then it should have been shown as such and not lumped up in the manner that it was done in the balance-sheet : " Being exchange surplus on remittance from Pakistan " in the balance-sheet. When this reference was argued out by the counsel for the income-tax department, the attorney for the respondents said that his counsel was Mr. Sukumar Mitra, who happens to be out of Calcutta. His junior was un-named. We even wanted to give the attorney liberty, who was making his submission before us, to argue the matter on behalf of M/s. Mukherjee and Biswas, who were the attorneys for the respondents, Then he, revealed that he was ..... X X X X Extracts X X X X X X X X Extracts X X X X
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