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TMI Blog1997 (6) TMI 10X X X X Extracts X X X X X X X X Extracts X X X X ..... tes, Kottayam, is a registered firm. For the assessment year 1974-75, the assessee returned a total income of Rs. 69,923. In the light of an inspection conducted by the Intelligence Officer, Kottayam, on August 5, 1975, in the estate and head office of the assessee, revealing heavy suppression in all aspects and serious inflation of expenses, the books of account were rejected. The assessment was completed on a total income of Rs. 2,24,939 as per assessment order dated August 28, 1978. Thereafter, the assessing authority initiated proceedings under section 35 of the Kerala Agricultural Income-tax Act, 1950, and the assessment was completed as per order dated July 2, 1979. The assessing authority reopened the assessment on the ground that the value of 2,748.9 kgs. of rubber, amounting to Rs. 14,294.28 had escaped assessment. This information was obtained by the assessing authority from the records seized by the Intelligence Squad, Kottayam, at the time of inspection of the estate and head office of the assessee-firm on August 5, 1975, and August 6, 1975. Aggrieved by the above, the assessee filed an appeal before the Deputy Commissioner, Agricultural Income-tax and Sales Tax, cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y proceed to assess or reassess such income 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. " It is contended by the learned Government Pleader that as per the records seized by the Intelligence Squad, Kottayam, at the time of inspection on August 5, 1975, and August 6, 1975, the total crop for 1973-74 was 61,904.9 kgs. of rubber. There was also a compounding of the offence. The yield of rubber fixed in the assessment for 1974-75 was 59,156 kgs. Thus, the value of 2,748.9 kgs. of rubber had escaped assessment. The fact that the above difference was not noted at the time of original assessment, would not disable the assessing authority to proceed under section 35, in view of the wording of section 35 : " If for any reason, agricultural income chargeable to tax under this Act has escaped assessment ". In K. K. Ismail v. State of Kerala [1979] 43 STC 123, a Division Bench of this court had occasion to consider the scope of assessment of escaped turnover under section 19 of the General Sales Tax Act with similar wording. After referring to an earlier Bench decision of this court in George v. ST ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Agricultural Income-tax Officer may, serve on the person liable to pay agricultural income-tax on such agricultural income ... a notice containing .... and may proceed to assess or reassess such income ... " In the above case, accepting the contention raised by the assessee, exemption was granted in respect of certain amounts from payment of agricultural income-tax. After the assessee paid two instalments out of three after the assessment order, the Agricultural Income-tax Officer issued notice under section 26 on the ground that agricultural income from certain lease, which should have been taxed, had escaped assessment. A supplementary assessment order was then passed. The assessee challenged the reopening of the assessment. After referring to several decisions, including those which arose under section 34 of the Indian Income-tax Act, the Supreme Court observed that the words of section 26 of the Bihar Act, do not involve possessing of or coming by some fresh information. The use of the words " any reason " which are of wide import dispenses with those conditions by which section 34 of the Indian Income-tax Act is circumscribed. It was therefore held that the Agricultural ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the present case. The provisions contained in section 19 of the Kerala General Sales Tax Act, which were the subject-matter for consideration in the decisions in Deputy CST v. T. P. Elias [1993] 90 STC 25 (Ker) and Deputy CST v. Cee Vee Kay and Co. [1996] 103 STC 55 (Ker) are also similarly worded. Recently, the apex court had occasion to consider an issue relating to assessment of escaped income under section 34(1)(b) of the Indian Income-tax Act, 1922. The relevant provisions read as follows (see [1997] 224 ITR 560, 571) : 34. Income escaping assessment.---If, . . . (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Income-tax, Officer has in consequence of information in his possession reason to believe that income, profits or gains chargeable to income-tax have escaped assessment for any year, or have been under-assessed, or assessed at too low a rate, or have been made the subject of excessive relief under this Act, or that excessive loss or depreciation allowance has been computed, he may in cases falling under clause (a) at any time and in cases falling under clause (b) at any time within ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ansmuted into an item of information in his possession only if and when its existence is realised and its implications recognised. Section 35 is couched in wide terms. Under the above section, an assessing authority can initiate proceedings if the whole or any part of the turnover of the dealer has escaped assessment " for any reason ". In view of the above, we have no hesitation to hold that the Agricultural Income-tax Appellate Tribunal was not justified in its findings that the revised assessment made under section 35 for the year 1974-75 was not in order. It is irrelevant whether the quantum of suppression made by the assessee was in the hands of the assessing authority at the time of original assessment or not. Even if these materials were available in the file, but were omitted to be taken into consideration by the assessing authority at the time of passing the original assessment order, initiation of proceedings under section 35 would be justified on those materials. In view of the above, we answer question No. 1 in the negative, in favour of the Revenue and against the assessee and decline to answer question No. 2. A copy of this judgment under the seal of this court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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