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TMI Blog1989 (11) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... the basis of the assessee's claim that these were used for the purpose of the assessee's business. Subsequently it came to the knowledge of the Department that until 1966 the assessee did not possess any jeep and these were purchased for election purpose only. Hence, the assessment was reopened under s. 147(a) with the approval of the CIT to withdraw the depreciation allowed in the assessment for not disclosing by the assessee truly and fully the material facts necessary for assessment. 3.The following reasons were recorded by the ITO for reopening the assessment in the notice issued under s. 147(a) of the IT Act, 1961: "The assessee purchased 50 jeeps in 1966. At the time of assessment it was claimed that these jeeps were used for business of the assessee. Accordingly the ITO allowed depreciation of ₹ 1,00,132 and drivers' salary of ₹ 369 totalling ₹ 1,00,501 relating to the jeeps in the assessment. After investigation it was found that the jeeps were not used for business for the assessee and were purchased for use of the candidates for general election which was held in 1967. Hence, the expenses claimed by the assessee of not relate to the bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant fully and truly as a result of which income chargeable to tax had escaped assessment in the original assessment. 6. The Tribunal on further appeal observed that "the assessee's representative submitted that the original return of income was filed on 26th Sept.,1967 and the assessment was completed on 26th Aug.,1971. The assessee filed details of the depreciation along with return of income amounting to ₹ 14,86,218. The assessee had given details of the claim giving description of the assets, written down value as on 1st April, 1966, additions during the year, write off during the year, normal depreciation, extra shift allowance, rate of depreciation and the said statement give the total additions of ₹ 10,83,035 are consisted of ₹ 10,00,132 as additions on account of purchase of jeeps. The ITO after scrutinising the claim allowed the depreciation only to the extent of ₹ 14,39,085 as per Annexure B of the assessment order. The assessments for the asst. y₹ 1968-69 and 1969- 70 were also taken up by the ITO simultaneously and orders were passed on the same date in respect of these assessments. In the assessment for the asst. yr. 1968-69, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses along with the return of income and as such the assessee has disclosed the material facts necessary for making the assessment. Further, the ITO must get the information after the assessment is over. In the case of the assessee the ITO did not get any information, but he investigated into the facts and then came to know that the depreciation was claimed wrongly. The ITO, in our view, cannot make investigation piecemeal. It was imperative upon him to make full investigation into the facts when he was examining the particulars of depreciation and expenses." The Tribunal ultimately concluded that "subsequent investigations, as is clear from the reasons recorded by the ITO, are not justified for initiating action under s. 147(a) of the Act. The information must come in possession of the ITO after the assessment is made. So the basis of initiating the proceedings under s. 147 is the information and not the investigation. Therefore, having regard to all the facts of the case we hold that the ITO was not justified in initiating action under s. 147(a) of the Act." 7. I fail to see, why the ITO cannot make an investigation after the assessment is over. The duty of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sclosure is not absolved by the ITO's failure to find out the truth by making thorough investigation into the statements made by the assessee. The ITO may accept the statements made by the assessee as true or make enquiries at the assessment stage. Later on, he may come across materials which go to show that the assessee had not made full or true disclosures of material facts in the course of assessment proceedings. There is nothing in s. 147 to suggest that the ITO cannot reopen the assessment in a case like this because he failed to investigate and find out the truth at the assessment stage. If it is a question of inference to be drawn from the basic facts, the ITO cannot reopen the assessment merely because he failed to draw the correct inference from the materials disclosed by the assessee. But, if the assessee does not disclose the basic facts fully or correctly then the assessee cannot be heard to say that it was for the ITO find out the truth. 10.In the case of Calcutta Discount Co. Ltd. vs. ITO & Anr. (1961) 41 ITR 191 (SC), there was no allegation that the assessee had not disclosed material facts fully and truly. The Supreme Court emphasized the fact that all primary ..... X X X X Extracts X X X X X X X X Extracts X X X X
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