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TMI Blog1991 (9) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... access to the reasons on which notice under section 147(1)(a) of the Act was issued, nor had he refused a copy thereof. Rather the Income-tax Officer had, vide his letter dated July 18, 1991, informed the petitioner that he could inspect the reasons recorded for the issuance of the said notice after he had filed the return in compliance with the said notice under section 147(1)(a) of the Act already served on him. At the time of hearing before the court, it was not in dispute that the assessee had submitted his return in pursuance of the notice under section 147 of the Act. Accordingly, this court had directed that before the Income-tax Officer proceeds further to assess inpursuance of the said notice under section 147 of the Act, he shall confront the assessee with the reasons recorded by him and supply him copy thereof. It was also made clear that after the petitioner is confronted with the reasons and if he still feels aggrieved, it shall be open to the petitioner to challenge the notice under section 147 of the Act on such grounds and before such forum which may be available to him under the law. The said writ petition was accordingly, disposed of on April 18,1991. Thereupon, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear in dispute has been filed, nor has a copy of the return filed in response to the impugned notice under section 147 of the Act for the assessment year 1989-90, been filed by Shri jawahar Lal Gupta along with the writ petition. We find that the writ petition wrongly states that the copy of the return is being filed and marked as annexure I, to the writ petition whereas, in fact, only a copy of the acknowledgment of the return has been filed and neither of the other aforesaid returns has been filed. Consequently, details which ought to have been submitted under the law by the assessee in regard to the income of the minor daughter have not been filed. The writ petition further states that along with the return, the petitioner has also filed (1) computation of income, (2) balance-sheet, (3) statutory audit statement and report on Form No. 3 CB, under rule 6G(1)(b) and Form No. 3 CD under rule 6G(2)(a). In paragraph 5 of the writ petition, it has further been averred that copies of the said documents are being filed as annexure 2 to the writ petition. But when we peruse annexure 2 aforesaid, we find that the said documents relate to Messrs. Continental Chemical Co., Rawatpura, Agra, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Income-tax Officer was not right in law in not applying his mind to the said certificate. He, therefore, contended that the Income-tax Officer is incorrect in coming to his conclusion that no evidence with regard to the liabilities which were actually paid before filing of the return was furnished. In our opinion, the said contention has got no force for number of reasons. Firstly, the certificate, as is clear from annexure 2 to the writ petition, related to Messrs. Continental Chemical Co., which was a registered partnership firm, in respect of which the assessee has himself filed copies of assessment orders for the assessment years 1982-83 to 1984-85, as annexure 3 to the writ petition. A bare perusal of the said assessment orders will show that Messrs. Continental Chemical Co., Rawatpura, Agra, was assessed as a registered firm for the years in dispute. It had two partners, one was Sri jawahar Lal Gupta and the other was Smt. Ratan Devi. The shares of the said two partners have also been determined at the end of the assessment orders passed in the said cases as provided under the law. Page 66 of the writ petition also is a copy of the notice of demand under section 156 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pening the assessment aforesaid, the position is as follows: Kumari Mayura Gupta is admittedly the minor daughter of the petitioner. The petitioner has filed a copy of the return in respect of Kumari Mayura Gupta for the assessment year 1989-90 as annexure 11 to the writ petition. Towards the end of the assessment order of Kumari Mayura Gupta for the assessment year 1989-90, we find that after discussion of the relevant evidence the Assessing Officer has concluded as follows : " Looking into the totality of facts and circumstances of the case, these receipts are not gifts but in the nature of casual and non recurring receipts, and hence liable to be charged to tax as income of the recipient. All these receipts have been used for business purposes, hence it cannot be affirmed nor has the assessee been able to prove that they were made involuntarily and without consideration. The income accruing from it is to be clubbed in the hands of the guardian as prima facie it appears to be indirect transfer of money for the benefit of the minor, since the paying capacity of the donors has not been established. " Thus, the Income-tax Officer had assessed Km. Mayura Gupta for the said year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r concern of the assessee and the assessee was the beneficial owner of the firm's income, included that income in the total income of the assessee. On the challenge thrown against the reopening of the said assessments, the Delhi High Court held that the reopening of the assessments was justified under the law. That case appears to be nearer to our case and in case we find that the assessee not having disclosed that income, had not disclosed fully and truly all material facts for the assessment, the assessment could be validly reopened under section 147(a) against the assessee. Thus after making a protective assessment in the case of Kumari Mayura Gupta, in our opinion, the law authorises the Income-tax Officer to initiate proceedings for reopening the assessment even against the assessee by way of completing the substantive assessment. In the case of the assessee before doing so it has to be found out as to whether the necessary conditions for taking action under section 147 of the Act are fulfilled or not. To confer jurisdiction to issue notice for reopening an assessment under section 147 of the Act, two conditions have been specified, namely, that the Income-tax Officer has re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailure to disclose fully and truly all material facts necessary for his assessment for that year " in section 147(a) of the Income-tax Act, 1961, postulated a duty on every assessee to disclose fully and truly all material facts necessary for his assessment. In the present case, as we have already observed, the assessee-petitioner has neither filed a copy of the original return for the assessment year 1989-90, nor filed a copy of a return filed in pursuance of the notice under section 147 of the Act, nor has filed copy of the earlier assessment order for the assessment year 1989-90, nor any averment to that effect even finds a place in the present writ petition therefore, this court is not in a position to examine the various facts from which it could be concluded as to what was the factual position prior to issuance of the impugned notice under section 147 of the Act for the assessment year 1989-90. The inference, therefore, is that the facts stated by the Income-tax Officer in his " reasons to believe " in so far as they relate to issuance of notice appear to be correct as far as the record of the present writ petition is concerned. The conclusion is that the assessee had not dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scious of the fact and we accordingly observe that these observations made by us are only at the stage " reason to believe " for the Income-tax Officer to proceed with reopening of the assessment and are not final conclusions with regard to the completion of the assessment orders under section 147 of the Act and it shall be open to the assessee to appropriately challenge the same in accordance with law at the appropriate stage. Sri S. P.. Gupta, learned counsel appearing for the assessee, has rightly stated that the adequacy and sufficiency of the reasons for reopening the assessment cannot be gone into by this court. He has also not advanced any submission in regard to the adequacy or sufficiency of the said reasons. Thus we are left with the last submission of Sri S. P. Gupta to the effect that the basis of the information recorded by the Assessing Officer in the assessment order in the case of Kumari Mayura Gupta alone could not be a valid information for the purposes of initiating proceedings under section 147 of the Act in the case of the petitioner. This argument was also advanced in the case of Sohan Singh [1986] 158 ITR 174 (Delhi) and the same had been repelled by the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustries Ltd. v. ITO [1965] 57 ITR 637 (SC), relied upon by learned counsel for the assessee, the court has observed that making fishing enquiry as a pretence cannot be allowed under the law for the purposes of reopening the assessment.. This position does not operate in the present case. The case of CIT v. Dwarka Prasad Bazaz [1987] 168 ITR 572 (Cal), relied upon by learned counsel for the petitioner, also related to benami transactions and is not relevant for the purpose of the present case. Thus, the assessee-petitioner having failed to discharge the burden that lay on him in satisfying this court that the assessing authority had no jurisdiction to invoke proceedings under section 147 of the Act by the impugned notices and because of the petitioner's omission to place all necessary facts before this court, as pointed out in the judgment and on the view taken by us as stated above and on the facts and materials which were present in this case before the Income-tax Officer at the time of issuance of the said notices, in our opinion, the Income-tax Officer concerned was wholly justified under the law in seeking to reopen the assessment proceedings against the petitioner under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X
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