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TMI Blog1964 (8) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... ion under section 25A of the Act of 1922 was put forward on the basis of a partition deed dated the 26th of February, 1952. In that registered partition deed the history of the family was given showing that the common ancestor was one Lau Ram who had four sons, Jagannath, Ram Charanlal, Ram Narain and Sri Ram Adharlal; that during the lifetime of Lau Ram, Ram Charan Lal and Ram Narain had separated from him whereas Jagannath had taken up service. It was further asserted that Ram Charan Lal and Ram Narain had invested their own money and started a commission agency firm styled Ram Charan Lal Ram Narain and further that Ram Charan Lal and Ram Narain had built and purchased property during their state of separateness even during the lifetime and after the death of their father, Lau Ram, and over which they were in separate possession and occupation. The only property which was admitted to have been ancestral and in joint possession was a single-storeyed house and four double-storeyed shops. It was claimed that this was the only property which was ancestral and required to be separated and the parties had by mutual consent partitioned the same. This partition deed, admittedly, was pres ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tation for taking action under section 147(b), the department appears to have woken up and issued a preliminary notice on the 7th of January, 1964. This runs: It appears that you have not shown income from property in the return for the year 1955-56, filed in the status of Hindu undivided family though the same was duly assessed in the succeeding and preceding years. Enquiries further revealed that the family owned properties other than that was assessed in the year 1956-57, namely the following: (i) House of Purbiatola (ii) 3 shops in Brownganj (iii) Another house at Purbiatola (iv) A third house in Purbiatola (v) 2 shops in Brownganj purchased by the family. You are requested to explain the reasons as to why income from these properties was not returned in the assessments of the Hindu undivided family. Also to show cause as to why action under section 147 should not be taken to assess income from the above properties. To this the petitioner replied on the 10th of January, 1964, the material portion whereof was as follows: It is submitted that the assessee's family divided itself through registered deed of 'partition' in February, 1952, an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to have got a specific order from him excluding the property income from the assessment of the family. It was urged that in the reply given to the show cause notice by the petitioner on the 10th of January, 1964, there was an admission that the assessee owned the properties as detailed in the notice of the Income-tax Officer, dated the 7th of January, 1964, and, therefore, the matter was one which fell within the jurisdiction of the Income-tax Officer to decide and the proceedings ought not to be stifled by the issue of a writ at this stage. These contentions are without force. If the assessee does not admit certain income to be his, there is no law which requires him to return that income in his return. His duty, as pointed out by the Supreme Court in Calcutta Discount Co. Ltd. v. Income-tax Officer [1961] 41 I.T.R. 191, is to place all the primary facts before the Income-tax Officer. There is also no provision of law, under which, if an application under section 25A of the Act of 1922 is dismissed or rejected, the assessee must proceed to return the income which is the subject-matter of the deed of partition. It is for the Income-tax Officer to include such income in the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respect of one of the properties which was the last one to be acquired and constructed in 1952-53, and which property, obviously, could not have been included in the deed of partition dated the 27th February, 1952. If, after having made the necessary enquiries he still did not care to add the income from property in the assessment of the Hindu undivided family which was made by him, there can be no escape from the conclusion that he was satisfied that the property did not belong to the Hindu undivided family but to the individuals who had laid claim thereto. It may be that the Income-tax Officer was wrong in the conclusion that he arrived at. It may again be that the income-tax Officer did not carry out as searching an enquiry as he ought to have done in order to ascertain the source from which these properties were acquired; but the failure of the Income-Officer to do his duty or to make a proper or searching investigation can be of little or no a vailto the department when it seeks to take assessment proceedings under the provisions of section 147(a) of the Act, i.e., after a period of four years have elapsed. The whole complexion of the case changes if the department slumber ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the petitioner to furnish the details of the income therefrom or upon his failure to do so to estimate such income. It cannot possibly be said that the failure to return the income from some property which was not admitted to be the property of the Hindu undivided family was failure to disclose any primary fact. The last contention of the department which is based on the so-called admission of the petitioner in the reply given to the preliminary notice is nothing but clutching at a straw. The reply of the petitioner dated the 10th of January, 1964, to the preliminary notice issued on the 7th January, 1964, must be read as a whole and a sentence here or there cannot be torn from its context or a loose expression used cannot be made the basis for putting an admission into the mouth of the petitioner which he never made. A reading of paragraphs 1 and 3 in juxtaposition with paragraph 2 where the alleged admission is said to have been made leaves no doubt that what the petitioner was trying to say was that since February, 1952, there was a partition of the Hindu undivided family and, therefore, the income from property was not returned. This is what is stated in paragraph 1 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ry facts and if such primary facts have been disclosed then the Income-tax Officer would have no jurisdiction to issue a notice in respect of an assessment year beyond the period of four years but within a period of eight years from the end of the relevant year. This condition, which was held by the Supreme Court to be a necessary condition, not having been satisfied in the present case it necessarily follows that the Income-tax Officer had no jurisdiction whatsoever to issue the notice under section 147(a) of the Income-tax Act of 1961. The rulings relied upon by Mr. Gulati have no application as they relate to the question of limitation which is a matter not pertaining to or affecting the jurisdiction of the Income-tax Officer to issue a notice under section 147. The question of limitation, manifestly, is a matter which does not touch the question of jurisdiction and, therefore, those rulings are of little or no assistance to the department in the present case. For the reasons given above, I would direct that a writ of certiorari will issue quashing the notices dated the 2nd March, 1964. The petition is accordingly allowed with costs. Petition allowed. - - TaxTMI - TMIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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