9911796707
TMI Blog1981 (2) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... d 12th April, 1973, and also restrained the present appellants from taking any proceedings against the present respondent in pursuance of the notices quashed. The learned judge held that the conditions precedent for the issue of the notice under s. 148 of the I.T. Act, 1961, had not been fulfilled. It was common ground that the provisions of s. 147(b) were not applicable to the case in view of the lapse of time and the only question before the learned judge was whether the conditions precedent as set out in cl. (a) of s. 147 had been fulfilled. This question was answered in the negative. The judgment under appeal has been reported in Dwarka Dass Bros. v. ITO [1979] 118 ITR 958. It sets out the facts and circumstances of the case elabora ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was completed after, enquiry. Thereafter the assessment was reopened because the ITO had received certain communications from the Commissioner from which it appeared that the creditors were mere name-lenders and the loan transactions were bogus. The ITO, therefore, considered that proper investigation regarding the loans taken by the appellant was necessary and reopened the assessment. This was held to be unjustified. 'In the later decision in the case of ITO v. Lakhmani Mewal Das [1976] 103 ITR 437 (SC) the original assessment had been similarly completed accepting the genuineness of certain cash credits and allowing the interest paid thereon as deduction. According to the report made by the ITO to the Commissioner setting out his reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceeded. Thereafter, the only material received by the ITO appears to be that the revenue authorities had carried out certain investigations, that they had discovered the existence of bogus hundi brokers who were allegedly lending their names to assessees and that a list had been circulated to various ITOs of the hundi brokers who were allegedly indulging in malpractices. The internal audit party appears to have discovered that some of the creditors whose credits had been accepted in the assessee's case fell within this category and raised an audit objection which was the immediate provocation for the reopening of the assessment. In this case also, as in the case before the Supreme Court, there is no live connection or link established betw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated the matter and came to the conclusion that the said credits were not genuine. It is on the basis of the subsequent assessments that the earlier assessments were reopened. It is not quite clear from the judgment as to what exactly was the substance of the investigation carried out and what the facts revealed by this investigation were. At page 795 of the judgment it is seen that at the time of the original assessment the loans had been accepted as genuine without any verification. But subsequently it was found that the alleged loan credits included the credits in the names of certain parties who were subsequently found to be non-genuine. It, thus, appears that in the course of the subsequent assessment the ITO had gathered certain mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... led certain statements and the finding of the Tribunal that there was no disclosure of the material facts at the time of original assessment was the basis on which the judgment proceeded. It is also interesting to see that in that case the assessee did not challenge the reassessment on the merits, but only challenged the validity of the proceedings taken for reassessment. Since, at the time of original assessment there had been no disclosure at all, the learned judges came to the conclusion that the subsequent information received by the ITO was enough to justify action under s. 147(a). We have, therefore, come to the conclusion that, for the purpose of the case before us, it, is not necessary to express any opinion as to whether the deci ..... X X X X Extracts X X X X X X X X Extracts X X X X
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