9911796707
TMI Blog1977 (8) TMI 49X X X X Extracts X X X X X X X X Extracts X X X X ..... appears that the Income-tax Officer, who made the sment, disallowed a sum of Rs. 4,06,488 claimed by the appellant on account of loss in P.D.O. transactions because according to the income-tax Officer they were speculative in nature as there was no delivery of the goods and he added back the said sum to the assessee's income. Thereafter, the appellant preferred an appeal against the said assessment order to the Appellate Assistant Commissioner challenging, inter alia, the disallowance of the said loss of Rs. 4,06,488. Thereafter, the impugned notice dated August 21, 1970, issued under section 148 of the Act was served on the appellant by the Income-tax Officer, " A " Ward, Jute Circle, Calcutta, on the ground that certain income of the appellant chargeable to tax for the assessment year 1963-64 had escaped assessment within the meaning of section 147 of the Income-tax Act. A summons dated December 29, 1970 was, thereafter, issued under section 131 of the Act by the said Income-tax Officer calling upon the appellant to give evidence and produce certain documents as mentioned in the said summons. Thereafter, certain correspondence passed between the appellant and the revenue and fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itioner for the assessment year 1963-64 and the reasons recorded by me for issuing a notice under section 148 of the Income-tax Act, 1961, on which the Commissioner duly granted such sanction after applying his mind and being duly satisfied are hereto exhibited and collectively marked 'A'. " The reasons recorded by Narasimham referred to in his second affidavit are in the following terms : " I have reason to believe that the assessee has concealed income particulars by concealing profits through spurious contracts in respect of purchase and sale of P.D.Os. The income as escaped is of the order of above Rs. 4 lakhs, and the said escapement is by reason of failure on the part of the, assessee to disclose fully and truly all material facts necessary for the assessment year 1963-64. Hence, I request the sanction of the Commissioner for reopening the I.T. assessment of the assessee for the assessment year 1963-64, and for issuing notice under section 148. (Sd.) S. Narasimham, (S. Narasimham), Income-tax Officer, "A" Ward, Jute Circle, Calcutta." The letter dated August 20, 1970, addressed by the Income-tax Officer, Narasimham, to the Commissioner of Income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act had any material relevant for the formation of the belief that due to omission or failure on the part of the appellant to disclose fully and truly all material facts, income chargeable to tax had escaped assessment for the assessment year 1963-64. In other words, whether the conditions precedent for exercise of the power under section 147 of the Act were satisfied in the instant case. Before proceeding further we may indicate that the counsel appearing for both sides agreed that on the basis of three documents, namely, " Note Re 1 Action u/s. 147 ", reasons recorded by S. Narasimham, Income-tax Officer, and the letter of the said Income-tax Officer dated August 20, 1970, which are at pages 79, 92 and 93, respectively, of the paper book, the question regarding validity of the said notice under section 148 of the Income-tax Act would have to be considered and determined in this appeal. Counsel appearing on behalf of the appellant submitted that in this case the recorded reasons and the documents mentioned above did not show that there was any material relevant for the purpose of the formation of the required belief or opinion by the Income-tax Officer. It was further submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... materials but would only see that there are materials relevant for the formation of the requisite belief. He has further submitted that two of the spurious contracts regarding P.D.O. transactions are mentioned in the note of the Income-tax Officer which is at page 79 of the paper book. It is also stated in the letter dated August 20, 1970 why such contracts are spurious. Counsel has also submitted that it cannot be said that the sum of Rs. 4 lakhs and odd referred to in the recorded reasons, which is at page 93 of the paper book, is the same amount which was disallowed by the Income-tax Officer in the assessment order as stated hereinbefore. From the said three documents it appears that there were materials before the Income-tax Officer for formation of the requisite belief for invoking jurisdiction under section 147 of the Act. The said documents show that, according to the Income-tax Officer, escapement of income to tax was by means of syphoning off of the profits through the media of P.D.O. transactions, spurious in nature. Particulars of some such transactions are men. tioned and why they were spurious is also indicated. In the document at page 92 of the paper book, it is sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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