9911796707
TMI Blog1975 (8) TMI 18X X X X Extracts X X X X X X X X Extracts X X X X ..... on the 28th June, 1971, from the Income-tax Officer, "J" Ward, Dist. IV(I), Calcutta, whereby the petitioner was informed that there was information in the possession of the said Income-tax Officer on the basis of which the Income-tax Officer held that M/s. Atlas Agencies of 51/59, Dariastan Street, Bombay-3, was a concern of the petitioner. Accordingly, the Income-tax Officer wrote that the income of that concern should have been assessed in the hands of the petitioner. The petitioner was, therefore, asked to show cause why action should not be taken against him to reassess the alleged income of the petitioner for the assessment years 1963-1964, 1964-65 and 1965-66 for including the alleged income of M/s. Atlas Agencies in the hands of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... htly by the counsel for the petitioner, to indicate that the Income-tax Officer examined in detail the transactions with various parties to find out the genuineness of those transactions. It is also apparent that the transactions with Atlas Agencies were disclosed. It is the case of the petitioner in paragraph 9 of the petition that the question of genuineness, existence and validity of all the parties including M/s. Atlas Agencies were scrutinised by the Income-tax Officer at the time of the above assessment. The petition under article 226 of the Constitution was filed on the ground that there was no material for the Income-tax Officer to form the belief for reassessing the income of the petitioner under section 148 of the Income-tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the so-called two persons of the first constitution of the firm. The huge hundi loans were borrowed by M/s. Atlas Agencies but not independently and not of their own ; the alleged loans were shown to have been guaranteed by my assessee. In the first constitution of M/s. Atlas Agencies two persons were shown as parties, one Shri C. P. Jhaveri and another, Shri L. C. Jhaveri. The former was an employee of M/s. Narayandas Paramananddas over 16 years. He was alleged to have been made active partner. Both of the gentlemen were not of such worthiness in financial resources as to start business on a large scale as in M/s. Atlas Agencies. Subsequently, in relation to assessment year 1961-62, there was so-called reconstitution of the firm in terms o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acts necessary for his assessment for assessment year 1963-64, the income chargeable to tax escaped assessment. Hence, proposal is put up under section 147(a) for approval of the Commissioner to issue notice under section 148. As per return filed in the name of M/s. Atlas Agencies, income was Rs. 72,481, but as per facts available on the file relating to M/s. Atlas Agencies, the income is likely to be assessed at Rs. 1,68,041. Sd/- Manohar Lal 23/3/72 (Manohar Lal) I.T.O. 'J' Ward, Dist. IV(I) Calcutta." The question is whether in these circumstances the revenue has really established its case from the materials from which necessary belief could be formed. In this connection, the principles are well-settled. But counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction under clause (a) of section 147 were present. Thereafter, there was a further appeal to the Supreme Court and it was held by the Supreme Court that after discovery of the primary facts relating to the transactions evidenced by the drafts it was for the officer to make necessary enquiries and to draw proper inference as to whether the amounts represented by the drafts could be treated as part of the total income of the appellant. The officer had not done so. Therefore, it was plainly a case of oversight and it could not be said that the income chargeable to tax escaped assessment by reason of omission or failure on the part of the appellant to disclose truly and fully all material facts. In the instant case, it is evident that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee to disclose fully and truly material facts necessary for the assessment as a result of which income chargeable to tax escaped assessment. In that view of the matter, the impugned notice must be quashed and the rule must be made absolute. In the premises, the impugned notice issued on 30th March, 1972, under section 148 of the Income-tax Act, 1961, is hereby quashed and the respondents are restrained from taking any proceeding in respect thereof. If any assessment has already been made pursuant to the impugned notice, the same is also quashed and set aside. The rule is made absolute to the extent indicated above. There will be no order as to costs. Operation of this order shall stand stayed for six weeks from today. - - TaxTMI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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