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TMI Blog1973 (2) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the failure or omission on the part of the assessee so as to attract the provisions of section 34(1)(a) of the Act ? 2. If the answer to the above question be in the negative, whether the Tribunal was right in affirming the assessment for the year 1943-44. made by the Income-tax Officer on February 22, 1952 ? " The assessee is a Hindu undivided family consisting of Sahu Jagdish Prasad and his sons. The family carried on a business in respect of which it adopted Dashra year as the accounting year. In the books relating to the previous year relevant to the assessment year 1944-45, the Income-tax Officer noticed two cash credits of Rs. 20,000 and Rs. 50,000 entered on October 28, 1942, and November 16, 1942, respectively. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alled upon to explain the source and nature of the cash credits, the assessee reiterated the explanation which it had given earlier during the course of proceedings for the year, 1944-45. The explanation was not accepted and the two amounts were assessed in the year 1943-44, representing the assessee's income from undisclosed source. The assessee's appeal to the Appellate Assistant Commissioner of Income-tax failed. It then went in second appeal before the Income-tax Appellate Tribunal. Two legal contentions were raised before the Tribunal : (1) that section 34(1)(a) was not applicable to the facts of the case and, as such, the assessment was barred by time ; and (2) that the assessment having been made on the Hindu undivided family after i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pute that the two amounts of cash credits had escaped assessment in the year 1943-44. The real question is as to whether the escapement was due to the omission or failure on the part of the assessee to disclose all material facts. The contention of the assessee is that the Income-tax Officer had come into possession of all material facts relating to two cash credits on February 22, 1947, when Sahu Jagdish Prasad had made a statement before him. At that time the assessment for the year 1943-44 was pending and the Income-tax Officer could have included the two amounts in that assessment. He did not do so under the erroneous belief that the two cash credits were assessable in the year 1944-45. Thus, the escapement took place not because of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1944-45. The order of the Income-tax Appellate Tribunal was thus the immediate cause for the proceedings under section 34. It is true that the assessee did not disclose to the Income-tax Officer that the two cash credits represented income from undisclosed source but that is not material. In spite of the efforts of the assessee to conceal the true nature and source of the cash credits the Income-tax Officer had become aware of the true facts on February 22, 1947. Once the primary facts were before him it was for him to draw a proper inference both of facts and law and to apply appropriate legal provisions, as has been pointed out by the Supreme Court in the case of Calcutta Discount Co. Ltd. v. Income-tax Officer Once all the primary fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... February 22, 1947, yet when the statement was recorded the had not finally made up his mind. There is nothing on record to show that the Income-tax Officer conducted any further enquiry in this regard. This contention of the learned counsel, therefore,cannot be accepted. It was next contended that in order to discharge the duty cast by section 34(1)(a) of the Act, the assessee should have included the two cash credits in its return for the year 1943-44. Anything short of that could not absolve the assessee of its obligation. We are unable to accept this contention. As has been held by the Supreme Court in the case of Calcutta Discount Co. Ltd., the disclosure by an assessee need not necessarily be in the return but it can be by other mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from another Income-tax Officer in support of which there was no material. In the circumstances, the Supreme Court held that the Income-tax Officer could not be said to be in possession of the true and material facts. Such is not the case here. In Ice and General Mills v. Income-tax Officer, the Income-tax Officer did not come in possession of any information during the course of original assessment proceedings. As such, this case is of no help. The same is the position with regard to the decision of the Punjab High Court in the case of S. D. Sachdeva v. Commissioner of Income-tax . If proper information is not disclosed to the Income-tax Officer during the course of the proceedings for the relevant assessment year nor does he acquire su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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