9911796707
TMI Blog1986 (4) TMI 84X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 26,610 on 5th Feb., 1974 and 19th Aug., 1978 for the asst. yrs. 1971-72 and 1972-73, respectively. However, the assessments were re-opened under s. 147(a) on the basis of raid conducted in the premises of M/s Sujan Singh Harbans Singh on 4th Aug., 1972 at Amritsar, for certain entries found in the secret register for the cash credits in the account of the assessee therein. On the above entries, the ITO believed that the assessee has not disclosed material facts in filing the returns of income for these assessment years and therefore, the income has escaped assessment in each assessment year. Thus, the ITO recorded the reasons for his belief and thereby issued notices under s. 147(a)/148 of the IT Act, 1961 (hereinafter referred to as the Act), which were served on the assessee. The assessee in response to these notices filed the returns, showing income as was shown by the assessee in the original returns contending therein that the entries in the secret register found in the premises of M/s. Sujan Singh Harbhan Singh, alleged to be in the name of the assessee are false and the assessee categorically denied that the assessee has made the cash credits in dispute to the firm M/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Singh which had been obtained from the said concerns and the entries appearing in that account tallied with those appearing in the books of the assessee: that primary facts had been disclosed to the ITO and subsequently, when certain entries were detected in the books of account of M/s Sujan Singh Harbans Singh, pertaining to the assessee that itself could not be presumed to be an adequate material before the ITO to have reasons to believe that any income had escaped assessment due to any omission or failure on the part of the assessee; that hence one of the two conditions which have to be satisfied in view of the decision in the case reported in CIT vs. Sri Bhiariji Mills Ltd. 1975 CTR (Pat) 107 : (1976) 103 ITR 599 (Pat) before the ITO acquired jurisdiction to issue a notice under s. 148 not having been satisfied. On these facts, the AAC held that the re-assessment proceedings taken in these case are ab initio void and as such the assessments made on the basis of mere suspicion were indefinite material could not be upheld. Thus, the AAC cancelled the reassessments made by the ITO. 6. The Revenue being aggrieved, has preferred these appeals. The first common ground in these app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has no dealing with M/s Sujan Singh Harbans Singh in the previous years relevant for the assessment years under consideration and moreover, the assessee has filed the certified copies of the accounts of M/s Sujan Singh, Harbans Singh, which show that whatever, the facts the assessee showed in the original returns were correct and, therefore, the assessee had disclosed the primary facts truly at the time of filing of the original returns for the assessment years under consideration and hence in the cases of the assessee, the issuance of notices under s. 147(a), r/w s. 148 are without jurisdiction. He further contends that it is for the Revenue to prove that the assessee has not disclosed the trues facts in filing the original returns, which the Department has failed to do, while the assessee has proved by filing the affidavits and certified copies of the accounts mentioned above in filing the returns in response to notice under s. 147(a)/148 of the Act. He further, contends that there is no material with the ITO on the basis of which, the ITO should have belief that the assessee has not disclosed the true facts in filing the original returns for the assessment years under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... artment is saying that the entries are there in the secret register of M/s Sujan Singh Harbans Singh in the account of the assessee and, therefore, it is for the assessee to dislodge these, the assessee has proved these entries as non-genuine on the ground that the assessee has filed certified copies of the accounts of M/s Sujan Singh, Harbans Singh, wherein the alleged entries in the secret register are not there. Moreover, these entries have no value in the eyes of law for taking any adverse inference against the assessee, because these entries are there in the register of M/s Sujan Singh Harbans Singh and none of the partners has been summoned by the ITO to record the statement to prove the veracity of these entries. What to say of it, there assessee has filed the affidavits mentioned above, which have gone unrebutted. Moreover, the certified copies of the account of M/s Sujan Singh, Harbans Singh are nowhere showing, the alleged entries. 11. In the case, P. R. Mukherjee vs. CIT (1956) 30 ITR 535 (Cal), their Lordships of Hon'ble Calcutta High Court held that a person could not be said to have committed or failed to disclose something if he had no knowledge of such thing; tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alleged entries are mentioned in the order of the AAC, which are reproduced for ready reference. ASSESSMENT YEAR 1972-73 Date Debit Credit 7-4-1971 15,000 . 10-5-1971 10,000 . 10-5-1971 10,000 . 9-8-1971 . 7,000 11-8-1971 45,000 . 12-8-1971 . 50,000 20-8-1971 40,000 . 26-8-1971 5,000 . 1-9-1971 60,000 . 8-9-1971 60,000 . 10-9-1971 2,500 50,000 13-9-1971 75,000 . 16-9-1971 . 26,000 17-9-1971 . 1,500 1-10-1971 50,000 . 7-10-1971 3,000 . 11-10-1971 25,000 . 4-11-1971 . 3,000 3-12-1971 70,000 14,523/65 3-12-1971 . 3,42,663/93 . 4,70,500 4,94,687/58 ASST. YR. 1971-72 29-4-1970 5,000 . 2-6-1970 40,000 . 3-6-1970 40,000 . 20-7-1970 10,000 60,000 4-8-1970 1,000 . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the assessments made on the basis of mere suspicion were indefinite material, could not be upheld. This finding of the AAC has gone unrebutted. 14. In view of our above discussion and reasons thereto we hold that reasons for belief of the ITO that it is the assessee who failed to disclose the true facts in filing the returns of income for the assessment years under consideration are not there and, therefore, the notice under s. 147(a)/148 are invalid and as such the reassessment proceedings under s. 147(1) in both the assessment years are void ab initio and, therefore, liable to be quashed. The AAC has acted accordingly in both the assessment years and, therefore, we confirm his order as his order is not erroneous at all, much more it is in accordance with law not at all arbitrary. 15. The third common ground in these appeals is regarding AAC's allowing a reduction of Rs. 74,852 and 64,187, holding that the reassessment proceedings taken in the case are ab initio void. The issue raised in this common ground is consequential to the decision on the common ground No. 2, which we have determined in favour of the assessee and against the Revenue. Therefore, consequential effec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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