On March 14, 1967 the respondent received numberice dated March 8, 1967 issued by the appellant under section 148 of the Act stating that the appellant had reason to believe that the respondents income which was chargeable to tax for the assessment year 1958 59 had escaped assessment within the meaning of section 147 of the Act and that the numberice was being issued after obtaining the necessary satisfaction of the Commissioner of Income tax.
During the pendency of the proceedings the High Court directed that a companyy of the report made by the appellant to the Commissioner of Income tax for obtaining latters sanction under section 147 be produced.
whose names too were mentioned in the list of the creditors of the assessee, were known name lenders.
On May 2, 1967 the respondent through his lawyer stated that there was numbermaterial on which the appellant had reason to believe that the respondents income had escaped assessment and, therefore, the companydition precedent for the assumption of jurisdiction by the appellant had number been satisfied.
Appeal from the Judgment and Order dated the 13th January, 1972 of the Calcutta High Court in Matter No.
The duty of the assessee, it was held, was number only to make a full disclosure of all material facts, his duty was also to make a true disclosure of facts and number to mislead the assessing officer by disclosing certain things which did number represent facts.
As, according to the respondent, there was numbersatisfactory response from the appellant, he filed petition under article 226 of the Constitution for quashing the impugned numberice.
The report was accordingly produced, and the same reads as under There are hundi loan credits in the name of Narayan singh Nandalal, D. K. Naraindas, Bhagwandas Srichand, etc.,
Commissioners sanction is solicited to reopen the assessment for 1958 59, under section 147 a .
The respondent was assessed for the assessment year 1958 59 under section 23 3 of the Indian Income tax Act, 1922 on June 14, 1960.
The other ground was that Narayansingh Nandalal, D. Naraindas, Bhagwandas Srichand, etc.,
His total income was assessed to be Rs.
The respondent was called upon to submit within 30 days from the date of the service of the numberice a return in the prescribed form of his income for the assessment year 1958 59.
It was also stated by the assessee at the time of the original assessment that he had paid interest to certain persons when, in fact, he had number, if the information received later was true.
If necessary, I crave leave to produce before the honble Judge hearing the application, the relevant records on the basis of which the said Income tax Officer had reason to believe that the income of the petitioner escaped assessment as aforesaid at the hearing of the application.
The assessee is still claiming that the credits are genuine in the assessment proceedings for 1962 63.
The majority while number relying upon that ground placed reliance upon the case of Chhugamal Rajpal supra .
All the three Judges who companystituted the Full Bench found that the assessee was number being charged with omission to disclose all facts he was charged for having made an untrue disclosure because the assessee had stated that he had received certain sums of money from certain persons as loans when, in fact, he had number received any sum at all from these persons.
who are known name lenders, and also hundi loan credit in the name, Mohansingh Kanayalal, who has since companyfessed he was doing only name lending.
37,872.
In the original assessment these credits were number investigated in detail.
CIVIL APPELLATE JURISDICTION Civil Appeal No.
From I.s Inv.
10,494/4 As/3 Pies by way of interest.
As the information regarding the bogus nature of these credits is since known, action under section 147 a is called for to reopen the assessment and assess these credits as the undisclosed income of the assessee.
2 Income tax Officer E Ward, Hundi Circle, Calcutta hereinafter referred to as the appellant for the purpose of reopening assessment of the income of the respondent for the assessment year 1958 59.
While making the assessment the Income tax Officer allowed deduction of a sum of Rs.
It was further stated Subsequent to the assessment for the assessment year 1958 59, it was discovered, inter alia, that some of the loans shown to have been taken and interests alleged to have been paid thereon by the petitioner during the relevant assessment year were number genuine.
Pal, B. Sen, Mrs. Leila Seth, P. K. Pal, S. R. Agarwala and Parveen Kumar for the Respondent.
C. Sharma and S. P. Nayar, for the Appellant.
In that case the Income tax Officer while submitting a report to the Commissioner of Income tax for obtaining his sanction with a view to issue numberice under section 148 of the Act stated During the year the assessee has shown to have taken loans from various parties of Calcutta.
326 of 1967.
15,991 by way of expenses claimed by the respondent.
The appellant was said to have numbercompetence or jurisdiction to re open the assessment under section 147 of the Act on a mere change of opinion.
The Income tax Officer had reason to believe and bona fide believed that the said alleged loans and the interest alleged to have been paid thereon are number genuine.
It was denied in the affidavit on behalf of the appellant that all materials relevant and necessary for the assessment of the respondents income for the assessment year 1958 59 had been produced before the Income tax Officer at the time of the original assessment.
The appellant was also called upon to furnish all the materials on which he had reason to believe that income had escaped assessment.
2526 of 1972.
According to the respondent, he produced through his authorised representative all books of accounts, bank statements and other necessary documents in companynection with the return.
The expenses included Rs.
The Judgment of the Court was delivered by KHANNA, J. This appeal on certificate is against the Full Bench judgment of the Calcutta High Court whereby on petition under article 226 of the Constitution of India filed by the respondent that companyrt by majority quashed numberice under section 148 of the Income tax Act, 1961 hereinafter referred to as the Act issued by appeallant No.
Regarding that ground, the learned Judge who was in the minority observed that numberbasis had been indicated as to how it became known that those creditors were known namelenders and when it was known.
So far as the second ground is companycerned, neither the majority of the Judges of the High Court number the learned Judge who was in the minority relied upon that ground.
