TMI Blog1973 (7) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... our learned brother, T. K. Basu J., in Matter No. 53 of 1967, by which order his Lordship has granted a writ in the nature of mandamus directing the revenue who were the respondents before his Lordship to " forthwith recall, cancel and withdraw the notice dated the 16th November, 1966, issued by the respondent No. 1 and a writ in the nature of prohibition restraining the respondents to forbear from giving any effect to the said notice. The respondents would, however, be at liberty to proceed according to law ". That order allowing the reliefs prayed for in an application under article 226 of the Constitution arose in the following circumstances : The respondent before us, Calcutta Chromotype (Private) Ltd., is a company incorporated unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 967, that " the reasons for reopening the assessment for the above year are that the profits on sale of machineries were not disclosed by you ". In that respect the company contended that there was no omission or failure to disclose that particular item in the course of the original assessment because in the balance-sheet which was submitted as a part of their return for the relevant year there was not only an entry showing on the liabilities side under the head " Machinery sales suspense " an amount of Rs. 2,17,214.50, but also in that balance-sheet there was a note in these terms : " 2. Machinery sales suspense Rs. 2,17,214.50. This amount represents the sale proceeds of certain old machineries. The original cost of the machineries is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial evidence could with due diligence has been disclosed by the Income-tax Officer will not necessarily amount to disclosure within the meaning of section 147 of the Act. This contention urged on behalf of the revenue was negatived by the learned trial judge, T. K. Basu J., by holding that Explanation 2 to section 147 is confined to cases of books of account and other evidence which are produced in the course of assessment proceedings but the balance-sheet of a company is a part of that return. In other words, the learned trial also proceeded to observe that once the statements contained in the balance-sheet are before the assessing authority, there is a duty cast on the assessing authority to enquire into those and find out whether they ar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iciently disclose the material particulars in so far as the assessee-company had omitted to disclose the profit or capital gain that had been earned by the sale of these machineries and the primary duty of disclosure of material facts not having been performed, the notice under section 148 was contended to be valid act under clause (a) of section 147 of the Income-tax Act, 1961. Mr. Sengupta in support of his contention relied on the judgment of the Division Bench of this court in Commissioner of Income-tax v. Hoosen Kasam Dada (India) Ltd. He also relied on the two well-known decisions of the Supreme Court : (1) in the case of S. Narayanappa v. Commissioner of Income-tax and (2) in the case of Kantamani Venkata Narayana and Sons v. First A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the further knowledge of the assessee-company. Moreover, the assertion of the assessee-company is that during the proceedings of assessment as desired by the Income-tax Officer a detailed list of the old machinery sold was produced before the Income-tax Officer ; that list has been appended as an annexure to the petition. There is no effective denial for the revenue as to that assertion made on behalf of the assessee-company. That detailed list taken with what appears in the balance-sheet both in the entry and in the note appended are enough to show that the assessee-company had done their duty to disclose all material facts within their knowledge. It was brought to the notice of the Income-tax Officer at the original proceeding and he form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to disclose it, unless it is a matter which he knows or knows of." We respectfully agree with the observations of the learned Chief Justice and in the present case, we, therefore, hold in agreement with the view of the learned trial judge that there has not been any omission to disclose material facts to enable the revenue to reopen the assessment for the year 1960-61 under clause (a) of section 147 of the Income-tax Act, 1961. The notice under section 148 that has been issued for that purpose upon the purported ground of omission to disclose the profits must, therefore, be held to have been issued in excess of jurisdiction. There was no occasion in this case for the Income-tax Officer to gather further facts by enquiry. What he could h ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
