TMI Blog1983 (1) TMI 146X X X X Extracts X X X X X X X X Extracts X X X X ..... rotectively. According to him, the returned income shall be added in the appropriate hands on substantial basis. Consequently, the ITO completed the assessments on protective basis 3. Similarly, Shri Dilipkumar Jain, for the assessment years 1978-79 and 1979-80 filed the returns declaring income of Rs. 10,220 and Rs. 12,060 respectively. The ITO required the assessee to produce evidence in support of his claim. In respect of his contention, he filed letters from Shri Balaji Trading Co., Sukhlal Pannalal Nagori, Shri Krishna Cloth Company, Vijay Textiles, Sanjiv Traders, Jaikishan Govinddas and Phoolchand Nathulal Patwa. In these letters it was stated that Shri Dilipkumar used to do dalali business for the last five or six years. The ITO also recorded the statements of Shri Dilipkumar and Shri Anandilal, partner of Shri Balaji Trading Company and also of Shri Manohar, proprietor of the cloth business under the name and style of Tated Stores, Indore. The copies of their statements are in the paper book. In these statements, the said persons did say that Shri Dilipkumar has been carrying on dalali business for the last five or six years and he is known to them. Even Shri Dilipkumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial till this date to show that really that income was earned by anybody else. The learned counsel further contended that there could be no dispute to the proposition that the ITO has right to complete the assessments on protective basis, but before completing the assessments, on protective basis, he is required under the law to start proceedings against somebody else, who may be, in the opinion of the ITO, was the real owner of such income. Under the circumstances, it is not correct to say that these assessments are on protective basis. In the absence of any other material and any proceedings which could be started against anybody else in respect of the ownership of such income, it may be taken that the assessments in question were on substantive basis and the findings of the authorities below, to the contrary, may be set aside accordingly. Reliance was also placed on the ratio of the decision of State of Orissa v. Maharaja Shri B.P. Singh Deo [1970] 76 ITR 690 (SC). 7. The learned departmental representative supported the orders of the authorities below. He further submitted that the ITO had every right to complete the assessments on protective basis where he was not satisfi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Act. . . ." If we read those decisions carefully, it would be clear that before completing the assessments on protective basis, the ITO is supposed to point out the name of the assessee who may be the owner of such income. It is common ground that in the present cases, till this date, the authorities below did not bring on record any material to show that the declared income in question really belongs to some other assessee. The learned departmental representative frankly conceded that till this date no proceedings in respect of the disputed income have been started against any other assessee. 9. The learned counsel for the assessee contended that the income-tax authorities have no right to call the present assessments as protective because till this date they have not started any proceedings against the alleged real owner of such income. In my opinion, the contention of the assessee has substance. No doubt, the income-tax authorities has the right to make the assessments on protective basis, but while doing so they are supposed to point out the name of the real owner of such income. At least some proceedings should be [commenced) against such assessee. Under the circu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l was bogus or sham. The ITO did not collect further material to show that such material was not genuine. 12. Under the law, as it stands, in proceeding under section 143(3) of the Income-tax Act, 1961, the ITO is bound to consider such evidence as the assessee may produce in support of his return and if after considering the evidence, so produced, he still thinks that he is not satisfied on any particular point, he can require the assessee to produce further evidence on that point. To that extent he may be taken to proceed quasi-judicially, but his quasi-judicial functions begin and end here. If not satisfied with the character of the evidence produced by the assessee, he is bound to lead evidence on his own account with a view to rebutting it. He may gather information in any manner he likes and utilise it against the assessee even if it does not in all respects satisfy the requirements of the Indian Evidence Act. The very nature of the proceedings conducted by him necessitates the use of such media for collecting information as he may not like to disclose to the assessee, and he is perfectly within his right if on enquiry by the assessee he refuses to disclose the source of hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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