TMI Blog1997 (5) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the original assessment in this case was completed on 15-12-1986 under section 143(1) on total income of Rs. 45,620. There were certain payments made in excess of Rs. 2,500 in cash which was allowed in the original assessment. This, according to the learned D.R., is in contravention of the provisions of section 40A(3) read with rule 6DD(j) of Income-tax Rules. The assessment was originally completed under section 143(1). Therefore, the Assessing Officer had no occasion to look into the materials furnished by the assessee. The Assessing Officer later on found that the income escaped assessment. Therefore, the proceedings under section 147 was initiated and higher income was assessed, which is valid in view of the facts of this case. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of the assessment under section 147(b) of the Act is valid on the facts of this case. Section 147 stood at the relevant point of time as under :--- "If---- (a) the Assessing Officer has reason to believe that, by reason of the omission or failure on the part of an assessee to make a return under section 139 for any assessment year to the Assessing Officer or to disclose fully and truly all material facts necessary for his assessment for that year, income chargeable to tax has escaped assessment for that year, or (b) notwithstanding that there has been no omission or failure as mentioned in clause (a) on the part of the assessee, the Assessing Officer has in consequence of information in his possession reason to believe that income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion under section 147(b) is, therefore, taken and the assessment is being reopened. Issue notice under section 148 of the Income-tax Act." A reading of this order sheet shows that the Assessing Officer on noticing the payments made exceeding Rs. 2,500 on various dates, came to the conclusion that the income escaped assessment as these payments were disallowable under section 40A(3), read with rule 6DD(j). It is an admitted fact that the assessee had filed audit reports alongwith the original return, which contains all the details. The information that formed basis for entertaining the reasonable belief was already on the file at the time of completing the original assessment. There was no new information shown by the Assessing Officer fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Lakhmani Mewal Das [1976] 103 ITR 437 (445) held as follow :---- "The duty of the assessee in any case does not extend beyond making a true and full disclosure of primary facts. Once he has done that his duty ends. It is for the Income-tax Officer to draw the correct inference from the primary facts. It is no responsibility of the assessee to advise the Income-tax Officer with regard to the inference which he should draw from the primary facts. If an Income-tax Officer, draws an inference which appears subsequently to be erroneous, mere change of opinion with regard to that inference would not justify initiation of action for reopening assessment." 8. In this case, the assessee had filed his return with full disclosures of primary facts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ingh v. CIT [1959) 35 ITR 1 (SC), CIT v. A. Raman Co. [1968] 67 ITR 11 (SC) and Bankipur Club Ltd. v. CIT [1971] 82 ITR 831 (SC) and we do not believe that the law has since taken a different course. Any observations in Kalyanji Mavji Co. v. CIT [1976] 102 ITR 287 (SC) suggesting the contrary do not, we say with respect, lay down the correct law." 10. The above decision of the Apex Court supports the case of the assessee in every aspect. The larger Bench of the Apex Court disapproved the view taken in Kalyanji Mavji Co. v. CIT [1976] 102 ITR 287 in this aspect of error discovered on a reconsideration of the same material which was available during the original assessment. In view of the above decision, the stand taken by the learned ..... X X X X Extracts X X X X X X X X Extracts X X X X
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